Schuyler Line Navigation Company; Protest No. 200224100971; 19 U.S.C. § 1466, Vessel repair; United States Korea Free Trade Agreement; United States Singapore Free Trade Agreement; Harmonized Tariff Schedule of the United States

H345712
June 5, 2026
OT-RR:BSTC:CCR H345712 KAM/DK
CATEGORY: Carriers Supervisory Liquidation Specialist C/o Vessel Repair Unit U.S. Customs and Border Protection 423 Canal Street Suite 246 New Orleans, LA 70130 RE: Schuyler Line Navigation Company; Protest No. 200224100971; 19 U.S.C. § 1466, Vessel repair; United States Korea Free Trade Agreement; United States Singapore Free Trade Agreement; Harmonized Tariff Schedule of the United States Dear Sir: This is in response to your memorandum of March 6, 2025, forwarding the above-referenced application for further review submitted on February 19, 2025, by counsel on behalf of Schuyler Line Navigation Company (“SLNC”). Our decision follows. FACTS SLNC is a United States-owned company operating a commercial, U.S.-flagged vessel, the M/V SLNC GOODWILL (“the subject vessel”). On October 29, 2023, the subject vessel entered Pearl Harbor, Hawaii, from Onsan, Republic of Korea.1 The subject vessel filed a Record of Vessel Foreign Repair or Equipment Purchase in accordance with 19 C.F.R §§ 4.7 and 4.14 on November 6, 2023, claiming to that several items purchased and installed were nondutiable.2 On July 26, 2024, SLNC’s Application for Relief from duties was granted in part and denied in part by Liquidation Specialists at the Vessel Repair Unit (“VRU”).3 On February 19, 2025, SLNC submitted an Application for Further Review of Protest through counsel of 1 CBPF226 at 1. 2 Id. 3 Determination Letter, July 26, 2024.
2 record.4 SLNC claims that several decisions from the Protest are incorrect and not in accordance with the law based on prior precedent, 19 U.S.C. § 1466 (known as the “Vessel Repair Statute”), and the United States’ Free Trade Agreements with Korea and Singapore.5 At issue are Exhibits 80, 86, 94, 95, 97, 99-103, 106, 107, 109, 112, 113, 116, 117, 120-128, 130, 129, 131, 133-143, 145, 146, 148, 149, 150, 234, 235, 236, 238, 239, 240, 241, 242, 244, 250-252, 261, 347, 373, 391, 392, 409, 411, 412, 414, 415. While we have not attached them here, please see the case file for further detail. As discussed in more detail below, the items were denied and are reviewed based on the following categories: (1) items purchased in one Free Trade Agreement country and loaded on the vessel in another Free Trade Agreement country; (2) parts necessarily installed; and (3) consumable, and safety and regulatory items. ISSUES Whether the items listed above, for which the protestant seeks relief, are dutiable under 19 U.S.C. §1466. LAW AND ANALYSIS As an initial matter, we note the protest was timely filed within 180 days of the date of duty determination.6 The entry was liquidated on July 26, 2024, and the instant protest was initially received by CBP on December 19, 2024.7 We note on February 19, 2025, the protestant made a request for further review, as required by 19 C.F.R. § 174.24, by providing a statement advising the basis of further review or describing the facts and law justifying its request for further review.8 As a result, the Protestant qualifies for Application for Further Review of Protest. The VRU requests guidance as to the resolution of the legal questions at issue. In forwarding the subject protest, the VRU explained that it had denied relief from duty in part and was seeking our determination. Accordingly, this response constitutes internal advice per 19 C.F.R. § 177.11. 19 U.S.C. § 1466(a) requires the payment of a 50% ad valorem duty on the “[t]he equipments, or any part thereof . . . or the repair parts or materials to be used, or the expenses of repairs made in a foreign country upon a vessel documented under the laws of the United States to engage in the foreign or coasting trade, or a vessel intended to be employed in such trade...”9 This provision is implemented by 19 C.F.R. § 4.14, which also outlines the bond requirements, entry requirements, and deadlines for submitting evidence of the cost of foreign repairs. Pursuant to 19 C.F.R. § 4.14(e), each vessel repair entry “must show all foreign voyage expenditures for equipment, parts of equipment, repair parts, materials and labor.”10 4 Application for Further Review of Protest No. 200224100971_SLNC Goodwill Voyage 6 at 1. 5 Id. 6 19 U.S.C. § 1514(c)(3) and 19 C.F.R. § 174.12(e). 7 CBP Form 19, at 1. 8 Application for Further Review of Protest No. 200224100971_SLNC Goodwill Voyage 6 at 1. 9 19 U.S.C. § 1466(a). 10 19 C.F.R. § 4.14(e).
