ENT-4/ENT-1-01-RR:IT:EC 113688 CC
Edmund Maciorowski, Esq.
Edmund Maciorowski, P.C.
1577 North Woodward, Suite 207
Bloomfield Hills, MI 48304
RE: Entry of noncommercial textile merchandise; express consignment; informal entry;
19 U.S.C. § 1498; 19 CFR § 143.21(a); HQ 226254
Dear Mr. Maciorowski:
This is in response to your request, with a supplemental submission dated June 15, 1998, on behalf of Freeds Storage, Ltd., concerning the importation of textile articles by U.S. customers for their own personal use.
FACTS:
You state that your client is a retail department store outlet located within the Windsor city limits in Ontario, Canada. Your client has many U.S. tourists who typically purchase one or two suits, and accessories, spending under 1000 Canadian dollars and returning with the goods to the U.S. One possibility which your client is considering is offering to ship the purchased goods from Canada to the U.S. customer by express consignment. You have raised the following issues concerning the importation of the subject textile articles.
ISSUES:
1. Whether the goods are eligible for informal entry pursuant to 19 CFR § 143.21(a).
2. Whether country of origin marking is required for the subject noncommercial goods.
3. Whether a NAFTA certificate of origin will be required for the subject noncommercial entries.
4. Whether express consignment shipments “accompany” the purchaser for purposes of subheadings 9804.00.65 and 9816.00.20 of the Harmonized Tariff Schedule of the United States (HTSUS).
LAW AND ANALYSIS:
We have thoroughly addressed the issues involved in importing textile articles valued at $200 or less by express consignment in Headquarters Ruling (HQ) 226254, dated November 3, 1995. Consequently, for your request we will address the issues present for merchandise valued at greater than $200.
You state that since merchandise valued at $2000 or less is eligible for informal entry, the subject merchandise should be eligible for informal entry. Acknowledging that the subject merchandise consists of textile articles, you argue that “19 CFR 143.21(a) allows for informal entry of merchandise, except that which is subject to quota or visa requirements.” In addition, you state that the subject merchandise should be entered under the informal entry procedures when imported by express consignment pursuant to 19 CFR § 143.23(i) and 19 CFR § 128.24.
19 U.S.C. § 1498 authorizes the Secretary of the Treasury to prescribe rules and regulations for the declaration and entry of, among other things, imported merchandise when the aggregate value of the shipment does not exceed a certain amount. Pursuant to 19 U.S.C. § 1498, Subpart C of Part 143 of the Customs Regulations (19 CFR Part 143, Subpart C) provides for the informal entry of merchandise. Section 662 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057 (1993) amended 19 U.S.C. § 1498 by increasing the amount to $2500 as the maximum dollar amount the Secretary of the Treasury could prescribe by regulation for the purposes of entry and declaration of merchandise. T.D. 98-28, effective July 2, 1998, amended the Customs Regulations, including Subpart C of Part 143, pursuant to 19 U.S.C. § 1498, to increase the maximum amount for informal entries to $2000.
19 U.S.C. § 1498 provides exceptions to the maximum amount allowed for informal entry. In fact, 19 U.S.C. § 1498 states:
The Secretary of the Treasury is authorized to prescribe rules and regulations for the declaration and entry of --
(1) Merchandise when--
(A) the aggregate value of the shipment does not exceed an amount specified by the Secretary by regulation, but not more than $2,500; or
(B) different commercial facilitation and risk considerations that may vary for different classes or kinds of merchandise or different classes of transactions may dictate.
Under the law prior to its amendment, the exception for the limit in the current law’s paragraph (1)(B) was contained in paragraph (1)(A), (B) and (C) and was for articles classified in certain schedules of the tariff schedule, including textile articles.
Pursuant to 19 U.S.C. § 1498, 19 CFR § 143.21(a) provides that certain classes of merchandise may only be entered under the informal entry procedures if their value does not exceed $250. Textile articles (Section XI of the HTSUS) are among those articles listed in
19 CFR § 143.21(a) subject to the $250 limit for informal entry. There is nothing in the language of 19 CFR § 143.21(a) that limits the $250 ceiling for informal entry to textile articles subject to quota. In addition, T.D. 98-28 did not amend the regulations to change the classes of articles subject to a lower informal entry limit or the dollar amount of the limit. Consequently, in accordance with 19 U.S.C. § 1498 and 19 CFR § 143.21(a), for the subject merchandise, any shipment of textiles valued over $250 will not be eligible for informal entry.
