[Federal Register Volume 64, Number 52 (Thursday, March 18, 1999)]
[Proposed Rules]
[Pages 13370-13372]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6640]


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DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 4

RIN 1515-AC35


Vessel Equipment Temporarily Landed for Repair

AGENCY: U.S. Customs Service, Department of the Treasury.

ACTION: Proposed rule.

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SUMMARY: This document proposes to amend the Customs Regulations to 
provide for the temporary landing in the United States of vessel 
equipment in need of repair, without requiring entry of that equipment 
under a Temporary Importation Bond (TIB). It is proposed that such 
equipment be permitted to be landed for repair and relading aboard the 
same vessel, subject to Customs issuance of a special permit or license 
for the landed equipment, under an International Carrier Bond. 
Uncertainty exists whether the relading of repaired equipment on 
vessels departing the United States would satisfy the TIB requirement 
that such merchandise be exported. The proposed amendments will 
eliminate this uncertainty while still allowing Customs adequate 
control over such unladings and ladings.

DATES: Comments must be received on or before May 17, 1999.

ADDRESSES: Written comments may be addressed to and inspected at the 
Regulations Branch, U.S. Customs Service, 1300 Pennsylvania Avenue, 
N.W., 3rd Floor, Washington, D.C. 20229.


[[Page 13371]]


FOR FURTHER INFORMATION CONTACT: Larry L. Burton, Office of Regulations 
and Rulings, 202-927-1287.

SUPPLEMENTARY INFORMATION:

Background

    Section 446, Tariff Act of 1930, as amended (19 U.S.C. 1446), 
provides that vessels arriving in the United States from foreign ports 
may retain vessel equipment and other named items aboard without the 
payment of duty. The statute also provides, however, that any of the 
named items that are landed and delivered from such a vessel are 
considered and treated as imported merchandise.
    The cited statute is implemented by Sec. 4.39 of the Customs 
Regulations (19 CFR 4.39), paragraph (b) of which provides that any 
articles other than cargo or baggage that are landed for delivery for 
consumption in this country are treated the same as any other imported 
article. Articles imported for consumption into the United States are 
subject to merchandise entry and the payment of applicable duty.
    It is Customs' view that when necessary equipment is unladed from a 
vessel only temporarily for the purpose of being repaired and then 
reladed, it is not being delivered for consumption into the commerce of 
the United States. It is also clear, however, that when anything is 
landed in the United States, Customs has the duty and responsibility to 
exercise sufficient control and to protect the revenue from any 
unlawful introduction of merchandise into the commerce of the country.
    There has been a lack of uniformity in the treatment that Customs 
has accorded vessel equipment temporarily landed for repair and 
relading. Some ports have employed Temporary Importation Bond (TIB) 
procedures in seeking to provide the necessary mechanisms for Customs 
control and the protection of the revenue, but a problem exists with 
the use of a TIB for this purpose. While a TIB would adequately protect 
the revenue during the period when vessel equipment was in the United 
States, the bond provisions could only be satisfied and potential 
liability extinguished when the covered equipment was exported from the 
United States. Exportation is defined in Sec. 101.1 of the Customs 
Regulations (19 CFR 101.1), which provides that something is exported 
when it is separated from the goods of this country with the intent 
that it be made a part of the goods belonging to some foreign country. 
Customs does not believe that relading vessel equipment that is 
intended to remain aboard that vessel meets the definition of 
exportation so that TIB bond liability may be adequately terminated.
    Section 4.30 of the Customs Regulations (19 CFR 4.30) provides that 
in all cases relevant to the present circumstances, no cargo, baggage, 
or other articles may be unladed from or laded upon any vessel arriving 
directly or indirectly from a foreign port or place, unless the Customs 
port director issues a permit allowing the activity (Customs Form 
3171). This would provide adequate control by Customs over equipment 
unladings and ladings in terms of advance notice and actual knowledge.
    Further, operators of vessels, or vessel agents acting in their 
stead, either have in place or can be required by local Customs 
officials to obtain International Carrier Bonds as reproduced in 
Sec. 113.64, Customs Regulations (19 CFR 113.64). Paragraph (b) of that 
bond provision (Sec. 113.64(b)) obligates the bond for matters relating 
to the unlading, safekeeping, and disposition of merchandise, supplies, 
crew purchases, and other articles to be found on a vessel. This would 
provide adequate protection of the revenue in terms of any potential 
introduction of temporarily landed vessel equipment into the commerce 
of the United States.
    This proposal would add a new paragraph (g) to Sec. 4.39 of the 
Customs Regulations (19 CFR 4.39(g)) to provide that equipment of a 
vessel arriving either directly or indirectly from a foreign port or 
place, if in need of repair, may be landed temporarily in order to be 
repaired. Unlading and relading would be in accord with the permit 
provisions of Sec. 4.30, and the appropriate International Carrier Bond 
would be obligated as provided under Sec. 113.64(b).

