HQ 0111297 - Vessel Repair; Casualty; Collision; Negligence; SGT. WILLIAM R. BUTTON V-26; Entry No. H19-0100335-0; 19 U.S.C. 1466. - United States International Trade Commision Rulings

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HQ 111297

February 19, 1991

VES-13-04/18/19 CO:R:IT:C 111297 JBW

CATEGORY: CARRIER

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

RE: Vessel Repair; Casualty; Collision; Negligence; SGT. WILLIAM R. BUTTON V-26; Entry No. H19-0100335-0; 19 U.S.C. 1466.

Dear Sir:

This letter is in response to your memorandum of September 4, 1990, which forwards for our review and ruling the above referenced application for relief from the assessment of vessel repair duties.

FACTS:

The record reflects that the subject vessel, the SGT. WILLIAM R. BUTTON, is a United States flag vessel under long term charter to the Military Sealift Command. The vessel arrived at the port of Honolulu on June 24, 1990, and vessel repair entry, number H19-0100335-0, was filed the same day as arrival. The entry shows that the vessel underwent foreign shipyard work in Pohang, Korea, in March, 1989. This work was necessitated in part because of a collision the vessel experienced on Saturday March 18, 1989. The applicant also claims that other repairs were made to meet safety regulations promulgated by the United States Coast Guard.

ISSUES:

(1) Whether the applicant has submitted sufficient evidence to demonstrate that work performed on the vessel, which was required to repair damage that resulted from a collision, is a casualty under 19 U.S.C. 1466.

(2) Whether repairs performed to meet requirements of the United States Coast Guard are dutiable under 19 U.S.C. 1466.

LAW AND ANALYSIS:

Title 19, United States Code, section 1466, 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 foreign or coastwise trade, or vessels intended to engage in such trade.

The statute provides for the remission of the above duties in those instances where good and sufficient evidence is furnished to show that foreign repairs were compelled by "stress of weather or other casualty" and were necessary to secure the safety and seaworthiness of the vessel to enable her to reach her port of destination. 19 U.S.C. 1466(d)(1). The term casualty, as it is used in the statute, has been interpreted as something that, 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. 23, 28-29, C.D. 362 (1940). In the absence of evidence of such a casualty causing event, we must consider the repair to have been necessitated by normal wear and tear. C.S.D. 89-95, 23 Cust. B. & Dec., No. 43, 4, 5 (1989).

The applicant claims that repairs made to the starboard side shell resulted from a collision experienced by the vessel while in Pohang, Korea. To demonstrate casualty, the applicant submits copies of invoices, the vessel log, the report of the American Bureau of Shipping, and certification by the master of the vessel relating to the nature of the damage and to the necessity of repairs to secure the safety and seaworthiness of the vessel to enable her to reach her United States port of destination. We find this evidence sufficient to demonstrate casualty. The costs on the Pohang Marine Engineering Co., Ltd., invoice relating to repair of the starboard side shell are remissible under 19 U.S.C. 1466(d)(1).

The applicant further claims that repairs made to the port anchor windlass and to the handrails, cradle, and guards were required to comply with regulations promulgated by the United States Coast Guard for the safety of ocean vessels. The port anchor windlass required the replacement of oil seals. The hand rails and guards were apparently damaged by military personnel working cargo. The applicant also states that the ship's LCM-8 cradle was repaired, but no cause of damage appears in the record.

We have held that the purchase of an article for a vessel because it is required by Coast Guard regulations does not warrant remission of the duty on the cost of the purchase. C.S.D. 82-95, 16 Cust. B. & Dec. 859, 860 (1982). Further, we have held that repairs necessitated by Coast Guard requirements do not in and of themselves constitute a casualty so that remission may be authorized. Id. The replacement of the oil seals appears to be simply the replacement of a worn part. We thus find that the cost of the repair to the port anchor windlass is dutiable under 19 U.S.C. 1466. Absent evidence of the cause of damage, we also find the cost of repairs to the LCM-8 cradle to be dutiable.

The Customs Service has held that damage caused by the negligence of stevedores is a casualty provided that the damage was not attributable to wear and tear or to the failure to replace or maintain a worn part. C.I.E. 1161/62, dated October 26, 1962. From the statement of the master, the log, and a telex, it appears that the damage caused to the railings and guards is in the nature of negligent damage to the vessel. We therefore find the costs relating to repairs of the rails and guards are remissible. These costs, however, are not separately itemized. They are therefore dutiable.

HOLDINGS:

(1) The applicant has submitted sufficient evidence to demonstrate that work performed on a vessel that was required to repair damage that resulted from a collision is a casualty under 19 U.S.C. 1466.

(2) Repairs performed to meet requirements of the United States Coast Guard are dutiable under 19 U.S.C. 1466. The repairs made to the port anchor windlass are dutiable, for they were made to correct parts damaged by wear and tear. Absent evidence of the cause of the damage, we find the cost of repairs to the LCM-8 cradle to be dutiable. The damage to the railings and guards was caused from negligent cargo handling and is considered a casualty. These latter costs are not separately itemized and are therefore dutiable.

Sincerely,

B. James Fritz
Chief

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