HQ 112426: New York Vessel Repair Entry No. 514-3004580-0, S/S HOWELL LYKES, Voyage No. 33; Petition; Casualty; 19 U.S.C. 1466(d)(1); 19 CFR 4.14

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 112426

                         April 29, 1993

VES-13-18 CO:R:IT:C  112426 BEW

CATEGORY:  Carriers

Chief, Residual Liquidation Branch
U.S. Customs Service
6 World Trade Center
New York, New York 10048-0945

RE:  New York Vessel Repair Entry No. 514-3004580-0, S/S HOWELL
     LYKES, Voyage No. 33;  Petition; Casualty; 19 U.S.C.
     1466(d)(1); 19 CFR 4.14

Dear Sir:

     This is in reference to a memorandum from your office which
forwards for our review a Petition for Relief from duties filed in
conjunction with the above-referenced vessel repair entry.  The
entry and application were timely filed.
  
FACTS:

     The record reflects that the subject vessel, the S/S HOWELL
LYKES, arrived at the port of Port Elizabeth, New Jersey, on
September 26, 1991.  Vessel repair entry, number 514-3004580-0,
was filed on September 26, 1991.  The entry indicates that the
vessel underwent repairs while in Naples, Italy, during the period
of September 14 through September 15, 1991.  The entry also
indicates that on September 9, 1991, while at the port of
Alexandria, Egypt, the local surveyor of the American Bureau of
Shipping (ABS) surveyed the subject vessel for damage which was
caused by the Bulgarian M.V. SERDICA when she struck the HOWELL
LYKES while she was docked at the port of Alexandria.  
     
     The applicant alleged that each of the invoices submitted
relate to the repairs necessary because of a casualty. 
Specifically, you refer for our consideration the invoices
generated by the alleged casualty.

     In our decision 112010 BEW, dated June 2, 1992, we ruled that:

     It is clear from the evidence that the vessel suffered damage
     to the port side occasioned by the M.V. SERDICA while it was
     docked in Egypt.  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 repairs
     were not made until September 14 and 15, 1991, when the vessel
     was in the port of Naples, Italy . . .


     Federal regulations provide for evidence that permits an
     expeditious resolution of the question of seaworthiness. 
     The applicant has not met the burden of proof that the
     particular repairs to this vessel (being related to the
     stowage of cargo) were necessary for the safety and
     seaworthiness of the vessel.  

     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).

     The petitioner has submitted a report from the American Bureau
of Shipping relating to the accident in Egypt and the repairs made
in Naples.

ISSUE:  
     
     Whether sufficient evidence is presented to establish that
foreign 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 also 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 which must be met in
order to qualify for remission under the subsection, these 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 which, like stress of weather, comes with
unexpected force or violence, such as fire, or 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.  
     
     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)).

     The file contains affidavits from the master, copies of
relevant pages from the ship's official log for the date of
September 9, 1991, Notice of Damage to company officials, and ABS
surveys relating to the alleged casualty.  The log for 
September 9, 1991, shows that at 09:23 hours, the HOWELL LYKES was
discharging its cargo of containers while moored along side the
Alexandria, Egypt, container terminal .  The M.V. SERDICA was
maneuvering in the area and landed heavily along the port side of
the subject vessel, causing possible damage to her hull, as well
as damage to her cargo stowage deck fittings, and containers stowed
along the ship's port side.  
     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."

     The ABS Report No. AL 6989, dated September 9, 1991, reports
that the vessel suffered damage as a result of the said collision,
however it further states, "Due to vessel's commitments, No repairs
were carried out at that time, however, it is recommended that
containers' pedestals at Frames No. M28  M30 port side not be used
... pending satisfactory repair to be carried out and dealt with
to the satisfaction of the attending Surveyor at the earliest
Owner's convenience and not later than the next regular drydock due
on December 1991".  The vessels' log book was endorsed by the
surveyor at this time.
     In a telex from the Master to Lykes, it is stated "ABS
SURVEYOR FINDS VESSEL SEAWORTHINESS NOT AFFECTED."

     Based on the foregoing, we find from the evidence submitted
with the petition that the ABS inspection revealed that the safety
and seaworthiness of the vessel was not affected by the collision,
therefore, the evidence submitted is insufficient to sustain a
finding of "casualty" as provided under the statute.  Accordingly,
the petition is denied.

HOLDING:

     The evidence presented is insufficient to prove that the
foreign repairs performed on the subject vessel were necessitated
by a casualty occurrence, thus warranting remission pursuant to 19
U.S.C. 1466.  The petition is denied.

                                   Sincerely,



                                   Stuart P. Seidel
                                   Director, International
                                   Trade Compliance Division