DRA-4-CO:R:C:E 223571 SLR
Regional Director
U.S. Customs Service
Regulatory Audit Division
423 Canal Street
Suite 337
New Orleans, LA 70130-2341
RE: Request for Internal Advice; Antiknock Compounds;
Dye Injection; Same Condition Direct Identification Drawback; 19 USC 1313(j)(1); Incidental Operations;
19 USC 1313(j)(4)
Dear Sir:
This is in response to your November 1, 1991 request
for internal advice regarding the same condition direct
identification drawback status of antiknock compounds which are
injected with dye prior to exportation. Your request, initially
directed to Headquarters Regulatory Audit Division, was forwarded
to this office for a response.
FACTS:
During the same condition direct identification drawback
audit of Ethyl Corporation (Ethyl), your office determined that
dyes are introduced into the imported/designated products
(antiknock compounds) upon exportation for identification
purposes. These antiknock compounds are Tetraethyl Lead
Aviation, Tetramethyl Lead Motor Mix, Tetramethyl Lead and Mixed
Lead Alkyl. Dyes are added to the antiknock compound three ways:
1. While being discharged from the shore tank to the vessel.
2. After placement into the vessel but prior to
vessel departure.
3. While the vessel is in transit to its foreign destination.
According to Ethyl, the dyes introduced serve no purpose
other than coloration for identification purposes and are thus
considered to be an incidental operation under 19 USC 1313(j)(4).
-2-
Since the third method of dye injection occurs after
exportation, your office agrees that those additions do not
affect that drawback claim. You question, however, whether the
dyes addition prior to exportation as in (1) and (2) changes the
condition of the antiknock compounds.
ISSUE:
Whether the antiknock compounds of methods (1) and (2)
qualify for same condition direct identification drawback under
19 USC 1313(j)(1).
LAW AND ANALYSIS:
Section 313(j)(1) of the Tariff Act of 1930, as amended
(19 USC 1313(j)(1)), provides for the allowance of drawback
upon exportation or destruction of duty-paid imported merchandise
which (1) is, before the close of the three year period beginning
on the date of importation, exported in the same condition as
imported, and (2) has not been used in the United States before
such exportation or destruction. Incidental operations, such as
testing, cleaning, and repacking, performed on the merchandise,
not amounting to manufacture or production for drawback purposes,
are not treated as a use of that merchandise in the United
States. 19 USC 1313(j)(4).
In C.S.D. 91-18, Customs indicated that "[permissible
incidental operations] should be limited to those that have
considerably little, if any, effect on imported merchandise; that
is, only insignificant, minimal changes in condition should be
tolerated." Customs cautioned, however, that "these exceptions
will be applied cautiously so as to avoid undermining the basic
condition concept."
Here, the addition of the dyes to the antiknock compounds
qualifies as an incidental operation. The dyes merely function
as identifiers and have no effect, other than coloration, on the
subject merchandise. Accordingly, the addition of the dyes will
not be treated as a "use" under 19 USC 1313(j)(4) for purposes of
19 USC 1313(j)(1).
In response to your immediate concern, the addition of
the dyes does not change the condition of the antiknock
compounds. The dyes neither alter the chemical composition of
the antiknock compounds nor enhance the performance of those
products. Consequently, the antiknock compounds meet the same
condition requirement of 19 USC 1313(j)(1).
-3-
HOLDING:
Based on the foregoing, the antiknock compounds qualify
for same condition direct identification drawback under
19 USC 1313(j)(1).
Sincerely,
John Durant, Director
Commercial Rulings Division