3 Furthermore, 19 C.F.R. § 4.14(i)(1)(i) requires that applications for relief from the assessment of a vessel repair duty must include “[i]temized bills, receipts, and invoices.”11 Lastly, CBP has held that the burden rests on the protestant to establish, by adequate, clear, and satisfactory documentary evidence, that an item is non-dutiable under 19 U.S.C. § 1466.12 Based upon the information provided and 19 U.S.C. § 1466, our position follows. ITEMS PURCHASED IN ONE FREE TRADE AGREEMENT COUNTRY BUT LOADED IN ANOTHER Exhibits 129, 148, 234, 235, 238, 239, 242, 244, 250-252, 261, 347, 373, 391, 409, 411, 412, 414, 415 consist of various equipment and parts purchased in Free Trade Agreement (“FTA”) countries, Korea and Japan, and laden aboard the subject vessel in a different FTA country, Singapore.13 VRU denied the protest of these Exhibits for a lack of evidence showing installation in the same FTA country as purchased, citing HQ H236157.14 The VRU stated the imported spare parts were not eligible for duty-free treatment under the U.S.-Singapore Free Trade Agreement (“US-SFTA”) since the spare parts were from a FTA country but not installed in that same FTA country.15 SLNC argues that it is entitled to FTA relief based on the country where the items were purchased, Korea, not laden, Singapore.16 SLNC asserts that the fact that the items were purchased in one country and loaded in another shows both a lack of intent to enter and a lack of actual entry into the commerce of the country of loading, Singapore.17 SLNC further asserts that equipment installation is not required for FTA treatment.18 Thus, SLNC argues, these items should be entitled to duty-free treatment.19 SLNC claims relief in accordance with the U.S.-SFTA and U.S.-Korea Free Trade Agreement (“U.S.-KFTA”). The implementation of the U.S.-SFTA is provided for by the United States-Singapore Free Trade Agreement Implementation Act20 implemented by General Note 25 to the Harmonized Tariff Schedule of the United States (“HTSUS”). The provisions of the Korea FTA were adopted by the United States with the enactment of the United States–Korea Free Trade Agreement Implementation Act21 implemented by General Note 33 to HTSUS. To be eligible for preferential treatment, the various equipment and parts had to have been “wholly obtained or produced in the territory of Singapore” or “wholly obtained and produced in the territory of Korea” as required by General Note 25(b)(i) and General Note 33(b)(i), respectively.22 11 19 C.F.R. § 4.14(i)(1)(i). 12 See HQ H035597 (Oct. 28, 2008). 13 Determination Letter, July 26, 2024, at 2. 14 Determination Letter, July 26, 2024, at 1. 15 Id. 16 Application for Further Review of Protest No. 200224100971_SLNC Goodwill Voyage 6 at 2. 17 Id. 18 Id. 19 Id. 20 United States-Singapore Free Trade Agreement Implementation Ac, (Pub. L. 108-78; 117 Stat. 948. 21 United States – Korea Free Trade Agreement Implementation Act, Pub. L. 112-41, 125 Stat. 428 (19 U.S.C. § 3805 note). 22 HQ H083356 (Nov. 17, 2009) (ruling that work performed en route to Singapore is not eligible for duty-free treatment under the U.S.-SFTA because “the U.S.-Singapore FTA is not applicable outside of Singapore and the
4 General Note 25(iii) states that: A good shall not be considered an originating good if, after it has undergone production that satisfies the requirements of this note, the good undergoes subsequent production or any other operation outside of the territory of Singapore and of the United States, other than unloading, reloading or any other operation necessary to preserve it in good condition or to transport the good the territory of Singapore or the United States.23 General Note 33(iii) uses the same language as applied to the U.S.-KFTA and also adds that a good is not considered an originating good if it “does not remain under the control of customs authorities in the territory of a country other than Korea or the United States.”24 It is our position that the Protestant has failed to provide sufficient evidence to show that various equipment and parts do qualify for preferential treatment pursuant to the U.S.-SFTA or the U.S.-KTFA. The Protestant has not provided any evidence that would support the position that the various equipment and parts were “wholly obtained or produced in the territory of Singapore” or “wholly obtained and produced in the territory of Korea” as required by General Note 25(b)(i) and General Note 33(b)(i), respectively.25 Therefore, these items are dutiable. PARTS NECESSARILY INSTALLED Exhibits 94, 95, 97, 99-103, 106, 107, 109, 112, 113, 116, 117, 120-128, 130, 131, 133-143, 145, 146, 149, 150, 236, 240, and 241 consist of spare parts. VRU denied claim under 19 U.S.C. §1466(h)(3), because there was insufficient documentation to show that the parts were “necessarily installed.”26 SLNC argues that VRU disregarded a sworn Declaration attesting to the installation of these relevant parts offered by SLNC’s Port Engineer to support relief for several items under 19 U.S.C. § 1466(h)(3).27 CBP has consistently held that internally generated documents (e.g., purchase orders, notarized statements of corporate officers), without more evidence, are self-serving statements United States”); and HQ H236157 (Dec. 18, 2012) (ruling that spare parts that were not only shipped from Japan and Korea, but were also manufactured in these countries as well, and did not qualify for preferential treatment pursuant to the U.S.-SFTA). 23 General Note 25(iii). 24 General Note 33(iii). 25 HQ H083356 (Nov. 17, 2009) (ruling that work performed en route to Singapore is not eligible for duty-free treatment under the U.S.-SFTA because “the U.S.-Singapore FTA is not applicable outside of Singapore and the United States”); and HQ H236157 (Dec. 18, 2012) (ruling that spare parts that were not only shipped from Japan and Korea, but were also manufactured in these countries as well, and did not qualify for preferential treatment pursuant to the U.S.-SFTA). 26 Application for Further Review of Protest No. 200224100971_SLNC Goodwill Voyage 6 at 3; Determination Letter, July 26, 2024, at 2,3. 27 Application for Further Review of Protest No. 200224100971_SLNC Goodwill Voyage 6 at 3; Declaration of Stephen Jones in Support of Administrative Protest (Dec. 18, 2024).
