HQ 952158: Barges; EN 89.01; The Conqueror; Section 27 of the Act of June 5, 1920, as amended (Jones Act) Dear Mr. Hensley:

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 952158

                        January 25, 1993
                                                               


CLA-2 CO:R:C:M  952158 LTO

CATEGORY:  Classification

TARIFF NO.:  8901.90.00

Mr. Robert Hensley
Hannah Marine Corporation
Route 83 and Archer Avenue
Lemont, Illinois 60439

RE:  Barges; EN 89.01; The Conqueror; Section 27 of the Act of
     June 5, 1920, as amended (Jones Act)
 
Dear Mr. Hensley:

     This is in response to your letters of July 10, 1992, and
September 17, 1992, requesting the classification of two barges
under the Harmonized Tariff Schedule of the United States
(HTSUS).  You have also asked whether those same vessels qualify
for documentation under the coastwise laws of the U.S.

FACTS:

     The articles in question are non-self-propelled barges. 
"Hull No. 1" was built as a steamship bulk carrier in the U.S.,
and flagged U.S.  It was later converted into a "barge," and
flagged foreign.  The vessel has suffered hull damage caused by a
marine casualty.  "Hull No. 2" is a deck cargo barge that also
was built and flagged in the U.S., and subsequently sold foreign. 
You state that you plan to purchase these vessels from foreign
interests, bring them to the U.S., and then repair, refurbish,
reflag and use them as dry bulk carriers in the coasting trade.

ISSUE:

1.   Whether the vessels in question are classifiable as barges
for the transportation of person or goods under Heading 8901,
HTSUS.

2.   Whether the vessels qualify for documentation under the
coastwise laws of the U.S.

                              - 2 -

LAW AND ANALYSIS:

     In regard to the dutiability of the vessels in question upon
their arrival in the U.S., it was long ago determined that
commercial vessels, being instrumentalities rather than articles
of commerce, are not subject to duty upon being brought into this
country.  See The Conqueror, 166 U.S. 110 (1897).  This result
was also seen in General Headnote 5(g) of the Tariff Schedules of
the United States, predecessor to the HTSUS.  

     The General Rules of Interpretation (GRI's) to the HTSUS
govern the classification of goods in the tariff schedule.  GRI 1
states in pertinent part that "for legal purposes, classification
shall be determined according to the terms of the headings and
any relative section or chapter notes . . . ."

     Heading 8901, HTSUS, provides for "[c]ruise ships, excursion
boats, ferry boats, cargo ships, barges and similar vessels for
the transportation of persons or goods."

     The Harmonized Commodity Description and Coding System
Explanatory Notes (EN) constitute the Customs Co-operation
Council's official interpretation of the Harmonized System. 
While not legally binding, the ENs provide a commentary on the
scope of each heading of the Harmonized System, and are generally
indicative of the proper interpretation of these headings.

     EN 89.01, pg. 1450, states that Heading 8901, HTSUS, covers
"all vessels for the transport of persons or goods," and includes
"[b]arges of various kinds, lighters and pontoons being flat-
decked vessels used for the transport of goods and, sometimes, of
persons."  The vessels in question are "barges," and are
classifiable under Heading 8901, HTSUS.  Specifically, they are
classifiable under subheading 8901.90.00, HTSUS, which provides
for other vessels for the transport of goods.     

     In regard to the qualification of these vessels for
documentation under the coastwise laws of the U.S., the coastwise
law pertaining to the transportation of merchandise, section 27
of the Act of June 5, 1920, as amended (41 Stat. 999; 46 U.S.C.
App. 883, often called the Jones Act), provides that:

     No merchandise shall be transported by water, or by
     land and water, on penalty of forfeiture of the 
     merchandise (or a monetary amount up to the value 
     thereof as determined by the Secretary of the 
     Treasury, or the actual cost of the transportation,
     whichever is greater, to be recovered from any 
     consignor, seller, owner, importer, consignee,
     agent, or other person or persons so transporting
                              - 3 -

     or causing said merchandise to be transported), 
     between points in the United States . . . embraced
     within the coastwise laws, either directly or via a
     foreign port, or for any part of the transportation,
     in any other vessel than a vessel of the United 
     States and owned by persons who are citizens of the
     United States . . . 

     Customs has consistently interpreted the coastwise
transportation prohibition to apply to all vessels except United
States-built, owned, and properly documented vessels (See 46
U.S.C. 12106, 12110, 46 U.S.C. App. 883, and 19 CFR 4.80).

     The mere fact that a vessel was built in this country and
enjoys American ownership does not serve to qualify it for
coastwise documentation.  Pursuant to the first proviso to
section 883:

     . . . no vessel having at any time acquired the lawful
     right to engage in the coastwise trade, by having 
     been built in or documented under the laws of the 
     United States, and later sold foreign in whole or in 
     part, or placed under foreign registry, shall hereafter
     acquire the right to engage in the coastwise trade.

This means that while there exists no restriction on the
documentation of the vessels in question under the United States
flag, the vessels may not be documented for the coastwise trade.

HOLDING:

     The barges are classifiable under subheading 8901.90.00,
HTSUS, which provides for "[c]ruise ships, excursion boats, ferry
boats, cargo ships, barges and similar vessels for the transport
of persons or goods . . . [o]ther vessels for the transport of
goods and other vessels for the transport of both persons and
goods."  The corresponding rate of duty for articles of this
subheading is free. 

     The barges in question may not be documented for the
coastwise trade.

                              Sincerely,




                              John Durant, Director