HQ 226646: Vessel Repair Entry No. C27-0132677-2; OMI COLUMBIA; V-LB001;Casualty; Stress of Weather; Collision; 19 U.S.C. 1466(d)(1)

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 226646

                          March 26, 1996

VES-13-20-RR:IT:EC 226646 GEV

CATEGORY: Carriers

Chief, Liquidation Branch
U.S. Customs Service
Post Office Box 2450
San Francisco, California 94111

RE: Vessel Repair Entry No. C27-0132677-2; OMI COLUMBIA; V-LB001;
Casualty; 
       Stress of Weather; Collision; 19 U.S.C.  1466(d)(1)

Dear Sir:

     This is in response to your memorandum dated December 13,
1995, forwarding an application for relief from duties assessed
pursuant to 19 U.S.C.  1466.  Our findings are set forth below.

FACTS:

     The OMI COLUMBIA is a U.S.-flag vessel owned by OMI Corp. of
New York, N.Y.  The applicant contends that on May 15, 1995, the
vessel sustained damage due to contact with a lightering vessel
during heavy weather while engaged in a lightering operation at
Chittagong Anchorage in the Bay of Bengal.  The subject damage
was subsequently surveyed by the American Bureau of Shipping
(ABS) at Karachi, Pakistan, on June 9, 1995, and in Fujairah,
U.A.E., on July 10, 1995.  Repairs were performed at Dubai
Drydocks, Dubai, U.A.E., from July 14 - 28, 1996.  The vessel
arrived in the United States at Los Angeles, California, on
September 8, 1994.   A vessel repair entry was timely filed.

     An application for relief, dated November 14, 1995, was
timely filed requesting "...relief from duty due
to...casualty..."  In support of its claim, the applicant
submitted copies of the following documentation:  ABS Report No.
KR2292-A1, dated June 15, 1995; ABS Report No. DU18043-B1, dated
July 25, 1995; Dubai Drydocks invoice nos. I-13022 and I-13023;
U.S. Coast Guard (USCG) form CG-2692 ("Report of Marine Accident,
Injury or Death"); Blaustein and Associates invoice no. 95/005;
Scana Skarpenord invoice no. 1514; Tameem Shipchandlers invoice
no. 16395; and Goltens Dubai invoice no. 3732/E2599.


                              - 2 -

ISSUE:

     Whether the evidence presented regarding foreign repairs to
the subject vessel is sufficient to warrant remission pursuant to
19 U.S.C.  1466(d)(1).

LAW AND ANALYSIS:

     Title 19, United States Code,  1466, provides in part for
payment of an ad valorem duty of 50 percent of 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 engage in such trade.  

     The regulations governing the submission of evidence and the
determination of dutiability of foreign shipyard operations under
 1466 are found in  4.14, Customs Regulations (19 CFR 
 4.14).  Subsection (d)(1) of  4.14 (19 CFR  4.14(d)(1))
provides that while an application for relief need not be
submitted in any particular format, it must make a claim for
relief under either paragraph (a) (items that are not subject to
duty) and/or paragraph (c) (circumstances allowing remission of
duty otherwise due), or both.  

     In regard to the application under consideration, although
relief is requested for the cost of repairs allegedly due to a
"casualty," no specification is made as to which work items this
claim pertains.  This glaring deficiency is critical in Customs
review of this matter given the fact that the shipyard invoices
cover work (e.g., engine overhaul) which far exceeds that needed
to repair the hull damage alleged to be casualty-related as
reflected on the ABS survey reports and the Master's statement on
the CG-2692.  As a result of the applicant's failure to comply
with the provisions of 19 CFR  4.14(d)(1), Customs is unable to
determine the scope of the applicant's request and the claim
under which the requested relief should be granted.    

     Notwithstanding the application deficiencies discussed
above, we note that with respect to a claim for relief that is
casualty-based,  1466(d)(1) provides that the Secretary of the
Treasury is authorized to remit or refund such duties if the
owner or master of the vessel was compelled by stress of weather
or other casualty to put into such 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. 
(see 19 CFR  4.14(c)(3)(i))

     The statute sets forth the following three-part test which
must be met in order to qualify for remission under the
subsection: 

     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.


                              - 3 -

     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, 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 casualty event, we must
consider the repair to have been necessitated by normal wear and
tear (ruling letter 106159, dated 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.  In the case under consideration,
aside from the applicant's bald claims, the only evidence
proffered to establish a casualty occurrence (i.e., part 1 of the
three-part test set forth above) is the above-referenced copy of
a CG-2629 containing, in Block 30, the following statement of the
Master:

          While undocking lightering vessel, wind shifted with
squall and
          turned lightering vessel's beam to oncoming swell. 
Lightering 
          vessel started rolling and struck OMI Columbia on port
side
          #3 Ballast Tank.

     While it is readily apparent from the record that the vessel
suffered damage, the record is devoid of further evidence
corroborating the Masters's statement (e.g., a logbook entry
mandated pursuant to 46 U.S.C.  11301(b)(12) stating the
circumstances under which the casualty occurred).  Although the
evidence submitted unequivocally establishes the extent of the
damage in question, the same cannot be said with respect to how
such damage occurred.  In addition, the evidence submitted is
deficient with respect to the extent of the alleged casualty
(i.e., parts 2 and 3 of the three-part test set forth above).
     