The $250 limit for informal entry for textile articles also would apply to merchandise imported by express consignment. 19 CFR § 143.23(i) provides for the informal entry of merchandise by express consignment for shipments under $2000 meeting the requirements of 19 CFR § 128.24. The informal entry procedures of shipments by express consignment not exceeding $2000, according to 19 CFR § 128.24(a), “may not be used for prohibited or restricted merchandise, merchandise which is subject to a quota or other quantitative constraints, or for any articles precluded from informal entry procedures by virtue of section 498, Tariff Act of 1930, as amended, (19 U.S.C. 1498).” As discussed above, pursuant to 19 U.S.C. § 1498, shipments of textile articles over $250 in value are not eligible for informal entry. Consequently, 19 CFR § 128.24 does not provide for the informal entry of textile articles valued over the $250 limit and imported by express consignment. Consequently, the importation of the subject textile merchandise that is valued greater than $250 is not eligible for informal entry, whether by express consignment or not.
You contend that the subject merchandise valued at $400 or less should be subject to the personal exemption of subheading 9804.00.65, HTSUS, and thus be duty free. In addition, you contend that the subject goods valued at less than $1000 should be eligible for the personal exemption provided under subheading 9816.00.20, HTSUS.
Subheading 9804.00.65, HTSUS, provides for the duty-free treatment of articles, with certain limitations, not over $400 in aggregate retail value in the country of acquisition, accompanying a returning United States resident. Subheading 9816.00.20, HTSUS, provides for a 10% ad valorem flat rate of duty (duty-free for Canadian goods) on the fair retail value of articles for personal or household use, or as bona fide gifts, not imported for the account of another person, valued in the aggregate at not over $1,000 fair retail value in the country of acquisition, accompanying a person arriving in the United States.
For the above provisions to apply, the merchandise must accompany the returning resident or person arriving in the U.S. You argue that the subject goods shipped to the purchaser by express consignment accompanies the purchaser when he or she returns to the U.S.
Part 148 of the Customs Regulations (19 CFR Part 148) provides for personal declarations and exemptions. 19 CFR § 148.4 concerns accompanying articles, with subparagraph (a) stating that generally, “[a]rticles shall be considered as accompanying a passenger or brought in by him if the articles arrive on the same vessel, vehicle, or aircraft on the same date as that of his arrival in the United States.” The subject merchandise is being shipped by express consignment and clearly would not meet the terms of 19 CFR § 148.4(a) for accompanying the passenger. In addition, in HQ 222602, dated August 1, 1990, we found that merchandise mailed by a commercial seller to the U.S. to the purchaser did not accompany her on her return to the U.S. Consequently, neither subheading 9804.00.65, HTSUS, nor subheading 9816.00.20, HTSUS, is applicable to the subject merchandise.
Concerning country of origin marking, 19 U.S.C. § 1304 provides that, unless excepted, every article of foreign origin imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to an ultimate purchaser in the U.S. the English name of the country of origin of the article. Subparagraph (a)(3) provides that the Secretary of the Treasury may promulgate regulations to authorize the exception of certain articles from the marking requirements including the following: (F) such article is imported for use by the importer and not intended for sale in its imported or any other form. The regulation promulgated to authorize this exception is 19 CFR § 134.32(f).
You state that the merchandise sold by your client is intended for the personal use of the purchaser and will not be resold. Based on the facts presented and assuming that a purchaser does not intend to resell the merchandise after it is imported, the exception to the country of origin marking requirements contained in 19 U.S.C. § 1304(a)(3)(F) and 19 CFR § 134.32(f) is applicable. Consequently, the subject merchandise would not be subject to country of origin marking requirements.
You have asked whether an importer of the subject merchandise must have a NAFTA certificate of origin. Obviously, a NAFTA certificate of origin could only be necessary if a NAFTA preference is claimed. Concerning the subject merchandise, you claim that it should be exempt from the NAFTA certificate requirements since the importations are noncommercial, and, therefore, fall within the exception of 19 CFR § 181.22(d)(2). As discussed above, assuming the merchandise is for the personal use of the importer and not for resale, it is noncommercial and, thus we would agree it falls within the exception of 19 CFR § 181.22(d)(2).
Finally, concerning the textile country of origin declaration requirements, you state that the subject merchandise should be exempt from these requirements, in accordance with 19 CFR § 12.130(h), which provides that a declaration is not required for shipments covered by an informal entry, although the port director may require such other evidence of the country of origin as deemed necessary. The declaration referred to in 19 CFR § 12.130(h) is the appropriate declaration set forth in paragraph (f)(1), (f)(2) or (f)(3) of section 12.130. Although such a declaration is not required for merchandise entered informally, evidence of the country of origin may be required.
HOLDINGS:
1. A shipment of textile articles may not be entered under the informal entry procedures unless it is valued at $250 or less.
2. Subheadings 9804.00.65 and 9816.00.20, HTSUS, are not applicable for the subject merchandise since it does not accompany the purchaser when he returns to the U.S.
3. A NAFTA certificate of origin will not be required for the subject noncommercial entries.
4. Country of origin marking is not required for the subject noncommercial goods.
Sincerely,
Jerry Laderberg
Chief
Entry Procedures and Carriers Branch