CON-9-03-RR:IT:EC 226334 GOB
Thomas G. Travis, Esq.
Jeremy Ross Page, Esq.
Sandler, Travis & Rosenberg, P.A.
5200 Blue Lagoon Drive
Miami, Florida 33126-2022
RE: Subheading 9804.00.10, HTSUSA; Professional tools and
equipment; Personal exemption
Dear Messrs. Travis and Page:
This is in response to your correspondence dated June 3,
1994 to the Entry Division of the Office of Trade Operations.
Your letter was referred by the Office of Field Operations to
this office on August 3, 1995. You made an additional submission
dated November 27, 1995.
FACTS:
Your ruling request was submitted on behalf of Westinghouse
Electric Corporation ("WEC"). The request pertains to subheading
9804.00.10, Harmonized Tariff Schedule of the United States
("HTSUSA").
You describe the pertinent facts as follows.
In the course of providing repair and installation services
to customers around the world, WEC sends engineers and other
professionals to various job sites. A variety of professional
tools and equipment (collectively referred to as "equipment") are
required for the work performed. The cross-border movement of
employees and equipment can occur in several ways.
For WEC's power generation operation, the equipment will
generally not be exported from the United States with the lead
engineer. In some cases, the lead engineer will already be at
the foreign site when the equipment arrives. In certain other
cases, the equipment will be shipped prior to the lead engineer's
departure. In this latter situation, WEC will try to have the
equipment at the foreign site within one to two weeks of the
engineer's arrival. In each of these two situations, after the
foreign work is completed, the equipment will generally arrive
back in the U.S. one to two weeks after the engineer arrives back
in the U.S. In some cases, however, the time gap may be up to
four weeks. In addition to these two situations, WEC's power
generation operation may also ship equipment with the lead
engineer or have it hand-carried by one engineer upon export and
then imported into the U.S. by another engineer. On lengthy
projects (one to two years), the engineer may enter and depart
the U.S. while the equipment remains at the foreign site.
With respect to WEC's nuclear operation, the equipment is
usually radioactive. Because under U.S. law, WEC is required to
ship such equipment on a cargo-only aircraft, the engineer does
not travel with the equipment to the job site. Two situations
are possible. First, the equipment is either consigned to WEC's
customer or to Westinghouse Energy Systems Europe ("WESE"), which
clears the equipment through Customs and arranges for movement to
the job site. The WEC crew, including the lead engineer, travels
separately to the job site. Similarly, after the job is
completed the WEC crew will return to the U.S., with the tools
following shortly thereafter. The second situation involves the
shipment of the tools to WESE, which provides the crew to perform
the work. In some cases, a WEC engineer may arrive from the U.S.
to assist in the project. After the completion of the WEC job
(or jobs), the equipment is returned to the U.S., unaccompanied
by a WEC engineer.
ISSUE:
The applicability of subheading 9804.00.10, HTSUSA to the
facts presented.
LAW AND ANALYSIS:
REQUESTER'S STATEMENTS, CLAIMS, AND REQUESTS
In your letter of June 3, 1994 you request clarification
with respect to the following.
Time Limitations - You state, in pertinent part:
...we respectfully request that Customs not set any finite
time limit for acceptability under HTS subheading
9804.00.10. Instead, we would ask that Customs provide the
District Director with the authority, on a case by case
basis, to determine whether this requirement is satisfied.
Exporter & Importer of Record - You state, in pertinent
part:
It is our position that the language "for the account of" in
the statute supports the ability of WEC to act as the
exporter/reimporter on its employees' behalf regardless of
Customs' characterization of HTS subheading 9804.00.10 as a
personal exemption.
...
In the alternative, if Customs does not agree that WEC
itself can act as the exporter/reimporter "for the account
of" the individual WEC employees, we would propose that the
employee be permitted to submit a superseding WEC bond at
the time of reimportation of the tools and equipment.
Multiple Trips - You seek confirmation of your view that the
fact that an employee might make several trips back and forth to
the U.S. prior to the completion of the project should not affect
the applicability of subheading 9804.00.10, as the returning
equipment will still be claimed under the personal exemption of
the same WEC employee who originally exported the merchandise.
