HQ 0111688 - Vessel Repair; Casualty; Underwater Damage; Temporary Repairs; 19 U.S.C. 1466; 19 C.F.R. 4.14; M/V FRANCES HAMMER; Entry No. C53-0012157-7. - United States International Trade Commision Rulings

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HQ 111688

December 5, 1991

VES-13-02/13-18 CO:R:IT:C 111688 JBW

CATEGORY: CARRIER

Deputy Assistant Regional Commissioner
Commercial Operations c/o Regional Commissioner
New Orleans, LA 70130-2341

RE: Vessel Repair; Casualty; Underwater Damage; Temporary Repairs; 19 U.S.C. 1466; 19 C.F.R. 4.14; M/V FRANCES HAMMER; Entry No. C53-0012157-7.

Dear Sir:

This letter is in response to your memorandum dated May 7, 1991, which forwards for our review the petition for review filed in conjunction with the above-referenced vessel repair entry.

FACTS:

The record reflects that the subject vessel, the M/V FRANCES HAMMER, arrived at the port of Houston, Texas, on June 30, 1990. Vessel repair entry, number C53-0012157-7, was made on July 9, 1990. The entry indicates that the vessel underwent rudder repairs in Malta and in Palermo, Italy. The petitioner, by counsel, filed an application for relief on September 26, 1990.

Damage to the port rudder of the vessel was discovered by the Chief Engineer of the vessel on May 18, 1990, while the vessel was in port in Yuzhnyy, U.S.S.R. Murky water conditions prevented a full inspection of the rudder. The Chief Engineer and the Master reviewed the plans of the rudder and made a preliminary evaluation regarding the damage. Because of a lack of repair facilities in Yuzhnyy and in the Black Sea, the Master decided to proceed through the straits of Bosphorous and Dardenelles to a point in the Agean Sea where a more complete inspection could occur. This evaluation was forwarded to the vessel operator, Ocean Chemical Carriers Inc., which concurred in the decision to move the vessel.

The vessel departed from Yuzhnyy on May 19, 1990. At a point west of "Nisos Mandrille" (Nsi Mandli), 37-56' N, 24- 24' E, ballast was shifted to tip the vessel for examination. This examination revealed that the upper quarter of the "Becker" rudder, including the rudder link and related fixtures, had been sheared off. The rudder was attached by the pintle through the pintle hole in the pintle bracket connected to the main rudder. The Master informed Ocean Chemical Carriers of his findings and was ordered to proceed to Malta for repairs.

On May 23, 1990, the vessel arrived at Malta. An inspector from the American Bureau of Shipping (ABS) examined the damage in Malta. This report outlined the damage to the Becker rudder. ABS Report No. MT 1924. Because no dry dock facilities were available in Malta at that time, the ABS inspector examined the temporary emergency repairs performed in Malta and stated that the vessel was fit to proceed, under slow speed and with tug assistance, to the dry dock in Palermo. ABS Certificate No. MT- 1926-X. Further temporary repairs were performed in the Fincanteri Shipyard in Palermo. The ABS again inspected the repairs. ABS Report No. PL 6998. The inspector found the ship fit to proceed on its intended voyages, but recommended that permanent repairs be made at the time of the vessel's scheduled dry dock in July, 1990.

We note that notwithstanding the claimed damage to a vital system of the ship, the Office of Marine Inspection of the United States Coast Guard has no record of correspondence on the subject vessel during the approximate time frame of the alleged casualty.

The Carrier Rulings Branch, finding that the application was untimely filed, denied the application for relief. Headquarters Ruling Letter 111476, dated March 26, 1991. This ruling further recommended that the file be referred for action on the untimely filed entry. Id. Finally, the ruling on the application requested that the applicant submit a complete itinerary of the vessel. Id. The petitioner submits documents demonstrating that it timely requested an extension to file its application and its supporting documentation. Notes from the vessel repair liquidation unit indicate that this request had been attached to documents relating to another vessel repair entry and was not acted upon when received. By telephone, the attorney called the vessel repair liquidation unit on August 23, 1990, to confirm that the extension for the subject entry and another entry had been granted. Believing that only the latter entry was under consideration, the vessel repair liquidation unit confirmed the granting of the extension. Consequently, this office made no notation of approval on the extension for the FRANCES HAMMER. You maintain that the application would have been timely filed had the request for extension been granted.

ISSUES:

(1) Whether the entry and application for relief were timely filed.

