19 U.S.C. §1466; Vessel Repair Entry NK7-0100114-2; Protest 2002-10-100005; Casualty Claim

HQ H095121 February 26, 2010 VES-3-18-RR:BSTC:CCI H095121 GOB CATEGORY: Carriers Supervisory Import Specialist c/o Vessel Repair Unit U.S. Customs and Border Protection 1515 Poydras Street, Suite 1700 New Orleans, LA 70112 RE: 19 U.S.C. §1466; Vessel Repair Entry NK7-0100114-2; Protest 2002-10-100005; Casualty Claim Dear Sir: This ruling is in response to your memorandum of February 3, 2010, forwarding for our review the application for further review of a protest filed by Liberty Maritime Corporation (“protestant”) with respect to Vessel Repair Entry NK7-0100114-2. Our ruling follows. FACTS: The M/V LIBERTY STAR (the “vessel”), a U.S.-flag vessel, incurred foreign shipyard costs. The vessel arrived in the port of Galveston, Texas on September 21, 2009. A vessel repair entry was timely filed. Your office issued a letter of duty determination on December 11, 2009 with respect to the application for relief. A protest was subsequently filed seeking relief from duty on numerous expenditures. In regard to claims for relief, the protestant states, in pertinent part, as follows: “It was the intention of the application for relief to seek relief on the casualty, parts, and labor portion of the repairs to the CO2 system which are required by the U.S.C.G. to satisfy requirements set forth by USCG …” The protestant has submitted a letter dated January 12, 2010 in which a Lieutenant Commander of the U.S. Coast Guard states, in pertinent part, as follows: The following is a statement of fact as it relates to Coast Guard Activities Europe involvement with Liberty Maritime following the inadvertent CO2 release on August 14th 2009 aboard the M/V LIBERTY STAR, in The Republic of Djibouti. Activities Europe was notified of the inadvertent discharge of 118 CO2 Cylinders on August 14th 2009….During these discussions, I made it clear that the vessel would not be allowed to sail until the CO2 system had been fully restored. An American Bureau of Shipping (“ABS”) Damage Repair Survey Report (last visit date August 27, 2009) provides in pertinent part as follows: Marine High Pressure Carbon Dioxide Systems for Engine Room found inadvertently discharged…. 1. Master advised that all persons onboard were safe and no injuries incurred at that time of accident. 2. Engine Room was generally examined and no significant defects were observed. 3. It was noted that the system had 28 numbers of Marine High Pressure CO2 cylinder valves with date code range of 10-07 to 06-08 (date code was 15-07 onboard) as reported on Safety Bulletin No. 5559, issued on 16 July 2009 by ANSUL (Tyco) advising that they have received isolated reports of Marine High Pressure Carbon Dioxide Systems inadvertently discharging and it has been found that in reported discharges an internal pressure vent on the cylinder valve may not be adequately venting pressure, causing a cylinder in the system to actuate, which would then cause all cylinders on the specific system to actuate. Same was inspected by Master on 27 July 2009 and reported to the company. ISSUE: Whether the costs for which the protestant seeks relief are dutiable or remissible under 19 U.S.C. § 1466. LAW AND ANALYSIS: Initially, we note that the information in the file indicates that the protest was timely filed under the statutory and regulatory provisions for protests. 19 U.S.C. § 1514(c)(3) and 19 CFR § 174.12(e). Title 19, United States Code, § 1466 (19 U.S.C. §1466) provides for the payment of duty at a rate of fifty percent ad valorem on the cost of equipment for and foreign repairs to vessels documented under the laws of the United States to engage in foreign or coastwise trade, or vessels intended to be employed in such trade. Section 1466(d)(1)) provides that the Secretary is authorized to remit or refund such duties if the owner or master of the vessel furnishes good and sufficient evidence that the vessel was compelled by stress of weather or other casualty to put into a foreign port and make repairs to secure the safety and seaworthiness of the vessel to enable her to reach her port of destination. Section 4.14(h)(2)(i), Customs and Border Protection (“CBP”) Regulations (19 CFR § 4.14(h)(2)(i)) provides that "port of destination" means such port in the United States. Section 1466(d)(1) and 19 CFR § 4.14(h)(2)(i) essentially set forth a three-part test, each of the elements of which must be established by good and sufficient evidence to qualify for remission: 1. a casualty occurrence; 2. an unsafe and unseaworthy condition; and 3. the inability to reach the port of destination in the U.S. without foreign repair. The term "casualty,” as it is used in the vessel repair statute (19 U.S.C. § 1466) has been interpreted as something which, like stress of weather, “comes with unexpected force or violence, such as that of a fire, or a collision, or an explosion.” See Dollar Steamship Lines, Inc. v. United States, 5 Cust. Ct. 23, 29 (1940). We also take notice of the following definitions of “casualty.” A serious or fatal accident . . . A disastrous occurrence due to sudden, unexpected or unusual cause. Accident; misfortune or mishap; that which comes by chance or without design. A loss from such an event or cause; as by fire, shipwreck, lightning, etc. Black’s Law Dictionary (5th ed., 1979). A serious or fatal accident. Black’s Law Dictionary (8th ed., 2004). Section 4.14(h)(2)(i), CBP Regulations (19 CFR § 4.14(h)(2)(i)) provides in pertinent part that “… a ‘casualty’ does not include any purchase or repair made necessary by ordinary wear or tear …” The primary issue presented for our review is the protestant’s casualty claim under 19 U.S.C. § 1466(d)(1). After careful consideration of this claim, we find that the protestant has not furnished good and sufficient evidence with respect to the required elements under 19 U.S.C. § 1466(d)(1). In particular, we find that the protestant has not established the occurrence of a casualty by good and sufficient evidence. (Because the protestant has not established this first element, we need not make determinations with respect to the second and third elements.) The ABS Damage Repair Survey Report, excerpted above, indicates that, prior to the claimed casualty, the owner of the vessel was advised of problems with respect to carbon dioxide systems discharging. There is no evidence of any actions that the vessel owner or operator took to ensure that its carbon dioxide systems would not be subject to sudden discharge. Further, the protestant has not provided any explanation for the issues raised in the ABS Damage Repair Survey Report. In sum, we determine that the protestant has not provided good and sufficient evidence with respect to the occurrence of a casualty. In its protest, the protestant also makes a number of other claims, but it has provided no documentary evidence or explanation for these claims. Under these circumstances, we have no choice but to deny these claims. HOLDING: The costs for which the protestant seeks relief are dutiable and non-remissible under 19 U.S.C. § 1466. With respect to the items addressed in this ruling, you are instructed to deny the protest. In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2007), 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 final duty determination 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