19 U.S.C. § 1466; 19 C.F.R. § 4.14(h)(2)(i); Vessel Repair Entry C20-0082350-3; Protest 2002-13-100038; M/V MARY ANN HUDSON.

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H248673 May 5, 2014 VES-13-18-OT:RR:BSTC:CCR H248673 KLQ CATEGORY: Carriers Supervisory Liquidation Specialist Vessel Repair Unit U.S. Customs and Border Protection 423 Canal Street, Suite 246 New Orleans, Louisiana 70130 RE: 19 U.S.C. § 1466; 19 C.F.R. § 4.14(h)(2)(i); Vessel Repair Entry C20-0082350-3; Protest 2002-13-100038; M/V MARY ANN HUDSON. Dear Ms. Borden: This ruling is in response to your November 27, 2013, memorandum in which you request further review of the protest filed by LMS Shipmanagement on behalf of United Ocean Services with respect to Vessel Repair Entry No. C20-0082350-3. Our decision follows. FACTS The M/V MARY ANN HUDSON (“the vessel”), departed from the United States (“U.S.”) on January 7, 2013, from Beaumont, Texas, incurred foreign shipyard expenses in Djibouti and Gibraltar, and returned to the U.S. on March 18, 2013. On March 26, 2013, United Ocean Services submitted Vessel Repair Entry No. C20-0082350-3 and the Application for Relief requesting relief from duty for, inter alia, work done in relation to the failure of two generators. On July 12, 2013, the Vessel Repair Unit (“VRU”) made a final determination of duties and granted relief in full. However, the purchase and installation of one new generator was not raised in the Application for Relief. United Ocean Services filed protest 2002-13-100038 on July 29, 2013, seeking relief from duty for the costs for the new generator. The following facts are from the Application for Relief, the Report of Marine Accident, Injury or Death, U.S. Coast Guard Form CG-2692, the Garba Service Report, the vessel log, and the American Bureau of Shipping (ABS) Class Survey Report. On January 20, 2013, Generator One experienced an electrical failure and caught fire. Specifically, “the main rotor frame came apart while the generator was running on line causing it to short the windings and put a high voltage spike across the board causing the original problem.” The crew extinguished the fire and put Generator Two on line. Power was restored six minutes after the initial electrical failure. The vessel’s log indicates that the vessel “lost power.” On February 2, 2013, 13 days after the failure of Generator One, Generator Three failed and “tripped off line” during a test. The Emergency Generator came on line, Generator Two was put on line, and full power was restored. A later service report indicates that Generator Three failed because of “blown fuses.” The ABS Report stated that Generator Three failed because “the stator armature, rotor and exciter were broken down.” The vessel’s log from February 2, 2013, indicates a “loss of power.” Insofar as there were no facilities or factories large enough to make the needed repairs, a “backup deck generator” was purchased and installed on the vessel in Djibouti. The vessel was allowed to travel with the temporary generator, but under certain restrictions. ISSUE Whether the costs for which the protestant seeks relief are dutiable, non-dutiable, or remissible under 19 U.S.C. § 1466? LAW AND ANALYSIS Title 19 United States Code section 1466(a) (19 U.S.C. §1466(a)) provides for the payment of duty on the cost of foreign repairs to vessels documented under the laws of the United States to engage in foreign or coastwise trade, saying, in pertinent part: The 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 to engage in the foreign or coasting trade, or a vessel intended to be employed in such trade, shall, on the first arrival of such vessel in any port of the United States, be liable to entry and the payment of an ad valorem duty of 50 per centum on the cost thereof in such foreign country. However, 19 U.S.C. § 1466(d)(1), provides: If the owner or master of such vessel furnishes good and sufficient evidence that— (1) such vessel, while in the regular course of her voyage, was compelled, by stress of weather or other casualty, to put into such foreign port and purchase such equipments, or make such repairs, to secure the safety and seaworthiness of the vessel to enable her to reach her port of destination; […] then the Secretary of the Treasury is authorized to remit or refund such duties, and such vessel shall not be liable to forfeiture, and no license or enrollment and license, or renewal of either, shall hereafter be issued to any such vessel until the collector to whom application is made for the same shall be satisfied, from the oath of the owner or master, that all such equipments