CIT Takes Issue With Customs' Duty Calculation in Dry-Docking Case
The vessel repair statute (Section 466 of the Tariff Act of 1930, 19 U.S.C. § 1466) requires the payment of a 50 percent ad valorem duty on the cost of foreign equipment purchased for, or expenses of repairs made to, U.S.-flag vessels in a foreign country. The purpose of the vessel repair statute is to protect U.S. shipyards and to discourage vessel operators from taking their vessels abroad for the purpose of obtaining less expensive foreign repairs. The U.S. Court of International Trade determined that "section 1466 expresses the legislative policy designed to provide maximum protection to American shipyards." Mount Washington Tanker Co. v. United States, 505 F. Supp. 209, 214 (1980), aff'd, 665 F.2d340 (C.C.P.A. 1981). The U.S.
Congress Voids Certain Ad Valorem Duties on Ship Repairs
By Jeanne M. Charles T. Trade and Technical Corrections Act of 2004 (the Act), signed into law on December 3, 2004, contains a provision that reverses a final rule, issued by the Bureau of Customs and Border Protection (CBP) in 2001 (Final Rule; 66 Fed. Reg. 16392 (March 26, 2001)), that subjected repairs made to U.S.-flag vessels while on the high seas to declaration, entry, and duty requirements. Simply put, the Act expands the list of items that are exempt from the 50 percent ad valorem duty requirement contained in the Vessel Repair Statute (19 U.S.C. § 1466) and, as a result, could possibly save owners and operators of U.S.-flag vessels large sums of money.
