HQ 112623: Vessel Repair; Los Angeles Vessel Repair Entry No. 110- 0104292-5; dated April 3, 1992; M/V PRESIDENT MADISON, Voyage 186; Application; Casualty; Heavy Weather; Evidence; 19 U.S.C. 1466

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 112623

                         August 13, 1993

VES-13-18 CO:R:IT:C  112623 BEW

CATEGORY:  Carriers

Deputy Regional Director
Commercial Operations
Pacific Region
One World Trade Center
Long Beach, California 90831-0700

RE:  Vessel Repair; Los Angeles Vessel Repair Entry No. 110-
     0104292-5; dated April 3, 1992; M/V PRESIDENT MADISON,
     Voyage 186; Application; Casualty; Heavy Weather; Evidence;
     19 U.S.C. 1466

Dear Sir:

     This is in reference to your memorandum of March 3, 1993,
which transmitted an application for relief from duties filed by
American President Lines, Ltd., in relation to the above-
referenced vessel repair entry, dated April 3, 1992.  The entry
and the application were timely filed.  The vessel arrived at the
port of Los Angeles on March 28, 1992.

FACTS:
          
     The M/V PRESIDENT MADISON, is a U.S.-flag vessel owned by 
American President Lines, Ltd.  The record shows that the
shipyard work in question was performed on the subject vessel in
Busan, Korea, and Kaohsiung, R.O.C., during the period of March 8
through March 18, 1992.

     The applicant requests review for remission of duty on the
following items:

     Item #     JCF#                 Vendor
     
     001       MA186-102             American Bureau of
                                     Shipbuilding Report No. BK
                                     7373, dated March 8, 1992
     002       MA186-103             American Bureau of
                                     Shipbuilding Report No.BK
                                     7374, dated March 8, 1992
     003       MA186-104             DAE GWANG
     007       MA186-108             TAI HO MARINE 008MA186-109TAI HO MARINE
     009       MA186-110             TAI HO MARINE
     0010      MA186-111             TAI HO MARINE
     0011      MA186-112             TAI HO MARINE
     0013      MA186-114             OMI ENGINEER

     The applicant states that the vessel encountered severe
weather conditions while enroute from Dutch Harbor, Alaska, to
Yokohama resulting in heavy weather damage to the Hatch Comings. 
It claims that foreign repairs became necessary immediately to
ensure the safety and seaworthiness of the vessel.  The applicant
has also submitted copies of relevant pages from the ship's log
containing the sea conditions on March 1, 3, 8, and 11, 1992, and
a Master's statement of fact dated March 8, 1992.  A Marine Note
of Protest was filed on March 6, 1992, when the vessel arrived at
Yokohama, Japan.  The Marine Note of Protest indicates that while
the vessel was bound from Dutch Harbor to Yokohama, from 0200
hours on March 3, 1992 through 1600 hours on March 4, 1992, the
vessel encountered Force 10 Winds, Force 7 seas, and Force 7
swells.  The report indicates that 5 D-rings fractured, 8 Base
Sockets fractured, 15 feet of railing destroyed, and 1 lashing
platform were damaged.  The file indicates that the vessel was
inspected for heavy weather damage by the American Bureau of
Shipping (ABS), report No. BK 7374, in Busan, Korea, on March 8,
1992.

     The applicant claims that the invoices submitted relate to
the repairs necessary because of the alleged casualty.

ISSUE:

     Whether sufficient evidence is presented to establish that
the subject repairs were necessitated by a "casualty" which is
remissible under the vessel repair statute (19 U.S.C. 1466).

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 ad
valorem on 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 be employed in such
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.  It is Customs position that
"port of destination" means a port in the United States.

     The statute thus sets a three-part test that must be met in
order to qualify for remission under the subsection, this being:

     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.

     The term "casualty" as it is used in the statute has been
interpreted as something that, like stress of weather, comes with
unexpected force or violence, such as fire, spontaneous explosion
of such dimensions as to be immediately obvious to ship's
personnel, 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 event, we must
consider the repair to have been necessitated by normal wear and
tear (ruling letter 106159, September 8, 1983).

     In addition, if the above requirements are satisfied by
evidence, the remission is restricted to the cost of the minimal
repairs necessary to "secure the safety and seaworthiness of the
vessel to enable her to reach her port of destination" (19 U.S.C.
1466(d)(1)).  Repair costs beyond that minimal amount are not
subject to remission.  

     Treasury Decision 78-180, sets out guidelines to be used
when relief is requested on the basis that the vessel encountered
high winds (T.D. 78-180, 12 Cust. B. & Dec. 382 (1978)).  It was
held that evidence of winds of force 9 on the Beaufort Scale, a 
numerical scale rating winds according to ascending velocity from
zero (calm) to twelve (hurricane), verified as required in the
regulations, and accompanied by a reasonable description of the
conditions, raise a presumption that severe weather conditions
caused the damage. (See also Rene de Kerchove, International
Maritime Dictionary 52 (2nd Ed. 1961).  

     Customs Regulations require that certain supporting evidence
be submitted with an application for relief from duties on
repairs resulting from stress of weather.  This evidence includes
photocopies of the relevant parts of the vessel's logs,  certification of any claimed casualty by the master or other
responsible vessel officer with personal knowledge of the facts,
and a certification by the master that the repairs were necessary
for the safety and seaworthiness of the vessel to enable her to
reach her port of destination in the United States (19 C.F.R.
  4.14(d)(1)(iii)(D)-(F)).

