VES-13-18-CO:R:IT:C 112925 DEC

Chief, Residual Liquidation and Protest Branch
United States Customs Service
Six World Trade Center
New York, New York 10048-0945

RE: Vessel Repair Entry No. C46-0015866-0, NOSAC RANGER V-79; Petition; Casualty; 19 U.S.C. 1466(d)(1); 19 C.F.R. 4.14

Dear Sir:

This is in reference to your memorandum of October 8, 1993, which transmitted a petition for review of the assessment of vessel repair duties filed in connection with the above- referenced vessel repair entry.

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 Antwerp, Belgium, on October 22, 1992, and Bremerhaven, Germany, on October 24, 1992.

The petitioner is challenging the assessment of duty based on its contention that the repairs performed were necessary because of a casualty. The petitioner states that the costs were incurred as a result of propeller damage, first discovered by divers in Antwerp, Belgium on October 22, 1992. On October 20, 1992, the vessel reduced its speed for arrival in LeHavre, France. The vessel experienced abnormally high vibration or "bucking," the incident was recorded in the vessel's log, and the master reported the problem to Pacific-Gulf on October 21, 1992. The vessel proceeded to Southhampton, England. Divers could not be mobilized prior to the vessel's departure from Southhampton. The vessel arrived at her next port, Antwerp, Belgium, on October 22, 1992, where an underwater survey revealed that the propeller was missing approximately two feet from the tip of one of its blades. Pacific-Gulf contacted Det Norske Veritas (DNV), a classification society, and LIPS to advise them of the damage. The vessel departed Antwerp on October 23, and proceeded to her next port, Bremerhaven, Germany, where DNV surveyed the damaged area, and advised that the propeller damage had to be dealt with prior to departure from Bremerhaven. -2-

ISSUE:

Whether there is sufficient proof 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:

The United States Coast Guard (USCG) is the controlling agency that determines questions of a vessel's fitness to proceed. The procedure by which the USCG renders such a determination is set forth in sections 2.01-15 and 31.10-25, USCG Regulations (46 C.F.R. 2.10-15, 31.10-25). The former states that a vessel may not proceed from one port to another for repairs unless prior authorization is obtained from the USCG Officer-In-Charge, Marine Inspection (OCMI) either through the issuance of a USCG "Permit to Proceed to Another Port for Repairs" (CG-948) or a CG-835 that would specify the restrictions on, and duration of, any voyage undertaken prior to obtaining permanent repairs. Notwithstanding the clear wording of the above USCG Regulations, specifically 46 C.F.R. 2.10-15 that does not distinguish between foreign or domestic locations, Customs has been informed by the OCMI, New York, New York, in a letter dated November 7, 1991, that "A formal Permit to Proceed is not normally issued to a vessel transiting foreign waters because the Certificate of Inspection (COI) would have to be removed from the vessel that would cause problems in transiting foreign waters."

In addition, we have subsequently learned from the Chief, Merchant Vessel Inspection and Documentation Division, USCG Headquarters, in a letter dated April 14, 1992, that "Vessel operators often make casualty reports for U.S. flag vessels damaged overseas verbally to the proper Coast Guard Marine Inspection Office, followed by the required written report. The Coast Guard cannot always send a marine inspector to a damaged vessel overseas on short notice. In such cases, the Coast Guard may consider the classification society report and the report of the vessel's master to determine the required temporary repairs and voyage restrictions."

Our review of the evidence submitted with the application reveals that the damage was caused by a casualty. The report shows that the damage to the vessel was possibly caused on October 20, 1993, when the vessel was entering the port of LeHavre. With regard to the evidence that the vessel was in need of repairs to secure her safety and seaworthiness, however, the documents show that the repairs to the propeller were not made until October 24, 1992, when the vessel arrived in the port of Bremerhaven, subsequent to a survey of the damage at the port of Antwerp. -3-

Notwithstanding any practice of verbally reporting foreign casualties to the USCG and that agency's subsequent verbal instructions, remission pursuant to 19 U.S.C. 1466(d)(1) will not be granted in the absence of documentary evidence that the casualty occurrence was timely reported to the USCG and that agency, directly or through the medium of a marine surveyor, permitted the vessel to proceed between two foreign locations in a damaged condition. The mere submission of a USCG Report of Marine Accident, Injury or Death (CG-2692), without accompanying documentation from the appropriate USCG OCMI (New York or Honolulu) authorizing the vessel to proceed in a damaged condition, will not suffice for granting remission pursuant to 19 U.S.C. 1466(d)(1).

Based on a review of the September 15, 1993, letter from the United States Coast Guard-Inspections Department, Customs is satisfied that the damage to the propeller blade is a casualty as defined under 19 U.S.C. 1466(d)(1). It is apparent that Customs was reluctant to classify the damage to the propeller as a casualty because the vessel proceeded in a state of disrepair between two foreign locations prior to being repaired. In addition, no documentary evidence indicating that the casualty occurrence was timely reported to the United States Coast Guard (USCG) was submitted nor did the USCG issue a permit to proceed between two foreign ports in a damaged condition.

HOLDING:

The above-referenced letter of September 15, 1993, together with a review of the record, provide a sufficient basis to substantiate the petitioner's claim that the subject repairs constitute a casualty. The duty with respect to the foreign work for which the applicant seeks remission is granted in full.

Sincerely,

Arthur P. Schifflin
Chief
Carrier Rulings Branch