[Federal Register Volume 65, Number 183 (Wednesday, September 20, 2000)]
[Rules and Regulations]
[Pages 56788-56790]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-24098]


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DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Parts 4 and 178

[T.D. 00-61]
RIN 1515-AC35


Vessel Equipment Temporarily Landed for Repair

AGENCY: Customs Service, Department of the Treasury.

ACTION: Final rule.

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SUMMARY: This document amends 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). Instead, such equipment may be landed from a 
vessel for repair and then reladen aboard the same vessel, subject to 
Customs issuance of a special permit or license for the landed 
equipment, under an International Carrier Bond. Uncertainty had existed 
as to whether the relading of repaired equipment on vessels departing 
the United States would satisfy the TIB requirement that such 
merchandise be exported. The amendment eliminates this uncertainty 
while still allowing Customs adequate control over vessel equipment 
that is landed for repair and thereafter reladen aboard the same 
vessel.

EFFECTIVE DATE: October 20, 2000.

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

[[Page 56789]]


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 which 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 
reladen aboard the vessel, 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 has existed 
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 which is intended to 
remain aboard that vessel meets the definition of exportation. 
Accordingly, TIB bond liability may not 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 (CF) 
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.
    Accordingly, by a document published in the Federal Register (64 FR 
13370) on March 18, 1999, Customs proposed to 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, could 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).

Discussion of Comment

    Counsel on behalf of a vessel operating company submitted the only 
comment in response to the notice of proposed rulemaking. The commenter 
supported the proposal, stating that vessel operators would be relieved 
of needless and burdensome procedures by its implementation. However, 
the commenter suggested that the proposed rule be changed to allow 
repaired equipment to be reladen aboard any vessel operated by the same 
company that landed the equipment for repair.
    Customs has determined that the suggested change should not be 
adopted. As previously noted, Customs Form (CF) 3171 is the document by 
which Customs would track and control the movement of equipment landed 
for repair. The CF 3171 is executed for a specific named vessel and 
does not extend to all vessels of the same line which may wish to lade 
or unlade equipment in a particular port of entry. As such, Customs 
believes that it can best exercise control over the relading of 
repaired equipment by requiring that it be placed on the same vessel 
which landed it for repair in the United States.

Adoption of Proposal

    In view of the foregoing, and following careful consideration of 
the comment received and further review of the matter, Customs has 
concluded that the proposed amendment published in the Federal Register 
(64 FR 13370) on March 18, 1999, should be adopted as a final rule 
without change.

Regulatory Flexibility Act and Executive Order 12866

    Because this final rule merely provides 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 the 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 Executive Order 
12866.

Paperwork Reduction Act

    The collections of information contained in this final rule 
document have previously been reviewed and approved by the Office of 
Management and Budget (OMB) in accordance with the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3507) 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)). The document restates the collections 
of information without substantive change. 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.
    Part 178, Customs Regulations (19 CFR part 178), is amended to make 
provision for these existing information collection approvals.

Drafting Information

    The principal author of this document was Larry L. Burton, Office 
of Regulations and Rulings, U.S. Customs

[[Page 56790]]

Service. However, personnel from other offices participated in its 
development.

List of Subjects

19 CFR Part 4

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

19 CFR Part 178

    Collections of information, Reporting and recordkeeping 
requirements.

Amendments to the Regulations

    Parts 4 and 178, Customs Regulations (19 CFR parts 4 and 178), are 
amended 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 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. Section 4.39 is amended 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.

PART 178--APPROVAL OF INFORMATION COLLECTION REQUIREMENTS

    1. The authority citation for part 178 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 1624; 44 U.S.C. 3501 et seq.

    2. Section 178.2 is amended by adding new listings in the table in 
appropriate numerical order to read as follows:


Sec. 178.2  Listing of OMB control numbers.

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             19 CFR section                                   Description                       OMB control No.
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*                  *                  *                  *                  *                  *
                                                        *
Secs.  4.10, 4.16, 4.30, 4.37, 4.39,      Application-Permit-Special License, Unlading-                1515-0013
 4.91, 10.60, 24.16, 122.29, 122.38,       Lading, Overtime Services (Customs Form 3171).
 123.8, 146.32, 146.34.
*                  *                  *                  *                  *                  *
                                                        *
Part 113................................  Customs Bond Structure (Customs Form 301 and                 1515-0144
                                           Customs Form 5297).
*                  *                  *                  *                  *                  *
                                                        *
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    Approved: June 18, 2000.
Raymond W. Kelly,
Commissioner of Customs.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 00-24098 Filed 9-19-00; 8:45 am]
BILLING CODE 4820-02-P