VES-13-18 CO:R:IT:C 111539 BEW
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
Carrier Rulings Branch