H308215

H308215 February 23, 2026 OT:RR:CTF:EPDR H308215 ECG CATEGORY: Entry Cris Wenthur Wenthur Law Group, LLP 4121 Napier Street San Diego, CA 92110 RE: Importation and dutiability of a yacht; exportation; 19 C.F.R. § 101.1; reimportation; 19 C.F.R. § 141.2. Dear Mr. Wenthur: This letter is in response to your ruling request of January 20, 2020, on behalf of Ithaka Charter, LLC, concerning potential duty liability on a yacht that was previously entered and duty-paid. Specifically, you inquire whether the yacht would become dutiable again if sailed out of the United States for cruising purposes and returned to the United States. Our decision is set forth below. FACTS: The vessel in question is a 63’ Nordhavn that was built by South Coast Marine Yacht Bldg, Ltd. in Xaimen, China in 2012. On February 8, 2013, it was imported into the United States by Pacific Asian Enterprises Inc. (“PAE”). The yacht was formally entered for consumption and all duties, taxes, and fees owed were paid by PAE. On May 30, 2013, the importer sold the yacht to Ithaka Charter, LLC (f/k/a Ithaka Journey, LLC) (“owner”), a U.S. company whose sole member is a U.S. citizen. The yacht was initially registered in the United States but, as of September 3, 2013, it has been registered in the Cayman Islands. The owner made this registration change because they were advised that a Cayman Islands registration was better for their personal security. The yacht has never been to the Cayman Islands and has not been imported into the Cayman Islands. The yacht is an expedition trawler and is designed to travel very long distances at relatively slow speeds. The owner acquired the yacht for expedition pleasure cruising. The yacht owner states that they intended to take a long-term expedition cruise to South America upon purchasing the yacht, but at no point had any intent to sever the vessel from the mass of things belonging to the United States with the intention of uniting them to the mass of things belonging to any other foreign country. Rather, the owner states they only intended to go for the adventure cruise to South America and continue adventure cruising after the yacht finished this initial major voyage, but at all times intended to return to the United States. The yacht had the following cruising history as of the date of the ruling request: May 3, 2013-September 15, 2013: California, United States September 15, 2013-January 24, 2014: Mexico January 24, 2014-April 30, 2014: Costa Rica April 30, 2014-February 1, 2015: Panama February 1, 2015-February 28, 2015: Columbia February 28, 2015-March 31, 2015: Ecuador March 31, 2015-May 15, 2015: Peru May 15, 2015-April 1, 2016: Chile, Patagonia, Falkland Islands, South Georgia Island April 1, 2016-November 1, 2016: Costa Rica November 1, 2016-June 1, 2018: California, United States June 1, 2018-January 20, 2020: Washington, United States and Canada According to this cruising history, the yacht was located outside the territorial waters of the United States for just over three years - from approximately September 15, 2013, to November 1, 2016. During this three year period, the yacht did not remain in any one foreign country for over a year. Since November 1, 2016, the yacht has remained in the United States. The owner now desires to sell the yacht in the United States to another U.S. citizen. ISSUE: Whether the yacht was exported when sailed out of the United States for expedition pleasure cruising, and is dutiable upon its return to the United States. LAW AND ANALYSIS: The determination as to whether a yacht is dutiable when it has previously been subject to entry and payment of duty depends upon whether it has been exported from the United States after its first importation. Generally, “[d]utiable merchandise imported and afterwards exported, even though duty thereon may have been paid on the first importation, is liable to duty on every subsequent importation into the Customs territory.” See 19 C.F.R. § 141.2. However, if imported duty-paid goods are taken out of the Customs territory of the United States but not exported, then there is no importation upon their return to the Customs territory. See Headquarters Ruling Letter (“HQ”) H213415 (July 8, 2014) (“absent an exportation event, duties are not applicable and entry is not required for imported duty-paid merchandise returned to the United States”); HQ 114291 (May 7, 1998) (finding that “[i]f an article leaves the United States but is not deemed to be exported, then there is no importation upon its return to the United States). Exportation, as defined in 19 C.F.R. § 101.1, requires a “a severance of goods from the mass of things belonging to this country with the intention of uniting them to the mass of things belonging to some foreign country.” Based on this definition, deciding whether an “exportation” has occurred is a two-step analysis, requiring assessment of whether: 1) the goods were severed 2 from the mass of things belonging to this country; and 2) there was an intent to unite the goods to the mass of things belonging to some foreign country. See HQ H213415. Both of these elements must be satisfied in order for merchandise to be exported - severance and intent must coincide to constitute an act of exportation. See generally Moore Dry Goods Co. v. United States, 11 Ct. Cust. App. 449 (1923). The first element, severance, requires the goods to physically leave the United States. The severance of goods from the mass of things belonging to the country of exportation requires evidence that the “that the goods in question have been physically carried out of the country of exportation.” National Sugar Refining Co. v. United States, 488 F. Supp. 907, 908 (Cust. Ct. 1980). Here, it is not disputed that the yacht has been removed from the United States for expedition pleasure cruising. However, removal from the United States is not of itself sufficient to establish exportation. Absent intent to unite yachts with the mass of things belonging to a foreign country, “yachts would not be exported even if severed from the mass of things belonging to the United States.” HQ H213415. With respect to an imported and duty-paid yacht, CBP has consistently held that simply taking a vessel outside the territorial waters of the United States for a temporary foreign pleasure cruise with the intent to return the vessel to the United States does constitute an exportation despite the vessel’s physical removal from the United States. See Customs Service Decision 79- 85 (Sept. 27, 1978); HQ 112035 (May 20, 1992); HQ H213415. Additionally, the country of registration for a yacht temporarily removed from the United States is not determinative of exportation, but a factor to be considered among others. For example, in HQ 114301, dated March 18, 1998, a vessel had been previously imported and entered for consumption into the United States, and registered in the United States, but was subsequently registered in Canada. The change in country of registration was only one factor among others that did not preclude CBP from deciding the vessel was not exported when it sailed from the United States to the Bahamas on annual holiday cruises. Similarly, in the current case, even though the yacht is registered in the Cayman Islands, this fact does not of itself establish that an exportation has occurred when it was removed from the United States when sailed to foreign countries on expedition pleasure cruises. The second element, “intention of uniting . . . to the mass of things belonging to some foreign country,” requires a “bona fide purpose to seek a foreign market or an actual diversion of the merchandise into the commerce of an intermediate country.” 19 C.F.R. § 101.1; HQ H213415 (quoting Nassau Distributing Co., Inc. v. United States, 29 Cust. Ct. 151, 154 (1952) (internal citations omitted)). This element of exportation requires evidence that merchandise was intended to be, or actually, entered into the foreign country fo

