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HQ 110923

July 19, 1990

VES-13-18 CO:R:P:C 110923 JBW


Deputy Assistant Regional Commissioner
Commercial Operations c/o Regional Commissioner
New Orleans, LA 70130-2341

RE: Vessel Repair; Remission; Dunnage; LETITIA LYKES; Voyage 82; VR-C14-0019295-6.

Dear Madam:

This letter is in response to your transmittal of March 9, 1990, forwarded for our review and ruling regarding the application for relief involving the above referenced case.


The record reflects that the subject vessel arrived at the port of Newport News, Virginia, on January 5, 1990. Vessel repair entry number VR-C14-0019295-6, Customs Form 226, was filed on the same day as arrival indicating foreign repairs in East London and Durban, South Africa, and in Singapore.

On February 19, 1990, Lykes Bros. Steamship Co., Inc., timely filed an application for relief and an amendment to its original entry. This amendment reported the following work performed in Singapore on November 14, 1989:

At Singapore - Modifications to vessel by Western Eagle that were necessary for loading of special cargo at Ulsan, Korea.

The ship's log states that these alterations were temporary and were necessary to permit the securing of three crane modules that exceeded the ship's existing cargo dimensions. The work included removing of cargo winches and winch controls, cutting of hatches and winch platforms, , welding of temporary stanchions, rigging temporary safety lines, and welding pad eyes for lashing of the cargo. The applicant contends that the work performed constitutes dunnage and consequently qualifies for remission of duty.


Whether costs for temporary alterations performed to permit a ship to carry a specialized cargo are remissible as dunnage under 19 U.S.C. 1466(d) (1982)?


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. The statute provides for the remission of the above duties where good and sufficient evidence is submitted to show that "equipments, or parts thereof, materials, or labor, were used as dunnage for cargo, or for the packing or shoring thereof...." 19 U.S.C. 1466(d)(3) (1982).

The term dunnage is defined to be "loose wood or other material used in a ship's hold for the protection of cargo." R. de Kerchove, International Maritime Dictionary 250 (2d ed. 1961); see also, Black's Law Dictionary 451 (5th ed. 1979); Headquarters Ruling Letter 103736, dated February 14, 1979. The function of dunnage is to protect cargo from water or from damage from chafing or shifting. See de Kerchove, supra, at 250. Applying this definition, the work performed and the material installed on the subject ship to secure the crane modules do not fall within the strict definition of dunnage.

19 U.S.C. 1466(d)(3) also permits remission for equipment, parts, materials, or labor used for the packing or shoring of cargo. The Customs Simplification Act of 1953 added 19 U.S.C. 1466(d)(3) (Section 3115(3), Revised Statutes). The legislative history discloses that the purpose of this provision was to permit installation abroad, without the payment of duty, of facilities on vessels for handling shipments of a type not usually carried, and thus enable vessels to secure cargoes for their homeward voyage that they would not otherwise be equipped to handle. C.I.E. 1274/63, dated August 13, 1963, citing H. Rep. No. 2174, 82d Cong., 2d Sess. (1953); see Bureau Letter dated January 21, 1964.

Although the materials and labor used to secure the crane modules are not considered dunnage, they nevertheless fall within the broader contemplation of the statute as facilities to secure cargo. Consequently, the duty on the temporary alterations to the ship to enable it to carry the crane modules is remissible pursuant to 19 U.S.C. 1466(d)(3).


Costs for temporary alterations performed to permit a ship to carry a specialized cargo, although technically not dunnage, are remissible under 19 U.S.C. 1466(d).


B. James Fritz

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