Vessel Repair Entry No. C20-0037425-9; S/S ULTRASEA, Voyage 49; Application; Casualty; Heavy Weather; 19 U.S.C. 1466; 19 CFR 4.14(d) Dear Sir:

HQ 112382 February 25, 1993 VES-13-18-CO:R:IT:C 112382 BEW CATEGORY: Carriers Regional Director Commercial Operations Division New Orleans, Louisiana 70130-2341 RE: Vessel Repair Entry No. C20-0037425-9; S/S ULTRASEA, Voyage 49; Application; Casualty; Heavy Weather; 19 U.S.C. 1466; 19 CFR 4.14(d) Dear Sir: This is in response to your memorandum dated July 10, 1992, that forwards for our review an application for relief from duties filed in conjunction with the above referenced vessel repair entry. FACTS: The S/S ULTRASEA is a U.S.-flag vessel owned by Bankers Trust Co. of New York, New York. The subject vessel underwent foreign repairs during the period of February 7 through March 1, 1992. After the completion of the repairs the vessel arrived in the United States at the port of New Orleans, Louisiana, on March 18, 1992. Vessel repair entry No. C20-0037425-9 was timely filed on March 23, 1992. An application for relief which was timely filed on May 15, 1992, requested remission of duty on the basis of a casualty. Submitted with the application were various invoices covering the work in question. The applicant states that the vessel encountered severe weather conditions while enroute from New Orleans, Louisiana, to Estonia during the period of January 11 through January 14, 1992, resulting in heavy weather damage to the vessel's rudder. It claims that foreign repairs became necessary immediately to ensure the safety and seaworthiness of the vessel. The applicant has submitted copies of relevant pages from the ship's log containing the sea conditions on January 11 through January 14, 1992. In addition, the application contains internal documents relating to the damage, the Master's affidavit, USCG Form 2692 Marine Notice of Accident report, USCG Form 835 Marine Inspectors Report, dated February 3, 1992, and ABS surveys relating to the alleged casualty. Specifically, you referred for our consideration the invoices generated by the alleged casualty. ISSUE: Whether sufficient evidence is presented to establish that foreign repairs were necessitated by a "casualty" which is remissible under the vessel repair statute (19 U.S.C. 1466)(d)(1). LAW AND ANALYSIS: Title 19, United States Code, section 1466(a), 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 the foreign or coastwise trade, or vessels intended to be employed in such trade. Paragraph (1), subsection (d) of section 1466 provides that duty may be remitted if good and sufficient evidence is furnished establishing that the vessel was compelled by stress of weather or other casualty to put into a 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. The statute thus sets a three-part test that must be met in order to qualify for remission under the subsection, this being: 1. The establishment of a casualty occurrence. 2. The establishment of unsafe and unseaworthy conditions. 3. 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 that, 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 a casualty event, we must consider the repair to have been necessitated by normal wear and tear (ruling letter 106159, September 8, 1983). In addition, if the above requirements are satisfied by evidence, the remission is restricted to the cost of the minimal repairs necessary to "secure the safety and seaworthiness of the vessel to enable her to reach her port of destination" (19 U.S.C. 1466(d)(1)). Repair costs beyond that minimal amount are not subject to remission. Customs Regulations require that certain supporting evidence be submitted with an application for relief from duties on repairs resulting from stress of weather. This evidence includes photocopies of the relevant parts of the vessel's logs, certification of any claimed casualty by the master or other responsible vessel officer with personal knowledge of the facts, and a certification by the master that the repairs were necessary for the safety and seaworthiness of the vessel to enable her to reach her port of destination in the United States (19 C.F.R. 4.14(d)(1)(iii)(D)-(F)). Treasury Decision 78-180, sets out guidelines to be used when relief is requested on the basis that the vessel encountered high winds (T.D. 78-180, 12 Cust. B. & Dec. 382 (1978)). It was held that evidence of winds of force 9 on the Beaufort Scale, a numerical scale rating winds according to ascending velocity from zero (calm) to twelve (hurricane), verified as required in the regulations, and accompanied by a reasonable description of the conditions, raise a presumption that severe weather conditions caused the damage. (See also Rene de Kerchove, International Maritime Dictionary 52 (2nd Ed. 1961). The applicant claims that the invoices submitted relate to the repairs necessary because of the alleged casualty. It is clear from the evidence submitted with the