The determination as to whether a yacht is dutiable when it has previously been subject to entry and payment of duty depends upon whether it has been exported from the United States after its first importation. Generally, “[d]utiable merchandise imported and afterwards exported, even though duty thereon may have been paid on the first importation, is liable to duty on every subsequent importation into the Customs territory.” See 19 C.F.R. § 141.2. However, if imported duty-paid goods are taken out of the Customs territory of the United States but not exported, then there is no importation upon their return to the Customs territory. See Headquarters Ruling Letter (“HQ”) H213415 (July 8, 2014) (“absent an exportation event, duties are not applicable and entry is not required for imported duty-paid merchandise returned to the United States”); HQ 114291 (May 7, 1998) (finding that “[i]f an article leaves the United States but is not deemed to be exported, then there is no importation upon its return to the United States). Exportation, as defined in 19 C.F.R. § 101.1, requires a “a severance of goods from the mass of things belonging to this country with the intention of uniting them to the mass of things belonging to some foreign country.” Based on this definition, deciding whether an “exportation” has occurred is a two-step analysis, requiring assessment of whether: 1) the goods were severed 2 

 from the mass of things belonging to this country; and 2) there was an intent to unite the goods to the mass of things belonging to some foreign country. See HQ H213415. Both of these elements must be satisfied in order for merchandise to be exported - severance and intent must coincide to constitute an act of exportation. See generally Moore Dry Goods Co. v. United States, 11 Ct. Cust. App. 449 (1923). The first element, severance, requires the goods to physically leave the United States. The severance of goods from the mass of things belonging to the country of exportation r