Multiple Employees - You state, in pertinent part:
Some projects obviously require the services of more than
one employee. In those situations, we believe that the
export documentation, whether or not filed by WEC or an
individual employee, should be allowed to reflect the names
of all of the employees for whose "account" the merchandise
is being exported. In such situations, we believe that upon
the return of the merchandise, WEC should be allowed to act
as importer of record "for the account of" any of the listed
employees. If Customs were to continue to require the
employee to act as importer of record, any of the listed
employees should be acceptable.
We should note that in a given situation all of the
employees might not be required to depart and return on the
same dates. If this situation arises, it would appear that
a potential question could exist if the return shipment is
made within two to four weeks of the return of an individual
employee who did not actually depart within one to two weeks
of the initial exportation...
Besides the above scenario, there may also be instances
where the WEC employee who exports the tools is not the same
as the one who imports them back into the United States, and
the returning employee is not among the listed employees for
whose "account" the merchandise is being exported...
...tools and equipment may occasionally be shipped either on
their own or accompanied by a WEC employee, but returned to
the United States unattended.
Registration Requirements - You state, in pertinent part:
Finally, we would also request that Customs review the
necessity of having the individual WEC employee complete a
CF 4455 (Certificate of Registration) prior to exportation
and present a CF 3299 (Declaration for Free Entry of
Unaccompanied Articles) upon reimportation...
In your submission dated November 27, 1995, you address the
following issues.
WEC as Importer of Record for the "Account of" an Individual
Employee - You state, in pertinent part:
In sum, it is clear that under 19 U.S.C. 1484, WEC is
authorized to act as importer of record, indeed, perhaps
required to act in that capacity unless the entry is made in
the name of a Customs broker. That position is consistent
with the "for the account of language" of HTS Subheading
9804.00.10, the "by or for" language of HTS Subheading
9813.00.50, and the language of U.S. Note 1(b) to Subchapter
XIII of Chapter 98 of the HTS. Allowing WEC to act as
importer of record is the only means to consistently enforce
these related provisions...
WEC as Importer or Record as a "Person" Under HTS Subheading
9804.00.10 - You state, in pertinent part:
...your office raised the intriguing question as to whether
it would be possible to consider WEC as a "person" for the
purposes of HTS Subheading 9804.00.10...
...
Even in the absence of employees, a corporation can "enter"
a jurisdiction as a legal matter by simply sending its
assets into that jurisdiction. By the same token, a
corporation can "leave" a jurisdiction by returning its
employees or assets..
Consequently, if the law generally recognizes that a
corporation can "arrive" or "enter" a jurisdiction in this
way, we see no reason to preclude such an interpretation
under the Customs laws...
Temporal Limitations - You state, in pertinent part:
...Customs should determine, on a case-by-case basis,
whether this requirement has been satisfied.
Multiple Employees - You state, in pertinent part:
What WEC proposes in this situation is that it provide a
list of all employees initially assigned to the particular
project and, where appropriate, update that list to reflect
any additions/changes in the WEC employees working on that
engagement.
Documentation - You state, in pertinent part:
...we do not believe that presentation of a CF 4455 and CF
3299 should be the only manner in which a claim for
classification under this tariff provision can be
supported...
What WEC has proposed goes beyond a mere oral declaration,
calling for the provision of export- and import-related
documentation other than the CF 4455 and CF 3299 to
substantiate a claim under HTS Subheading 9804.00.10. Such
documentation...would include, inter alia, copies of
commercial invoices, packing lists, bills of lading, and
Shipper's Export Declarations, all of which would provide
written verification that the tools being imported are the
same tools as those that were previously exported for use on
the particular WEC project.
CUSTOMS' PRECEDENT AND AUTHORITY
General Note 1 to the HTSUSA provides as follows:
Tariff Treatment of Imported Goods and of Vessel Equipments,
Parts and Repairs. All goods provided for in this schedule
and imported into the customs territory of the United States
from outside thereof, and all vessel equipments, parts,
materials and repairs covered by the provisions of
subchapter XVIII to chapter 98 of this schedule, are subject
to duty or exempt therefrom as prescribed in general notes 3
through 14, inclusive, and general note 16.
Subheading 9804.00.10, HTSUSA, provides for duty-free
treatment for the following:
Articles imported by or for the account of any person
arriving in the United States from a foreign country:
Professional books, implements, instruments and tools
of trade, occupation or employment, which have been
taken abroad by him or for his account.
