VES-13-02/13-18 CO:R:IT:C 111688 JBW
Deputy Assistant Regional Commissioner
Commercial Operations
c/o Regional Commissioner
New Orleans, LA 70130-2341
RE: Vessel Repair; Casualty; Underwater Damage; Temporary
Repairs; 19 U.S.C. 1466; 19 C.F.R. 4.14; M/V FRANCES
HAMMER; Entry No. C53-0012157-7.
Dear Sir:
This letter is in response to your memorandum dated May 7,
1991, which forwards for our review the petition for review filed
in conjunction with the above-referenced vessel repair entry.
FACTS:
The record reflects that the subject vessel, the M/V
FRANCES HAMMER, arrived at the port of Houston, Texas, on June
30, 1990. Vessel repair entry, number C53-0012157-7, was made on
July 9, 1990. The entry indicates that the vessel underwent
rudder repairs in Malta and in Palermo, Italy. The petitioner,
by counsel, filed an application for relief on September 26,
1990.
Damage to the port rudder of the vessel was discovered by
the Chief Engineer of the vessel on May 18, 1990, while the
vessel was in port in Yuzhnyy, U.S.S.R. Murky water conditions
prevented a full inspection of the rudder. The Chief Engineer
and the Master reviewed the plans of the rudder and made a
preliminary evaluation regarding the damage. Because of a lack
of repair facilities in Yuzhnyy and in the Black Sea, the Master
decided to proceed through the straits of Bosphorous and
Dardenelles to a point in the Agean Sea where a more complete
inspection could occur. This evaluation was forwarded to the
vessel operator, Ocean Chemical Carriers Inc., which concurred
in the decision to move the vessel.
The vessel departed from Yuzhnyy on May 19, 1990. At a
point west of "Nisos Mandrille" (Nsi Mandli), 37-56' N, 24-
24' E, ballast was shifted to tip the vessel for examination.
This examination revealed that the upper quarter of the "Becker"
rudder, including the rudder link and related fixtures, had been
sheared off. The rudder was attached by the pintle through the
pintle hole in the pintle bracket connected to the main rudder.
The Master informed Ocean Chemical Carriers of his findings and
was ordered to proceed to Malta for repairs.
On May 23, 1990, the vessel arrived at Malta. An inspector
from the American Bureau of Shipping (ABS) examined the damage in
Malta. This report outlined the damage to the Becker rudder.
ABS Report No. MT 1924. Because no dry dock facilities were
available in Malta at that time, the ABS inspector examined the
temporary emergency repairs performed in Malta and stated that
the vessel was fit to proceed, under slow speed and with tug
assistance, to the dry dock in Palermo. ABS Certificate No. MT-
1926-X. Further temporary repairs were performed in the
Fincanteri Shipyard in Palermo. The ABS again inspected the
repairs. ABS Report No. PL 6998. The inspector found the ship
fit to proceed on its intended voyages, but recommended that
permanent repairs be made at the time of the vessel's scheduled
dry dock in July, 1990.
We note that notwithstanding the claimed damage to a vital
system of the ship, the Office of Marine Inspection of the United
States Coast Guard has no record of correspondence on the
subject vessel during the approximate time frame of the alleged
casualty.
The Carrier Rulings Branch, finding that the application was
untimely filed, denied the application for relief. Headquarters
Ruling Letter 111476, dated March 26, 1991. This ruling further
recommended that the file be referred for action on the untimely
filed entry. Id. Finally, the ruling on the application
requested that the applicant submit a complete itinerary of the
vessel. Id. The petitioner submits documents demonstrating that
it timely requested an extension to file its application and its
supporting documentation. Notes from the vessel repair
liquidation unit indicate that this request had been attached to
documents relating to another vessel repair entry and was not
acted upon when received. By telephone, the attorney called the
vessel repair liquidation unit on August 23, 1990, to confirm
that the extension for the subject entry and another entry had
been granted. Believing that only the latter entry was under
consideration, the vessel repair liquidation unit confirmed the
granting of the extension. Consequently, this office made no
notation of approval on the extension for the FRANCES HAMMER.
You maintain that the application would have been timely filed
had the request for extension been granted.
ISSUES:
(1) Whether the entry and application for relief were
timely filed.
(2) Whether the evidence submitted demonstrates that the
repairs performed to the vessel's "Becker" rudders were the
result of a casualty and were necessary to secure the safety and
seaworthiness of the vessel.
LAW AND ANALYSIS:
I. TIMELINESS OF THE FILINGS OF THE ENTRY
AND THE APPLICATION FOR RELIEF
The application for relief filed in conjunction with the
entry was denied in full, for this office determined that the
application was untimely filed. Further, this office found that
the entry was untimely filed and recommended that the entry be
referred for appropriate penalty action.
