DRA-4 CO:R:C:E 221245 GG
Assistant Regional Commissioner of Customs
Commercial Operations
Pacific Region
1 World Trade Center
Suite 705
Long Beach, California 90831-0700
RE: Request for Internal Advice on rejected merchandise and same
condition drawback claims; 19 U.S.C. 1313(c); 19 U.S.C. 1313(j);
untimely return to Customs' custody; physical transfer into
foreign trade zone essential for exportation purposes;
destruction outside zone permitted although valuable waste must
be accounted for; proper party must file claim; certificates of
delivery unnecessary for rejected merchandise drawback claims.
Dear Sir:
This is in response to your January 20, 1989, and March 1,
1990, requests for internal advice on the issue of rejected
merchandise and same condition drawback claims submitted by Nike,
Inc., and the Nissho Iwai American Corporation (NIAC). The
purpose of this memorandum is to resolve particular problems
found in these claims and to provide guidance on the ongoing and
future drawback programs of Nike, Inc.
FACTS:
Nike, Inc. is a wholesale distributor of athletic footwear,
with its headquarters located in Beaverton, Oregon. It engages
NIAC to perform certain financing and import-export services on
its behalf. Nike, Inc. purchases, through NIAC, substantially
all of the athletic footwear it acquires from overseas suppliers
for U.S. and foreign sales. Since 1980, Nike, Inc. and NIAC have
been filing drawback claims on athletic footwear. They have been
doing so under both the rejected merchandise and the same
condition provisions of the drawback law.
The claims have been filed in three places: Portland,
Maine; Memphis, Tennessee; and Portland, Oregon. 53 claims for
both rejected merchandise and same condition drawback have
already been paid. In 1987, Customs audited the outstanding
drawback claims. As a result of questions raised by the audit,
the remaining claims remain unliquidated.
The audit revealed a number of problems. There were 5
areas of concern with respect to the rejected merchandise
drawback claims:
1) Many of the shoes claimed to be defective had been worn
by the consumer, which, according to Nike, Inc., precluded
specification testing. An examination of the shoes by
Customs prior to their destruction revealed that the wear on
the shoes was sometimes extensive. The company did not
present any specifications which could have been used to
determine whether the defects were due to their breach. In
addition, shoes with very slight defects were claimed for
drawback but similar defects were observed at retail stores,
which raised questions about Nike, Inc.'s quality control
standards and what constitutes a defect for drawback
purposes.
2) Nike, Inc. justified drawback based on warranty
reimbursements from foreign factories in lieu of proof that
the shoes were not manufactured to specification. However,
in some instances, the company's accounting records did not
provide a clear audit trail to show that foreign
manufacturers had been billed and had reimbursed Nike, Inc.
for the drawback shoes.
3) Nike, Inc. requested extensions of the statutory 90-day
period allotted to return rejected shoes to Customs'
custody. Several Customs' field offices granted the
extensions, but did not specify their length. In some
instances, Nike, Inc. returned shoes more than a year after
their release, even though Customs had orally advised the
company that the extensions were only for one year.
4) Drawback entries reflect that the defective shoes were
deemed exported by being sent to a foreign trade zone
under zone restricted status. However, in a significant
number of cases, and with Customs' approval, only the
paperwork, and not the shoes, was admitted into the
zone. The shoes were then destroyed outside of the
zone.
5) Nike, Inc. filed many of the drawback claims, although
it was not the importer of record and may not have been the
actual owner named in the import entries.
The problem unique to the same condition drawback claims were:
6) The importer, NIAC, and the ultimate consignee, Nike,
Inc., filed all of the claims, although Nike International
exported the merchandise.
Finally, both kinds of claims shared a common problem:
7) There were no certificates of delivery tracking the
merchandise exported (or, in the case of the rejected shoes,
destroyed) back to the imported merchandise.
ISSUES:
1) Whether use of merchandise renders it ineligible to be
claimed as a basis for rejected merchandise drawback?
2) Whether the exporter-claimant must tie the defect in the
merchandise to a failure by the manufacturer to follow
specifications?
3) Whether the payment of a warranty claim that is based on a
failure to meet a quality-control standard is sufficient evidence
that the merchandise failed to meet a specification within the
meaning of 19 U.S.C. 1313(c)?
