CON-9-CO:R:C:E 221702, 221710 L
Mr. James B. Clawson
Executive Vice President
International Business-Government Counsellors, Inc.
818 Connecticut Avenue, NW.
Washington, D.C. 20006
RE: Eligibility of Cinematography Equipment for Entry
Temporarily Free of Duty Under Bond or Under an
A.T.A. Carnet
Dear Mr. Clawson:
You ask whether cinematography cameras and related equipment
may be imported under temporary importation under bond (TIB)
procedures pursuant to subheading 9813.00.50, Harmonized Tariff
Schedule of the United States (HTSUS) or under an A.T.A. carnet in
accordance with the Customs Convention on the Temporary
Importation of Professional Equipment.
FACTS:
An American corporation is the United States importer and
distributor of cinematography cameras and related equipment . The
importer purchases the equipment from a related foreign
manufacturer, enters them for consumption, and then places the
duty-paid cameras in inventory in either its Resale Division or
its Rental Division. Cameras purchased for the Resale Division
are resold to buyers in the United States; cameras purchased for
the Rental Division are leased to motion picture producers and
directors in the United states for use in the production of films
for theatrical release.
The importer proposes to abolish its Rental Division and the
related foreign manufacturer will establish its own Rental
Corporation abroad. Cameras would be purchased and owned by the
foreign Rental Corporation. The foreign Rental Corporation would
then lease the equipment to foreign nationals who have been
engaged to work in the production of commercial films in the
United States. The foreign nationals would then import the
equipment into the United States, acting as importers of record,
under subheading 9813.00.50, HTSUS, temporarily free of duty under
bond, or under cover of an A.T.A. carnet.
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The cameras would be used in the United States by the foreign
nationals or under their supervision. After completion of filming
the films would be edited, scored, printed and distributed in the
United States, The copyrights would be owned by the United States
production company, which would also own all other property rights
in the film.
ISSUES:
The following issues are presented:
1. May foreign-origin cinematography equipment which is intended
for use in the production of motion pictures for United
States persons and corporations be imported temporarily free
of duty under cover of an A.T.A. carnet?
2. May foreign-origin cinematography equipment which is intended
for use in the production of motion pictures for United
States persons and corporation be imported temporarily free
of duty under a temporary importation bond in accordance with
subheading 9813.00.50 of the HTSUS?
LAW AND ANALYSIS:
Annex B to the Customs Convention on the Temporary
Importation of Professional Equipment (the "Professional
Equipment" Convention) relates to the conditions of grant of
temporary admission of cinematographic equipment, which includes
cameras of all kinds, under an A.T.A. carnet.
The conditions of temporary admission are that the equipment:
(a) shall be owned by a natural person resident abroad or by
a legal person established abroad;
(b) shall be imported by a natural person resident abroad or by
a legal person established abroad;
(c) shall be capable of identification on re-exportation;
provided that in the case of blank image or sound recording
media the most flexible means of identification shall be
applied;
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(d) shall be used solely by or under the personal supervision of
the visiting person, provided that this condition shall not
apply in the case of equipment imported for the production of
a film under a co-production contract to which a person
resident or established in the country of temporary
importation is a party and which is approved by the competent
authorities of that country under an inter-government
agreement concerning cinematographic co-production;
(e) shall not be the subject of a hire contract or similar
arrangement to which a person resident or established in the
country of temporary importation is a party.
Pursuant to 19 CFR 114.22(a) the A.T.A. carnet is acceptable
for goods to be temporarily entered under the Customs Convention
on the Temporary Importation of Professional Equipment.
Subheading 9813.00.50, HTSUS, provides for the admission
temporarily free of duty under bond, as prescribed in U.S. note 1
to subchapter XIII, chapter 98, HTSUS, of professional equipment,
tools of trade, repair components for equipment or tools admitted
under this subheading and camping equipment; all the foregoing
imported by or for nonresidents sojourning temporarily in the
United States and for the use of such nonresidents.
It is suggested that if a leased cinematography camera were
imported by a foreign national it would qualify for duty-free
temporary entry only if used exclusively by or for the foreign
national or foreign corporate entry. If the foreign national
employed a cameraman or cinematographer who was a United States
resident the use of a carnet or TIB entry would be improper, since
the equipment would be used in furthering the profession of a
United States resident rather than a temporary sojourner from
abroad.
This suggestion is not necessarily true. The requirement
under either the carnet or TIB entry is that the article be used
solely by or under the personal supervision of the nonresident.
The person operating the article, if under the personal
supervision of the nonresident, need not be a nonresident. See,
for example, paragraph IV 3. "Use of equipment" in the Text and
Commentary to the Customs Convention on the Temporary Importation
of Professional Equipment (September 1962), wherein it is noted
that the provision "... does not preclude the possibility of
assistance by nationals, whatever their professional
qualifications".
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It is further suggested that where a United States person or
corporation uses or benefits from the imported equipment, the use
of a carnet or TIB entry is inappropriate. That is, equipment
rented by a foreign rental corporation to a foreign national
working on a United States film production would not be imported
"for a person visiting a country in order to make a specified
film", as specified in the definition of "cinematographic
equipment" in Annex B to the "Professional Equipment Convention".
Both the "Professional Equipment" Convention and subheading
9813.00.50 provide that professional equipment may be imported by
a nonresident for use solely by or under the personal supervision
of the nonresident. If the foreign national working on the United
States film in the above example is a nonresident of the United
States and the equipment imported by him is being used solely by
him or under his personal supervision, it is being imported "for a
person visiting a country in order to make a specified film or
films" and a carnet or TIB entry is appropriate, assuming all
other requirements are met. Of course, the nonresident could not
use these provisions for the purpose of importing equipment to be
held in inventory for subsequent lease or rent to third parties in
the United States.
HOLDINGS:
1. Foreign - origin cinematography equipment which is owned by
a natural person resident abroad or by a legal person
established abroad and which is intended for use in the
production of motion pictures in the United States for United
States persons or corporations and which will be used solely
by or under the personal supervision of the nonresident
importer may be imported under cover of an A.T.A. carnet.
2. Foreign-origin cinematography equipment which is intended for
use in the production of motion pictures in the United States
for United States persons or corporations and which will be
used solely by or under the personal supervision of the
nonresident importer may be imported temporarily free of duty
under bond under subheading 9813.00.50, HTSUS.
Sincerely,
John Durant, Director
Commercial Rulings Division