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HQ 110924

July 13, 1990

VES-13-18-CO:R:P:C 110924 GV


Deputy Assistant Regional Commissioner
Classification and Value Division
ATTN: Regional Vessel Repair Liquidation Unit 6 World Trade Center
New York, New York 10048-002980

RE: Gloucester, Massachusetts Vessel Repair Entry No. 559- 1237166-7; HANNAH BODEN

Dear Sir:

This is in response to your memorandum dated March 12, 1990, transmitting documentation pertaining to the above referenced vessel repair entry. Our findings are set forth below.


The HANNAH BODEN is a U.S.-flag fishing vessel owned by Sea Star Corporation (Sea Star) of Marblehead, Massachusetts. The vessel had foreign shipyard work performed on her in St. John's, Newfoundland, Canada, during the period of October 9-23, 1989. Subsequent to the completion of the work the vessel arrived in the United States at Gloucester, Massachusetts, on November 26, 1989. A vessel repair entry covering the work in question was filed on December 1, 1989.

No application for relief was filed regarding this entry. In response to a Notice of Action (CF 29), dated January 26, 1990, from the New York Vessel Repair Liquidation Unit, requesting the requisite documentation for liquidation of the entry (i.e., invoices, surveys, logs, and any other factual information regarding the cause of the damage in question) Sea Star, by letter dated February 13, 1990, forwarded the shipyard invoice and a copy of a Note of Protest from the captain of the subject vessel. The letter further stated that there were no logs kept.

According to the captain's Note of Protest, dated October 16, 1989, the vessel experienced engine failure sometime between 6:00 p.m. and 7:00 p.m. on the evening of October 5, 1989, while operating in the swordfishing grounds of the Newfoundland Sea Mounts, situate east of the Grand Banks, off the Province of

Newfoundland, Canada. The captain unsuccessfully attempted to repair the engine. "He noted that an adjustment had come off one of the engine valves and he determined that he was not able to effect repairs at that time." (see p. 2 of the Note of Protest) On the morning of October 6 the master contacted the Canadian Coast Guard to arrange a tow to a port but they "informed the Master to stand-by as the Vessel was not in Canadian Jurisdiction but was in the Jurisdiction of the State of New York." (see p. 3 of the Note of Protest) On the evening of October 7 the subject vessel was subsequently towed by the Canadian Coast Guard to the port of the City of St. John's, Newfoundland, Canada, arriving on October 9, 1989.

The captain stated that at the time of the engine failure, "...the wind was at 35 knots, the temperature was 61 degrees fahrenheit, the skies were overcast but the visibility was clear, the seas had 12' waves with ground swells to 15'." (see p. 3 of the Note of Protest). We note, however, that the captain also stated that, "On the evening of 5 October 1989, the inclement weather, which did not make it possible to fish on 4 October 1989, began to clear." (see p. 2 of the protest)


Whether evidence is presented sufficient to prove that the foreign repairs performed on the 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 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. Section 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.

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 the absence of evidence of such a casualty causing event, we must consider the foreign repairs to have been necessitated by normal wear and tear.

In regard to the vessel under consideration, we note that since it is a fishing vessel (and therefore in possession of a certificate of documentation endorsed for the fisheries pursuant to 46 U.S.C. 12108), unless it was engaged in trade (which includes the transportation of merchandise or passengers), or issued a permit to touch and trade, it is not subject to the provisions of 19 U.S.C. 1466 and the Customs Regulations promulgated thereunder (see the first sentence of 19 U.S.C. 1466(a), 19 CFR 4.14(a)(2)(i), 19 CFR 4.15(a), C.I.E. 139/61, and T.D. 49140(12)).

In the event the subject vessel was issued a permit to touch and trade, or did engage in commercial activities such as the transportation of merchandise or passengers, it would be subject to section 1466 and 19 CFR 4.14. It should therefore be noted that absent Customs authorized extensions of time, failure to submit an application for relief with supporting evidence within 60 days from the date of the first arrival of the vessel (see 19 CFR 4.14(b)(1)(ii)(B)) results in the entry being forwarded for immediate liquidation. Although an application for relief need not be in any particular form, pursuant to 19 CFR 4.14(d)(1)(i) it should allege that an item or a repair expense is not subject to duty under either paragraph (a) of section 4.14 (items that are not subject to duty) and/or paragraph (c) (circumstances allowing remission otherwise due). The letter from Sea Star, dated February 13, 1990, is not only untimely, it also meets neither of the above criteria for an application.

Aside from failing to comply with the above procedural requirements, the owner of the vessel has not established that the repairs in question were necessitated as a result of a casualty within the meaning of section 1466(d)(1). The only evidence submitted to this effect is the captain's Note of Protest (dated one week after the vessel arrived in St. John's under tow) which, in and of itself, is not only insufficient to prove a casualty occurrence, but it also shows that the vessel left U.S. waters in order to obtain foreign repairs.


If the subject vessel is documented for the fisheries pursuant to 46 U.S.C. 12108, but was not issued a permit to touch and trade pursuant to 19 CFR 4.15(a), and did not engage in trade, it is not subject to the provisions of 19 U.S.C. 1466.

In the event the vessel is fisheries documented and has been issued a such a permit, or has engaged in trade (thereby rendering it subject to the provisions of 19 U.S.C. 1466), the evidence presented is not only untimely but is also insufficient
to prove that foreign repairs performed on the vessel for which relief is sought were necessitated by a casualty occurrence, thus warranting remission pursuant to 19 U.S.C. 1466(d)(1).


B. James Fritz

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