4) Where the exporter-claimant requested extensions of the 90-
day return period for defective merchandise, and received an
unlimited written extension as well as an oral instruction to
return the merchandise within a year of release, may Customs deny
drawback when the return took place after more than a year had
elapsed?
5) Must rejected merchandise be physically admitted into a
foreign trade zone to be considered exported for drawback
purposes, or would a paper transfer suffice? Can destruction
occur outside of the zone?
6) May an exporter who is not the importer of record or the
actual owner named in the import entry, receive a duty refund
under the rejected merchandise drawback law?
7) Is the importer of record or the ultimate consignee, who is
not the exporter, entitled to same condition drawback?
8) Are certificates of delivery required to track merchandise
that is designated as the basis for rejected merchandise and same
condition drawback claims?
LAW AND ANALYSIS:
Section 1313(c) of the Tariff Act of 1930, as amended (19
U.S.C. 1313(c)) authorizes drawback on merchandise not conforming
to sample or specifications if such merchandise is returned to
Customs' custody for exportation within 90 days after release
from Customs' custody. The legislative purpose behind allowing a
duty refund under these circumstances was to prevent financial
hardship on importers who, because they were not allowed to
inspect the merchandise prior to its release, were only able to
discover after the duty had already been paid that the
merchandise was so far from specifications that it was useless to
them.
The first issue raised is whether used merchandise may be
included as a basis for a rejected merchandise drawback claim.
While supervising the destruction process, Customs officers
observed that many of the shoes that Nike, Inc. was going to
claim drawback on had been worn extensively, in some cases to the
point of consumption. This fact, together with the discovery
that some retailers encouraged the trade-in of used shoes to
induce further sales, led Customs to question whether the returns
were because of defects or, alternatively, generous refund
offers. An examination of the legislative history of 19 U.S.C.
1313(c) reveals that use of merchandise before its return to
Customs' custody, would not in and of itself preclude drawback;
in 1953, Congress' stated purpose in extending the return time of
rejected merchandise from 30 to 90 days, was to ensure that the
claimant would have a reasonably adequate time to discover latent
defects or "those which can only be ascertained by test or use."
See S. Rept. 632, 83rd Cong. (1953), reprinted in 1953 U.S. Code
Cong. and Adm. News, p. 2283 at 2294. Clearly, some use would be
allowed under the law.
Although the shoes could be used, it was incumbent upon a
claimant to establish that the shoes were returned because they
failed to meet sample or specifications, and not, as suggested
above, because of a trade-in policy or generous company attitude
towards general customer dissatisfaction with the product. In
this regard, the courts have held that a rejected merchandise
claimant must establish the specifications by competent evidence.
See, e.g, Revillon Freres Trading Co., Ltd., Railway Express
Agency, Inc. v. United States, T.D. 49213 (1937); Border
Brokerage Company - A.G. Grasher v. United States, 53 Cust. Ct.
6, C.D. 2465 (1964). There are two ways in which a claimant can
demonstrate to Customs' satisfaction that merchandise did not
conform to sample or specifications: 1) by presenting
specifications and showing that the defect was caused by a
failure to meet those specifications; or 2) by proving that the
imported merchandise failed to meet a warranty guaranty as to
length of service, and the credit allowed for it amounted to 90%
or more of the purchase price. A discussion of this second
method will follow, but we will first address the issue of
whether drawback eligibility was adequately proved by
demonstrating that the shoes were defective because they were not
manufactured according to specifications.
The courts have allowed drawback based on unwritten and oral
specifications, but they have also stated that the term
"specifications" means something more than mere speculation.
See, e.g., Lansing Company, Inc. v. United States, 77 Cust. Ct.
92, C.D. 4675 (1976); and Border Brokerage Company, 53 Cust.Ct.
at 11. The term "specifications" is defined in The American
Heritage Dictionary, Second College Edition, as "a detailed and
exact statement of particulars, especially a statement
prescribing materials, dimensions, and workmanship for something
to be built, installed, or manufactured"; and in Black's Law
Dictionary, Fifth Edition, "specifications", as used in law
relating to manufacturing, means "a particular or detailed
statement, account, or listing of the various elements,
materials, dimensions etc. involved". The three companies here
did not provide Customs with any information that, under these
definitions, could be considered to be specifications, but did
attempt to justify some of its claims by referencing the internal
defect codes it assigned to the returned shoes. These codes,
consisting of 3-digit numbers, identified various problems, such
as loose stitching, sole separations, or dye transfers. However,
none of the companies has conclusively linked these defects to a
failure of its manufacturers to follow specifications. Absent
such a link, Customs cannot determine whether the problems were
caused by a manufacturing defect or rather, were the result of a
design defect or consumer abuse or consumption of the shoes. The
possibility of a design defect was raised when Customs observed
recurring problems in some of the returned shoes. This is
significant because the intent of 19 U.S.C. 1313(c) was to
redress only manufacturing defects rather than poor designs that
were incorporated into the specifications.
