HQ 113116: Vessel Repair Entry No. 110-6461439-6; 19 U.S.C. 1466; 19 U.S.C. 1466(d)(1); 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 113116

                            July 12, 1994

VES-13-18-CO:R:IT:C   113116 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); PRESIDENT JEFFERSON, V-299 

Dear Sir:

     This is in response to your memorandum dated May 19, 1994,
which forwarded the petition submitted by American President Lines,
Ltd. ("petitioner") 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.

     In Ruling 113025 dated March 7, 1994 with respect to this
vessel repair entry, we granted part of the application for relief
and denied part of the application for relief.

Petitioner's Claims  

     The petitioner contends that a casualty occurred with respect
to the aft stern tube seal.  It also maintains that certain U.S.-
manufactured parts purchased in the United States are not dutiable.

ISSUE:

     Whether duty on certain items is subject to remission pursuant
to 19 U.S.C. 1466(d)(1).


                              

                              - 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) 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;
     3. the inability to reach the port of destination without
foreign repairs.  

     In Ruling 113025 we found that a casualty occurrence had not
been established.

     The petitioner has now submitted additional information.  It
has submitted a letter dated September 20, 1993 from Global Diving
& Salvage, Inc. ("Global") which states in part:

     On Sept. 18, 1993 Global Diving and Salvage, Inc. performed
an   underwater stern inspection of the S/S "President Jefferson"
     at Terminal 5, Seattle, WA.  Purpose of the dive was to
     determine if the rope guard was free of obstructions, and look
     for possible oil leak.
     ...
     The following conditions were found to exist:

     Rope Guard:  No discrepancies noted.  No oil was observed   
     coming from the top inspection port at any time during the  
     drive.  All rope cutters were in place...All net & line were
     removed and given to the port engineer.

     Waukesha Seal:  The full circumference of the seal was
     observed and was found to be free of any foreign material.

                              - 3 -

     In its petition, the petitioner states the following: 

     Voyage 299 started at Seattle on September 19, 1993 and the
     vessel sailed on September 20, 1993 in a seaworthy condition,
     no repairs required.

     On September 27, 1993 en route Dutch Harbor to Yokohama an oil
     leak of one drop every 2 to 3 minutes was observed.

     On October 5, 1993, the Master reported a significant stern
     seal oil leak (see Enclosure "C") and requested "repair
     soonest."  At that time the USCG initiated a citation dated
     October 17, 1993 which prohibited the vessel from proceeding
     until the seal was satisfactorily repaired.  See Enclosure
     "E."

     Global's inspection was accomplished on the day prior to the
commencement of the subject voyage.  Global's inspection and the
fact that an oil leak occurred a short time thereafter are
probative of the fact that a casualty occurred between the time of
the inspection and the oil leak.

     At the application stage the petitioner submitted
documentation from the U.S. Coast Guard which stated:

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

     Based upon the newly-submitted documentation, i.e., the letter
from Global with respect to the inspection on September 18, 1993, 
we determine that a casualty occurred and that remission of the
duty on the cost of the aft stern tube seal repairs pursuant to 19
U.S.C. 1466(d)(1) is appropriate.  The cost of these repairs
includes all parts used therein, including the cost of the seal
kit.

HOLDING:

     Duty on the cost of the aft stern tube seal repairs and
related parts is remitted pursuant to 19 U.S.C. 1466(d)(1).  The
petition is granted.



                                                                 
                              Sincerely,



                              Arthur P. Schifflin
                              Chief
                              Carrier Rulings Branch