     It is clear from the evidence submitted with the application
that on March 3, 1992, the vessel encountered severe weather
conditions, namely, Force 10 winds, Force 7 seas and Force 7
swells.  The vessel's log on March 3, 1992, shows that while
enroute from Dutch Harbor to Yokohama, the vessel was pitching
moderately to heavily to a "high w'ly swell and a very high
WNW'ly sea.  Occasional snow squalls."  The vessel arrived in
Yokohama, Japan, on March 6, 1992.  

     The United States Coast Guard (USCG) is the controlling
agency that determines questions of a vessel's fitness to
proceed.  The procedure by which the USCG renders such a
determination is set forth in sections 2.01-15 and 31.10-25, USCG
Regulations (46 CFR 2.10-15, 31.10-25).  The former states that a
vessel may not proceed from one port to another for repairs
unless prior authorization is obtained from the USCG Officer-In-
Charge, Marine Inspection (OCMI) either through the issuance of a
USCG "Permit to Proceed to Another Port for Repairs" (CG-948) or
a CG-835 that would specify the restrictions on, and duration of,
any voyage undertaken prior to obtaining permanent repairs.  The
latter states that with respect to tank vessels, "No extensive
repairs to the hull or machinery which affect the safety of a
vessel shall be made without the knowledge of the Officer-In-
Charge, Marine Inspection." 
 
     Notwithstanding the clear wording of the above USCG
Regulations, specifically 46 CFR 2.10-15 that does not
distinguish between foreign or domestic locations, Customs has
been informed by the OCMI, New York, New York, in a letter dated
November 7, 1991, that "A formal Permit to Proceed is not
normally issued to a vessel transiting foreign waters because the
Certificate of Inspection (COI) would have to be removed from the
vessel that would cause problems in transiting foreign waters." 

     In addition, we have subsequently learned from the Chief,
Merchant Vessel Inspection and Documentation Division, USCG
Headquarters, in a letter dated April 14, 1992, that "Vessel
operators often make casualty reports for U.S. flag vessels
damaged overseas verbally to the proper Coast Guard Marine
Inspection Office, followed by the required written report.  The
Coast Guard cannot always send a marine inspector to a damaged  vessel overseas on short notice.  In such cases, the Coast Guard
may consider the classification society report and the report of
the vessel's master to determine the required temporary repairs
and voyage restrictions."

     Our review of the evidence submitted with the application
reveals that the damage was caused by a casualty.  The report
shows that the damage to the vessel was caused when the vessel
encountered heavy weather conditions while enroute from Dutch
Harbor, Alaska, to Yokohama, Japan, during the period of March 3
and 4, 1992.  Subsequently, the vessel proceeded to Busan, Korea.
 
     With regard to the evidence that the vessel was in need of
repairs to secure her safety and seaworthiness, however, the
documents show that the damage survey and repairs were not made
until March 8, 1992, when the vessel arrived in the port of Busan
from Yokohama.

     In cases such as the one under consideration, (i.e., where a
vessel that has been damaged foreign, proceeds in a state of 
disrepair between two foreign locations prior to being repaired
foreign, and subsequently sails to its U.S. port of destination),
notwithstanding any practice of verbally reporting foreign
casualties to the USCG and that agency's subsequent verbal
instructions, remission pursuant to 19 U.S.C. 1466(d)(1) will not
be granted in the absence of documentary evidence that the
casualty occurrence was timely reported to the USCG and that
agency, directly or through the medium of a marine surveyor,
permitted the vessel to proceed between two foreign locations in
a damaged condition.  The mere submission of a USCG Report of
Marine Accident, Injury or Death (CG-2692), without accompanying
documentation from the appropriate USCG OCMI (New York or
Honolulu) authorizing the vessel to proceed in a damaged
condition, will not suffice for granting remission pursuant to 19
U.S.C. 1466(d)(1). 

     The applicant has not met a burden of proof that is provided
for by federal regulations.  

     Accordingly, in the absence of any determination of the USCG
regarding the subject vessel's safety and seaworthiness, and
absent the evidence that would be adduced by the required USCG
determination on the issue of seaworthiness, the applicant has
failed to substantiate its claim for remission under  1466(d)(1).
     With regard to item No. 1 - ABS survey Report No. BK 7373,
covering the test of the No. 17 deep water ballast tank, Customs
has held that where periodic surveys are undertaken to meet the
specific requirements of a classification society, insurance
carrier, etc., the cost of the surveys is not dutiable even when
dutiable repairs are effected as a result thereof; however, in
the liquidation process Customs should go beyond the mere labels
of "continuous" or "ongoing" before deciding whether the item is
dutiable.  If an inspection or survey is conducted as a part of
an ongoing maintenance and repair program labelled "continuous"
or "ongoing" the cost is dutiable.  Also, if the survey is to
ascertain the extent of damage sustained, or to ascertain if the
work is adequately completed, the costs are dutiable as part of
the repairs which are accomplished pursuant to holdings in C.I.E.
429/61, C.S.D. 79-2, and C.S.D. 79-277.  We find that the survey
relating to Report No. BK 7373 is nondutiable.  The application
is granted as to the cost for item No. 1.

HOLDINGS:

     The evidence presented is insufficient to substantiate that
the subject repairs were necessitated by a casualty.  The foreign
work for which the applicant seeks remission is therefore
dutiable under 19 U.S.C. 1466.

     The cost associated with item No.1, ABS survey Report BK7373
covering the test of the No. 17 deep water ballast tank, is
nondutiable.

                                     Sincerely,




                                     Acting Chief
                                     Carrier Rulings Branch