An inability to tie defects to a failure by the manufacturer
to follow specifications, will not prove fatal to a 19 U.S.C.
1313(c) drawback claim where the claimant has documentation that
shows that it received reimbursement under a warranty guarantee
as to length of service. Treasury Decision 69-120(3) (T.D. 69-
120(3)) provides that when imported merchandise fails to meet a
warranty guarantee as to length of service, then the article may
be considered to be not conforming to specifications within the
meaning of 19 U.S.C. 1313(c), if the credit allowed for it
amounts to 90% or more of the purchase price. Some of the supply
agreements in effect between Nike, Inc. and its foreign
manufacturers make provision for a 100% reimbursement for
defective shoes returned to the factory within a specified time;
such agreements would qualify as warranty guarantees under T.D.
69-120(3). The age of the shoes is immaterial as long as they
are returned within the period specified in the warranty. Other
Nike, Inc. supply agreements which also provide for full
reimbursement for defective shoes, but place no time limitation
on their return, appear to extend lifetime guarantees and may
also be considered to be warranty guarantees as to length of
service. Regulatory Audit has indicated that there is evidence
that many of the rejected merchandise claims can be supported by
detailed billings of up to 75% of the dollars claimed. To the
extent that Nike, Inc. has documentation that proves that it
billed, and received a reimbursement of at least 90% of the
purchase price from, a manufacturer under a warranty guarantee as
to length of service, then the company can receive a refund of
duties if it fulfills all other requirements of the drawback law.
The key factor is that the company must have records that show
that it billed a manufacturer for defective shoes under a
qualifying warranty reimbursement provision, and that its billing
was honored by the manufacturer. The records must sufficiently
identify and detail drawback items in the accounting records to
enable Customs to readily trace and identify those same items in
the drawback claims.
The next issue concerns extensions of time to return
rejected merchandise to Customs' custody. Under the statute,
merchandise not conforming to sample or specifications must be
returned to Customs' custody for exportation within ninety days
after its initial release. The district director has the
authority under 19 U.S.C. 1313(c) and section 191.142(b)(4) of
the Customs Regulations (19 CFR 191.142(b)(4)) to extend this
period in writing, and Customs has previously allowed an
extension when it was persuaded that the latent nature of defects
impeded the timely discovery of a failure to meet a
specification. See, e.g., Customs Service Decision (C.S.D.) 81-
176 and C.S.D. 85-53. Nike, Inc. requested extensions because it
discovered that the vast majority of its defective returns
occurred more than 90 days after release from Customs' custody.
The delays were attributed to the length of time the shoes
remained in warehouse and retailer inventory before being sold to
consumers, who then had to wear the shoes until the alleged
defects surfaced. Following their return to the retailer, the
shoes then were shipped to Nike, Inc. for examination and
sorting. In a memorandum to Customs dated December 1, 1980,
Nike, Inc. estimated that the entire process could take between
65 and 250 days.
Several districts responded to Nike, Inc.'s extension
requests by giving written approvals, which did not specify the
length of the extensions. As a result, many shoes were returned
more than a year after their release from Customs' custody. The
auditors state that this occurred despite the fact that the
districts had advised Nike, Inc. that, based on the 65-250 day
projection, the maximum extension allowed would be one year.
The open-ended written approvals take precedence over the oral
instructions to return the merchandise within one year, because
both the statute and the regulations require an extension to be
in writing, and do not specifically limit the extension period to
one year. Consequently, Nike, Inc. should not be denied drawback
solely because it returned the shoes to Customs' custody more
than a year after their release where an extension was granted.
In the future, the districts should specify the length when
granting extensions. It may be helpful to consider that Congress
contemplated extensions that would be "reasonably adequate" for
the discovery of latent defects or those which could only be
ascertained by test or use.
