VES-13-18-CO:R:P:C 110924 GV
Deputy Assistant Regional Commissioner
Classification and Value Division
ATTN: Regional Vessel Repair Liquidation Unit
6 World Trade Center
New York, New York 10048-002980
RE: Gloucester, Massachusetts Vessel Repair Entry No. 559-
1237166-7; HANNAH BODEN
Dear Sir:
This is in response to your memorandum dated March 12, 1990,
transmitting documentation pertaining to the above referenced
vessel repair entry. Our findings are set forth below.
FACTS:
The HANNAH BODEN is a U.S.-flag fishing vessel owned by Sea
Star Corporation (Sea Star) of Marblehead, Massachusetts. The
vessel had foreign shipyard work performed on her in St. John's,
Newfoundland, Canada, during the period of October 9-23, 1989.
Subsequent to the completion of the work the vessel arrived in
the United States at Gloucester, Massachusetts, on November 26,
1989. A vessel repair entry covering the work in question was
filed on December 1, 1989.
No application for relief was filed regarding this entry.
In response to a Notice of Action (CF 29), dated January 26,
1990, from the New York Vessel Repair Liquidation Unit,
requesting the requisite documentation for liquidation of the
entry (i.e., invoices, surveys, logs, and any other factual
information regarding the cause of the damage in question) Sea
Star, by letter dated February 13, 1990, forwarded the shipyard
invoice and a copy of a Note of Protest from the captain of the
subject vessel. The letter further stated that there were no
logs kept.
According to the captain's Note of Protest, dated October
16, 1989, the vessel experienced engine failure sometime between
6:00 p.m. and 7:00 p.m. on the evening of October 5, 1989, while
operating in the swordfishing grounds of the Newfoundland Sea
Mounts, situate east of the Grand Banks, off the Province of
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Newfoundland, Canada. The captain unsuccessfully attempted to
repair the engine. "He noted that an adjustment had come off one
of the engine valves and he determined that he was not able to
effect repairs at that time." (see p. 2 of the Note of Protest)
On the morning of October 6 the master contacted the Canadian
Coast Guard to arrange a tow to a port but they "informed the
Master to stand-by as the Vessel was not in Canadian Jurisdiction
but was in the Jurisdiction of the State of New York." (see p. 3
of the Note of Protest) On the evening of October 7 the subject
vessel was subsequently towed by the Canadian Coast Guard to the
port of the City of St. John's, Newfoundland, Canada, arriving on
October 9, 1989.
The captain stated that at the time of the engine failure,
"...the wind was at 35 knots, the temperature was 61 degrees
fahrenheit, the skies were overcast but the visibility was clear,
the seas had 12' waves with ground swells to 15'." (see p. 3 of
the Note of Protest). We note, however, that the captain also
stated that, "On the evening of 5 October 1989, the inclement
weather, which did not make it possible to fish on 4 October
1989, began to clear." (see p. 2 of the protest)
ISSUE:
Whether evidence is presented sufficient to prove that the
foreign repairs performed on the vessel for which relief is
sought, were necessitated by a casualty occurrence, thus
warranting remission pursuant to 19 U.S.C. 1466(d)(1).
LAW AND ANALYSIS:
Title 19, United States Code, section 1466, provides in part
for payment of an ad valorem duty of 50 percent of 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 trade. Section 1466(d)(1)
provides that the Secretary of the Treasury is authorized to
remit or refund such duties if the owner or master of the vessel
was compelled by stress of weather or other casualty to put into
such foreign port to make repairs to secure the safety and
seaworthiness of the vessel to enable her to reach her port of
destination.
The term "casualty" as it is used in the statute, has been
interpreted as something which, like stress of weather, comes
with unexpected force or violence, such as fire, explosion or
collision (Dollar Steamship Lines, Inc. v. United States, 5 Cust.
Ct. 28-29, C.D. 362 (1940)). In the absence of evidence of such
a casualty causing event, we must consider the foreign repairs to
have been necessitated by normal wear and tear.
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In regard to the vessel under consideration, we note that
since it is a fishing vessel (and therefore in possession of a
certificate of documentation endorsed for the fisheries pursuant
to 46 U.S.C. 12108), unless it was engaged in trade (which
includes the transportation of merchandise or passengers), or
issued a permit to touch and trade, it is not subject to the
provisions of 19 U.S.C. 1466 and the Customs Regulations
promulgated thereunder (see the first sentence of 19 U.S.C.
1466(a), 19 CFR 4.14(a)(2)(i), 19 CFR 4.15(a), C.I.E. 139/61, and
T.D. 49140(12)).
In the event the subject vessel was issued a permit to
touch and trade, or did engage in commercial activities such as
the transportation of merchandise or passengers, it would be
subject to section 1466 and 19 CFR 4.14. It should therefore be
noted that absent Customs authorized extensions of time, failure
to submit an application for relief with supporting evidence
within 60 days from the date of the first arrival of the vessel
(see 19 CFR 4.14(b)(1)(ii)(B)) results in the entry being
forwarded for immediate liquidation. Although an application for
relief need not be in any particular form, pursuant to 19 CFR
4.14(d)(1)(i) it should allege that an item or a repair expense
is not subject to duty under either paragraph (a) of section 4.14
(items that are not subject to duty) and/or paragraph (c)
(circumstances allowing remission otherwise due). The letter
from Sea Star, dated February 13, 1990, is not only untimely, it
also meets neither of the above criteria for an application.
Aside from failing to comply with the above procedural
requirements, the owner of the vessel has not established that
the repairs in question were necessitated as a result of a
casualty within the meaning of section 1466(d)(1). The only
evidence submitted to this effect is the captain's Note of
Protest (dated one week after the vessel arrived in St. John's
under tow) which, in and of itself, is not only insufficient to
prove a casualty occurrence, but it also shows that the vessel
left U.S. waters in order to obtain foreign repairs.
HOLDING:
If the subject vessel is documented for the fisheries
pursuant to 46 U.S.C. 12108, but was not issued a permit to touch
and trade pursuant to 19 CFR 4.15(a), and did not engage in
trade, it is not subject to the provisions of 19 U.S.C. 1466.
In the event the vessel is fisheries documented and has been
issued a such a permit, or has engaged in trade (thereby
rendering it subject to the provisions of 19 U.S.C. 1466), the
evidence presented is not only untimely but is also insufficient
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to prove that foreign repairs performed on the vessel for which
relief is sought were necessitated by a casualty occurrence, thus
warranting remission pursuant to 19 U.S.C. 1466(d)(1).
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch