HQ 0110719 - Vessel Repair Entry No. C13-00106874, dated June 19, 1989; Date of Arrival: May 30, 1989; Port of Arrival: Baltimore, Maryland; Vessel: M/V AMERICAN FALCON, Voyage No. 52 - United States International Trade Commision Rulings

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HQ 110719

July 13, 1990

VES-13-18-CO:R:P:C 110719 BEW

CATEGORY: CARRIER

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

RE: Vessel Repair Entry No. C13-00106874, dated June 19, 1989; Date of Arrival: May 30, 1989; Port of Arrival: Baltimore, Maryland; Vessel: M/V AMERICAN FALCON, Voyage No. 52

Dear Sir:

This is in reference to an application for relief from duties filed by American Transport Lines, in relation to the above referenced vessel repair entry dated June 19, 1989, transmitted to this office by memorandum dated December 18, 1989. We have reviewed the entire record, and render the following advice.

FACTS:

The record shows that the shipyard work in question was performed on the subject vessel in Felixstowe, United Kingdom, Rotterdam, Holland, and Bremerhaven, West Germany, during the month of May 1989.

The subject vessel arrived in the United States at the port of Baltimore, Maryland, on May 30, 1989.

The applicant claims that relief for the subject items should be granted because the items should be classified as nondutiable items covered under title 19, United States Code, section 1466 and sections 4.14(a) and 4.14(c) of the Customs Regulations.

The entire vessel repair entry involves a potential duty of $1,572.70.

You have requested our advice concerning the following items. We will refer to the work using the item numbers and invoice descriptions shown on the attachments and invoices submitted with your memorandum.

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.

We have reviewed all of the elements for which relief is sought and, render the following advice on the (3) subject invoices:

The file contains copies of the contemporaneously prepared Master's report and the vessel's log concerning the damage and repair to the vessel's radar system. 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 is insufficient to support a finding of a casualty as provided in section 1466(d)(1). Accordingly, the cost incurred for repairs under item No. 1. - Felixstowe Marine Electronics No. 22507 is dutiable.

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 item No. 3 - Sealash BV invoice is nondutiable.

With regard to item No. 4 - Mobiltec invoice No. 160, items are dutiable, except those costs for freight, courier, packing and customs clearance.

HOLDING:

The foreign repair work for which the applicant seeks relief is dutiable under 19 U.S.C. 1466 with exception of those items noted above.

Sincerely,

B. James Fritz

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