Also of concern was whether a paper transfer to a foreign
trade zone, and destruction of footwear outside of the zone,
would satisfy the requirement in 19 U.S.C. 1313(c) that the
rejected merchandise be exported. As we noted earlier, in many
instances Nike, Inc. is said to have transferred defective shoes
directly from its warehouses to the destruction sites without
first admitting the shoes in a foreign trade zone. Several
districts knew of this procedure and reportedly authorized it.
The fourth proviso of section 3 of the Foreign Trade Zones
Act of 1934, as amended (19 U.S.C. 81c), provides that articles
which have been taken into a zone from Customs' territory for the
sole purpose of exportation, destruction or storage shall be
considered to be exported for drawback purposes. The language of
the statute clearly requires that the merchandise be physically
taken into the zone. Furthermore, the person transferring the
merchandise into the zone must declare on Customs Form 7539 that
the merchandise was actually transferred into the zone for the
sole purpose of exportation, destruction, or storage, and also
must obtain on the same form a certification from the foreign
trade zone operator that the merchandise was received in the
zone. See section 191.165 of the Customs Regulations (19 CFR
191.165). The mere filing of the Customs Form 7539 without the
admission of the shoes into the zone would not satisfy the
requirement that the articles have to be taken into the zone.
Merchandise admitted into a foreign trade zone for the sole
purpose of exportation, destruction, or storage will be given
zone-restricted status on proper application. See sections
146.44 and 191.162 of the Customs Regulations (19 CFR 146.44 and
191.162). The drawback claimant must request zone restricted
status in order to for its shoes to be considered to be exported
for drawback purposes. Once in zone-restricted status,
merchandise can only be transferred to Customs' territory under
certain limited circumstances, which are described in section
146.70 of the Customs Regulations (19 CFR 146.70). This
regulation specifically authorizes the transfer of zone-
restricted status merchandise into Customs' territory for
destruction. However, this would only be a constructive transfer
from the zone; legally, the shoes would be considered to have
remained in the zone in zone-restricted status although they had
been physically removed for the limited purpose of destruction.
The consequence of this is that any valuable residue that results
from the destruction process must be accounted for; it must be
taken back into the zone where it can be stored, exported, or
destroyed, or returned to Customs' territory for consumption if
the Foreign Trade Zones Board determines that such a return would
be in the public interest. See C.S.D. 80-67.
Notwithstanding the foregoing discussion, an otherwise
eligible claimant should not be penalized for its failure to
follow the correct procedure with respect to these particular
entries, because it acted with the approval of Customs. If any
similar transactions occur in the future, however, the rejected
merchandise must be admitted into the foreign trade zone.
In the course of its audit, Customs discovered technical
deficiencies in the drawback claims. Specifically, ineligible
claimants may have filed some claims, there were no certificates
of delivery or powers of attorney, and drawback rights were not
transferred. Some of these deficiencies apparently resulted
from the confusion about respective drawback rights and
obligations that arose due to the close relationship and
intertwined transactions between the separate corporations of
NIAC, Nike, Inc., and Nike International. As stated earlier,
NIAC is the importer/financier and buying agent for Nike, Inc.,
while Nike International, which is a subsidiary of Nike, Inc.,
purchases shoes from its parent for overseas distribution.
These 3 corporations are separate legal entities, and cannot be
considered to be a single entity for drawback purposes.
Accordingly, each is subject to the applicable drawback laws and
regulations.
Several of the technical problems involved the rejected
merchandise drawback claims. The filing of some claims by
ineligible parties was of particular concern. Section
191.142(b)(6) of the Customs Regulations (19 CFR 191.142(b)(6))
provides that drawback is only payable to the exporter-claimant
who is also the importer of record or the actual owner named in
the import entry. Difficulties became apparent when Customs
reviewed a sample of 18 claims and discovered that: 1) NIAC was
the importer of record for all 18 claims; 2) 11 of the drawback
entries listed Nike, Inc. as exporter, while no exporter was
listed on the 7 remaining claims; conversely, the applications
for zone admission/zone restricted status showed NIAC as the
exporter in 14 instances while Nike, Inc. was exporter the
remaining 4 times; 3) Nike, Inc. was listed as the drawback
claimant on 14 drawback entries while NIAC was shown on 4.
