HQ 111770: Vessel Repair; Entry No. C27-0054151-2; PRESIDENT JOHNSON V-239; Casualty; Seaworthiness

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 111770

                        December 17, 1991

VES-13-18-CO:R:IT:C 111770 GEV

CATEGORY:  Carriers

Chief, Technical Branch
Commercial Operations
Pacific Region
One World Trade Center
Long Beach, California 90731

RE:  Vessel Repair; Entry No. C27-0054151-2; PRESIDENT JOHNSON
     V-239; Casualty; Seaworthiness

Dear Sir:

     This is in response to your memorandum dated June 18, 1991,
transmitting an application for relief from duties assessed
pursuant to 19 U.S.C. 1466.  Our findings are set forth below.

FACTS:

     The PRESIDENT JOHNSON is a U.S.-flag vessel owned and
operated by American President Lines, Ltd. (APL), of Oakland,
California.  The subject vessel had foreign shipyard work
performed in Kaohsiung, Taiwan, and Yokohama, Japan, during April
of 1991.  Subsequent to the completion of the work the vessel
arrived in the United States at Los Angeles, California, on April
22, 1991.  A vessel repair entry covering the work in question
was filed on the date of arrival.

     An application for relief, dated May 13, 1991, was timely
filed requesting remission pursuant to 19 U.S.C. 1466(d)(1).
The applicant states that while at anchor offshore Kaohsiung
(Lat. 22-33.4N, Long. 120-14.9E) on April 6, 1991, at 1:40 p.m.,
the vessel encountered a severe cyclone causing the ship to drag
anchor and resulting in extensive damage to the vessel.

     In support of their claim the applicant has submitted the
following:  (1) all itemized bills, receipts, and invoices
covering items specified for relief; (2) an American Bureau of
Shipping damage survey report and the accompanying invoice; (3) a
National Weather Service Barogram of April 5-6, 1991, which
recorded the sudden extreme change in barometric pressure
evidencing the existence of the cyclone and the force with which
it hit the vessel; (4) a Marine Note of Protest filled out by the
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master describing the incident in question; (5) an APL Damage
Report filled out by the master referencing the ABS damage
survey; (6) a telefax transmission to APL from the U.S. Coast
Guard Resident Inspector, Singapore, granting the vessel
permission to proceed from Kaohsiung to Yokohama with its
starboard hand propeller lifeboat inoperable due to storm damage;
(7) a U.S. Coast Guard Report of Marine Accident; and (8) a
telefax transmission from The Salvage Association reporting the
extent of the damage found as a result of their survey of the
vessel.

ISSUE:

     Whether evidence is presented sufficient to prove that the
foreign repairs performed on the vessel for which relief is
sought were necessitated by a casualty occurrence thus
warranting remission pursuant to 19 U.S.C. 1466(d)(1).

LAW AND ANALYSIS:

     Title 19, United States Code, section 1466, provides in part
for payment of an ad valorem duty of 50 percent of 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 engage in such trade.  Section 1466(d)(1)
provides that the Secretary of the Treasury is authorized to
remit or refund such duties if the owner or master of the vessel
was compelled by stress of weather or other casualty to put into
such foreign port to make repairs to secure the safety and
seaworthiness of the vessel to enable her to reach her port of
destination.

     The term "casualty", as it is used in the vessel repair
statute (19 U.S.C.1466) 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 (see
Dollar Steamship Lines, Inc., v. United States, 5 Cust. Ct. 28-
29, C.D. 362 (1940)). 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 106159, September 8,
1983).

     It is noted that section 4.14(c)(3)(i), Customs Regulations
(19 CFR 4.14(c)(3)(i), provides that "port of destination" means
such port in the United States.  This point is not in dispute,
however, it is an embellishment upon section 1466(d)(1) which, as
stated above, sets forth the following three-part test which must
be met in order to qualify for remission:

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     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.

     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 the case under consideration, the evidence supports the
establishment of a casualty occurrence (i.e., a cyclone).  The
damage incurred to the vessel (i.e., damaged communications,
navigation and lifesaving equipment) rendered the vessel unsafe
and unseaworthy to reach its port of destination without
obtaining foreign repairs.  Accordingly, remission of the duties
assessed on the repairs in question is warranted.

HOLDING:

     The evidence presented is sufficient to prove that foreign
repairs performed on the subject vessel for which relief is
sought were necessitated by a casualty occurrence thereby
warranting remission pursuant to 19 U.S.C. 1466(d)(1).

                                   Sincerely,




                                   B. James Fritz
                                   Chief
                                   Carrier Rulings Branch