CON-9-CO:R:C:E 223491 PH
Assistant District Director
Commercial Operations Division
U. S. Customs Service
Champlain, New York 12919
RE: Use of Temporary Importation Bonds (TIB's) for Merchandise
subject to Countervailing or Antidumping Duty
Dear Sir:
In your letter of October 7, 1991, you requested our advice
with regard to TIB entries of merchandise subject to
countervailing or antidumping duty. Our advice follows.
FACTS:
You state that recently a Customs broker attempted to file a
TIB entry on merchandise subject to countervailing duty. Citing
Treasury Decision 54802(54), your office took the position that a
TIB is a consumption entry and, therefore, in addition to a bond
for double the duty due, a cash deposit was also required for the
countervailing duty. You state that it is the position of your
office that upon exportation of the article, the bond for the
duty would be cancelled but that the cash deposit would be held
until resolution of the countervailing duty case, at which time
they would be finalized, increased, or decreased.
With your letter, you enclosed a copy of a letter from a law
firm stating that it represents a Customs broker (apparently the
broker referred to above). In this letter, it is contended that
merchandise subject to dumping duties or countervailing duties
may be admitted under a TIB without the payment of the dumping
duties or countervailing duties and that they (the dumping duties
or countervailing duties) should be included in the bond.
ISSUE:
Are TIB entries of merchandise subject to countervailing or
antidumping duty considered consumption entries?
LAW AND ANALYSIS:
Subchapter XIII, Chapter 98, HTSUSA, provides for the
admission of certain articles temporarily free of duty under bond
(i.e., TIB's). The Customs Regulations pertaining to TIB's are
found in 19 CFR 10.31 - 10.40. Under 19 CFR 10.31(f), unless
otherwise provided, a bond is required for a TIB entry in an
amount equal to double the duties which it is estimated would
accrue "... had all the articles covered by the entry been
entered under an ordinary consumption entry." Under 19 CFR
10.31(h), after the entry and bond for a TIB entry have been
accepted, the merchandise may be released to the importer but
"[t]he entry shall not be liquidated as the transaction does not
involve liquidated duties." Cancellation of a TIB bond is
provided for in 19 CFR 10.39. Failure to export or destroy
merchandise admitted under a TIB results in a demand for the
payment of liquidated damages equal to double the estimated
duties applicable to the entry (unless the bond was for a lesser
amount) (19 CFR 10.39(d)(1)).
Customs has consistently held that a TIB entry is not an
entry for consumption. See 19 CFR 141.0a(f), defining "entered
for consumption" and 19 CFR 10.31(f), quoted above, which clearly
distinguishes between a TIB entry and "an ordinary consumption
entry"; note also that a TIB entry is not liquidated (19 CFR
10.31(h) cited above, see also 19 CFR 159.2). Court decisions
interpreting the term entry for consumption support this position
(see A. W. Fenton Co., Inc. v. United States, 55 CCPA 54, C.A.D.
933 (1968); Excel Shipping Corp. v. United States, 44 Cust. Ct.
55, C.D. 2153 (1960); Korlis, Ltd. v. United States, 56 Cust. Ct.
365, 367, C.D. 2660 (1966), in which merchandise entered for
consumption is described as that "which goes immediately into the
commerce of the United States, as distinguished from merchandise
entered for storage in a warehouse, for exhibition, for
transportation, etc.").
An exception to the above is that TIB entries are considered
to be consumption entries for purposes of administering quotas
(see Treasury Decisions (T.D.'s) 54802(53) and 54802(54) and
ruling 306885, dated June 29, 1979). The rationale for so
deeming TIB entries to be consumption entries for purposes of
administering quotas is that to rule otherwise could allow the
circumvention of the quota laws (i.e., otherwise merchandise
subject to quota for which no visa could be obtained could be
entered under a TIB entry and, if consumed in the United States,
subject only to liquidated damages).
The provisions of the countervailing duty law and the
antidumping law are applicable to merchandise "entered, or
withdrawn from warehouse, for consumption" (see 19 U.S.C.
1671b(d)(1), 1671b(e)(2), 1671c(d)(3), 1671d(c)(4)(B),
1671d(c)(4)(C), 1671e(a)(1), 1671e(b)(2), 1671f(a), 1671f(b), and
1671h; 19 U.S.C. 1673b(d)(1), 1673b(e)(2), 1673c(i)(1)(A)(ii),
1673d(c)(4)(B), 1674d(c)(4)(C), 1673e(a)(1)(A), 1673e(b)2),
1673e(c)(1)(C), 1673f(a), 1673f(b), and 1673g(a); 19 U.S.C.
1675(c) and 1675(e); see also 19 U.S.C. 1516a(c)(1), 1516a(e)(1),
and 1516a(g)(5)(B); see also ruling 550990 dated September 21,
1977). Therefore, antidumping duty and countervailing duty would
not be applicable to TIB entries unless the latter were
"considered" to be consumption entries, as is done for purposes
of administering quotas. However, the rationale for considering
TIB entries to be consumption entries for purposes of administer-
ing quotas does not exist with regard to the countervailing duty
law and the antidumping law. In the case of these laws, the TIB
bond may be set in an amount to take into account countervailing
or antidumping duties in order to protect the revenue (see 19 CFR
10.31(f)). As stated in the letter which you enclosed with your
request for advice, we have so held in the past with regard to
antidumping duties (see memorandum 201949 dated September 26,
1974, and ruling 208418 dated November 14, 1977).
We have consulted with the Office of Trade Operations, in
the Office of Commercial Operations, about this matter. By copy
of this ruling, we are alerting that Office to the possibility
that guidelines may be necessary on the sufficiency of TIB bonds
covering TIB entries of merchandise subject to countervailing or
antidumping duty. We understand that the Office of Trade
Operations may be considering the requirement for a single entry
bond in such situations.
HOLDING:
TIB entries of merchandise subject to countervailing or
antidumping duty are not consumption entries. In the case of
such TIB entries, the TIB bond should be set in an amount to take
into account countervailing or antidumping duty in order to
protect the revenue.
Sincerely,
John Durant, Director