HQ 116015 - Protest number 4601-03-200464; Vessel repair entry number NZ9 -0000002-3; M/V CHESAPEAK BAY; Voyage 026; 19 U.S.C. §1466; Casualty - United States International Trade Commision Rulings

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HQ 116015

August 14, 2003

VES-13-18 RR:IT:EC 116015 CK

CATEGORY: CARRIER

Supervisory Customs Liquidator
Bureau of Customs and Border Protection
1210 Corbin Street
3rd Floor Conference Room
Newark, New Jersey 07201

RE: Protest number 4601-03-200464; Vessel repair entry number NZ9 -0000002-3; M/V CHESAPEAK BAY; Voyage 026; 19 U.S.C. §1466; Casualty

Dear Sir:

This is in response to your memorandum of June 19, 2003 which forwarded the protest submitted by Nicholas Bachco Co. Inc. (Bachco), with respect to the above-referenced vessel repair entry.

FACTS:

The M/V CHESAPEAKE BAY completed voyage 026 when it entered the port of Newark, New Jersey on February 17, 2002. Vessel repair entry (CF 226) NZ9-0000002-3 was timely filed on February 19, 2002. The entry was subsequently liquidated on May 16, 2003 with duty assessed on foreign repairs. By letter dated June 10, 2003, Bachko filed the above-numbered protest on the grounds that the foreign repairs involving the boiler on the M/V CHESEAPEAKE BAY are not dutiable as they were an emergency repair.

Protestant argues that duty is not payable as the repairs at issue were mandated by the classification society, the American Bureau of Shipping (ABS), as well as the Piraeus Port Authorities, before the vessel was permitted to sail.

The CF 226 lists a repair of faulty video printed circuit board in January 2002 in Salerno, Italy, and repair and replacement of boiler and parts in Piraeus, Greece

Included with the supporting documentation submitted by the Protestant are the following: requisition and completion reports for repairs, dated January 8 and 11, 2002, for work authorized in Salerno, Italy on the radar, which included work on the video board; electronic reservations for a flight from Athens to Munich, and Munich to Copenhagen; job order authorizations, requisition for repairs, and e-mails detailing the request for boiler repairs to be performed in Piraeus, Greece; and an invoice for boiler repairs, and associated costs, and chemical, safety, and magnetic particle inspections on the M/V CHESAPEAKE BAY for work performed between January 23, 2002 and January 31, 2002.

Also attached are invoices for workmen, including bricklayers, boiler makers, and a foreman coordinator, along handhole gaskets, and manholes.

A Master’s affidavit dated February 17, 2002 is also included. The affidavit states that the radar began to fail en route to Salerno, Italy, where a repairman boarded and fixed the radar. The affidavit states that on the voyage to Piraeus, Greece the tubes of the auxiliary boiler were leaking and the technical representative for the manufacturer inspected the boiler and stated that a large crack was observed. The affidavit states that the port official required an ABS inspector to attend the vessel, and issue a report, and the ABS inspector required immediate repair. The affidavit states that the vessel’s documentation was taken and not returned until the ABS was satisfied with the repairs.

ISSUE:

Whether the protestant’s claim for remission due to a casualty should be granted pursuant to 19 U.S.C. § 1466(d)(1).

LAW AND ANALYSIS:

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. It is Customs position that “port of destination” means a port in the United States. (See, 19 CFR § 4.14(h)(2)(i))

The statute sets forth the following three-part test which must be met in order to qualify for remission under the subsection:

The establishment of a casualty occurrence.

The establishment of unsafe and unseaworthy conditions.

The inability to reach the port of destination without obtaining foreign repairs.

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, spontaneous explosion of such dimensions as to be immediately obvious to ship’s personnel, 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 casualty event, we must consider the repair to have been necessitated by normal wear and tear (Headquarters’ ruling letter 106159, dated September 8, 1983).

In this case, there is no allegation of stress of weather, violence, fire, and or spontaneous explosion. There is no allegation nor evidence of stress of weather or any event of unexpected force at all.

Additionally, while the Master’s affidavit references the requirement of an ABS inspector in Piraeus and the requisition for repairs calls for an ABS inspector, there is no evidence that an ABS inspector was involved in the surveying of these repairs.

As noted above, there is no allegation nor any evidence put forth of stress of weather or event of any unexpected force at all that is the cause of the repairs at issue. Additionally, there is no independent evidence, such as an ABS survey, that the repairs were required for seaworthiness, nor as the result of a “casualty.” Therefore, the protestant’s claim for remission due to a casualty pursuant to 19 U.S.C. § 1466(d)(1) should be denied.

HOLDING:

The protestant’s claim for remission pursuant to 19 U.S.C. § 1466(d)(1) is denied.

Accordingly, the protest is denied.

Sincerely,

Glen E. Vereb

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