HQ 0110733 - Honolulu Vessel Repair Entry No. H19-0010438-1 dated August 23, 1989; MAERSK CONSTELLATION, voyage 89-03. application; casualty; insufficient documentation, 19 U.S.C. 1466(d); 19 CFR 4.14(c) - United States International Trade Commision Rulings

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HQ 110733

August 7, 1990

VES-13-18-CO:R:P:C 110733 BEW

CATEGORY: CARRIER

Chief, Technical Branch
Commercial Operations Division
Pacific Region
1 World Trade Center
Long Beach, California 90831

RE: Honolulu Vessel Repair Entry No. H19-0010438-1 dated August 23, 1989; MAERSK CONSTELLATION, voyage 89-03. application; casualty; insufficient documentation, 19 U.S.C. 1466(d); 19 CFR 4.14(c)

Dear Sir:

This is in reference to a memorandum dated December 26, 1989, from your office which transmitted an application for relief from duties filed by Maersk Line, Limited, relating to vessel repair entry No. H190010438-1 filed on August 23, 1989, for foreign repairs performed on the MAERSK CONSTELLATION, voyage 89-03.

FACTS:

The record shows that the shipyard work in question was performed on the subject vessel in Yokohama, Japan, during the period August 8, 1989, respectively. The subject vessel arrived in the United States at the port of Honolulu, Hawaii, on August 17, 1989.

The entire vessel repair entry involves an estimated duty of $9,546.

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(d) of the Customs Regulations.

The applicant claims that the repairs or equipment purchases described in the documents were necessitated by a casualty, i.e., emergency radar repairs, emergency repairs to the evaporators and emergency repairs to the crane. 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 it to reach its port of destination.

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(a), provides in pertinent part for payment of duty in the amount of 50 percent ad valorem on the cost of foreign repairs to vessels documented under the laws of the United States to engage in the foreign or coastwise trade, or vessels intended to be employed in such trade.

Paragraph (1), subsection (d) of section 1466 provides that duty may also be remitted if good and sufficient evidence is furnished establishing that the vessel was compelled by stress of weather or other casualty to put into a foreign port to make repairs to secure the safety and seaworthiness of the vessel to enable her to reach her port of destination. It is Customs position that "port of destination" means a port in the United States."

The statute thus sets a three-part test which must be met in order to qualify for remission under the subsection, these being:

1. The establishment of a casualty occurrence.

2. The establishment of unsafe and unseaworthy conditions.

3. The inability to reach the port of destination without obtaining foreign repairs.

The term "casualty" as it is used in the statute, has been interpreted as something which, like stress of weather, comes with unexpected force or violence, such as fire, explosion, or collision (Dollar Steamship Lines, Inc. v. United States, 5 Cust. Ct. 28-29, C.D. 362 (1940)). In this sense, a "casualty" arises from an identifiable event of some sort. In the absence of evidence of such a casualty event, we must consider the repair to have been necessitated by normal wear and tear (ruling letter 106159, September 8, 1983).

The applicant describes the repairs as follows:

1. The radar repairs were necessary to make the vessel seaworthy because to sail without two fully operational radars would be in violation of both U.S. and International laws.

2. The repairs to the freshwater generator were required when previous repairs failed. It claims that while the vessel has a fresh water storage capacity, contamination of the fresh water could cause a severe problem for the ship and a potential life threatening situation for the crew.

3. The repairs to the crane were necessary by because while operating the cranes offloading cargo, a casualty occur, i, e, the wire jumped the sheave due to excessive lowering speed by the stevedore crane operation while unloading armored personnel carriers.

It claims that each of the invoices submitted relate to the repairs necessary because of a casualty.

The file contains copies of the contemporaneously prepared reports concerning the damage and repair to the radar; and copies of internal documents relating to the evaporator and the crane. These documents amount to reports on the presence of damage, but provide no evidence as to how the damage occurred.

It is clear from the evidence that the vessel was in need of repairs to secure her safety and seaworthiness, however, the evidence is insufficient to show what actually caused the break down of the radar and the evaporator or the stevedore negligence involving the crane. Based on the evidence it appears that the repairs may have been due to the lack of proper maintenance. Absent clear proof of an identifiable event to show an unexpected force or violence, such as fire, explosion, or collision resulting in damage, such cost of repairs is not remissible (see C.I.E. 1826/58). The documentation submitted is insufficient to support a finding of a casualty as provided in section 1466(d)(1). Accordingly, the cost incurred for the repairs associated with the "emergency" repairs is dutiable.

HOLDING:

The foreign work for which the applicant seeks relief is dutiable under 19 U.S.C. 1466.

Sincerely,

B. James Fritz

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