The predecessor to subheading 9804.00.10, HTSUSA, was item
810.20, Tariff Schedules of the United States Annotated
("TSUSA"), which contained language identical to subheading
9804.00.10.
In A Manual of Customs Law by Ruth F. Sturm, 1974 edition,
p. 173-174, the author states, in pertinent part:
Where Congress has carved out special privileges or
exemptions from the general provisions levying duties upon
imported articles, the courts have strictly construed such
exceptions and have resolved any doubt in favor of the
government. Swan & Finch Company v. United States, 190 U.S.
143, 23 SCR 702, 47 L. Ed. 984 (1903); Pelz-Greenstein Co.
v. United States, 17 CCPA 305, T.D. 43718 (1929)...
A conditionally free provision is in the nature of a
privilege and must be strictly construed. All regulations
must be complied with. MacNichol Packing Co., et al. v.
United States, 14 Ct. Cust. Appls. 400, T.D. 42050 (1927);
Afram Bros. Company v. United States, 49 Cust. Ct. 53, C.D.
2360 (1962)...
...
An exception which carves out something which would
otherwise be included must be strictly construed. Goat &
Sheepskin Import Co., et al. v. United States, 5 Ct. Cust.
Appls. 178, T.D. 34254 (1914); [et al.]
The following Customs rulings are pertinent to the subject
ruling request.
In Ruling 223373 dated December 11, 1991, which involved the
applicability of subheading 9804.00.10, we stated in pertinent
part as follows:
The exemption for tools of trade [subheading 9804.00.10] is
considered a personal exemption available only to
individuals arriving in the U.S. from a foreign country.
Merchandise consigned to and entered by or for the account
of a firm does not qualify for this exemption. There is no
requirement of ownership by the individual in order to
benefit from the exemption. Therefore, merchandise of
domestic or foreign manufacture exported from the U.S. by an
individual employed by the company, AFL, and reimported by
the same individual, even though actually owned by AFL, is
eligible for exemption from duty as tools of trade.
Additionally, the act by the employee of accompanying the
equipment to and from Mexico, although not required, would
be a sufficient connection between the exportation of the
goods and the employee's journey home.
...
The equipment which will be accompanied by an employee of
AFL to Mexico from the U.S. and from Mexico returning to the
U.S. will be entitled to exemption from duty under
9804.00.10 HTSUS as tools of trade if the CF 4455, the CF
3299 and the CF 7501 is [sic] completed and presented
according to 19 CFR 148.53, 10.68 of the Customs
Regulations.
In Ruling 223198 dated October 7, 1991, we stated in
pertinent part:
9804.00.10 HTSUS is considered a personal exemption
available only to individuals arriving in the U.S. from a
foreign country. Merchandise consigned to and entered by or
for the account of a firm does not qualify for this
exemption. There is no requirement of ownership by the
individual in order to benefit from the exemption.
Therefore, merchandise of foreign manufacture exported from
the U.S. by an individual and reimported by the same
individual, even though actually owned by the company by
which such individual is employed, is eligible for exemption
from duty as tools of trade.
From the facts presented on the CF 4455, we deduce that Mr.
Wills...spent a total of two weeks in Barranquilla, Columbia
[sic] during February, 1990. The equipment, on the other
hand, was exported from the U.S. to Columbia [sic] on
December 26, 1989, a month prior to the employee's arrival
in Columbia [sic], and delivered and entered into the U.S.
on May 24, 1990, over three months after the employee
returned to the U.S. It is not sufficient that the
merchandise and the employee are simultaneously in the
country during some period of time. Although this nexus
must be shown, there is an additional requirement that the
articles and the employee come back into the U.S.
concurrently. Based upon the documentation presented, this
requirement has not been met.
In Ruling 714111 dated October 20, 1980, we stated in
pertinent part as follows:
Inasmuch as item 810.20, TSUS, is personal in nature, the
imported article must be in the name of an individual, not a
corporation. If a claim for free entry is made under this
provision, it is essential that before exportation the
article be registered on a CF 4455 in the name of the
individual employee of the corporation by or for whose
account the article is to be shipped. However, if the
article is not registered, a CF 3299 must be executed by the
arriving person or employee at the time of entry.