NIAC could only have filed a rejected merchandise drawback
claim and obtained a duty refund if: 1) it "exported" the
merchandise; 2) it was the importer of record or the actual
owner listed on the import entry; and 3) it had evidence that the
shoes failed to meet sample or specifications. The documents
examined by the auditors indicate that NIAC was the importer of
record, but, as noted in the preceding paragraph, there is
conflicting information about which company "exported" the shoes.
Under section 191.166 of the Customs Regulations (19 CFR
191.166), the exporter for purposes of rejected merchandise
drawback, in situations where exportation is accomplished through
admission into a foreign trade zone, is the transferor of the
defective merchandise into the zone. The transferor is the
person named in the foreign trade zone operator's certification
on the notice of transfer or the drawback entry. Therefore, if
NIAC were the transferor, and it had proof that the shoes failed
to meet sample or specifications, it could have filed claims
because of its status as importer of record. With respect to the
pending claims, it appears that only Nike, Inc., and not NIAC,
received warranty reimbursements from the factories. NIAC's
inability to produce evidence showing that the shoes failed to
meet specifications would preclude it from obtaining drawback on
any of these particular claims.
To file claims, Nike, Inc. must establish not only that it
was the exporter, but also that it was the importer of record or
the actual owner named in the import entry. Nike, Inc. delegated
the task of importing the shoes to NIAC, therefore it would have
to prove that it actually owned the shoes.
The regulations that were promulgated in 1931 in response to
the enactment of the rejected merchandise drawback statute,
stated that the importer could apply for drawback; under the law
in effect at that time, the importer was the consignee who was
also deemed to be the owner of the merchandise. See section 484
of the Tariff Act of 1930, 46 Stat. 722 (1930)(amended 1983); and
section 483 of the Tariff Act of 1930, 46 Stat. 722
(1930)(repealed 1983). In 1951, Customs, in an effort to
simplify the handling of drawback applications, extended the
right to file rejected merchandise drawback entries to the actual
- in addition to the deemed - owner of the merchandise. See T.D.
52757. However, the actual owner had to file a declaration that
supported his ownership claim. Although owners' declarations
are no longer required, Nike, Inc. would still have to submit
information with the entry that showed that it actually owned the
shoes. Sample entry summaries indicate that prior to 1981, NIAC
was the importer and the shoes were listed on the accompanying
invoices as being "for the account of NIAC"; from 1981 to 1986,
NIAC was the importer but the invoices reflected that the shoes
were imported "for the account of Nike, Inc."; and in late 1986,
Nike, Inc. was included on the CF 7501 as the ultimate consignee.
Evidence that the shoes were imported "for the account of Nike,
Inc.", and that Nike, Inc. was the ultimate consignee, is
persuasive, but is not in itself conclusive, in determining
whether Nike, Inc. qualified as the actual owner named in the
import entry. Certainly, some weight should be given to the fact
that Nike, Inc. was the consignee, because, although it does not
prove actual ownership, it does comport with the intent of the
original 1931 regulations that the benefit of rejected
merchandise drawback should extend to consignees of defective
merchandise. This intent was thwarted to some extent when the
definition of importer of record was changed in 1983 to exclude
consignees.
The audit revealed other information that bolsters Nike,
Inc.'s ownership claim. An examination of the supply agreements
between NIAC and Nike, Inc. indicates that Nike, Inc. had a
proprietary interest in the shoes at the time of their entry.
Although the terms of those agreements specify that NIAC, as
Nike, Inc.'s "purchasing agent", would place orders and buy the
shoes from the manufacturers, pay all transportation and
insurance charges as well as customs duties, and retain title
until it resold and delivered the shoes to Nike, Inc. in the
United States, they also required NIAC to resell the shoes
exclusively to Nike, Inc. The restrictions placed on NIAC's
right to dispose of the shoes, and Customs' view from a valuation
standpoint that the two-tiered sales arrangement created no more
than a bona fide agency relationship between NIAC and Nike, Inc.,
all indicate that Nike, Inc., not NIAC, was the actual owner of
the shoes at the time of entry. To the extent that these supply
agreements were in effect at the time that the pre-1981 invoices
listed the shoes as "for the account of NIAC", then Customs may
discount the contradictory information on the invoices.
