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HQ 109993

July 3, 1989

VES-13-18-CO:R:P:C 109993 GV


Deputy Assistant Regional Commissioner
Classification and Value Division
ATTN: Regional Vessel Repair Liquidation Unit New York, New York 10048-0945

RE: Dutiability of certain foreign shipyard operations performed on U.S.-flag LASH barges

Dear Sir:

Reference is made to the November 30, 1987, application for relief from vessel repair duties filed by Waterman Steamship Corporation in relation to entry number 514-3003125-5, dated October 21, 1987. The entry was filed upon the arrival of the vessel S.S. SAM HOUSTON, V-47, at the port of New York on October 17, 1987, whereupon duties were assessed upon the value of foreign shipyard operations pursuant to 466, Tariff Act of 1930, as amended (19 U.S.C. 1466).


The vessel S.S. SAM HOUSTON is a Lighter Aboard Ship (LASH) barge mother vessel. A single vessel repair entry was filed to cover repairs to numerous LASH barges, each of which should have been the subject of a separate entry with a unique entry number. The application for relief is submitted to cover fourteen (14) of the barges, with no claim for relief having been submitted for the remainder of the vessels. Those barges for which relief is sought are the following:

WA-1-0049 WA-1-0229
WA-1-0068 WA-2-0367
WA-1-0095 WA-1-0405
WA-1-0158 WA-1-0438
WA-1-0259 WA-1-0439
WA-1-0279 WA-2-0457
WA-1-0295 LB-810


Whether evidence is presented sufficient to prove that the repairs performed on the barges for which relief is sought, were necessitated by a casualty occurrence, thus warranting remission.


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 Stated to engage in foreign or coastwise trade, or vessels intended to engage in such trade.

Paragraph (1), subsection (d) of 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. Thus, it is necessary that in order to qualify for duty remission, the party seeking relief must show both the occurrence of a casualty, and that the repair was necessary for safety and seaworthiness.

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, explosion 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 causing event, we must consider the repair to have been necessitated by normal wear and tear (ruling letter 105159, September 8, 1983).

Owing to the factors peculiar to the operation of LASH barges, special standards of evidence are provided in the Customs Regulations when casualty claims are made concerning such vessels under 1466(d)(1). Section 4.14(d)(1)(iii)(G), Customs Regulations (19 CFR 4.14(d)(1)(iii)(G)), provides that there must be submitted evidence showing that a barge was inspected immediately prior to being loaded upon its vessel of departure from the U.S., that it was found to be seaworthy at that time, that damage was discovered during the course of the foreign voyage, and that the repairs performed were necessary for the safety and seaworthiness of the barge to enable it to reach its U.S. port of destination. Documents purporting to demonstrate these elements must have been prepared at the time that barges were placed aboard for foreign departure, and must have been prepared and signed by responsible persons in a position to attest to the veracity of the statements being made. Documents executed after the fact and/or by persons with no first-hand 3
knowledge of the actual condition of barges immediately prior to foreign departure are of no probative value, and are insufficient for the purpose for which they are submitted.

In the present case, documents are contained in the file covering the 14 barges regarding which relief is being sought. The documents each contain the statement that various of the barges were found to be in sound condition upon being loaded on the outward-bound vessel, and are signed by the Master and the Chief Officer. These statements are, however, undated. There is no way for Customs to determine whether these statements were executed contemporaneously with the lading of the vessels, thus providing credible evidence, or whether they were prepared at some later date.

Further in regard to this case, we note that the foreign work listed on the vessel repair entry (CF 226) for many of the barges in issue is not supported by adequate documentation (i.e., invoices). The fact that special standards of evidence for LASH barges are provided in section 4.14(d)(1)(iii)(G) in the event of a casualty claim does not obviate the requirement set forth in section 4.14(d)(1)(iii)(A), Customs Regulations to submit all itemized bills, receipts and invoices covering those items for which relief is sought.

Accordingly, in regard to those invoices that were submitted, all charges listed thereon are dutiable with the exception of the following:

Barge No. WA-1-0299 P.T. Intan Sengkunzit Invoice No. 02/INREP/VIII/1987 (charges for towing are free as are the charges for mooring and having the barge on a slipway)

Barge No. WA-1-0158 P.T. Rantai Laut Invoice No. 17/BG/RL/VIII/1987 (charges for towing /drydock are free)

Barge No. WA-1-0405 Then Engineering Invoice No. TES/D/2100/87/07 SD (charges for towing/drydock are free)

Barge No. WA-1-0438 Then Engineering Invoice No. TES/D/2107/87/07 SD (charges for towing/drydock are free)

Barge No. LB-810 Then Engineering Invoice No. TES/D/2117/87/07 SD (charges for towing/drydock are free)

Barge No. WA-1-0049 Then Engineering Invoice No. TES/D/2116/87/07 SD (charges for towing/drydock and/or cleaning-cargo are free)

Barge No. WA-1-0295 Then Engineering Invoice No. TES/D/2114/87/07 SD (Charges for towing/drydock and/or cleaning-cargo are free)

Barge No. WA-1-0068 Then Engineering Invoice No. TES/D/2111/87/07/ SD (charges for towing/drydock are free


In light of the foregoing, we recommend that relief be denied for this application, with the exception of those expenditures noted above.


B. James Fritz

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