or parts thereof or materials and repairs made within the year immediately preceding such application have been duly accounted for under the provisions of this section, and the duties accruing thereon duly paid; and if such owner or master shall refuse to take such oath, or take it falsely, the vessel shall be seized and forfeited. The statute thus sets a three-part test which must be met in order to qualify for remission under the subsection, these being: 1. The establishment of a casualty occurrence; 2. The establishment of unsafe and unseaworthy conditions; and 3. The inability to reach the port of destination without obtaining foreign repairs. Title 19 Code of Federal Regulations Section 4.14(h)(2)(i) entitled “Relief from duty under 19 U.S.C. 1466(d),” provides: Requests for relief from duty under 19 U.S.C. 1466(d) consist of claims that a foreign shipyard operation or expenditure involves any of the following: (i) Stress of weather or other casualty. Relief will be granted if good and sufficient evidence supports a finding that the vessel, while in the regular course of its voyage, was forced by stress of weather or other casualty, while outside the United States, to purchase such equipment or make those repairs as are necessary to secure the safety and seaworthiness of the vessel in order to enable it to reach its port of destination in the United States. For the purposes of this paragraph, a ‘casualty’ does not include any purchase or repair made necessary by ordinary wear and tear, but does include the failure of a part to function if it is proven that the specific part was repaired, serviced, or replaced in the United States immediately before the start of the voyage in question, and then failed within six months of that date. It is CBP’s position that “port of destination” means a port in the United States. Protestant asserts that the facts as discussed above constitute a marine casualty as a basis for relief from vessel repair duties pursuant to 19 U.S.C. § 1466(d)(1) and 19 C.F.R. § 4.14(h)(2)(i). Jurisprudence has provided significant guidance regarding the phrase “or other casualty.” In Dollar S.S. Lines v. United States, the United States Customs Court stated, “we are clearly of the opinion that the court below was correct in its holding that ‘other casualty,’ as used in said section, meant an accidental destruction by some cause of like character and operation as fire such as lightning, floods, cyclones, storms, or other uncontrollable force, which ordinary foresight and prudence could not guard against or prevent.” The Dollar Court further reasoned: In the case at bar the word “casualty” is to be considered together with the phrase “stress of weather.” The phrase “or other casualty” is supplemental to and qualifies the phrase “stress of weather” broadening the term to include other similar casualties. In order to determine the particular class of casualty under which exemption from duty may be granted by the Secretary of the Treasury, we must consider the meaning of the term “stress of weather.” The word “stress” is defined in Funk and Wagnalls New Standard Dictionary, page 2396, as follows: 2. Force exerted to or beyond the point of strain; tension; as, to subject a faculty to the utmost stress. 3. Influence exerted forcibly; pressure; violence; compulsion; as stress of weather. We have, therefore, under the term “stress of weather” the forcible influence or violence of the weather exerted upon vessels unexpectedly in such a manner that the safety and seaworthiness thereof is so endangered that the purchase of equipment or the making of repairs becomes necessary in order to enable such vessel to reach her port of destination. A casualty similar to “stress of weather” would include such as is violently exerted; that which comes with unexpected force or violence, such as that of a fire, or a collision, or an explosion. We are of the opinion that a casualty similar to “stress of weather” should be of necessity a happening that comes with the violence of the turbulent forces of nature. In International Navigation Co. v. United States, the Customs Court, citing Dollar, examined the legislative history of section 466, Tariff Act of 1922, the predecessor of 19 U.S.C. § 1466. Noting that Congress had chosen not to include language to allow remission of duties to repair damages suffered or to replace equipment damaged or worn out during a voyage, the Court stated, “it is evident that under the provision as enacted it was not intended that duties should be remitted in all cases where repairs were made because of damages suffered or equipment