HQ 113025: Vessel Repair Entry No. 110-6461439-6; 19 U.S.C. 1466; 19 U.S.C. 1466(d)(1); 19 U.S.C. 1466(d)(2); PRESIDENT JEFFERSON, V-299

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 113025

                            March 7, 1994

VES-13-18-CO:R:IT:C      113025 GOB

CATEGORY:   Carriers

Deputy Regional Director
Commercial Operations
Pacific Region
One World Trade Center
Long Beach, California 90831

RE:  Vessel Repair Entry No. 110-6461439-6; 19 U.S.C. 1466; 19
     U.S.C. 1466(d)(1); 19 U.S.C. 1466(d)(2); PRESIDENT JEFFERSON,
     V-299

Dear Sir:

     This is in response to your memorandum dated February 4, 1994,
which forwarded the application for relief submitted by American
President Lines, Ltd. ("applicant") with respect to the above-
referenced vessel repair entry.

FACTS:

     The record reflects the following.  The PRESIDENT JEFFERSON
("vessel") is a U.S.-flag vessel owned and operated by the
applicant.  Certain foreign shipyard work was performed on the
vessel on voyage 299.  The vessel arrived at the port of Seattle,
Washington on October 26, 1993 and filed a vessel repair entry.

     Your office has asked us to review the following work:

          1.  The items listed as "General Services" on page one
of the spreadsheets.
          2.  The items listed under "Stern Tube Repair Work" on
pages one and two of the spreadsheet.
          3.  Items 12 and 13 under "Owners Account General
Repairs" on page two of the spreadsheet.
          4.  Item 14 on the CF 226.
          5.  Item 15 on the CF 226.

ISSUES:

     Whether the items at issue are dutiable pursuant to 19 U.S.C.
1466.  Whether duty on certain of the items is subject to remission
pursuant to 19 U.S.C. 1466(d).


                              - 2 -

LAW AND ANALYSIS:

     19 U.S.C. 1466 provides for the payment of duty at a rate of
fifty percent ad valorem on the cost of foreign repairs to vessels
documented under the laws of the United States to engage in foreign
or coastwise trade, or vessels intended to be employed in such
trade.

19 U.S.C. 1466(d)(1) Issue

     19 U.S.C. 1466(d)(1) provides in part that the Secretary of
the Treasury is authorized to remit or refund such duties if the
owner or master of the vessel furnishes good and sufficient
evidence that the vessel was compelled by stress of weather or
other casualty to put into a foreign port and make repairs to
secure the safety and seaworthiness of the vessel to enable her to
reach her port of destination.  19 CFR 4.14(c)(3)(i) provides that
"port of destination" means such port in the United States and
"...only the duty on the cost of the minimal repairs needed for the
safety and seaworthiness of the vessel is subject to remission or
refund."

     19 U.S.C. 1466 and 19 CFR 4.14 essentially set forth a three-
part test, each of the elements of which must be established by
good and sufficient evidence to qualify for remission:

     1. a casualty occurrence;
     2. an unsafe and unseaworthy condition; and
     3. the inability to reach the port of destination without
foreign repairs.

     The evidence of record includes the following.  

     The application states, in part:

     The emergency drydocking of this vessel at Kobe Japan on
     October 15-18, 1993 was occasioned as a consequence of      
the USCG citation (Encl. C) which dictated that the leading      
aft stern tube seal be permanently repaired prior to returning   to
the next US port. To make these mandatory permanent             
repairs it was physically necessary to drydock the vessel in     
Kobe, Japan.  See also ABS Report KO 19397, dated 17 October     
1993 (Encl. G).
     
     A U.S. Coast Guard "Worklist" dated October 17, 1993 states:

     Make permanent repairs to leaking aft stern tube seal prior 
     to returning to next U.S. port.

     A document entitled "American President Lines Job Control
Form" states:

                              - 3 -

     Vessel stern seal has been fouled by a fish net and requires 
     seal renewal.

     We find that the applicant has not established that a casualty
occurred.  Evidence which is typically submitted to establish a
casualty occurrence includes documents such as a vessel's log and
statement or affidavit of the master.  

     Accordingly, the following items are dutiable and the duty is
not remissible: the items listed under "Stern Tube Repair Work" on
pages one and two of the spreadsheets; and item 14 on the CF 226,
described as "Stern Seal Repair."

19 U.S.C. 1466(d)(2) Issue

     19 U.S.C. 1466(d) provides in part that:

     (d) If the owner or master of such vessel furnishes good and
     sufficient evidence that -
          ...
          (2) such equipments or parts thereof or repair parts or
          materials, were manufactured or produced in the United
          States, and the labor necessary to install such
          equipments or to make such repairs was performed by
          residents of the United States, or by members of the
          regular crew of such vessel; or
          ...
     then the Secretary of the Treasury is authorized to remit or
     refund such duties... (Emphasis supplied.)

     19 CFR 4.14(c)(3)(ii) states that remission or refund of duty
is authorized if good and sufficient evidence shows:

     (ii) United States parts and equipment installed with American
     labor.  The equipment, equipment parts, repair parts or
     materials used on the vessel were manufactured or produced in
     the United States and purchased by the owner of the vessel in
     the United States, and the labor necessary to install such
     equipment or to make such repairs was performed by residents
     of the United States or by members of the regular crew of the
     vessel. (Emphasis supplied.)

     The applicant has submitted documentation indicating that "one
seal kit" used in the subject repairs was purchased by it in the
United States.  However, no documentation has been submitted to
establish that the seal kit was installed by residents of the U.S.
or by the vessel's crewmembers.  Accordingly, the second part of
the statutory and regulatory test for remission is not satisfied.

     Accordingly, the cost of the seal kit, which is listed as item
15 on the CF 226, is dutiable and the duty is not remissible. 


                              - 4 -

Other Items
     
     The items listed on page one of the spreadsheets under
"General Services" are nondutiable.  These items are drydocking,
telephone installation, fresh water, and other similar charges.
 
     Item 12 on page two of the spreadsheets under "Owners Account
General Repairs" is described as "Net Cutter JCF #JE299-805
(MODIFICATION)."  A drawing of the net cutter has been submitted. 
We find that this item is a nondutiable modification.

     Item 13 on page two of the spreadsheets under "Owners Account
General Repairs" is described as on the spreadsheet "Spare Parts
JCF #JE299-806 (Transportation & Crane Service)."  The pertinent
invoice states, in part: "Owner's spare parts taken onboard. 
(Transportation & Crane Service Only)."  We find that this item is
nondutiable as transportation and crane services.

HOLDING:

     As detailed supra, the application is granted in part and
denied in part.



                                                                 
                              Sincerely,



                              Arthur P. Schifflin
                              Chief
                              Carrier Rulings Branch