[Federal Register Volume 64, Number 52 (Thursday, March 18, 1999)] [Proposed Rules] [Pages 13370-13372] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 99-6640] ======================================================================= ----------------------------------------------------------------------- DEPARTMENT OF THE TREASURY Customs Service 19 CFR Part 4 RIN 1515-AC35 Vessel Equipment Temporarily Landed for Repair AGENCY: U.S. Customs Service, Department of the Treasury. ACTION: Proposed rule. ----------------------------------------------------------------------- SUMMARY: This document proposes to amend 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). It is proposed that such equipment be permitted to be landed for repair and relading aboard the same vessel, subject to Customs issuance of a special permit or license for the landed equipment, under an International Carrier Bond. Uncertainty exists whether the relading of repaired equipment on vessels departing the United States would satisfy the TIB requirement that such merchandise be exported. The proposed amendments will eliminate this uncertainty while still allowing Customs adequate control over such unladings and ladings. DATES: Comments must be received on or before May 17, 1999. ADDRESSES: Written comments may be addressed to and inspected at the Regulations Branch, U.S. Customs Service, 1300 Pennsylvania Avenue, N.W., 3rd Floor, Washington, D.C. 20229. [[Page 13371]] FOR FURTHER INFORMATION CONTACT: Larry L. Burton, Office of Regulations and Rulings, 202-927-1287. 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 that 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 reladed, 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 exists 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 that is intended to remain aboard that vessel meets the definition of exportation so that TIB bond liability may 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 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. This proposal would 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, may 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). Comments Before adopting this proposal, consideration will be given to any written comments that are timely submitted to Customs. Comments submitted will be available for public inspection in accordance with the Freedom of Information Act (5 U.S.C. 552), Sec. 1.4, Treasury Department Regulations (31 CFR 1.4), and Sec. 103.11(b), Customs Regulations (19 CFR 103.11(b)), on regular business days between the hours of 9:00 a.m. and 4:30 p.m. at the Regulations Branch, U.S. Customs Service, 1300 Pennsylvania Avenue, N.W., 3rd Floor, Washington, D.C. Regulatory Flexibility Act and Executive Order 12866 Because the proposed rule would merely provide 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, if adopted, the proposed 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 E.O. 12866. Paperwork Reduction Act The collections of information contained in this notice of proposed rulemaking have been previously reviewed and approved by the Office of Management and Budget (OMB) in accordance with the Paperwork Reduction Act of 1995 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)). 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 assigned by OMB. Although this document restates the collections of information without substantive change, comments are specifically requested concerning: Whether the proposed collections of information are necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; The accuracy of the estimated burden associated with the proposed collections of information (see below); How to enhance the quality, utility, and clarity of the information to be collected; How to minimize the burden of complying with the proposed collections of information, including the application of automated collection techniques or other forms of information technology; and Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information. The collection of information in this proposed regulation is in Sec. 4.39. This information is required and will be used to effect the temporary unlading and lading of vessel equipment landed for repair, in order to ensure enforcement of the Customs and related laws and the [[Page 13372]] protection of the revenue. The likely respondents are business or other for-profit institutions. Estimated annual reporting and/or recordkeeping burden: one hour. Estimated average annual burden per respondent/recordkeeper: one hour. Estimated number of respondents and/or recordkeepers: one. Estimated annual frequency of responses: one. Comments concerning suggestions for reducing the burden of the collections of information should be sent to the Regulations Branch, Office of Regulations and Rulings, U.S. Customs Service, 1300 Pennsylvania Avenue, N.W., 3rd Floor, Washington, D.C. 20229. A copy should also be sent to U.S. Customs Service, Information Services Group, Attention: J. Edgar Nichols, Room 3.2-C, 1300 Pennsylvania Avenue, N.W., Washington, D.C. 20229. Comments should be submitted within the time frame that comments are due regarding the substance of the proposal. Drafting Information: The principal author of this document was Larry L. Burton, Office of Regulations and Rulings, U.S. Customs Service. However, personnel from other offices participated in its development. List of Subjects in 19 CFR Part 4 Customs duties and inspection, Entry, Inspection, Merchandise, Reporting and recordkeeping requirements, Vessels. Proposed Amendments to the Regulations It is proposed to amend part 4, Customs Regulations (19 CFR part 4), 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 would 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. It is proposed to amend Sec. 4.39 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. Approved: February 23, 1999. Raymond W. Kelly, Commissioner of Customs. John P. Simpson, Deputy Assistant Secretary of the Treasury. [FR Doc. 99-6640 Filed 3-17-99; 8:45am] BILLING CODE 4820-02-P