Marine News, March 2005

<BODY> <div> "in a foreign country," rather than "on the high seas"), while clarifying that the com- pensation paid to crewmembers for such repairs was not dutiable. The Mount Washington Tanker Compa- ny case involved a U.S.-flag vessel that engaged in transporting oil between vari- ous Pacific ports. During the course of its operations, the vessel needed repairs to overhaul its main generator. The vessel owner hired Swedish citizens and flew them to the vessel to make onboard repairs. During most of the time these individuals were onboard, the ship was transiting the high seas. Following the completion of the repairs, the Swedish cit- izens disembarked and were flown home. Upon the return of the T/S Mount Wash- ington to the port of Honolulu, CBP assessed duties on the repairs made to the main generator. In appealing this deci- sion, the Plaintiffs contended that repairs made on the high seas did not meet the requirements in §1466(a) because they were performed on the high seas and thus outside of sovereign territory, i.e., not inside the territorial sea of a foreign coun- try. At the center of this controversy was the term "foreign country." The Plaintiffs argued that the term was ambiguous and that generally the "high seas" would not be considered a foreign country. The court disagreed and stated that the term "foreign country" had not been treated uniformly by all courts and therefore the term could be given a different meaning based on the legislative purpose of the underlying statute. In this case, the court reasoned that if the high seas were not considered a foreign country, then the leg- islative purpose of protecting U.S. ship- yards would be frustrated. When review- ing challenged agency decisions, courts determine whether the agency's action was arbitrary, capricious, or an abuse of discretion. Here, the court held that CBP's decision to assess duties on these repairs did not violate this standard. Con- sequently, until December 2004, equip- ment, repair parts, and materials either installed or used by the vessel's crew on the high seas were subject to the ad val- orem duty. Righting a Wrong. Congress reversed CBP's Final Rule promulgated in 2001 by adding a new provision to Section 1466(h) of the Vessel Repair Statute that exempts from vessel repair duties equipment, repair parts, and materials that are installed on the high seas by the vessel's regular crewmembers. The new exemp- tion specifically excludes from vessel repair duties the cost of equipment, repair parts, and materials that are installed on a U.S.-flag vessel engaged in the foreign or coastwise trade if the installation is per- formed by members of the regular crew while the vessel is on the high seas. In addition, declaration and entry are not required with respect to such equipment, repair parts, and materials. 19 U.S.C. § 1466(h)(4). There remain issues, however, that may still provide some confusion when operat- ing within this new law. These issues include just what constitutes the "high seas" and how CBP will deal with the fact that the Final Rule is reversed retroactive to April 25, 2001. First, according to sev- eral CBP Rulings, the "high seas" are Call for a free catalog or to order our demonstration video. Proton 4 Marine Magnetometer $9,995 $7,995 $19,995 $4,295 SeaLion ROV TOV-1 Towed Video Pulse 12 Boat-towed Metal Detector “Side scan sonars are one of the most effective tools for underwater searches because they create a detailed picture of what’s on the bottom. The printout “removes the water” giving a clear pic- ture of the bottom. Fishers SSS-100K side scan lets you search large areas quickly, the SSS-600K finds even the small soft targets, and the SSS-100/600K combines the best fea- tures of both systems. Each of their side scan sonars produce a 17” wide high resolution printout to give you a detailed picture unmatched by other low cost side scan systems.” 1953 County St., E. Taunton, MA 02718 USA • (800)822-4744 Tel. (508)822-7330 • FAX: (508)880-8949 or 822-1931 • JWFishers@aol.com (508)822-7330 • FAX: (508)880-8949 • email: jwfishers@aol.com • www.jwfishers.com ROV’s from 17” wide printout “Your search begins by removing the water with Fishers Side Scan Sonars” -Jack Fisher, President DDW-1 Depressor Wing $1,195 Optional PC display available. From $19,995 CT-1 Cable Tracker with Signal Injector $9,995 Circle 223 on Reader Service Card Circle 226 on Reader Service Card Legal Beat March, 2005 MarineNews 11 MN MARCH05 2(9-16).qxd 3/4/2005 12:09 PM Page 11 </div> <span id="lblContents"></span> <br /> <br /> <a href="http://www.digitalwavepublishing.com/" title="Digital Magazine">Digital Wave Publishing</a> </BODY>