Protest No. 2002-07-101727; Vessel Repair Entry No. C20-0041470-9; EL FARO; 19 U.S.C. § 1466(d)(2); Casualty; 19 U.S.C. § 1466(d)(1)

HQ H022589 March 19, 2008 VES-13-18-OT:RR:BSTC:CCI H022589 JLB CATEGORY: Carriers Supervisory Import Specialist Vessel Repair Unit U.S. Customs and Border Protection 1515 Poydras Street, Suite 1700 New Orleans, Louisiana 70112 RE: Protest No. 2002-07-101727; Vessel Repair Entry No. C20-0041470-9; EL FARO; 19 U.S.C. § 1466(d)(2); Casualty; 19 U.S.C. § 1466(d)(1) Dear Sir: This letter is in response to your memorandum of January 15, 2008, forwarding the above-referenced protest for further review. We have reviewed the arguments set forth by your office and by the protestant, Seastarline LLC. Our decision follows. FACTS The subject protest involves foreign shipyard work undergone by the vessel EL FARO as well as work performed by foreign labor while the vessel was in transit. The vessel is currently owned and operated by Seastarline LLC. On June 2, 2007, the vessel arrived in Shuaiba, Kuwait for shipyard work and returned to the United States at the port of Jacksonville, Florida on June 28, 2007. A vessel repair entry was timely filed. On December 7, 2007, your office issued a decision which assessed vessel repair duties in the amount of $9,857.56. A timely protest was filed thereto for the duties assessed for two items. ISSUE Whether the foreign repairs performed on the vessel for which relief is sought are dutiable under 19 U.S.C. § 1466? LAW AND ANALYSIS Pursuant to 19 U.S.C. § 1466(a), there must be a 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 engage in such trades. Item 1 This Item covers the “installation of a Furno Depth Sounder.” The protestant alleges that, “this equipment was provided in the U.S. and shipped to Kuwait.” (Emphasis added). Pursuant to 19 U.S.C. § 1466(d)(2), a duty may be remitted if good and sufficient evidence is provided establishing “such equipments…were manufactured or produced in the United States, and the labor necessary to install such equipments or to make such repairs was performed by residents of the United States, or by members of the regular crew of such vessel.” Therefore, a two-prong test must be met with respect to granting duty-free treatment to the installation of equipment: (1) U.S. manufacture or production must be established, and (2) the labor must have been performed by U.S. residents or members of the regular crew of the vessel. To establish U.S. manufacture or production, a party must submit a statement from the vendor or manufacturer of the equipment that it was manufactured or produced in the United States. See Headquarters Ruling Letter 113663, dated September 25, 1996; Headquarters Ruling Letter 111309, dated March 5, 1991; Headquarters Ruling Letter 115945, dated May 19, 2003. The protestant has not provided any such statement as to the manufacture or production of the equipment in question, the Furno Depth Sounder. While the protestant did submit an invoice from Seacoast Electronics, Inc. in Jacksonville, Florida and documentation that the equipment was subsequently shipped to Kuwait, this is insufficient. CBP has previously held that an invoice from a U.S. company does not constitute a statement sufficient to establish U.S. manufacture or production. See Headquarters Ruling Letter 113383, dated April 12, 1995. Additionally, the second prong of the test, that the labor was performed by U.S. residents or members of the regular crew of the vessel, has not been met. The protestant provides contradictory claims in the protest stating in one section that the technician was furnished by a U.S. company to travel to Kuwait and then stating in another section that the technician traveled from the U.K. The invoice provided only states the costs of the technician’s travel and does not provide the location from which he traveled or his residency. Consequently, it has not been established that the labor to install the Furno Depth Sounder was performed by U.S. residents or members of the regular crew of the vessel. Thus, the protestant has failed to satisfy both parts of the two-pronged test for 19 U.S.C. § 1466(d)(2). Accordingly, this item is held to be dutiable. Item 2 Pursuant to 19 U.S.C. § 1466(d)(1), a 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 enter 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 CBP’s position that "port of destination" means a port in the United States. The statute thus sets a three-part test which must be met in order to qualify for remission: 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. See Headquarters Ruling Letter 111539, dated December 11, 1991; Headquarters Ruling Letter 116426, dated March 23, 2006. The term "casualty" has been interpreted as something which, like stress of weather, comes with unexpected force or violence, such as fire, or spontaneous explosion of such dimensions as to be immediately obvious to ship's personnel, or as a collision. See Dollar Steamship Lines, Inc. v. United States, 5 Cust. Ct. 23, 28-29 (1940). In the absence of evidence of a casualty event, we must consider the foreign repair to have been necessitated by normal wear and tear. See Headquarters Ruling Letter 106159, September 8, 1983. The protestant has provided insufficient evidence of what actually caused the need for the emergency repairs. The invoice merely states that one troubleshooting was performed “to open & investigate the high temperature of Turbine Bearing.” While the protest asserts that the repair was “performed to assure the safety of the ship’s crew, the ship, and its cargo, and to remain in compliance with U.S. Coast Guard rules regarding seaworthiness,” no explanation is provided as to how the vessel’s turbo generator was damaged. It appears that the repairs were due to the lack of proper maintenance. The submitted documentation does not assert that the emergency repairs were required due to weather, force, violence, collision or any other casualty event, therefore, we must find that the emergency repairs were necessitated by normal wear and tear. In view of the lack of good and sufficient evidence justifying the granting of relief for a casualty claim under 19 U.S.C. § 1466(d)(1), this item is held to be dutiable. HOLDING After a thorough review of the record, the protest is denied as detailed above. In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), 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 recalculation of duties of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, Glen E. Vereb, Chief Cargo Security, Carriers and Immigration Branch