United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 2001 HQ Rulings > HQ 114556 - HQ 115294 > HQ 115122

Previous Ruling Next Ruling
HQ 115122

December 20, 2000

VES-13-18/BON-2-RR:IT:EC 115122 GEV


Chief, Vessel Repair Liquidation Unit
U.S. Customs Service
423 Canal Street
New Orleans, Louisiana 70130

RE: Protest No. 2002-98-100303; Vessel Repair Entry No. C20- 0047025-5; SS LASH ATLANTICO; Bond Validity; Casualty; 19 U.S.C. § 1466(d)(1)

Dear Sir:

This is in response to your memorandum dated July 31, 2000, forwarding for our review the above-referenced protest. Our ruling on this matter is set forth below.


The SS LASH ATLANTICO is a U.S.-flag vessel owned and operated by Coastal Barge Corporation (“CBC”). The vessel incurred foreign repair costs during a cruise which began in September of 1993. In this regard the protestant alleges that on February 3, 1994, while the vessel was moored to a dock at Cadiz, Spain, an explosion occurred causing one of its boilers to suffer a ruptured condenser tube which caused damage to the floor/screen tubes and the air intake plenum expansion joint. Foreign repair work was subsequently performed on the vessel.

The vessel arrived in the United States at New Orleans, Louisiana, on September 21, 1994. An incomplete vessel repair entry was timely filed. An application for relief, dated December 14, 1994, with some supporting documentation was timely filed. Further attempts by your office to obtain all supporting documentation were futile. Consequently, by your letter dated October 16, 1995, the application was granted in part and denied in part, and the applicant was advised of its right to file a petition pursuant to § 4.14(d)(2) of the Customs

Regulations (19 CFR § 4.14(d)(2)). No such petition was filed. The entry was subsequently liquidated on December 5, 1997.

On March 14, 1998, Customs mailed a formal demand to the protestant, Hartford Fire Insurance, as surety, in the amount of $419,649.32, in satisfaction of liquidated duties assessed pursuant to the vessel repair statute (19 U.S.C. § 1466) for foreign repairs performed on the subject vessel. A protest was timely filed by the surety proffering the following arguments. First, the single entry International Carrier Bond upon which the demand was made is invalid and therefore unenforceable due to the fact that it lacks the signature and seal of the principal, the entry number, and a transaction date. In the alternative, the protestant claims remission of duties pursuant to 19 U.S.C. § 1466(d)(1) for the costs of repairs to the vessel performed as a result of a boiler explosion which constituted a “casualty” within the meaning of that statutory provision.


Whether the single entry International Carrier Bond submitted for this vessel repair entry is invalid and therefore unenforceable since it lacks a signature and seal of the principal, the entry number, and a transaction date.

Whether the costs for which the protestant seeks remission should be granted pursuant to 19 U.S.C. § 1466(d)(1).


Title 19, United States Code, § 1466(a), provides in pertinent part for the payment of an ad valorem duty of 50 percent of the cost of "...equipments, or any part thereof, including boats, purchased for, or the repair parts or materials to be used, or the expenses of repairs made in a foreign country upon a vessel documented under the laws of the United States..."

Section 1466(d)(1) provides that the Secretary of the Treasury is authorized to remit or refund such duties imposed under § 1466(a) 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 Customs Regulations promulgated pursuant to 19 U.S.C. § 1466 are set forth in 19 CFR § 4.14. With respect to bonds, § 4.14(b)(1) provides, in pertinent part, that “[e]stimated duties shall be deposited or a bond on Customs Form 301, containing the bond conditions set forth in § 113.64 [International Carrier Bond] of this chapter shall be filed,” As noted above, the single entry International Carrier Bond in this case lacks a signature and seal of the principal, the entry number, and a transaction date. In view of these deficiencies, by our memorandum of November 9, 2000, we forwarded a copy of the subject bond to the Assistant Chief Counsel, Indianapolis, Indiana, requesting their review and opinion in this matter. In response to our request, we received their memorandum of December 12, 2000 (copy enclosed) wherein they opined that the aforementioned deficiencies render the subject bond incomplete and invalid and therefore concur with the protestant that any demand on the surety should be withdrawn. Consequently, the protest should be granted.


The single entry International Carrier bond submitted for this vessel repair entry is invalid and therefore unenforceable since it lacks a signature and seal of the principal, the entry number, and a transaction date. The demand on surety should therefore be withdrawn.

Our holding with respect to Issue 1 moots our rendering a decision regarding those costs for which the protestant seeks remission pursuant to 19 U.S.C. § 1466(d)(1).

Accordingly, the protest is granted.

In accordance with § 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to mailing this decision. Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the

Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.


Larry L. Burton

Previous Ruling Next Ruling