(2) Whether the evidence submitted demonstrates that the repairs performed to the vessel's "Becker" rudders were the result of a casualty and were necessary to secure the safety and seaworthiness of the vessel.

LAW AND ANALYSIS:

I. TIMELINESS OF THE FILINGS OF THE ENTRY AND THE APPLICATION FOR RELIEF

The application for relief filed in conjunction with the entry was denied in full, for this office determined that the application was untimely filed. Further, this office found that the entry was untimely filed and recommended that the entry be referred for appropriate penalty action.

The Customs Regulations require that applications for relief be filed within sixty days from the date of first arrival of the vessel. 19 C.F.R. 4.14(d)(1)(ii) (1991). The regulations provide further that if good cause is shown, "the vessel repair liquidation unit may authorize one 30-day extension of time to file beyond the 60-day filing period." Id.; 19 C.F.R. 4.14(b)(2)(ii) (1991) (time period for submitting evidence of cost). The regulations do not prescribe the form--whether oral or written--that such an authorization must take.

The record shows that a timely request for an extension was filed. The vessel repair liquidation unit did not respond by name to this request, but telephone communication with the attorney involved was interpreted as an authorization for the extension. Review by the vessel repair liquidation unit now indicates that had the request been considered the authorization would have been granted. Moreover, the application was filed within ninety days of arrival, which would have been within the authorized extension period. Because of the unusual administrative error involved in this case that has come to the attention of this office after the issuance of our denial of the application, we will consider the application to have been timely filed.

In ruling on the application, this office also found that the entry was untimely filed. The regulations require that a vessel repair entry be made within five working days of arrival of the vessel. 19 C.F.R. 4.14(b)(2). The subject vessel arrived in the United States on Saturday, June 30, 1990. The week following this date included the Independence Day holiday, which is a date Customs offices are closed. 19 C.F.R. 101.6(a). The fifth working day after arrival would be July 9, 1990. We conclude, therefore, that the entry, having been filed on July 9, 1990, was timely filed.

II. REMISSIBILITY OF DUTIES PAID ON REPAIRS PERFORMED TO CORRECT DAMAGE RESULTING FROM ALLEGED CASUALTY

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 petitioner in this case alleges that the underwater damage discovered in Yuzhnyy resulted in a remissible casualty. The Customs Service has ruled that "[e]xperience demonstrates damage to underwater parts of vessels, including propellers is usually not easily detectable or susceptible of definite proof respecting the date and place of occurrence. Therefore, relief under [section 1466] is granted in the absence of testimony showing that the vessel concerned was grounded, struck bottom, or her propeller contacted some floating object capable of causing damage, prior to the commencement of the voyage." C.I.E. 1202/59, dated August 13, 1959 (emphasis added); Headquarters Ruling Memorandum 109473, dated June 27, 1988. A corollary to the general rule that underwater damage results in a casualty is that some evidence must be presented to infer that the damage did not occur prior to the voyage. C.I.E. 1202/59. In the 1959 ruling, the Customs Service found that inspection of the propeller just before the commencement of the voyage sufficient evidence to infer the underwater damage did not occur prior to the voyage. Id.

From the record before us, we cannot conclude that the alleged underwater damage occurred after the departure of the vessel from Jacksonville, Florida, on April 27, 1990. The record contains no evidence to show that the rudder had been inspected prior to the voyage or when the last rudder inspection occurred. The Master's statement, dated May 30, 1990, indicates that during the course of the voyage from Jacksonville to Yuzhnyy the vessel experienced a decrease in speed, an increase in fuel consumption, sluggish steering, and a hotter than normal engine temperature. While both the master and the chief engineer link the engine performance to the rudder damage, we have no statement or evidence to show when these indicators first began to change or whether they changed during the course of the voyage to Yuzhnyy. Absent such evidence, we cannot conclude that the underwater damage occurred after the vessel departed Jacksonville. The petitioner's claim for remission on the basis of a casualty is denied.

HOLDINGS:

(1) Because of the unusual administrative error involved in this case that has come to the attention of this office after the issuance of our denial of the application, we now conclude that the application was timely filed. We also conclude that in ruling on the timeliness of the entry, we failed to account for the Independence Day holiday. In recalculating the time period, we determine that the entry was timely filed.

(2) The petitioner has not submitted sufficient evidence to infer that the underwater damage to the vessel occurred after the departure of the vessel from Jacksonville, Florida, on April 27, 1990. The petitioner's claim for remission on the basis of a casualty is therefore denied.

Sincerely,

B. James Fritz
Chief

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