OT:RR:CTF:VS H108655 CMR
Ms. Katie Heisinger
Special Tactical Services, LLC
1569 Diamond Springs Road
Suite B
Virginia Beach, VA 23455
RE: Classification and Entry Procedures for Certain Equipment used by Vessel
Security Personnel
Dear Ms. Heisinger:
This is in response to your letter of May 20, 2010, on behalf of your company, Special Tactical Services, LLC, and its affiliates (hereinafter, STS), requesting guidance on the proper entry process and documentation required when unlading certain equipment used by security personnel assigned to U.S. flagged commercial vessels.
FACTS:
STS provides security services aboard seven U.S. flagged vessels. The purpose of the security services is to ensure the safety of the vessel and its crew while at sea. In providing this service, STS stows aboard equipment (weapons, ammunition, body armor, optics and helmets) considered defense material under 22 Code of Federal Regulations (CFR) Parts 120 and 121. The equipment is utilized by STS security personnel while at sea when traveling through high risk waters. The equipment is locked in a container on board until the security team personnel arrive and is used by the security personnel during the voyage. The security teams embark and disembark the vessel overseas. The equipment is never removed from the vessel when in a foreign port and is locked in storage on board should the security personnel disembark
while abroad. The equipment remains the property of STS and consists of U.S. origin goods, with the exception of Canadian-origin night vision goggles.
The equipment is loaded on board the vessel while the vessel is in a U.S. port through U.S. Customs and Border Protection (CBP) under a DSP-73 License for Temporary Export of Unclassified Defense Articles, which STS obtains from the Department of State. STS has advised that it also files under the Automated Export System (AES).
STS will remove the equipment from the vessel only when at a U.S. port of entry and only under limited circumstances, i.e., at the end of the service contract; when in need of cleaning or repair; and to transfer to another vessel owned by the same shipping line. As of yet, STS has not removed equipment from a U.S. flagged vessel for any these reasons. STS will file the entry when equipment is unladen from a vessel.
You indicated in your letter that STS has encountered inconsistent instructions regarding the proper documentation to present to the port when removing the security equipment from a vessel. You provided several examples of instructions received, including instructions to make a formal entry by filing CBP forms 3461 (Entry/Immediate Delivery), 7501 (Entry Summary) and classifying the equipment in subheading 9801.00.10, of the Harmonized Tariff Schedule of the United States (HTSUS), as U.S. goods returned after having been exported without any advancement in value or improvement in condition while abroad.
ISSUES:
I. What entry documents and procedures are required when the equipment used
by STS security personnel is removed from a U.S. flagged vessel at a U.S. port of entry, for any reason?
II. How is the STS equipment classified under the HTSUS at the time of entry?
LAW AND ANALYSIS:
With the exception of the Canadian night vision goggles, the merchandise at issue consists of U.S.-origin goods. In order to determine the proper entry procedures and documentation requirements for the goods at issue, we considered whether the security equipment is vessel equipment within the scope of 19 U.S.C. § 1446. The Cargo Security, Carriers and Immigration Branch of our office has advised us that the security equipment at issue is not vessel equipment. Therefore, we will examine whether the security equipment may be considered tools of the trade classifiable subheading 9801.00.85, HTSUS, and entitled to a Free rate of duty.
Subheading 9801.00.85, HTSUS, provides for: “Professional books, implements, instruments, and tools of trade, occupation, or employment, when returned to the United States after having been exported for use temporarily abroad, if imported by or for the account of the person who exported such items.” The security equipment falls within the scope of “tools of the trade” as the equipment is necessary for the security team to carry out its job aboard a vessel. See Headquarters Ruling Letter (HQ) 561005, dated August 5, 1998, and HQ H013537, dated July 2, 2007 (items necessary for the exercise of the trade or profession). The U.S. origin security equipment and the Canadian-origin night vision goggles may be entered under subheading 9801.00.85, HTSUS, as “tools of the trade.”
In section 44 of the “Miscellaneous Trade and Technical Corrections Act of 1996,” Pub. L. No. 104-295, 110 Stat. 3514 (1996), Congress amended the HTSUS to add heading, 9801.00.85, to permit the duty-free entry of “tools of the trade” by corporations as well as individuals. See Senate Report 104-393, the “Miscellaneous Trade and Technical Corrections Act of 1996,” at 24. The CBP regulations have not been amended to provide specific procedures for utilizing subheading 9801.00.85, HTSUS. However, although the CBP Regulations do not provide for specific documentation required to substantiate a claim under subheading 9801.00.85, HTSUS, carnets, commercial invoices, packing lists, customs documents related to the initial importation of the merchandise into the United States, or any other documentation which shows that the merchandise being imported under subheading 9801.00.85, HTSUS, is the same as what was exported, may be utilized for this purpose. We recommend you use the CBP Form 4455, Certificate of Registration, when claiming a duty exemption under subheading 9801.00.85, HTSUS. You should register the equipment with CBP prior to lading on a vessel.
In addition, with regard to the U.S. origin equipment, which we understand to be everything except for the night vision goggles of Canadian origin, subheading 9801.00.10, HTSUS, provides for: “Products of the United States when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad.” 19 CFR § 10.1, “Domestic products; requirements on entry,” sets forth the regulatory requirements for entry under subheading 9801.00.10, HTSUS, including the filing of a foreign shipper’s declaration, and a declaration by the owner, importer, consignee, or agent having knowledge of the facts regarding the claim for free entry. You should consult the requirements set forth in 19 CFR § 10.1(a) through (d).
HOLDING:
The security equipment is classifiable as “tools of the trade” and may be entered under subheading 9801.00.85, HTSUS. The security equipment should be registered with CBP through use of the CBP Form 4455. The equipment will be subject to informal entry procedures upon unlading, for any reason, from a vessel.
In addition, the U.S. origin security equipment may be entered under subheading 9801.00.10, HTSUS, as American Goods Returned, subject to formal entry requirements. The entry summary may be made on the CBP Form 3311 (Declaration for Free Entry of Returned American Products), in lieu pf a CBP Form 7501 (Entry Summary).
The DS-73 License issued by the Department of State should be presented to CBP personnel at the time of entry.
Sincerely,
Monika R. Brenner, Chief
Valuation and Special Programs Branch