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HQ 110715

May 4, 1990

VES-13-18-CO:R:P:C 110715 BEW

CATEGORY: CARRIER

Deputy Assistant Regional Commissioner
Commercial Operations
ATTN: Regional Vessel Repair Liquidation Unit New York, New York 10048-0945

RE: Baltimore Vessel Repair Entry No C13-0010645-2, dated August 15, 1989, M/V AMERICAN FALCON

Dear Sir:

This is in reference to an application for relief from duties and accompanying documentation, filed by Crowley Maritime Corporation in relation to the above referenced vessel repair entry dated August 15, 1989, transmitted to this office by memorandum dated December 18, 1989.

The record shows that the shipyard work in question was performed on the subject vessel in Bridgend, United Kingdom, and in Rotterdam, Holland, during the period April 8 through April 15, 1989. The subject vessel arrived in the United States at the port of Baltimore, Maryland, on April 29, 1989.

The entire vessel repair entry involves an estimated duty of $1,740.

The applicant claims that the repairs or equipment purchases described in the documents were necessitated by a casualty, i. e., damage caused by stevedore negligence. It claims that the vessel was compelled, because of damage, to make repairs and to purchase such equipment to secure the safety and seaworthiness of the vessel to enable to reach its port od destination.

You have requested our advice concerning certain work and services performed aboard.

ISSUE:

Whether the foreign work performed on the subject vessel is dutiable under 19 U.S.C. 1466.

LAW AND ANALYSIS:

Title 19, United States Code, section 1466, provides in pertinent part for payment of an ad valorem duty of 50 percent of the cost of foreign repairs to a vessel documented under the laws of the United States to engage in the foreign or coastwise trade.

Section 1466 (d)(1) provides that the Secretary of the Treasury is authorized to remit or refund such duties if the owner or master of the vessel submits good and sufficient evidence that the vessel was compelled by stress of weather or other casualty to put into such foreign port to make repairs to secure the safety and seaworthiness of the vessel to enable her to reach her port of destination.

The term "casualty", as it is used in the vessel repair statute (19 U.S.C. 1466), has been interpreted by the Customs Court as something which, like stress of weather, comes from unexpected force or violence, such as from a fire, explosion, or collision (see Dollar Steamship Lines, v. United States, 5 Cust. Ct. 28-29, C.D. 362 (1940)).

A clear requirement of the statute is that the vessel be compelled by such a casualty to seek foreign shipyard service to secure the safety and seaworthiness of the vessel and to enable her to safely reach her port of destination.

The file contains copies of the contemporaneously prepared Master's report and the vessel's log concerning the damage and repair. These documents amount to reports on the presence of damage, but provide no evidence as to how the damage occurred. Absent clear proof of an identifiable event resulting in damage, such damage is assumed to have resulted from ordinary wear and tear. The documentation submitted sustains a finding of wear and tear, but is insufficient to support a finding of a casualty as provided in section 1466(d)(1). Accordingly, the cost incurred for repairs under Aber Marine Services and the Asea Brown Boveri invoices to this vessel repair entry is dutiable.

In Headquarters ruling 106543 JM, we held that mere cleaning operations are not dutiable. However, cleaning operations which remove rust and deterioration or worn parts, and which are a necessary factor in the effective restoration of a vessel to its former state of preservation, constitute vessel repairs (See C.I.E. 429/61). Our review of the DHS Services invoice reveals that no repairs were performed. Pursuant to C.I.E. 429/61 the cost for the cleaning services rendered is nondutiable.

Pursuant to C.D. 1830, expenses incurred for shipping, crating and packing are not expenses of repair, and as such are not subject to duty under section 1466. Accordingly, the lashing gear listed on the Sealash BV invoice is nondutiable.

Sincerely,

B. James Fritz

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