VES-13-18 CO:R:IT:C 112397 BEW
Regional Director
Commercial Operations Division
New Orleans, Louisiana 70130-2341
RE: Petition for Relief; Vessel Repair Entry No. C15-0012664-9;
dated February 4, 1992; M/V GREEN RIDGE, V-16; Casualty;
Heavy Weather; Evidence; One-Round Voyage Rule
Dear Sir:
This is in reference to your memorandum of July 21, 1992,
that forwards a Petition for Relief from duties assessed under
the provisions of title 19, United States Code, section 1466 in
vessel repair entry No. C15-0012664-9 relating to the M/V GREEN
RIDGE, Voyage 16. The vessel arrived at the port of New Orleans,
Louisiana, on January 30, 1992.
FACTS:
The GREEN RIDGE is a U.S.-flag vessel owned by Central Gulf
Lines, Inc. The record shows that the shipyard work in question
was performed on the subject vessel in Nordenham, Germany, during
the period of January 12 through January 17, 1992.
An application for relief was timely filed by the vessel
operator in which it was claimed that the vessel encountered
severe weather conditions while enroute to Nordenham, Germany,
resulting in heavy weather damage to the steering gear system,
Salzgitter printer, and fuel viscosity control.
In the application it claimed that:
[T]he repair of the steering gear system was
paramount to the operation of the vessel and
the safety of the crew and cargo. The alarm
system is of extreme importance in the proper
operation of the vessel and all relayed
equipment, a malfunctioning alarm system
could be considered extremely dangerous to
crew, vessel and cargo as well. The viscos[c]ity
control system directly impacts the main engine
performance and vessel safety. All three (3) systems
work together in determining proper vessel
operation....
By decision dated May 5, 1992, your office denied the
application on the basis that:
Your application for relief does not contain evidence
linking the severe weather to the repair items. In
fact, based on the limited amount of supporting
evidence, the damage does not appear to be a result of
severe weather. Therefore, your application for relief
from duty due to a severe weather casualty is denied.
The petition for relief centers primarily around the repairs
to the steering gear system, the alarm system and the fuel
viscosity control.
The petitioner claims that the vessel encountered severe
weather while enroute to Germany from the United States, however,
its application was predicated on emergency repairs. It alleges
that during the course of the voyage the steering gear
malfunctioned, and that this malfunction included the ERC alarm
system and the fuel viscosity control. It contends that during
Voyage 15 the vessel experienced problems with the steering gear
system and it became necessary to send a technician to Tekiroad
to effect repairs. It claims that the problem re-occurred during
the voyage to Germany (Voyage 16), necessitating repair of the
steering gear again. In addition to the petition, the petitioner
has submitted documentation from Voyage 15, and has asked that
consideration be given under the six-month rule set forth in 19
CFR 4.14(3)(i).
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), 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 which 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 which, 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 enable the vessel to reach her port of
destination. 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 for damages 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).
The file contains copies of internal documents relating to
weather conditions. These documents amount to reports of the
presence of severe weather, but provide no evidence as to how the
damage to the steering gear, the alarm system or the fuel
viscosity control occurred.
The Customs Service has held that repairs required by stress
of weather or other casualty must be made on the same voyage that
the damage occurred (C.I.E. 1325/58). Under the provisions of
C.I.E. 1156/62 the cost of foreign repairs made as a temporary
expedient in order for the vessel to return to the United States
for permanent repairs is subject to the duty provision of the
statute although the repairs made may be insufficient to restore
continued operation. There is a distinction between repairs made
as a temporary expedient which prove insufficient to restore
continued operation and repairs which are completely ineffective
and of no value to the vessel (C.I.E. 1128/60). Where the
evidence sustains a finding that the repairs made in the United
States were "completely ineffective and ... of no value to the
vessel", the duties will be remitted.
Under the "one-round-voyage" rule, abstracted in Treasury
Decision (T.D.) 71-83(38), 5 Cust. B. & Dec. 160, 167 (1971):
If satisfactory evidence is furnished clearly
showing any part of a vessel to have been
repaired and/or serviced just prior to the
commencement of a voyage from a United States
port, it is reasonable to assume that the
part is seaworthy for a round voyage, foreign
and return. Unless evidence indicates some
other reason necessitated the repairs during
the voyage, failure of that part to function
within six months after the repair and/or
servicing in the United States may be
considered a casualty within the meaning of
[19 U.S.C. 1466(d)]. However, remission of
duty under that statute in the circumstances
is limited to duty on the essential, minimum
foreign repairs to the parts.
Section 4.14(c)(3)(i), Customs Regulations (19 C.F.R.
4.14(c)(3)(i)), provides, with regard to the "one-round-voyage"
rule, that:
For the purposes of this section, the term
"casualty" does not include any purchases or
repairs necessitated by ordinary wear and
tear, but does include a part's failure to
function if satisfactory evidence shows that
the specific part was repaired or serviced
immediately before starting the voyage from
the United States port and that the part
failed to function within six months of such
repair or servicing.
This regulation does not contemplate, however, that those
repairs made in the United States would be only minimal,
temporary repairs to permit the vessel to travel to a foreign
shipyard for final repairs.
The evidence is insufficient to support a finding that the
vessel encountered heavy weather conditions during the period of
January 8 through January 12, 1992, the dates outlined in Exhibit
C which relate to weather conditions. In addition, the evidence
is insufficient to show what actually caused the alleged damage
which we presume occurred prior to January 12 through January 17,
1992, the dates on which the subject foreign repair work was
performed. Absent clear proof of an identifiable event to show
the cause of the alleged damage, the cost of repairs is not
remissible (see C.I.E. 1826/58). Further, there is no evidence
contained in the file that clearly shows that any of the subject
parts of the vessel had been repaired and/or serviced just prior
to the commencement of a voyage from a United States port to
Germany, an element necessary for remission under the one-round
voyage rule. Accordingly, the petition is denied.
HOLDING:
The evidence presented is insufficient to substantiate that
the foreign repairs on the subject vessel were necessitated by a
casualty occurrence, thus warranting remission under 19 U.S.C.
1466. The petition is denied as set forth in the law and
analysis above.
Sincerely,
Acting Chief
Carrier Rulings Branch