DRA-2-02-CON-13-CO:R:C:E 223791 SR
Mr. Gordon C. Anderson
Meyer Customs Brokers
8100 Mitchell Rd., Suite 200
Eden Prairie, MN 55344
RE: Proof of exportation documentation for purposes of same
condition drawback for merchandise to be sold in duty-free shops
on a cruise vessel; 19 U.S.C. 1313(j); 19 C.F.R. 101.1(K); 191
C.F.R. Subpart E; C.S.D. 84-6; HQ 222284
Dear Mr. Anderson:
This is in reference to your letter dated February 20, 1992,
concerning proof of export documentation for merchandise to be
sold in on cruise ships, for purposes of same condition drawback.
Please note that a shop on a vessel is outside the scope of 19
U.S.C. 1555(b), and therefore, can not be considered to be a
"duty-free" shop.
FACTS:
The importer is importing miniature replica cruise ships
that are made in China. These replica souvenirs will be sold to
Carnival Cruise Lines in Florida. Carnival Cruise Lines will
sell the replica souvenirs in their duty-free shops on their
cruise vessels.
ISSUE:
What documentation is required to show proof of exportation
for merchandise that is to be sold in a shop aboard a cruise
vessel?
LAW AND ANALYSIS:
In order to qualify for drawback, an exportation must occur.
Exportation is defined in 19 C.F.R. 101.1(k) as follow:
A severance of goods from the mass of things belonging to
this country with the intention of uniting them to the mass
of things belonging to some foreign country. The shipment
of merchandise abroad with the intention of returning it to
the United States with a design to circumvent provisions of
restriction or limitation in the tariff laws or to secure a
benefit accruing to imported merchandise is not an
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exportation. Merchandise of foreign origin returned from
abroad under these circumstances is dutiable according to
its nature, weight, and value at the time of its original
arrival in this country.
Whether merchandise sold on a cruise ship is considered to
be exported depends on the itinerary of the vessel. If the
vessel sails out and returns to the United States without
stopping at any foreign ports it is called a "cruise to nowhere."
Because a cruise to nowhere does not stop at any foreign ports,
merchandise sold on the ship is not considered to be exported;
therefore, it is not eligible to receive drawback.
If a cruise vessel makes stops at foreign ports it is still
not likely that the items in the vessel's store are being
exported from the country with the intent of uniting to the mass
of things belonging to a foreign country. Souvenirs sold on
cruise ships would most likely be bought by the passengers with
the intent of bringing them back into the United States.
However, the merchandise sold on board a cruise vessel may be
considered exported if proof of exportation can be shown.
Evidence of exportation for purposes of drawback is provided for
in Subpart E of part 191 of the Customs Regulations (enclosed).
However, because there is doubt that these goods are actually to
be exported, the port may require foreign landing certificates as
alternative proof that the goods were exported.
Enclosed are a copy of C.S.D. 84-6 and an information letter
HQ 222284, that further discuss our position on this issue.
HOLD:
In order to receive drawback you must show that the souvenir
replicas are intended to be exported. If you feel you this
requirement is met, the documentation discussed above is
necessary to show proof of exportation.
Sincerely,
William G. Rosoff
Chief