     In regard to parts 2 and 3 of the three-part test set forth
above, the 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 
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 which 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."  




                              - 4 -

     Notwithstanding the clear wording of the above USCG
Regulations, specifically 46 CFR
 2.10-15 which does not distinguish between foreign or domestic
locations, it is the practice of the USCG not to issue a formal
permit-to-proceed to a vessel transiting foreign waters because
its certificate of inspection would have to be removed resulting
in problems in transiting foreign waters.  (See Customs ruling
112060)  Furthermore, the USCG acknowledges that vessel operators
often make casualty reports for U.S.-flag vessels damaged
overseas verbally to the proper USCG Marine Inspection Office,
followed by the required written report.  Since the USCG cannot
always send a marine inspector to a damaged vessel overseas they
oftentimes consider the classification society report and the
report of the vessel's master to determine the required temporary
repairs and voyage restrictions. Id.

     Customs has previously addressed the sufficiency of evidence
in casualty claims such as this where a vessel that has been
damaged foreign proceeds in a state of disrepair between foreign
locations (i.e., Chittagong, Karachi and Dubai) prior to its
being repaired in a foreign port, and 
subsequently sails to its U.S. port of destination.  (See Customs
Rulings 112060, dated May 21, 1992; 112061, dated June 10, 1992;
112063, dated June 8, 1992; 112229, dated June 11, 1992, and
113501, dated October 24, 1995).  It is Customs position, as
stated in the aforementioned 
rulings, that 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 foreign locations in a
damaged condition.  The mere submission of a CG-2692, without
accompanying documentation from the appropriate USCG OCMI
authorizing the vessel to proceed in a damaged condition and
specifying what, if any, restrictions apply, will not suffice for
granting remission pursuant to 19 U.S.C.  1466(d)(1). 

     As discussed above, the record in this case is devoid of the
requisite USCG documentation for granting remission pursuant to 
1466(d)(1).  Further in this regard we note the applicant's
statement that, "It was determined by U.S. Coast Guard and also
ABS Class surveyor that vessel was not sea-worthy [sic] for
return trip to United States without repairs."  No such
determination is reflected in the USCG or ABS documentation
submitted.  

     In addition, the evidence that has been submitted is
contradictory to the relief requested.  For example, we note that
Block 31 of the CG-2629 contains the following statement by the
Master:

          Side Shell stove in approx. 3 inches in way of Frames
80 & 81
          Side Shell Longitudinal #1 & #2 deflected upward
slightly
          Web Frame Support buckled
          
               Seawortyness [sic] NOT affected 



                              - 5 -

     Consequently, the applicant is requesting that Customs find
the subject vessel unseaworthy to return to its U.S. port of
destination yet at the same time it submits a statement from the
Master that the vessel's seaworthiness has not been affected by
the damage incurred.  In addition, after the damage was incurred
on May 15, 1995, the vessel was not surveyed by the ABS until
June 9, 1995, in Karachi, Pakistan, and July 14, 1995, in
Fujairah, U.A.E., and was not repaired until July 14, 1995, in
Dubai, U.A.E. (almost two months after the damage was incurred). 
This chronology of events leads Customs to conclude that the
vessel owner considered the condition of the vessel after the
damage was incurred to be other than unsafe and unseaworthy.

     In addition, ABS Report No. KR2292-A1 covering the hull
damage survey at Karachi, Pakistan, specifically provides,
"Owners requested that permanent repairs be deferred at this
time." (Emphasis added)  Not only does this statement shed
further doubt on the claimed unseaworthiness of the vessel, it
should be noted that Customs has long-held that the cost of
deferred repairs allegedly due to a casualty occurrence may not
be remitted where such deferral is for a considerable period
after the alleged casualty occurrence and/or there is no adequate
explanation for the delay .  (See C.I.E.s 1262/60 and 538/62,
respectively.)  

     Finally, we note the above-referenced ABS report also states
that the fracture at cargo tank no. 4 between web frames 67 and
68 was temporarily repaired and "considered satisfactory at this
time for continued operation."  The report further stated that
the vessel need be "permanently repaired...prior to crediting of
Annual Survey - Hull, due in November 1995."  We find this six
month gap between the time the damage was incurred and the time
when the ABS would require permanent repairs be made to their
satisfaction further bolsters our position that the damage to the
vessel rendered it other than unsafe and unseaworthy within the
meaning of
 1466(d)(1).                

     Accordingly, the statutorily mandated three-part test for
remission has not been met.  The evidence presented is therefore
insufficient to warrant remission pursuant to 19 U.S.C. 
 1466(d)(1).  

HOLDING:

     The evidence presented regarding foreign repairs to the
subject vessel is insufficient to warrant remission pursuant to
19 U.S.C.  1466(d)(1).  The applicant's claim is therefore
denied.

                              Sincerely,




                              William G. Rosoff
                              Chief
                              Entry and Carrier Rulings Branch