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HQ 110804

July 9, 1990

VES-13-18-CO:R:P:C 110804 GV


Chief, Technical Branch
Pacific Region
300 North Los Angeles Street
Post Office Box 2071
Los Angeles, California 90053-3379

RE: Seattle Vessel Repair Entry No. 335-0902839-6, PRESIDENT MADISON V-159

Dear Sir:

Your memorandum dated January 17, 1990, forwarded an application for relief from duty assessed pursuant to 19 U.S.C. 1466 on the cost of foreign work performed on the subject vessel. You seek our advice regarding five items covered by the above referenced entry. Our findings are set forth below.


The PRESIDENT MADISON is a U.S.-flag vessel owned by American President Lines, Ltd. (APL) of Oakland, California. During the vessel's departure from Kobe, Japan, on September 9, 1989, en route to Kaohsiung, Taiwan, the main propulsion shaft thrust bearing failed. The failure was evidenced by the bearing's high temperature and lube oil strainer differential pressure alarms sounding one after another after the main steam turbine speed increased to 85 r.p.m. Particles of the melted bearing metal circulated through the lubricating oil system, plugging the strainers. Upon examination of the strainers, a considerable amount of non-ferrous material was found in the first strainer. Several attempts were made to increase main turbine speed all of which failed. Upon consulting via satellite with APL shore personnel, it was decided the vessel could not proceed in this condition without incurring extensive damage to the reduction bull gear and reduction pinion gears and therefore should return to Kobe for repairs.

The subject vessel arrived in Kobe on September 11, 1989, and the repairs in question took place during the period of September 11-21, 1989. Subsequent to the completion of the repairs the vessel arrived in Seattle, Washington, on September 29, 1989. A vessel repair entry was filed on October 6, 1989.

An application dated December 13, 1989, was submitted claiming that the above repairs were necessitated as a result of a casualty and therefore the duties assessed thereon should be remitted pursuant to 19 U.S.C. 1466(d)(1). The applicant contends that the bearing failure was due to the presence of tin oxide particles (which are hard, sharp, and abrasive) on the bearing metal. Test results from lube oil samples from the contaminated oil revealed the presence of sulphur reducing bacteria which attack the bearing metal and cause the formation of tin oxide. In support of its claim the applicant submitted the following: (1) a copy of a memo of the Port Engineer, Mr. George R. Burton; (2) a copy of an APL damage report; (3) a copy of a U.S. Coast Guard Report of Marine Accident; (4) a copy of Captain John G. Stewart's message to APL headquarters; (5) copies of shipyard invoices covering the repairs in question; (6) copies of an American Bureau of Shipping (ABS) invoice and report; and (7) a copy of a certificate of analysis from the laboratory which tested the lube oil samples.


Whether evidence is presented sufficient to prove that the foreign repairs performed on the subject vessel for which relief is sought were necessitated by a casualty occurrence, thus warranting remission pursuant to 19 U.S.C. 1466(d)(1).


Title 19, United States Code, 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 States to engage in foreign or coastwise trade, or vessels intended to engage in such trade. Section 1466(d)(1) provides for remission of the above duties in those instances where good and sufficient evidence is furnished to show that foreign repairs were compelled by "stress of weather or other casualty" necessary to secure the safety and seaworthiness of the vessel to enable her to reach her port of destination.

The term "casualty", as it is used in the vessel repair statute (19 U.S.C. 1466) has been interpreted by the Customs Court as something which, like stress of weather, comes with unexpected force or violence, such as a fire, explosion, or collision (see Dollar Steamship Lines, Inc., v. United States, 5 Cust. Ct. 28-29, C.D. 362 (1940)).

In regard to the applicant's claim, we note that in view of the Customs Court's interpretation noted above, damage attributed to defective lubricants cannot be considered a casualty for purposes of section 1466(d)(1). Accordingly, the repairs in question are dutiable.


The evidence presented is insufficient to prove that the foreign repairs performed on the subject vessel for which relief is sought were necessitated by a casualty occurrence. Accordingly, remission pursuant to 19 U.S.C. 1466(d)(1) is denied.


B. James Fritz

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