application that on January 11 through January 14, 1992, the vessel encountered severe weather conditions. The vessel's log shows that on the said dates the vessel was rolling and pitching in rough seas and swells, and taking on green water over the port side. The log also shows that the vessel encountered Northwesterly Force 7 and 8 winds and 15 to 18 feet swells. On January 14, 1992, the log shows that at 09:00 hours the "vessel vibration has noticeably increased above normal". The applicant alleges that on January 29, 1992, after the vessel arrived in Estonia and after the cargo had been discharged, the vessel was inspected for damage from the heavy seas and swells, and that from a visual inspection it was observed that the steering gear had dropped. Testing showed signs of rudder damage. It further alleges that because no repair facilities were available that vessel proceeded under U.S. Coast Guard authorization to Poland for repairs. The United States Coast Guard (USCG) is the controlling agency that determines questions of a vessel's fitness to proceed. The procedure by which the USCG renders such a determination is set forth in sections 2.01-15 and 31.10-25, USCG Regulations (46 CFR 2.10-15, 31.10-25). The former states that a vessel may not proceed from one port to another for repairs unless prior authorization is obtained from the USCG Officer-In- Charge, Marine Inspection (OCMI) either through the issuance of a USCG "Permit to Proceed to Another Port for Repairs" (CG-948) or a CG-835 that would specify the restrictions on, and duration of, any voyage undertaken prior to obtaining permanent repairs. The latter states that with respect to tank vessels, "No extensive repairs to the hull or machinery which affect the safety of a vessel shall be made without the knowledge of the Officer-In- Charge, Marine Inspection." Notwithstanding the clear wording of the above USCG Regulations, specifically 46 CFR 2.10-15 that does not distinguish between foreign or domestic locations, Customs has been informed by the OCMI, New York, New York, in a letter dated November 7, 1991, that "A formal Permit to Proceed is not normally issued to a vessel transiting foreign waters because the Certificate of Inspection (COI) would have to be removed from the vessel that would cause problems in transiting foreign waters." In addition, we have subsequently learned from the Chief, Merchant Vessel Inspection and Documentation Division, USCG Headquarters, in a letter dated April 14, 1992, that "Vessel operators often make casualty reports for U.S. flag vessels damaged overseas verbally to the proper Coast Guard Marine Inspection Office, followed by the required written report. The Coast Guard cannot always send a marine inspector to a damaged vessel overseas on short notice. In such cases, the Coast Guard may consider the classification society report and the report of the vessel's master to determine the required temporary repairs and voyage restrictions." The ABS Report No. GD1228, dated February 29, 1992, reports that the vessel suffered damage to her rudder and pintle as a result of heavy weather damage. The file also contains evidence that the vessel owners notified the USCG OCMI of the casualty and USCG permitted that vessel to proceed to Poland for repairs due to the unavailability of repair facilities in Estonia to do the repair work. In cases such as the one under consideration, (i.e., where a vessel that has been damaged foreign, proceeds in a state of disrepair between two foreign locations prior to being repaired foreign, and subsequently sails to its U.S. port of destination), notwithstanding any practice of verbally reporting foreign casualties to the USCG and that agency's subsequent verbal instructions, remission pursuant to 19 U.S.C. 1466(d)(1) will not be granted in the absence of documentary evidence that the casualty occurrence was timely reported to the USCG and that agency, directly or through the medium of a marine surveyor, permitted the vessel to proceed between two foreign locations in a damaged condition. The mere submission of a USCG Report of Marine Accident, Injury or Death (CG-2692), without accompanying documentation from the appropriate USCG OCMI (New York or Honolulu) authorizing the vessel to proceed in a damaged condition, will not suffice for granting remission pursuant to 19 U.S.C. 1466(d)(1). Accordingly, we found from the evidence submitted with the application that the damage was caused by a casualty, and that the USCG permitted the vessel to proceed between two foreign locations in a damaged condition. The applicant has submitted evidence sufficient to substantiate its claim for remission under 1466(d)(1). HOLDING: The evidence presented is sufficient to prove that the foreign repairs performed on the subject vessel were necessitated by a casualty occurrence, thus warranting remission pursuant to 19 U.S.C. 1466. Sincerely, Acting Chief Carrier Rulings Branch