HQ 109766: Exemption from Customs user fees

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.

                                          1



                                  HQ 109766

                                  October 19, 1988

          VES-5-8-CO:R:P:C 109766 KMF

          CATEGORY: Carriers

          Mr. David A. Romasco
          Sea-Based Aerostat Program
          G.E. Government Services
          Range Projects Manufacturing
          360 East Drive
          Melbourne, FL  32904

          RE: Exemption from Customs user fees

          Dear Mr. Romasco:

                This is in response to your letter dated September 21,
          1988, in which you request that we exempt your vessels from the
          Customs user fees.  You state that the vessels are under contract
          with the United States Coast Guard (Contract No. DTCG23-85-C-
          20045) to furnish a specialized vessel and some crew and
          technicians for the purposes of assisting in the interdiction of
          drug smuggling.  You state further that under the terms and
          conditions of the contract, the vessel's operation and movements
          are entirely at the discretion of the Coast Guard.  We have
          contacted the Coast Guard and verified the above information.

                The Customs user fees were set forth as a part of the
          Consolidated Omnibus Budget Reconciliation Act (COBRA).  A fee of
          $397 is assessed on the arrival of a commercial vessel of 100 net
          tons or more.  19 U.S.C.{58c(a)(1).

                The law does not provide an exemption for commercial
          vessels simply because they are operated by a government entity.
          See Customs Ruling Letters VES-5-8-CO:R:CD:C 108470 JM (Jul. 15,
          1986) and VES-5-08-CO:R:CD:C 108653 JM (Nov. 7, 1986).  Customs
          has determined, however, that a vessel owned by or under the
          complete control of the United States, not carrying passengers or
          merchandise in trade, is not a commercial vessel as that term is
          used in the COBRA.

                Under the contract you describe, the vessel is exempt from
          the user fees established in 19 U.S.C. {58a. It is not a














                                          2


          commercial vessel for purposes of that statute.  Though G.E. crew
          and technicians remain on board the vessel, the vessel operation
          and movements are at the discretion of the Coast Guard.
          Consequently, the vessel is under the control of the United
          States.  Furthermore, under the contract you describe, in which
          the vessel is used in assisting in the interdiction of drug
          smuggling, the vessel is not carrying passengers or merchandise
          in trade.  Thus, in accord with Customs determinations, in the
          limited fact pattern described above, the vessel is not a
          commercial vessel as that term is used in the COBRA, and is not
          required to pay user fees.

                                              Sincerely,



                                              B. James Fritz
                                              Chief
                                              Carrier Rulings Branch