HQ 110923: Vessel Repair; Remission; Dunnage; LETITIA LYKES; Voyage 82; VR-C14-0019295-6.

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 110923

                          July 19, 1990




VES-13-18  CO:R:P:C  110923  JBW

CATEGORY:  Carriers

Deputy Assistant Regional Commissioner
Commercial Operations
c/o Regional Commissioner
New Orleans, LA 70130-2341

RE:  Vessel Repair; Remission; Dunnage; LETITIA LYKES;
     Voyage 82; VR-C14-0019295-6.

Dear Madam:

          This letter is in response to your transmittal of March
9, 1990, forwarded for our review and ruling regarding the
application for relief involving the above referenced case.

FACTS:

          The record reflects that the subject vessel arrived at
the port of Newport News, Virginia, on January 5, 1990.  Vessel
repair entry number VR-C14-0019295-6, Customs Form 226, was filed
on the same day as arrival indicating foreign repairs in East
London and Durban, South Africa, and in Singapore.

          On February 19, 1990, Lykes Bros. Steamship Co., Inc.,
timely filed an application for relief and an amendment to its
original entry.  This amendment reported the following work
performed in Singapore on November 14, 1989:

          At Singapore - Modifications to vessel by Western Eagle
          that were necessary for loading of special cargo at
          Ulsan, Korea.

The ship's log states that these alterations were temporary and
were necessary to permit the securing of three crane modules that
exceeded the ship's existing cargo dimensions.  The work included
removing of cargo winches and winch controls, cutting of hatches
and winch platforms, , welding of temporary stanchions, rigging
temporary safety lines, and welding pad eyes for lashing of the
cargo.  The applicant contends that the work performed
constitutes dunnage and consequently qualifies for remission of
duty.

ISSUE:

          Whether costs for temporary alterations performed to
permit a ship to carry a specialized cargo are remissible as
dunnage under 19 U.S.C. 1466(d) (1982)?

LAW AND ANALYSIS:

          Title 19, United States Code, section 1466, 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 foreign or
coastwise trade, or vessels intended to engage in such trade.
The statute provides for the remission of the above duties where
good and sufficient evidence is submitted to show that
"equipments, or parts thereof, materials, or labor, were used as
dunnage for cargo, or for the packing or shoring thereof...." 19
U.S.C. 1466(d)(3) (1982).

          The term dunnage is defined to be "loose wood or other
material used in a ship's hold for the protection of cargo."  R.
de Kerchove, International Maritime Dictionary 250 (2d ed. 1961);
see also, Black's Law Dictionary 451 (5th ed. 1979); Headquarters
Ruling Letter 103736, dated February 14, 1979.  The function of
dunnage is to protect cargo from water or from damage from
chafing or shifting.  See de Kerchove, supra, at 250.  Applying
this definition, the work performed and the material installed on
the subject ship to secure the crane modules do not fall within
the strict definition of dunnage.

          19 U.S.C. 1466(d)(3) also permits remission for
equipment, parts, materials, or labor used for the packing or
shoring of cargo.  The Customs Simplification Act of 1953 added
19 U.S.C. 1466(d)(3) (Section 3115(3), Revised Statutes).  The
legislative history  discloses that the purpose of this provision
was to permit installation abroad, without the payment of duty,
of facilities on vessels for handling shipments of a type not
usually carried, and thus enable vessels to secure cargoes for
their homeward voyage that they would not otherwise be equipped
to handle.  C.I.E. 1274/63, dated August 13, 1963, citing H. Rep.
No. 2174, 82d Cong., 2d Sess. (1953); see Bureau Letter dated
January 21, 1964.

          Although the materials and labor used to secure the
crane modules are not considered dunnage, they nevertheless fall
within the broader contemplation of the statute as facilities to
secure cargo.  Consequently, the duty on the temporary
alterations to the ship to enable it to carry the crane modules
is remissible pursuant to 19 U.S.C. 1466(d)(3).


HOLDING:

          Costs for temporary alterations performed to permit a
ship to carry a specialized cargo, although technically not
dunnage, are remissible under 19 U.S.C. 1466(d).



                              Sincerely,



                              B. James Fritz
                              Chief
                              Carrier Rulings Branch