HQ 0110910 - Baltimore Vessel Repair Entry No. C13-0011878-8, dated October 23, 1989; M/V AMERICAN CONDOR, Voyage No. 061. Application; casualty; submerged object, 19 U.S.C. 1466(d); 19 CFR 4.14(c) - United States International Trade Commision Rulings

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HQ 110910

August 8, 1990

VES-13-18-CO:R:P:C 110910 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. C13-0011878-8, dated October 23, 1989; M/V AMERICAN CONDOR, Voyage No. 061. Application; casualty; submerged object, 19 U.S.C. 1466(d); 19 CFR 4.14(c)

Dear Sir:

This is in reference to a memorandum dated March 2, 1990, from your office which transmitted an application for relief from duties filed by American Transport Lines, relating to vessel repair entry No. C13-0011878-8 filed on October 23, 1989, for foreign repairs performed on the AMERICAN CONDOR, voyage 061.

FACTS:

The record shows that the shipyard work in question was performed on the subject vessel in Antwerp, Belgium, during the month of October 1989. The subject vessel arrived in the United States at the port of Baltimore, Maryland, on October 20, 1989.

The entire vessel repair entry involves a potential duty of $4,381.

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.

You have requested our advice concerning repairs to the port and starboard propellers alleged to have been caused by a casualty. The applicant claims that the repairs and equipment purchases described in the documents were necessitated by a casualty, i.e., damage to the port and starboard propellers due to the striking of an unknown submerged object. 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:

Emergency inspection of and temporary repairs by divers to port and starboard propeller blades damaged by striking unknown submerged object.

The file contains copies of the contemporaneously prepared Master's report concerning the damage and repair work, and the American Bureau of Shipping (ABS) report No. AN17045 concerning the survey of the damage and the repairs performed on the port and starboard propeller. The evidence submitted establishes that the damage to the subject vessel was clearly the result of a casualty within the meaning of section 1466. Accordingly, the cost incurred for the subject repairs is non-dutiable.

HOLDING:

The evidence presented is sufficient to prove that the foreign repairs performed on the subject vessel were necessitated by a casualty occurrence, thus warranting remission pursuant to 19 U.S.C. 1466.

Sincerely,

B. James Fritz

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