5 that do not constitute sufficient proof in support of the position postured.28 Third party, corroborating evidence is required in such instances.29 In HQ H327273, CBP found that invoices and supporting affidavits on company letterhead, signed by officers at the company were unlikely to be the type of self-serving, internally generated documents that CBP usually found insufficient.30 The invoices and affidavits at issue in H327273 were produced from the companies from which the parts at issue were purchased, as well as affidavits stating that these items were either manufactured in the U.S. or, if they were imported, then the applicable duties had already been paid on them.31 In this instance, the sworn affidavit is from SLNC’s Port Engineer. This differs from the situation in HQ H327273, because the sworn affidavit is from the protesting company’s agent, as opposed to the producing company’s agent. It is our position that the affidavits are self-serving and, absent further corroborative evidence, the items are dutiable. Therefore, these items are not entitled to relief under 19 U.S.C. §1466(h)(3) and are subject to duty. CONSUMABLES, AND SAFETY AND REGULATORY ITEMS 1. EXHIBIT 80 – MEDICINES Exhibit 80 consists of a Replacement Transocean Medical Inventory Control System, a 30 inch x 30 inch container with a series of nine color-coded medical kits that reflects nine maritime-specific medical categories: cardiac, dermatological, endocrine, gastrointestinal, genitourinary, pulmonary, head/eyes/ear/nose/throat, infectious disease and multi-use pharmacy.32 VRU denied protest for Exhibit 80, claiming it was dutiable equipment.33 SLNC argues that Exhibit 80 is medicine for use crew usage and is thus a consumable.34 Regarding whether a particular article is considered to be a non-dutiable consumable as opposed to dutiable equipment for purposes of administering 19 U.S.C. § 1466, the courts have held that “consumable supplies” are “supplies for the consumption, sustenance, and medical needs of the crew and passengers during the voyage.”35 Exhibit 80 is used for the medical needs of the crew while onboard the vessel. Thus, Exhibit 80 is consumable and not subject to duty thus entitled to relief under 19 U.S.C. §1466(h)(2). 2. EXHIBIT 86 – FIRST AID KITS 28 See HQ H327273 (Feb. 3, 2023); HQ H252033 (June 18, 2014), HQ H246931 (Apr. 3, 2014), HQ H057909 (Mar. 2, 2010), and HQ 111942 (Mar. 15, 1995). 29 HQ H302915 (July 19, 2019). 30 HQ H327273 (Feb. 3, 2023). 31 Id. 32 Exhibit 80. 33 Determination Letter, July 26, 2024, at 1. 34 Application for Further Review of Protest No. 200224100971_SLNC Goodwill Voyage 6 at 2 (citing HQ 116061 (Nov. 17, 2003), which states that “pills are consumable and are not dutiable). 35 H.E. Warner, Trustee, American Mail Line, Ltd. v. United States, 28 CCPA 143, at 150, quoting from Southwestern Shipbuilding Co. v. United States, 13 Ct. Cust. App. 74, T.D. 40934 (1925); HQ113404 (Apr. 21, 1995).