C.S.D. 80-155 (711263 dated November 7, 1979), which
involved item 801.20, TSUSA, states in pertinent part:
Item 810.20, TSUS, is categorized by the tariff schedules as
a personal exemption and, therefore, requires that the
action be done by or for the account of an individual,
rather than a business activity. ORR Ruling 75-0134 states
that: "Therefore, the tools of trade must be taken out and
returned either by the employee or for his account, and not
in the name of the company." We have ruled that item
810.20, TSUS, is not concerned with the ownership of such
articles but is concerned with whether such articles are
taken out and returned by or for the account of an
individual. Therefore, such articles mentioned in section
10.68, Customs Regulations, owned by a corporation, could be
entitled to duty-free treatment under item 810.20, TSUS, if
they were taken out and returned by or for the account of an
employee of the corporation.
C.S.D. 80-84 (710375 dated August 14, 1979), which involved
item 810.20, TSUSA, states in pertinent part:
...This [item 810.20) is a personal exemption available to
individuals.
A corporation could bring equipment into the United States
under this exemption if an individual of the corporation
takes the equipment in and out of the country in his own
name. T.D. 53136 makes this possible by providing that
ownership of tools of trade is not a condition for free
entry. Merchandise of domestic or foreign origin exported
from the United States and reimported by the same
individual, even though the equipment or tools are not his
personal property, can qualify for free entry under item
810.20.
C.S.D. 80-75 (710884 dated August 8, 1979) contains language
substantially the same as that excerpted from C.S.D. 80-84,
supra.
PRD 74-16 dated June 20, 1974 stated in pertinent part:
...a corporation or other entity cannot claim entitlement to
item 810.20, TSUS, as it is a personal exemption which may
be claimed only by an individual returning to the United
States.
DETERMINATIONS
After a consideration of the facts and issues presented, and
the applicable statutes, regulations, and precedent, we make the
following determinations.
Subheading 9804.00.10 as a Personal Exemption/Ability of WEC to
Make Entry
As the language of subheading 9804.00.10 and the above-cited
rulings make clear, subheading 9804.00.10 is a personal exemption
available only to individuals. As the cited rulings indicate,
the corporate entity WEC is not a "person" for the purpose of
subheading 9804.00.10. Thus, WEC cannot make entry "on its own
behalf" and utilize subheading 9804.00.10.
Pursuant to 19 U.S.C. 1484, WEC, as the owner of the
equipment, may make entry for the equipment as the importer of
record. However, as the importer, WEC would not be entitled to
claim the employee's personal exemption since the employee's
exemption is limited to the employee.
The next question, or series of questions, relates to the
WEC employee (or employees) who is arriving in the United States
from a foreign country. Subheading 9804.00.10 pertains to
"[a]rticles imported by or for the account of any person arriving
in the United States from a foreign country." The articles to
which subheading 9804.00.10 applies are described as "...tools of
trade, occupation, or employment, which have been taken abroad by
him or for his account." The language of subheading 9804.00.10
indicates that if just one employee is involved, the articles
must have been taken abroad by that employee, or for his account,
and the same articles must be imported by or for the account of
that same person who took the articles abroad. Rulings 223373
and 223198, C.S.D. 80-155 (citing ORR Ruling 75-0134), and C.S.D.
80-84, all excerpted supra, make clear the requirement that the
same person must be involved with the exportation and the
reimportation of the equipment.
Timing
The equipment does not have to accompany the employee on his
trip from the United States, nor must it accompany the employee
on the employee's return to the United States. However, the
employee must return to the United States within a reasonable
period of time of the return of the equipment. Similarly, the
employee must leave the United States within a reasonable period
of time of the shipment of the equipment from the United States.
We note that Ruling 223198, excerpted supra, states in
pertinent part:
...there is an additional requirement that the articles and
the employee come back into the U.S. concurrently. (Emphasis
supplied.)
We believe that the "concurrent requirement" of Ruling
223198 is satisfied by the employee leaving or returning within a
reasonable period of time of the departure or return of the
equipment. Webster's Third New International Dictionary (1968;
unabridged) defines "concurrent" in pertinent part as follows:
1 a : converging, meeting, intersecting, running together at
a point...2 : occurring, arising, or operating at the same
time often in relationship, conjunction, association, or
cooperation...3 : acting in conjunction...
