H326838

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H326838 October 17, 2022 OT-RR:BSTC:CCR H326838 HKC CATEGORY: Carriers Donna L. Borden Supervisory Liquidation Specialist C/o Vessel Repair Unit U.S. Customs and Border Protection 423 Canal Street Suite 246 New Orleans, LA 70130 RE: 19 U.S.C. § 1466; Protest 2002-22-100827; Vessel Repair Entry NK-7-0800093-1; M/V LIBERTY EAGLE Dear Madam: This is in response to your email dated August 12, 2022, forwarding for our further review the protest filed by the Liberty Maritime Corporation with respect to Vessel Repair Entry NK-7-0800093-1. Our decision is set forth below. FACTS The following facts were extracted from the protest filed by the Liberty Maritime Corporation (“Liberty Maritime”) on July 19, 2022. The M/V LIBERTY EAGLE (“the vessel”) is a U.S.-flag vessel. Shortly after departing Moroni, Union of the Comoros, on April 29, 2021, the vessel reported high temperatures in its propeller shaft stern tube bearings. The vessel proceeded at reduced speed to Durban, South Africa, where it was determined that the vessel could not safely proceed on her intended voyage to Houston, Texas. The American Bureau of Shipping (ABS) was contacted, which conducted a survey of the vessel revealing melted white metal on the propeller shaft and melted shaft bearings. ABS recommended completing all repairs prior to departure. Repairs consisting of withdrawal of the propeller and tailshaft, as well as renewal of the stern tube bearings and seals occurred at the Dormac Marine & Engineering shipyard in Durban. Upon completion of the repairs, the vessel continued on her intended voyage to Houston. On August 10, 2021, the Liberty Maritime filed an application for relief on the basis of 19 U.S.C. § 1466(d)(1). On February 4, 2022 CBP denied this application for relief on the basis that insufficient evidence was furnished to show the foreign repairs were compelled by “stress of weather or other casualty” under 19 U.S.C. § 1466(d)(1). On July 19, 2022 Liberty Maritime filed a timely protest of CBP’s letter denying its application for relief. In its protest, Liberty Maritime alleges the damage to the vessel necessitating foreign repairs was caused by “an unexpected and sudden rush of water” which “caused the stern tube bearing to abruptly fail”. Liberty Maritime further states that “[b]ased on the observations made by (ABS) Surveyors at the time of repair, it was clear that the catastrophic failure of the stern tube bearing was not a direct result of ordinary wear and tear, but the sudden and rapid deterioration of the bearing caused by unexpected ingress of water into the stern tube.” Liberty Maritime also provided maintenance service reports dating from April 2012, January 2014, and May 2019 showing the stern tube bearings were in acceptable condition during these periods. ISSUE Whether the costs for which the protestant seeks relief are remissible under 19 U.S.C. § 1466(d)(1)? LAW AND ANALYSIS Title 19 United States Code section 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. Pursuant to 19 C.F.R. § 4.14(h)(2)(i): 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 Customs 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.” 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 

section of this ruling. You are instructed to deny the protest with respect to the costs discussed in this ruling.Sincerely,W. Richmond BeeversChief, Cargo Security, Carriers and Restricted Merchandise BranchOffice of International Trade, Regulations and RulingsU.S. Customs and Border Protection