Manifest; Bilge Water; Engine Room Sludge; 19 U.S.C. § 1584; 19 U.S.C. § 1401(c)

HQ H133295 September 19, 2011 VES-3-01:RR:BSTC:CCI H133295 ALS CATEGORY: Carriers Mr. Tom Lucek AMS D.E.S. Riley-Sherman Shipping Agency, Inc. P.O. Box 110 Friendswood, Texas 77549-0110 RE: Manifest; Bilge Water; Engine Room Sludge; 19 U.S.C. § 1584; 19 U.S.C. § 1401(c) Dear Mr. Lucek: This letter is in response to your correspondence dated November 17, 2010, requesting a ruling on whether or not oily bilge water and engine room sludge removed from vessels at a United States port are required to be manifested as merchandise. Our ruling is set forth below. FACTS: You request a ruling on whether or not oily bilge water and engine room sludge removed from vessels, coastwise-qualified or not, at a Customs and Border Protection (CBP) port are required to be manifested as merchandise. You state that these items are removed from a vessel’s engine room and are not residue from any cargo transported by a vessel. ISSUE: Whether oily bilge water and engine room sludge that are removed from a vessel at a CBP port of cargo must be manifested as cargo pursuant to 19 U.S.C. § 1584. LAW AND ANALYSIS: Pursuant to 19 U.S.C. § 1584, if any merchandise, including sea stores, which has been unladen from a vessel bound for the United States, and which is not included or described on the manifest, the master of the vessel or the person directly or indirectly responsible for any discrepancy between the merchandise of said manifest shall be liable for a penalty equal to the lesser of $10,000 or the domestic value of the merchandise. Pursuant to 19 U.S.C. § 1401(c), the word “merchandise” means goods, wares, and chattels of every description and includes merchandise the importation of which is prohibited, and monetary instruments as defined in 31 U.S.C. § 5312. It is well settled that “merchandise” does not include the equipment of a vessel so long as it is used by that vessel, and that such articles have been defined as those which are "...necessary and appropriate for the navigation, operation or maintenance of the vessel and for the comfort and safety of the persons on board." See, e.g., CBP Ruling HQ 058647 (May 18, 2009), citing CBP Ruling HQ 114298 (July 7, 1998). See also Treasury Decision 49815(4) (March 13, 1939). Whether such articles constitute vessel equipment is a case-by-case determination. See HQ H058647, supra, and CBP Ruling HQ 115938 (April 1, 2003). In H058647, we determined that trotlines and a containment boom constituted vessel equipment. In 114298, we found that items transferred between two co-dependant vessels to be used as necessary for the operation of those vessels constituted vessel equipment. In CBP Ruling HQ 115666 (May 20, 2002), we determined that the transportation of waste sludge did not constitute “fish” because it was an incidental by-product of processing operations. In the present case, the subject oily bilge water and engine room sludge are by-products of the vessel’s engine operations. They are removed from the vessel as waste in the same sense that the water sludge was disposed of in 115666. To that extent, we find that neither the oily bilge water nor the engine room sludge is merchandise as defined under section 1401 and rulings interpreting such. Therefore, the requirement in section 1584 to manifest imported merchandise is inapplicable to these items. HOLDING: 19 U.S.C. § 1584 is not applicable to the oily bilge water and engine room sludge because those items are not “merchandise” as defined under 19 U.S.C. § 1401. Sincerely, George Frederick McCray Supervisory Attorney-Advisor/Chief Cargo Security, Carriers and Immigration Branch Office of International Trade, Regulations & Rulings U.S. Customs and Border Protection