6 Exhibit 86 consists of four first aid kits.36 The VRU denied protest for Exhibit 86, claiming it was dutiable equipment and that the submitted receipt is not an invoice, but a purchase order, which is insufficient to grant relief.37 VRU also claimed the submission of the receipt was not timely.38 SLNC argues that Exhibit 86 is medicine for use crew usage and is thus a consumable.39 SLNC additionally argues that the submission was an invoice in the form of a receipt.40 SLNC also claims that this submission was timely, because the invoice date is August 4, 2023, and the date of Vessel arrival to the United States for this voyage was October 29, 2023.41 Finally, SLNC claims that this item is a non-dutiable purchase because it is a regulatory requirement pursuant to the International Convention for the Safety of Life at Sea (“SOLAS”) and 46 C.F.R 199.175(b)(10).42 CBP has previously found first aid kits nondutiable.43 However, 19 C.F.R. § 4.14(i)(l)(i) provides a specific listing of the kinds of documentary evidence which must be filed to support applications for relief from vessel repair duties. This list begins with “itemized bills, receipts, and invoices.” CBP has consistently found that unlike invoices, purchase orders submitted without corroborating evidence are insufficient to grant relief.44 CBP has also consistently held that internally generated documents (e.g., purchase orders, notarized statements of corporate officers), without more evidence, are self-serving statements that do not constitute sufficient proof in support of the position postured.45 Here, Exhibit 86 is a purchase order, as opposed to a receipt. The evidence provided shows that an order was placed and received, but nothing further. There was no corroborating evidence submitted in conjunction with the purchase order. As a result, we find that this constitutes insufficient proof that these parts are nondutiable items, and they remain subject to duty. Therefore, Exhibit 86 is subject to duty and not entitled to relief under 19 U.S.C. §1466(h)(2). 3. EXHIBITS 392 AND 414 - SAFETY AND REGULATORY ITEMS Exhibit 392 consists of a lifeboat release hook.46 SLNC argues that Exhibit 392 meets a safety and regulatory requirement and should not be subject to duty under 19 U.S.C. § 1466.47 36 Exhibit 86. 37 Application for Further Review of Protest No. 200224100971_SLNC Goodwill Voyage 6 at 3. 38 Id. 39 Id. 40 Id. 41 Id. 42 Id. 43 HQ W116237 (Dec. 15, 2004). 44 See HQ 116525 (Dec. 21, 2005); HQ 111309 (Mar. 5, 1991) (“unlike an invoice, which is a document frequently generated by a third party contemporaneously with delivery, a purchase order is a less certain variable in the delivery chain”). 45 See HQ H327273 (Feb. 3, 2023); HQ H252033 (June 18, 2014), HQ H246931 (Apr. 3, 2014), HQ H057909 (Mar. 2, 2010), and HQ 111942 (Mar. 15, 1995). 46 Exhibit 392. 47 Application for Further Review of Protest No. 200224100971_SLNC Goodwill Voyage 6 at 4 (arguing that Exhibit 392 is not subject to duty because it fulfills a SOLAS requirement to have lifeboats and survival crafts in case of an emergency onboard the vessel. See 46 C.F.R. 199.190(i)(3)).
7 SLNC asserts that 46 C.F.R § 199.190(i)(3) requires proper servicing of lifeboat and rescue boat release gear and therefore should not be subject to duty under 19 U.S.C. § 1466.48 CBP has previously held that lifeboats are equipment of the vessel, and therefore dutiable as vessel equipment under 19 U.S.C. § 1466.49 Thus, Exhibit 392 is equipment, and subject to duty. Exhibit 414 consists of one set of 15 mins smoke and 2-hour light signal.50 SLNC argues that the Safety of Life at Sea convention requires smoke and light signals for use during man overboard and emergency situations.51 SLNC asserts that since Exhibit 414 meets a safety and regulatory requirement and should not be subject to duty under 19 U.S.C. § 1466.52 CBP has previously held that smoke signals are equipment, and therefore dutiable as vessel equipment under 19 U.S.C. § 1466. Thus, Exhibit 414 is equipment, and subject to duty.53 HOLDING Following a thorough analysis of the facts as well as of the law and applicable precedents, we have determined that the protest with respect to the items considered should be denied in part and granted in part as specified in the “Law and Analysis” portion of this ruling.
Sincerely,
W. Richmond Beevers, Chief Cargo Security, Carriers and Restricted Merchandise Branch 48 CBP Form 19_SLNC Goodwill 6_application for further review of protest at 2. 49 HQ H114676 (May 10, 1999) (“It is our view that lifeboats are equipment of the vessel.”) 50 Exhibit 414. 51 CBP Form 19_SLNC Goodwill 6_application for further review of protest at 2. 52 Application for Further Review of Protest No. 200224100971_SLNC Goodwill Voyage 6 at 4 (arguing that Exhibit 414 is required for man overboard emergency situation, and the provided invoice specifically notes that this is “Approved to SOLAS,” thus meeting a safety and regulatory requirement). 53 HQ H116061 (Nov. 17, 2003).