**HQ H022589**

**March 19, 2008**

**VES-13-18-OT:RR:BSTC:CCI** H022589 JLB

**CATEGORY**: Carriers

Supervisory Import Specialist

Vessel Repair Unit

U.S. Customs and Border Protection

1515 Poydras Street, Suite 1700

New Orleans, Louisiana 70112

RE: Protest No. 2002-07-101727; Vessel Repair Entry No. C20-0041470-9;
EL FARO; 19 U.S.C. § 1466(d)(2); Casualty; 19 U.S.C. § 1466(d)(1)

Dear Sir:

This letter is in response to your memorandum of January 15, 2008,
forwarding the above-referenced protest for further review. We have
reviewed the arguments set forth by your office and by the protestant,
Seastarline LLC. Our decision follows.

**FACTS**

The subject protest involves foreign shipyard work undergone by the
vessel EL FARO as well as work performed by foreign labor while the
vessel was in transit. The vessel is currently owned and operated by
Seastarline LLC. On June 2, 2007, the vessel arrived in Shuaiba, Kuwait
for shipyard work and returned to the United States at the port of
Jacksonville, Florida on June 28, 2007. A vessel repair entry was timely
filed. On December 7, 2007, your office issued a decision which assessed
vessel repair duties in the amount of \$9,857.56. A timely protest was
filed thereto for the duties assessed for two items.

**ISSUE**

Whether the foreign repairs performed on the vessel for which relief is
sought are dutiable under 19 U.S.C. § 1466?

**LAW AND ANALYSIS**

Pursuant to 19 U.S.C. § 1466(a), there must be a 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 the
foreign or coastwise trade, or vessels intended to engage in such
trades.

# Item 1

This Item covers the "installation of a Furno Depth Sounder." The
protestant alleges that, "this [equipment]{.underline} was provided in
the U.S. and shipped to Kuwait." (Emphasis added). Pursuant to 19 U.S.C.
§ 1466(d)(2), a duty may be remitted if good and sufficient evidence is
provided establishing "such equipments...were manufactured or produced
in the United States, and the labor necessary to install such equipments
or to make such repairs was performed by residents of the United States,
or by members of the regular crew of such vessel." Therefore, a
two-prong test must be met with respect to granting duty-free treatment
to the installation of equipment: (1) U.S. manufacture or production
must be established, and (2) the labor must have been performed by U.S.
residents or members of the regular crew of the vessel.

To establish U.S. manufacture or production, a party must submit a
statement from the vendor or manufacturer of the equipment that it was
manufactured or produced in the United States. [See]{.underline}
Headquarters Ruling Letter 113663, dated September 25, 1996;
Headquarters Ruling Letter 111309, dated March 5, 1991; Headquarters
Ruling Letter 115945, dated May 19, 2003. The protestant has not
provided any such statement as to the manufacture or production of the
equipment in question, the Furno Depth Sounder. While the protestant did
submit an invoice from Seacoast Electronics, Inc. in Jacksonville,
Florida and documentation that the equipment was subsequently shipped to
Kuwait, this is insufficient. CBP has previously held that an invoice
from a U.S. company does not constitute a statement sufficient to
establish U.S. manufacture or production. [See]{.underline} Headquarters
Ruling Letter 113383, dated April 12, 1995.

Additionally, the second prong of the test, that the labor was performed
by U.S. residents or members of the regular crew of the vessel, has not
been met. The protestant provides contradictory claims in the protest
stating in one section that the technician was furnished by a U.S.
company to travel to Kuwait and then stating in another section that the
technician traveled from the U.K. The invoice provided only states the
costs of the technician's travel and does not provide the location from
which he traveled or his residency. Consequently, it has not been
established that the labor to install the Furno Depth Sounder was
performed by U.S. residents or members of the regular crew of the
vessel. Thus, the protestant has failed to satisfy both parts of the
two-pronged test for 19 U.S.C.\
§ 1466(d)(2). Accordingly, this item is held to be dutiable.

**Item 2**

Pursuant to 19 U.S.C. § 1466(d)(1), a duty may be remitted if good and
sufficient evidence is furnished establishing that the vessel was
compelled by stress of weather or other casualty to enter into a foreign
port to make repairs to secure the safety and seaworthiness of the
vessel to enable her to reach her port of destination. It is CBP's
position that \"port of destination\" means a port in the United States.
The statute thus sets a three-part test which must be met in order to
qualify for remission:\
\
1. The establishment of a casualty occurrence.\
\
2. The establishment of unsafe and unseaworthy conditions.\
\
3. The inability to reach the port of destination without obtaining
foreign repairs.

[See]{.underline} Headquarters Ruling Letter 111539, dated December 11,
1991; Headquarters Ruling Letter 116426, dated March 23, 2006.

The term \"casualty\" has been interpreted as something which, like
stress of weather, comes with unexpected force or violence, such as
fire, or spontaneous explosion of such dimensions as to be immediately
obvious to ship\'s personnel, or as a collision. [See]{.underline}
[Dollar Steamship Lines, Inc. v. United States]{.underline}, 5 Cust. Ct.
23, 28-29 (1940). In the absence of evidence of a casualty event, we
must consider the foreign repair to have been necessitated by normal
wear and tear. [See]{.underline} Headquarters Ruling Letter 106159,
September 8, 1983.

The protestant has provided insufficient evidence of what actually
caused the need for the emergency repairs. The invoice merely states
that one troubleshooting was performed "to open & investigate the high
temperature of Turbine Bearing." While the protest asserts that the
repair was "performed to assure the safety of the ship's crew, the ship,
and its cargo, and to remain in compliance with U.S. Coast Guard rules
regarding seaworthiness," no explanation is provided as to how the
vessel's turbo generator was damaged. It appears that the repairs were
due to the lack of proper maintenance. The submitted documentation does
not assert that the emergency repairs were required due to weather,
force, violence, collision or any other casualty event, therefore, we
must find that the emergency repairs were necessitated by normal wear
and tear. In view of the lack of good and sufficient evidence justifying
the granting of relief for a casualty claim under 19 U.S.C. §
1466(d)(1), this item is held to be dutiable.

**HOLDING**

After a thorough review of the record, the protest is denied as detailed
above.

In accordance with the Protest/Petition Processing Handbook (CIS HB,
January 2002, pp. 18 and 21), 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 recalculation of duties 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