HQ 110995: Vessel repair; casualty; preliminary ruling Vessel: SURF CITY

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 110995

                          June 18, 1990

VES-13-18-CO:R:P:C 110995 KVS

CATEGORY:  Carriers

Mr. John W. Lovel
President
Gleneagle Ship Management Co.
6220 Westpark
Suite 225
Houston, TX  77057

RE:  Vessel repair; casualty; preliminary ruling
     Vessel:  SURF CITY

Dear Mr. Lovell:

     This is in response to your letter of April 16, 1990, which
requests a preliminary ruling regarding the damage sustained by
the SURF CITY.

FACTS:

     Your letter states that the SURF CITY, owned by Chesapeake
Shipping Inc., sailed from Kuwait loaded with a mixed cargo of
Naptha and Gas Oil.  While en route to Italy, approximately 50
miles NW of Dubai, U.A.E., the vessel suffered an explosion in
the No. 4 ballast tank.  The explosion occurred on February 22,
1990, at approximately 10:15 a.m. local time.  The resulting fire
was not completely extinguished until the evening of March 6,
1990, by which time the vessel had been towed to a position in
the Gulf of Oman, off Fujairah, U.A.E.

     Your letter requests a preliminary ruling, on behalf of the
vessel's owner (who has received an offer for the sale of the
vessel), regarding the dutiability of any repairs to the SURF
CITY.

ISSUE:

     Whether the duty on the alleged casualty-related foreign
repair is remissable 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
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ad valorem on the cost of foreign repairs to vessels engaged,
intended to engage, or documented under the laws of the United
States to engage in the foreign or coastwise 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.  Thus, in order to qualify for
duty remission, it is necessary that the party seeking relief
must show both the occurrence of a casualty, and the minimal
repairs necessary for the safety and seaworthiness of the
vessel.

     The term "casualty", as it is used in the statute, has been
interpreted to mean something which, like stress of weather,
comes with unexpected force or violence, such as fire, explosion
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, we must consider a repair to have
been necessitated by normal wear and tear (Customs Letter Ruling
105159 (dated September 8, 1983).

     Under this interpretation of 19 U.S.C. 1466(d), an explosion
resulting in fire damage would fall within the category of a
"casualty" within the meaning of the statute, and thus, qualify
the applicant for remission of duty assessed on those repairs.

     The information given in this ruling is subject to the
caveat that sufficient evidence of casualty must be submitted
upon the vessel's entry for remission of vessel repair duty to be
granted.

     In addressing the issue of supporting documentation, the
Customs Regulations, in section 4.14(d)(1)(iii) provide, in
pertinent part, that each application for relief shall include
duplicate copies of the following evidence:

     (A) All itemized bills, receipts, and invoices covering
     items specified in paragraph (a)(1) of this section,
     segregating the cost of those items for which relief is
     sought from all other items listed in the vessel repair
     entry.

     (B) Full and complete photocopies of the relevant parts
     of the vessel's logs.

     (C) Photocopies of any American Bureau of Shipping or
     other classification society report of the cause and
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     type of damage and the nature of the remedial action
     taken, together with photocopies of any certifications
     of seaworthiness.

     (D) A certification by the master or other responsible
     vessel officer with personal knowledge of the facts
     relating to the relief sought, including, but not
     limited to, details of the claimed stress of weather or
     other casualty, when and where it occurred, the damages
     due to such stress of weather or other casualty, and
     the place and date where the vessel was repaired or
     the equipment for the vessel was purchased.

     (E) A certification by the master as to whether the
     repairs or equipment purchases were necessary for the
     safety and seaworthiness of the vessel to enable it to
     reach its port of destination in the United States.

     In addition to the above-mentioned list, the applicant is
free to submit any other documents in support of the appication
for relief.  Regarding the 4.14(d)(1)(iii)(C) requirement of a
damage report by a classification society, we are unfamiliar with
Henderson Marine Consultants of Dubai.  But assuming that they
are a qualified marine surveyor or that a qualified marine
surveyor would verify their findings, it is probable that
remission would lie.

HOLDING:

     Although the evidence presented would indicate that the
subject vessel has suffered damage due to casualty, thus
permitting remission of vessel repair duties, we require that
additional documentation, as detailed in the Law and Analysis
section of this ruling, be submitted before remission can be
granted pursuant to 19 U.S.C. 1466(d)(2).

                                     Sincerely,




                                     B. James Fritz
                                     Chief
                                     Carrier Rulings Branch