HQ 111643: Vessel Repair Entry No. 335-0100592-1 PRESIDENT MADISON V- 173; Vessel Repairs; casualty; evidence

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 111643

                        February 7, 1992

VES-13-18 CO:R:IT:C  111643 BEW

CATEGORY:  Carriers

Chief, Technical Assistant
Pacific Region
Commercial Operations
One World Trade Center
Long Beach, California 90853

RE:  Vessel Repair Entry No. 335-0100592-1 PRESIDENT MADISON V-
     173; Vessel Repairs; casualty; evidence

Dear Sir:

     This is in reference to an application for relief from
duties filed by American President Lines, Ltd., in relation to
the above referenced vessel repair entry dated February 6, 1991.
The entry and the application were timely filed.  The vessel
arrived at the port of Seattle, Washington, on February 2, 1991.

FACTS:

     The PRESIDENT MADISON is a U.S.-flag vessel owned by
American President Lines, Ltd.  The record shows that the
shipyard work in question was performed on the subject vessel at
the Tai Ho Marine Eng. Co., Ltd., in Kaohsiung, Taiwan, and at
the Hong Kong United Dry Dock during the month of January 1991.

     The applicant requests review for remission of duty on the
following repairs:

     Item #       JCF#                     Vendor

     01        MA 173-102            Tai Ho Marine Eng Co., Ltd.
     02        MA 173-103            Tai Ho Marine Eng Co., Ltd.
     03        MA 173-104            Marine SVC & Engineering
     04        MA 173-105            Tai Ho Marine Eng Co., Ltd.
     05        MA 173-106            Tai Ho Marine Eng Co., Ltd.
     06        MA 173-107            Hongkong United Dockyards,
                                     Ltd.
     07        MA 173-108            Hongkong United Dockyards,
                                     Ltd.
     08        MA 173-109            American Bureau of Shipping
     09        MA 173-110            American Bureau of Shipping
     10        MA 173-111            Tai Ho Marine Eng Co., Ltd.

     The applicant claims that each of the invoices submitted
relate to the repairs necessary because of a casualty.  The
applicant contends that the vessel sustained the following damage
as a result of heavy weather damage:

     (A)  Fractured D-Ring and base sockets
     (B)  Starboard pedestal destroyed
     (C)  Three cracks in No. 6 starboard fuel oil tank
     (D)  Hatch cover guide ripped off at row No. 3
     (E)  Corner on hatch cover at row No. 8 cracked and gasket
          dislodged
     (F)  Box girder cracked through the deck.

     You have requested our advice concerning repairs which
relate to the alleged casualty.

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 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.

     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)).

     In Treasury Decision 78-180, we set 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)).  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.  (See Rene de Kerchove, International Maritime
Dictionary 52 (2nd Ed. 1961).

     The Marine Note of Protest subscribed to by the ship's
master on January 10, 1991, in the port of Yokohama, Japan,
indicates that the vessel experienced Force 6-9 Winds, Force 5-6
seas, and Force 4-7 swells on January 5, 1991, and again on
January 8, from 1000 hours through 2400 hours on January 9, 1991,
the vessel experienced "rough and boisterous seas and Force 6-9
Winds, Force 5-6 seas, and Force 6-8 swells.  In addition to the
Marine Note of Protest, the file contains copies of relevant
pages from the ship's log and official log containing the sea and
wind conditions during the crossing from Alaska to Yokohama,
Japan.

     It is clear from the evidence that the vessel encountered
heavy weather conditions during the period of January 5 through
January 10, 1991, that the vessel suffered damage due to severe
weather conditions, and that the vessel was in need of repairs to
secure her safety and seaworthiness.  Our findings as to the
entry are set forth below:

     With respect to the following items, all items are non
     dutiable due to the casualty suffered by the vessel:

          01   MA 173-102            Tai Ho Marine Eng Co., Ltd.
          02   MA 173-103            Tai Ho Marine Eng Co., Ltd.
          03   MA 173-104            Marine SVC & Engineering
          04   MA 173-105            Tai Ho Marine Eng Co., Ltd.
          05   MA 173-106            Tai Ho Marine Eng Co., Ltd.
          06   MA 173-107            Hongkong United Dockyards,
                                     Ltd.
          07   MA 173-108            Hongkong United Dockyards,
                                     Ltd.
          10   MA 173-111            Tai Ho Marine Eng Co., Ltd.

     In C.I.E. 429/61 we noted that:

          ... expenses which are incurred in conducting
          inspections made subsequent to the repairs,
          so as to ascertain whether the work had been
          properly performed, are dutiable as integral
          parts of the expenses of repairs although
          separatly [sic] itemized.  Moreover, testing
          which is effected for the purpose of
          ascertaining whether repairs to certain
          machinery or parts of the vessel are
          required, or are performed in order to
          ascertain if the work is adequately
          completed, are also integral parts of the
          repairs and are accordingly dutiable.

     Pursuant to the holdings in C.I.E. 429/61, and extending the
concept to surveys as well as inspections, if a survey is
conducted to ascertain the extent of damage sustained, or to
ascertain if the work is adequately completed, the costs are
dutiable as part of the repairs which are accomplished.  In the
subject case, the surveys were conducted as a part of the repairs
relating to the casualty.  With respect to the American Bureau of
Shipping (ABS) Surveys, we find as follows:

     Item No. 08- MA 173-109, American Bureau of Shipping invoice
relating to Report No. HK8617, the documentation is incomplete in
that only the two pages or the report relating to the Hull damage

survey have been submitted.  Base on this submission, we cannot
determine that the survey was related to the damage that was due
to the subject casualty thereby rendering the vessel unseaworthy.
Accordingly, we find this survey to be dutiable.

     Item No. 09-MA 173-110, American Bureau of Shipping Invoice
relating to ABS Report No. KS6887 - all costs are remissible.

HOLDING:

     The evidence presented is sufficient to substantiate that
the subject repairs were necessitated by a casualty, thus
warranting remission pursuant to 19 U.S.C. 1466 as to all items
except item No. 8.

     The documentation submitted is incomplete as to the ABS
survey listed in Item No. 08- MA 173-109, therefore, remission is
denied as to this item.

                                     Sincerely,



                                     B. James Fritz
                                     Chief
                                     Carrier Rulings Branch