On August 25, 2009, the CIT issued its decision in Puerto Rico Towing & Barge Co. v. United States, affirming CBP’s assessment of vessel repair duties on Puerto Rico Towing & Barge Co.’s (“PRT’s”) US-flagged vessel under the Vessel Repair Statute. CBP assessed these duties upon the reentry of PRT’s vessel into San Juan after the vessel underwent repairs in the Dominican Republic.
The Vessel Repair Statute, 19 U.S.C. § 1466, imposes a 50 percent tariff on the value of certain vessel repairs performed abroad, except that a vessel that “arrives in a port of the United States two years or more after its last departure from a port in the United States” is subject to the duties only on those repairs made “during the first six months after the last departure of such vessel from a port of the United States.” Seeking to invoke this exemption, plaintiff, PRT, brought this action to challenge CBP’s assessment of vessel repair duties based on the claim that its vessel had not been in a US port for over two years. Rejecting this claim, the CIT concluded that San Juan is a port of the United States for purposes of the Vessel Repair Statute and, therefore, the vessel was not exempt from vessel repair tariffs.