HQ 113159 - New York Vessel Repair Entry No. C46-0016913-9, NOSAC RANGER, Voyage 104; Petition; Casualty; 19 U.S.C. 1466(d)(1); 19 CFR 4.14 - United States International Trade Commision Rulings

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HQ 113159

February 17, 1995

VES-13-18 R:T:C 113159 BEW

CATEGORY: CARRIER

Chief, Residual Liquidation and Protest Branch U.S. Customs Service
6 World Trade Center
New York, New York 10048-0945

RE: New York Vessel Repair Entry No. C46-0016913-9, NOSAC RANGER, Voyage 104; Petition; Casualty; 19 U.S.C. 1466(d)(1); 19 CFR 4.14

Dear Sir:

This is in reference to your memorandum of July 1, 1994, which transmitted a petition for relief from duties filed by Pacific-Gulf Marine, Inc., in relation to the above-referenced vessel repair entry, dated February 2, 1994. The entry and the application were timely filed. The vessel arrived at the port of Newark on February 2, 1994.

FACTS:

The NOSAC RANGER, is a U.S.-flag vessel owned by Car Carrier, Inc. The record shows that the shipyard work in question was performed on the subject vessel in Halifax, Canada, on January 31, 1994. The application was denied April 15, 1994, on the basis that the evidence submitted did not support a claim that the repairs were necessitated by a casualty.

The petition centers around the repair of the vessel's gyro compass. The petitioner claims that the proximate cause of the gyro compass failure was due to severe weather conditions encountered while the vessel was proceeding from Bremerhaven, Germany to Halifax, Canada. The petitioner claims that the subject invoice relates to the repairs necessary because of a casualty. It claims that the repairs were of an emergency nature and necessary for the safe operation of the vessel. The petitioner has submitted copies of relevant pages from the ship's log containing the sea conditions on January 27,1994, and the Acting Master's statement of fact dated May 10, 1994. The documents submitted show that the vessel encountered Force 8 and 9 winds, and that the vessel was pitching moderately in large southernly swells and rough seas. The report indicates that at 1736 hour there was a gyro compass failure, and that the vessel was steered by magnetic compass until it reached Halifax.ISSUE:

Whether sufficient evidence is presented to establish that the subject repairs were necessitated by a "casualty" which is remissible under the vessel repair statute (19 U.S.C. 1466).

LAW AND ANALYSIS:

Title 19, United States Code, section 1466(a), (19 U.S.C. 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 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 that must be met in order to qualify for remission under the subsection, this 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 that, like stress of weather, comes with unexpected force or violence, such as fire, 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 "secure the safety and seaworthiness of the vessel to enable her to reach her port of destination" (19 U.S.C. 1466(d)(1)). Repair costs beyond that minimal amount are not subject to remission. Customs Regulations require that certain supporting evidence be submitted with an application for relief from duties on repairs resulting from stress of weather. This evidence includes photocopies of the relevant parts of the vessel's logs, certification of any claimed casualty by the master or other responsible vessel officer with personal knowledge of the facts, and a certification by the master that the repairs were necessary for the safety and seaworthiness of the vessel to enable her to reach her port of destination in the United States (19 C.F.R. §§4.14(d)(1)(iii)(D)-(F)).

Treasury Decision 78-180, sets out guidelines to be used when relief is requested on the basis that the vessel encountered high winds (T.D. 78-180, 12 Cust. B. & Dec. 382 (1978)). It was held that evidence of winds of force 9 on the Beaufort Scale, a numerical scale rating winds according to ascending velocity from zero (calm) to twelve (hurricane), verified as required in the regulations, and accompanied by a reasonable description of the conditions, raise a presumption that severe weather conditions caused the damage. (See also Rene de Kerchove, International Maritime Dictionary 52 (2nd Ed. 1961).

It is clear from the evidence submitted with the petition that on January 27, 1994, the vessel encountered severe weather conditions, namely, Force 8 and 9 winds, and large swells and rough seas. The vessel arrived in Halifax on February 2, 1994.

We have reviewed the invoices submitted with the petition. It is clear from the evidence that the vessel was in need of repairs due to a breakdown of the vessel's gyro compass. Further, it is clear from the evidence that the vessel was in need of repairs to secure her safety and seaworthiness. The evidence submitted is sufficient to show that the vessel sustained a casualty while en route to Canada. According the petition is granted.

HOLDING:

The evidence presented is sufficient to substantiate that the subject repairs were necessitated by a casualty. The foreign work for which the petitioner seeks remission is therefore remissible under 19 U.S.C. 1466.

Sincerely,

Arthur P. Schifflin
Chief

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