Comments

    Before adopting this proposal, consideration will be given to any 
written comments that are timely submitted to Customs. Comments 
submitted will be available for public inspection in accordance with 
the Freedom of Information Act (5 U.S.C. 552), Sec. 1.4, Treasury 
Department Regulations (31 CFR 1.4), and Sec. 103.11(b), Customs 
Regulations (19 CFR 103.11(b)), on regular business days between the 
hours of 9:00 a.m. and 4:30 p.m. at the Regulations Branch, U.S. 
Customs Service, 1300 Pennsylvania Avenue, N.W., 3rd Floor, Washington, 
D.C.

Regulatory Flexibility Act and Executive Order 12866

    Because the proposed rule would merely provide a different method 
to allow vessel equipment to be temporarily landed for repair without 
the payment of duty, it is certified pursuant to the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.) that, if adopted, the proposed 
rule will not have a significant economic impact on a substantial 
number of small entities. Accordingly, it is not subject to the 
regulatory analysis or other requirements of 5 U.S.C. 603 and 604. Nor 
does the document meet the criteria for a ``significant regulatory 
action'' as specified in E.O. 12866.

Paperwork Reduction Act

    The collections of information contained in this notice of proposed 
rulemaking have been previously reviewed and approved by the Office of 
Management and Budget (OMB) in accordance with the Paperwork Reduction 
Act of 1995 and assigned OMB control numbers 1515-0013 (Application-
Permit-Special License, Unlading-Lading, Overtime Services (Customs 
Form 3171)) and 1515-0144 (Customs Bond Structure (Customs Form 301 and 
Customs Form 5297)). An agency may not conduct or sponsor, and a person 
is not required to respond to, a collection of information unless the 
collection of information displays a valid control number assigned by 
OMB. Although this document restates the collections of information 
without substantive change, comments are specifically requested 
concerning:
    Whether the proposed collections of information are necessary for 
the proper performance of the functions of the agency, including 
whether the information will have practical utility;
    The accuracy of the estimated burden associated with the proposed 
collections of information (see below);
    How to enhance the quality, utility, and clarity of the information 
to be collected;
    How to minimize the burden of complying with the proposed 
collections of information, including the application of automated 
collection techniques or other forms of information technology; and
    Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of services to provide information.
    The collection of information in this proposed regulation is in 
Sec. 4.39. This information is required and will be used to effect the 
temporary unlading and lading of vessel equipment landed for repair, in 
order to ensure enforcement of the Customs and related laws and the

[[Page 13372]]

protection of the revenue. The likely respondents are business or other 
for-profit institutions.
    Estimated annual reporting and/or recordkeeping burden: one hour.
    Estimated average annual burden per respondent/recordkeeper: one 
hour.
    Estimated number of respondents and/or recordkeepers: one.
    Estimated annual frequency of responses: one.
    Comments concerning suggestions for reducing the burden of the 
collections of information should be sent to the Regulations Branch, 
Office of Regulations and Rulings, U.S. Customs Service, 1300 
Pennsylvania Avenue, N.W., 3rd Floor, Washington, D.C. 20229. A copy 
should also be sent to U.S. Customs Service, Information Services 
Group, Attention: J. Edgar Nichols, Room 3.2-C, 1300 Pennsylvania 
Avenue, N.W., Washington, D.C. 20229. Comments should be submitted 
within the time frame that comments are due regarding the substance of 
the proposal.
    Drafting Information: The principal author of this document was 
Larry L. Burton, Office of Regulations and Rulings, U.S. Customs 
Service. However, personnel from other offices participated in its 
development.

List of Subjects in 19 CFR Part 4

    Customs duties and inspection, Entry, Inspection, Merchandise, 
Reporting and recordkeeping requirements, Vessels.

Proposed Amendments to the Regulations

    It is proposed to amend part 4, Customs Regulations (19 CFR part 
4), as set forth below.

PART 4--VESSELS IN FOREIGN AND DOMESTIC TRADES

    1. The general authority citation for part 4 as well as the 
specific authority citation for Sec. 4.39 would continue to read as 
follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1431, 1433, 1434, 1624; 
46 U.S.C. App. 3, 91;
* * * * *
    Section 4.39 also issued under 19 U.S.C. 1446;
* * * * *
    2. It is proposed to amend Sec. 4.39 by adding a new paragraph (g) 
to read as follows:


Sec. 4.39  Stores and equipment of vessels and crews' effects; unlading 
or lading and retention on board.

* * * * *
    (g) Equipment of a vessel arriving either directly or indirectly 
from a foreign port or place, if in need of repairs in the United 
States, may be unladen from and reladen upon the same vessel under the 
procedures set forth in Sec. 4.30 relating to the granting of permits 
and special licenses on Customs Form 3171 (CF 3171). Adequate 
protection of the revenue is insured under the appropriate 
International Carrier Bond during the period that equipment is 
temporarily landed for repairs (see Sec. 113.64(b) of this chapter), 
and so resort to the procedures established for the temporary 
importation of merchandise under bond is unnecessary. Once equipment 
which has been unladen under the terms of a CF 3171 has been reladen on 
the same vessel, potential liability for that transaction existing 
under the bond will be extinguished.

    Approved: February 23, 1999.
Raymond W. Kelly,
Commissioner of Customs.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 99-6640 Filed 3-17-99; 8:45am]
BILLING CODE 4820-02-P