If Nike, Inc. can establish that it exported previously
imported shoes, that it had proof that those shoes failed to meet
specifications, and that it followed all pertinent regulations,
then it would be eligible, as the actual owner of the shoes, to
file claims and obtain a duty refund under 19 U.S.C. 1313(c).
Claims already pending may be amended to reflect this information
if the merchandise that is the subject of the claims has been
exported within 3 years. See section 191.61 and 191.64 of the
Customs Regulations (19 CFR 191.61 and 191.64).
Regulatory Audit requests guidance on whether certificates
of delivery are required for tracking/identifying/transferring
rejected merchandise drawback rights from NIAC to Nike, Inc. The
regulations pertaining to this kind of drawback, found in section
191.142 of the Customs Regulations (19 CFR 191.142) do not
require the filing of certificates of delivery. The reason for
this is that, because the only person authorized to file a
rejected merchandise drawback claim is an exporter who is also
the importer of record or the actual owner listed on the import
entry, then theoretically the merchandise will not have been
transferred to a party who had no connection with - and thus no
proof of - its importation. This is in contrast to the situation
found in manufacturing and same condition drawback, where the
exporter is not the importer. Under these types of drawback
where the exporter-claimant is not the importer, a certificate of
delivery or a certificate of delivery and manufacture is required
to identify the imported, duty-paid merchandise which is the
basis for drawback, and to prevent an overpayment of drawback.
The auditors encountered several problems with the same
condition drawback (19 U.S.C. 1313(j)) claims. Perhaps the most
significant concerns which entity filed the claims. Unlike
rejected merchandise drawback, whose purpose is to reimburse the
importer or actual owner of the defective articles, same
condition drawback targets the exporter as the beneficiary of the
duty refund. See, e.g., C.S.D. 88-14. In the present case, the
auditors reviewed a sample of 19 claims and found that, without
exception, Nike International was the exporter. However, NIAC,
the importer, filed 17 of the claims while Nike, Inc., the
ultimate consignee, filed the remaining two. This is a clear-cut
situation where the only party eligible to file a claim was the
exporter, Nike International; claims filed by other parties
would be invalid. Nike International may be able to file amended
claims on shoes which had not been exported more than 3 years
previously.
If, in the future, Nike International does file same
condition drawback claims, it must document the transfer of shoes
from NIAC and Nike, Inc. to its custody with certificates of
delivery. See section 191.141(b)(1) of the Customs Regulations
(19 CFR 191.141(b)(1)).
HOLDING:
1) Use of defective merchandise prior to its return to Customs'
custody does not necessarily affect its eligibility to be the
subject of a rejected merchandise drawback claim.
2) When the claimant is not basing a rejected merchandise
drawback claim on a warranty reimbursement from the
manufacturer, it must show by competent evidence that the defect
was caused by the manufacturer's failure to follow
specifications.
3) An claimant under 19 U.S.C. 1313(c) can demonstrate that the
defective merchandise did not meet specifications by showing that
it billed the manufacturer, and received a credit of at least 90
percent of the purchase price, for a failure to meet a warranty
guarantee as to length of service.
4) A claim under 19 U.S.C. 1313(c) may not be denied on the
ground that the claimant failed to return the goods to Customs'
custody in a timely manner, if the extension fails to state a
time limit.
5) Defective merchandise must be physically admitted into a
foreign trade zone in zone restricted status to be considered
exported for drawback purposes. Destruction can occur outside
the zone with the district director's approval. However, the
transfer outside of the zone is only a constructive transfer and
any valuable waste resulting from the destruction process must be
taken back into the zone where it must be stored, exported, or
destroyed, unless the Foreign Trade Zones Board determines its
return to Customs' custody would serve the public's interest.
6) Rejected merchandise drawback is payable only to the
exporter who is the importer of record or the actual owner named
in the import entry.
7) Under same condition drawback, only the exporter is entitled
to same condition drawback.
8) Certificates of delivery are not required to trace
merchandise that is the subject of a rejected merchandise
drawback claim, because only the importer or the owner named in
the entry documents is entitled to claim drawback under 19
U.S.C. 1313(c). However, under 19 U.S.C. 1313(j), certificates
of delivery would be necessary where the exporter did not import
the merchandise, in order to show eligibility for same condition
drawback.
You are instructed to liquidate the drawback entries at
issue in accordance with the holdings contained in this response
to your request for internal advice.
Sincerely,
John Durant
Director, Commercial
Rulings Division