HQ 109764: Tariff classification of a two-person submarine and the applicability of the coastwise laws to its use in the United States.

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                                       HQ 109764

                                   November 18, 1988

            VES 12-02 CO:R:P:C DHR

            CATEGORY:  Carriers

            TARIFF NO.:  General Headnote 5 (g), Tariff Schedules of the
                         United States
                         Item 8901.10.00 Harmonized System
                         Tariff Schedules

            Mr. Dale G. Vander Yacht
            Border Brokerage Company
            Post Office Box B
            Blaine, Washington 98230

            RE:  Tariff classification of a two-person submarine and the
                 applicability of the coastwise laws to its use in the
                 United States.

            Dear Mr. Yacht:

                 Your inquiry of May 25,1988, addressed to our New York
            office concerning the tariff classification of two-man
            submarines and the application of the coastwise laws to their
            operation has been referred to the Carrier Rulings Branch for a
            direct reply to you.

            FACTS:

                 It is proposed to import Canadian-built two-man
            submarines.  The craft is self-propelled by a battery-driven
            electric motor and is referred to by the manufacturer,
            Adventure Vehicle Dynamics, Inc., of British Columbia, as a
            "Sport Sub".

                 The advertising literature for the submarine makes
            reference to a Sport Sub pilot requiring training in its
            operation plus having to have scuba certification.  The
            literature also refers to the revenue which can be generated by
            the Sport Sub's making 6 to 8 excursion dives per day.  The
            letter of inquiry represents that the craft would generally be
            used for hire, whereby an operator would take a person for a
            ride and return to the point of departure.


















                                         - 2 -






            ISSUES:

                 1.  Whether the Sport Sub is subject to duty.

                 2.  Whether the operation of the Sport Sub, as described
                     in the letter of inquiry, would be in violation of the
                     coastwise laws.

                 3.  Could the craft engage in coastwise trade if the hull
                     were manufactured in the United States.

            LAW AND ANALYSIS:

                 Section 401, Tariff Act of 1930, as amended (19 U.S.C.
            1401), defines the term "vessel" as "every description of water
            craft or other contrivance used, or capable of being used, as a
            means of transportation in water."  The Sport Subs are deemed
            to be "vessels" as that term is used in the statutes.

                 General Headnote 5 (g), Tariff Schedules of the United
            States (TSUS) provides that vessels which are not yachts or
            pleasure vessels within the purview of the Schedules are not
            articles subject to the provisions of the Schedules.

                 Item 8901.10.00, Harmonized System Tariff Schedules of the
            United States (effective January 1, 1989 ) provides that
            vessels such as the craft under consideration used for the
            transportation of persons are free of duty.

                 The Customs Service has ruled that vessels which carry
            passengers solely within United States territorial waters are
            engaged in coastwise trade, even where the passengers disembark
            from the vessel at the United State point of embarkation.  It
            follows that vessels which traverse waters outside the United
            States during the course of a round trip from a United States
            point are not engaged in coastwise trade.  Pursuant to the
            provisions of section 12102, title 46, United States Code, only
            a vessel which is built in the United States can be documented
            to engage in the coastwise trade.  The United States Coast
            Guard is the agency responsible for the documentation of
            vessels.















                                         - 3 -




            HOLDING:

                 1.  The Sub Sport two-man submarines, if brought in for
            use as described in your letter, would not be subject to the
            assessment of duty.  If, however, it should later be determined
            that the crafts are suitable for use and are being used by
            either the owner or operator for pleasure purposes, the Customs
            Service would be constrained to review the issue of whether
            they are subject to the payment of duty under either the TSUS
            or the Harmonized System.

                 2.  The dutiable status of the Sport Sub would not affect
            the applicability of the coastwise laws to its proposed
            operation.

                 3.  Whether the Sport Sub would be considered U.S.-built
            if the hull were manufactured in the United States and thus be
            entitled to engage in the coastwise trade would be a matter for
            determination by the United States Coast Guard.



                                         Sincerely,



                                         B. James Fritz
                                         Chief,
                                         Carrier Rulings Branch





            CC: Assistant Area Director, New York







            CO:R:P:C:DReusch:mr 10/28/88