The Customs Regulations require that applications for relief
be filed within sixty days from the date of first arrival of the
vessel. 19 C.F.R. 4.14(d)(1)(ii) (1991). The regulations
provide further that if good cause is shown, "the vessel repair
liquidation unit may authorize one 30-day extension of time to
file beyond the 60-day filing period." Id.; 19 C.F.R.
4.14(b)(2)(ii) (1991) (time period for submitting evidence of
cost). The regulations do not prescribe the form--whether oral
or written--that such an authorization must take.
The record shows that a timely request for an extension was
filed. The vessel repair liquidation unit did not respond by
name to this request, but telephone communication with the
attorney involved was interpreted as an authorization for the
extension. Review by the vessel repair liquidation unit now
indicates that had the request been considered the authorization
would have been granted. Moreover, the application was filed
within ninety days of arrival, which would have been within the
authorized extension period. Because of the unusual
administrative error involved in this case that has come to the
attention of this office after the issuance of our denial of the
application, we will consider the application to have been timely
filed.
In ruling on the application, this office also found that
the entry was untimely filed. The regulations require that a
vessel repair entry be made within five working days of arrival
of the vessel. 19 C.F.R. 4.14(b)(2). The subject vessel
arrived in the United States on Saturday, June 30, 1990. The
week following this date included the Independence Day holiday,
which is a date Customs offices are closed. 19 C.F.R. 101.6(a).
The fifth working day after arrival would be July 9, 1990. We
conclude, therefore, that the entry, having been filed on July 9,
1990, was timely filed.
II. REMISSIBILITY OF DUTIES PAID ON REPAIRS PERFORMED TO
CORRECT DAMAGE RESULTING FROM ALLEGED CASUALTY
Title 19, United States Code, section 1466, 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 foreign or
coastwise trade, or vessels intended to engage in such trade.
The statute provides for the remission of the above duties in
those instances where good and sufficient evidence is furnished
to show that foreign repairs were compelled by "stress of weather
or other casualty" and were 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).
The petitioner in this case alleges that the underwater
damage discovered in Yuzhnyy resulted in a remissible casualty.
The Customs Service has ruled that "[e]xperience demonstrates
damage to underwater parts of vessels, including propellers is
usually not easily detectable or susceptible of definite proof
respecting the date and place of occurrence. Therefore, relief
under [section 1466] is granted in the absence of testimony
showing that the vessel concerned was grounded, struck bottom, or
her propeller contacted some floating object capable of causing
damage, prior to the commencement of the voyage." C.I.E.
1202/59, dated August 13, 1959 (emphasis added); Headquarters
Ruling Memorandum 109473, dated June 27, 1988. A corollary to
the general rule that underwater damage results in a casualty is
that some evidence must be presented to infer that the damage did
not occur prior to the voyage. C.I.E. 1202/59. In the 1959
ruling, the Customs Service found that inspection of the
propeller just before the commencement of the voyage sufficient
evidence to infer the underwater damage did not occur prior to
the voyage. Id.
From the record before us, we cannot conclude that the
alleged underwater damage occurred after the departure of the
vessel from Jacksonville, Florida, on April 27, 1990. The record
contains no evidence to show that the rudder had been inspected
prior to the voyage or when the last rudder inspection occurred.
The Master's statement, dated May 30, 1990, indicates that during
the course of the voyage from Jacksonville to Yuzhnyy the vessel
experienced a decrease in speed, an increase in fuel consumption,
sluggish steering, and a hotter than normal engine temperature.
While both the master and the chief engineer link the engine
performance to the rudder damage, we have no statement or
evidence to show when these indicators first began to change or
whether they changed during the course of the voyage to Yuzhnyy.
Absent such evidence, we cannot conclude that the underwater
damage occurred after the vessel departed Jacksonville. The
petitioner's claim for remission on the basis of a casualty is
denied.
HOLDINGS:
(1) Because of the unusual administrative error involved in
this case that has come to the attention of this office after the
issuance of our denial of the application, we now conclude that
the application was timely filed. We also conclude that in
ruling on the timeliness of the entry, we failed to account for
the Independence Day holiday. In recalculating the time period,
we determine that the entry was timely filed.
(2) The petitioner has not submitted sufficient evidence to
infer that the underwater damage to the vessel occurred after
the departure of the vessel from Jacksonville, Florida, on April
27, 1990. The petitioner's claim for remission on the basis of a
casualty is therefore denied.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch