- Type : • HTSUS :
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Related:
116263
OT:RR:CTF:ER
H238308 PTM
Carl D. Cammarata, Esq.
Law Offices of George R. Tuttle
Three Embarcadero Center
Suite 1160
San Francisco, CA 94111
RE: 19 CFR Part 192; Exportation of Rejected Self-Propelled Vehicles
Dear Mr. Cammarata:
This letter is with respect to your letter of January 24, 2013, on behalf of Porsche Cars North America, Inc. (“Porsche”) and Porsche AG (“PAG”), in which you request a ruling pursuant to 19 C.F.R. §177.1. Our response follows.
FACTS:
Porsche is the importer and distributor of Porsche vehicles. The vehicles are imported by Porsche from its parent company, PAG. PAG is the designer, manufacturer and exporter of the vehicles. Porsche routinely imports hundreds of vehicles at a time under one consumption entry. Porsche is the original U.S. owner of the imported vehicles. Porsche orders the vehicles from PAG, pays for them, is the importer of record for them and takes possession of the vehicles. After importation, Porsche typically sells and distributes the imported vehicles to Porsche dealers throughout the United States. The Porsche dealers sell the vehicles to their ultimate purchasers.
On occasion, prior to selling the vehicle to a dealership, Porsche may determine that a particular vehicle is unfit for sale and reject it. Rejected vehicles will be returned to PAG in Germany. The rejection will occur immediately after entry and release of the vehicle from CBP custody, but before the vehicle has been removed from the port. The vehicles are not used prior to their rejection and return to PAG and are in new condition. Your submission inquires whether the subject motor vehicles are considered “used” within the meaning of 19 C.F.R. §192.1, which would subject the vehicles to the export control requirements for used self-propelled vehicles set forth in 19 U.S.C. §1627a and the CBP regulations at 19 C.F.R. Part 192.
ISSUE:
Whether the subject motor vehicles are “used” for the purposes of 19 U.S.C. §1627a and 19 C.F.R. §192.1.
LAW AND ANALYSIS:
The new vehicles Porsche imports, rejects, and returns to Germany will not be subject to the additional export control requirements for used, self-propelled vehicles if they are not “used” within the meaning of 19 U.S.C. §1627a. This statute prohibits the unlawful exportation of certain used self-propelled vehicles. It provides, in relevant part:
(b) Regulations; violations; penalties. A person attempting to export a used self-propelled vehicle shall present, pursuant to regulations prescribed by the Secretary, to the appropriate customs officer both the vehicle and a document describing such vehicle which includes the vehicle identification number, before lading if the vehicle is to be transported by vessel or aircraft, or before export if the vehicle is to be transported by rail, highway, or under its own power. Failure to comply with the regulations of the Secretary shall subject such person to a civil penalty of not more than $ 500 for each violation.
The CBP regulations promulgated thereunder are set forth in 19 CFR Part 192, Subpart A, which sets forth the requirements for the exportation of used, self-propelled vehicles. If the vehicles are not “used” by the definition set forth in 19 C.F.R. §192.1, the exportation requirements of 19 C.F.R. §192.2 are not applicable. The regulation defines “used” as “any self- propelled vehicle the equitable or legal title to which has been transferred by a manufacturer, distributor, or dealer to an ultimate purchaser.” See 19 C.F.R. §192.1. The term “ultimate purchaser” is defined as “the first person, other than a dealer purchasing in his capacity as a dealer, who in good faith purchases a self-propelled vehicle for purposes other than resale.” Id. Therefore, if the vehicles are not “used,” then they are not subject to the additional export control requirements described above.
In the scenario presented, Porsche does not meet the definition of “ultimate purchaser” as defined by the regulation. It purchases the vehicles from PAG for resale to dealerships, who in turn sell the vehicles to customers. Consequently, Porsche is not the “first person, other than a dealer,” who purchases the vehicle, and further, Porsche purchases these vehicles for resale. The definition of “used” as set forth in 19 C.F.R. §192.1, requires the self-propelled vehicle to be sold by a manufacturer, distributor or dealer to an ultimate purchaser. Porsche is not an ultimate purchaser, and legal title on the rejected vehicles is never passed to an ultimate purchaser. Because the Porsche is not an “ultimate purchaser” and the vehicles are not “used” by the definitions of 19 C.F.R. §192.1, the export requirements for used self-propelled vehicles in 19 U.S.C. §1627a and 19 C.F.R. §192.2 are not applicable.
In a previous ruling, CBP examined whether prototype vehicles consigned, but not sold, to Porsche by PAG were subject to the requirements of 19 C.F.R. Part 192 when the vehicles were returned to Germany after testing. In that case, we held that:
The facts clearly indicated that the subject vehicles are consigned to Porsche. As such, there is no sale of the vehicles and no transfer of title to an ultimate purchaser. Therefore, we find that the vehicles are not “used” vehicles within the meaning of Part 192, CBP Regulations…Accordingly the vehicles are not subject to the requirements of Part 192, CBP Regulations.” See HQ 116263 (July 9, 2004).
Although the instant case is distinguishable in that the vehicles here are transferred from PAG to Porsche rather than consigned, there is still no transfer of title to an ultimate purchaser as defined in the regulation. Consequently, the analysis is the same. Because Porsche is not an ultimate purchaser and the vehicles are not considered used as defined by the regulation, they are not subject to the requirements of 19 U.S.C. §1627a and Part 192 of the CBP regulations.
HOLDING:
The vehicles imported by Porsche that are rejected and returned to Germany without a transfer of title to an ultimate purchaser are not “used” vehicles within the meaning of 19 U.S.C. §1627a and 19 C.F.R. § 192.1. Consequently, the export requirements for used, self-propelled vehicles set forth in 19 C.F.R. Part 192 are not applicable.
Sincerely,
Carrie L. Owens, Chief
Entry Process and Duty Refunds Branch