We believe that the second definition supra is the most pertinent
definition for the purpose of the subject issue. As stated
supra, we believe that the "concurrent requirement" of is
satisfied by the employee leaving or returning within a
reasonable period of time of the departure or return of the
equipment.
Multiple Employees
To the best of our knowledge, the issue with respect to the
use of multiple employees and subheading 9804.00.10 has not been
addressed. We believe that, under certain circumstances,
subheading 9804.00.10 may be utilized where multiple employees
are involved. The employee who claims entitlement to the
exemption must be able to show that entitlement whether the
employee is alone or in a group. However, the exemption is
personal to the claiming employee, who is the importer of record.
Additional Trips by Employees
Provided that the requirements of subheading 9804.00.10, as
described in this ruling, are met, the employee or employees may
make an additional trip or trips from the foreign place to the
United States and back to the foreign place without invalidating
the subheading 9804.00.10 claim. As stated supra, in order to
qualify for subheading 9804.00.10, the employee must leave the
United States within a reasonable period of time of the shipment
of the merchandise and the employee must return to the United
States within a reasonable period of time of the return of the
merchandise.
Documentation Required
WEC asks for the ability to submit documentation other than
the CF 4455 and CF 3299 to support its claim for subheading
9804.00.10. We are unable to grant this request.
In Ruling 223373, supra, we stated:
Before exportation, the equipment foreign or domestic [sic]
subject to classification under 9804.00.10 HTSUS, must be
registered on Customs Form 4455, Certificate of
Registration, in the name of the individual, or the employee
of an organization, by or for whose account the articles are
taken or shipped abroad and will be returned.
Upon reentry into the U.S., the returning individual or
broker on behalf of the returning individual is required to
present the CF 4455, the CF 7501, Entry Summary including a
reference made to the employee as the importer, and the
Customs Form 3299, Declaration For Free Entry of Articles
Not Accompanying a Resident or Nonresident. If the district
director is satisfied an oral declaration may be accepted in
lieu of a written declaration.
HOLDINGS:
1. As the language of subheading 9804.00.10 and the above-cited rulings make clear, subheading 9804.00.10 is a personal
exemption available only to individuals. As the cited rulings
indicate, the corporate entity WEC is not a "person" for the
purpose of subheading 9804.00.10. Thus, WEC cannot make entry
"on its own behalf" and utilize subheading 9804.00.10. The
language of subheading 9804.00.10 indicates that if just one
employee is involved, the equipment must have been taken abroad
by that employee, or for his account, and the same equipment must
be imported by or for the account of that same person who took
the articles abroad. Rulings 223373 and 223198, C.S.D. 80-155
(citing ORR Ruling 75-0134), and C.S.D. 80-84, all excerpted
supra, make clear the requirement that the same person must be
involved with the exportation and the reimportation of the
equipment.
2. The equipment does not have to accompany the employee on
his trip from the United States, nor must it accompany the
employee on the employee's return to the United States. However,
the employee must return to the United States within a reasonable
period of time of the return of the equipment. Similarly, the
employee must leave the United States within a reasonable period
of time of the shipment of the equipment from the United States.
3. Under certain circumstances, subheading 9804.00.10 may
be utilized where multiple employees are involved. The employee
who claims entitlement to the exemption must be able to show that
entitlement whether the employee is alone or in a group.
However, the exemption is personal to the claiming employee.
4. Provided that the requirements of subheading 9804.00.10,
as described in this ruling, are met, the employee or employees
may make an additional trip or trips from the foreign place to
the United States and back to the foreign place without
invalidating the subheading 9804.00.10 claim.
5. As stated in Ruling 223373, before exportation, the
equipment subject to classification under 9804.00.10 HTSUS, must
be registered on Customs Form 4455, Certificate of Registration,
in the name of the individual by or for whose account the
equipment is taken or shipped abroad and will be returned. Upon
reentry into the U.S., the returning individual is required to
present the CF 4455, the CF 7501, Entry Summary including a
reference made to the employee as the importer, and the Customs
Form 3299, Declaration For Free Entry of Articles Not
Accompanying a Resident or Nonresident. If the district director
is satisfied an oral declaration may be accepted in lieu of a
written declaration.
Sincerely,
Director
International Trade Compliance
Division
cc: U.S. Customs Service
Marilyn Babousis, FNIS (Team 243)
J.F.K. Airport
Bldg. 77
Jamaica, NY 11430