damaged or worn out during the course of a voyage, even though such repairs were necessary to maintain the vessel in a seaworthy condition. It was only where the damage occurred by reason of some serious or extraor-dinary event, described as ‘stress of weather or other casualty,’ that remission was permitted.” The Customs Court further expounded on the Congressional intent underlying § 1466 in Suwannee Steamship Company v. United States. In that case, the Court further expanded upon the Congressional choice of language in § 1466, noting that the decision not to include the language, “…or to repair damages suffered or to replace equipment damaged or worn out during the voyage,” reflected a desire to protect American shipyards. The Suwannee Steamship Court contrasted the intent of the rejected House amendment with that of the final language adopted by the Senate, saying: The rationale for this revision of section 466 was stated succinctly in the Report of the House Committee on Ways and Means: “Your committee believes that the limitations of this section [section 466 of the Tariff Act of 1922] are too strict and result in an unnecessary burden on American shipping. The section as construed does not permit the remission for refunding of duties in the case of equipment purchased or repairs made in the ordinary course of the voyage to replace worn-out equipment or to repair minor damages or ordinary wear and tear.” H. Rep. No. 7, 71st Cong., 1st Sess. 171 (1929). Clearly, the House amendment would have greatly increased the situations in which duties were to be remitted. Under the amendment, only a general overhaul or reconditioning would have been excluded from the remission allowance. See id. The members of the Senate Finance Committee rejected this House amendment, and, in the bill reported to the full Senate, substituted the wording that presently appears in section 466. Both the hearings of the Senate Committee, and the committee's final report on section 466, evidence the concern of the committee members that the House amendment would have provided insufficient protection for American shipyards, the class for whose benefit the section was originally formulated. See Senate Hearings on H.R. 2667, 71st Cong., 1st Sess., Vol. XVII at 537-46 (1929) [hereinafter cited as Hearings]; S. Rep. No. 37, 71st Cong., 1st Sess. 72 (1929). In furthering this goal of protecting American shipyards, the Senate version of section 466 did two things. First, it limited remission to relatively serious repairs: those necessary “to secure the safety and seaworthiness of the vessel to enable her to reach her port of destination.” And second, it strictly defined both the nature and the timing of the cause of the damage necessitating the repairs. This was accomplished by authorizing remission only for those repairs caused “by stress of weather or other casualty,” provided that the stress of weather or other casualty occurred while the vessel was “in the regular course of her voyage.” In its implementation of 19 U.S.C. § 1466, CBP has consistently applied the holdings in Dollar, International Navigation, and Suwannee Steamship. See HQ 106159 (September 8, 1983); HQ 115911 (May 9, 2003); HQ W116688 (February 9, 2007); and HQ 112144 (June 10, 1992). The facts at hand do not meet the three-part test previously discussed in that they do not establish a casualty occurrence, the very first requirement of the test. In the instant case, absent evidence of an extrinsic force, the existing evidence indicates that the generators failed because of wear and tear. The protestant has adduced no evidence that the generators were acted upon by some identifiable event or unexpected outside force or violence so as to be immediately obvious to ship’s personnel, as required to establish a casualty occurrence. In short, there was no identifiable occurrence to the generators that caused them to fail. Therefore, we consider the failure to have been caused by normal wear and tear. In HQ 106159 (September 8, 1983) the relationship of an unseaworthy condition to the casualty for the purposes of 19 U.S.C. § 1466 was laid out, saying: The petitioner is apparently equating a finding of unseaworthiness with a casualty occurrence. The two are not necessarily related. A finding that a vessel is unseaworthy provides no evidence of exactly how it came to be in such a state. In fact, absent specific evidence to the contrary, we consider foreign repairs to have been necessitated by normal wear and tear, a result which does not permit remission. CBP has consistently held that machinery failure, without evidence that such