HQ 0111539 - Protest No. 27040-003361; SS KENAI, Voyage No. 9003; Vessel Repairs; casualty; - United States International Trade Commision Rulings

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HQ 111539

December 11, 1991

VES-13-18 CO:R:IT:C 111539 BEW

CATEGORY: CARRIER

Chief, Technical Assistant
Pacific Region
Commercial Operations
One World Trade Center
Long Beach, California 90853

RE: Protest No. 27040-003361; SS KENAI, Voyage No. 9003; Vessel Repairs; casualty;

Dear Sir:

This is in reference to a memorandum from your office which transmitted protest No. 27040-003361, relating to vessel repair entry No. C27-0045908-7, concerning the SS KENAI, Voyage No. 9003, which arrived at the port of Long Beach, California, on March 28, 1990. The entry was filed on March 28, 1990.

FACTS:

In March 1990, while in Montevideo, Uruguay, the vessel SS KENAI underwent various shipyard operations. The dutiability of these operations has previously been considered by your office. The entry was liquidated on June 27, 1990. The protest was timely filed on August 6, 1990. Included in your considerations was the matter of whether the cost associated with the installation of the following items is dutiable under the statute:

TSAKOS Invoice No. 5886 Item Nos. 901 and 902 -

901 - Steel repairs fractured internal structure in aft s//w tank

901 - Main Bearing of Immediate shaft smoothed

These are the only items which are presently being protested.

The protestant claims that the subject items should be duty free because the invoice relates to repairs necessary because of a casualty, i.e., the vessel sustained damage as a result of heavy weather.

The documents submitted with the protest and the invoice show that foreign repairs were made during the period of March 7 through March 9, 1990.

In support of this contention, the protestant has submitted a statement by the ship's master, dated March 10, 1990, copies of the vessel's log for the period of March 3 through March 10, 1990, and an American Bureau of Shipping (ABS) Report, No. MTV 90-50409.

Our findings are set forth below.

ISSUE:

Whether sufficient evidence is presented to establish that the foreign repairs which were made to the vessel's tanks were necessitated by a "casualty" thus warranting remission pursuant to 19 U.S.C. 1466(d)(1).

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, or spontaneous explosion of such dimensions as to be immediately obvious to ship's personnel, 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).

In addition, if the above requirements are satisfied by evidence, the remission is restricted to the cost of the minimal repairs necessary to enable the vessel to reach her port of destination. Repair costs beyond that minimal amount are not subject to remission.

In Treasury Decision 78-180, we set out guidelines to be used when relief is requested on the basis that the vessel encountered heavy weather. (T.D. 78-180, 12 Cust. B. & Dec. 382 (1978)). We held that winds of force 9 on the Beaufort Scale, a numerical scale rating winds according to ascending velocity from zero (calm) to twelve (hurricane), accompanied by a reasonable description of the conditions and verified as required in the regulations, raise a presumption that damages caused were due to stress of weather. The damage reports filed by the ship's master indicate winds of force 2-5. (See Rene de Kerchove, International Maritime Dictionary 52 (2nd Ed. 1961).

Relevant pages from the ship's log and official log containing sea and wind conditions for the period of March 3 through March 9, 1990, show that the vessel only encountered Force 2-5 winds. In addition, the vessel's log reveals that the vessel experienced Force 7 winds on March 10, 1990, the day after the repairs were performed.

It is clear from the ABS survey that the vessel suffered damage to her tanks, however, the evidence submitted is insufficient to show that the tank damage was caused by heavy weather. With regard to the evidence that the vessel was in need of repairs to secure her safety and seaworthiness, the master alleges that the cracks were discovered on March 3 while the vessel was enroute from Nederland, Texas, to Long Beach, California, via ports in South America. On March 5, the vessel was diverted to Buenos Aries for repairs. The master's report states that the vessel was too large to proceed to Buenos Aries safely, so it was ordered to Uruguay for repairs. There is no evidence in the master's report, the ABS report, or the vessel's log to sustain that prior to the repairs, the vessel encountered heavy weather which caused the tank damage. The evidence submitted is insufficient to sustain a casualty remissible under the provisions of section 1466(d)(1). Accordingly, the protest is denied.

HOLDING:

The evidence presented is not sufficient to prove that the foreign repairs performed on the subject vessel for which relief is sought were necessary for its safety and seaworthiness therefore remission pursuant to 19 U.S.C. 1466(d)(1) is denied.

Accordingly, the protest is denied.

Sincerely,

B. James Fritz
Chief

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