failure was caused by an outside force, does not qualify as a marine casualty. In HQ 112908 (October 9, 1996), a turbo-generator failed service when started. The protestant argued that this occurrence was a marine casualty. CBP denied the protest stating, “in this regard we note that Customs has long-held that a breakdown or failure of machinery may not be regarded as a casualty for purposes of remission pursuant to 19 U.S.C. 1466(d)(1) in the absence of a showing that it was caused by some outside force. (C.S.D. 79-32, citing C.I.E. 1829/58).” This ruling is similar to the present case in that the protestant has not shown that an outside force caused the failure of the two generators. In HQ W116688 (February 9, 2007), the turbocharger on the vessel’s main engine exploded and the vessel sustained fire damage as a result. CBP remarked, “[t]he claim that the ship was subject to an explosion and fire is not in dispute. However, the cause of that damage is the determinative fact for this ‘casualty’ claim.” In that case, the Salvage Association report stated, “[the explosion] is considered likely to have resulted from either defective or incorrectly installed fuel injector which permitted excess, un-burnt fuel to enter the turbocharger which ignited and lead to the explosion.”[sic] CBP, citing C.S.D. 79-32, which held that a breakdown or failure of machinery may not be regarded as a casualty in the absence of a showing that it was caused by some outside force, ruled that the cause of the explosion did not fall within the definition of a casualty, and remission under 19 U.S.C. § 1466(d)(1) was denied. In the instant case, the vessel’s log from January 20, 2013, the date of the loss of Generator One, simply states that Generator One “lost power.” The Garba Service Report associated with Invoice 14234 states that Generator One failed when “the main rotor frame came apart while the generator was running on line causing it to short the windings and put a high voltage spike across the board causing the original problem.” This event resulted in a fire, but similar to HQ W116688, the protestant did not present evidence to indicate that an extrinsic force caused the failure. In fact, the Service Report suggests a spontaneous disintegration of the main rotor frame, an occurrence more likely the result of wear and tear than an extrinsic force. CBP held in HQ 114288 (March 20, 1998) that “the documentation submitted by the applicant indicates simply that the main engine ‘tripped’ or failed. The mere occurrence of engine failure, by itself, is not a casualty.”  In the current matter, on February 2, 2013, Generator Three failed. The Report of Marine Accident, Injury or Death, CG-2692 states, “while testing Emergency fire pump and incinerator, #3 generator bogged down and tripped off line. Emergency generator came on line and #2 was started and put on line. Full power restore at 1103 (-1)”[sic]. In addition, the vessel’s log from February 2, 2013, states that there was a “loss of power.” In the instant case, Generator Three merely “tripped offline.” Therefore, similar to HQ 114288, this ‘tripping offline’ does not qualify as a marine casualty. After careful consideration, we are of the opinion that our prior determinations in HQ 115911, HQ W116688, and HQ 112144 represent the correct application of 19 U.S.C. § 1466 to the facts of this case. These rulings correctly apply the law of 19 U.S.C. § 1466, as laid out in Dollar, International Navigation, and Suwannee Steamship that duties should not be remitted in all cases where repairs were made because of damages suffered or equipment damaged or worn out during the course of a voyage, even though such repairs were necessary to maintain the vessel in a seaworthy condition. We are required by the language of Dollar and International Navigation to hold that the purchase of one new generator occasioned by the failure of two of the M/V MARY ANN HUDSON’s generators was not necessitated by a marine casualty. Accordingly, the new generator is dutiable. HOLDING The costs for which the protestant seeks relief are dutiable under 19 U.S.C. § 1466 as discussed in the Law and Analysis section of this ruling. You are instructed to deny the protest with respect to the costs discussed in this ruling. 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 this decision must be accomplished prior to the 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, Lisa L. Burley Chief/Supervisory Attorney-Advisor Cargo Security, Carriers and Restricted Merchandise Branch Office of International Trade, Regulations and Rulings U.S. Customs and Border Protection