CLA-2-CO:R:C:E 224025 SR
Tariff No.: 9801.00.80
District Director
Pembina, North Dakota 58271
RE: IA 31/92; Internal Advice request concerning free entry of
tractors under the Canada-U.S. Free Trade Agreement that have
previously been exported from the U.S. and have received
drawback.
Dear Sir:
This is in reference to your request of May 4, 1992,
concerning the re-entry of tractors, that have previously been
exported from the U.S. and received drawback, under the U.S.-
Canadian Free Trade Agreement under subheading 9801.00.80,
Harmonized Tariff Schedule of the United States (HTSUS). Our
decision follows.
FACTS:
Tractor parts of Canadian origin were imported into the U.S.
where they were made into tractors. The completed tractors were
exported back to Canada and drawback in the amount of $561.00 has
been paid on the parts. The importer now wishes to reimport the
tractors into the U.S. free of duty according to the terms of the
Canadian Free Trade Agreement under subheading 9801.00.80, HTSUS,
which allows Canadian articles that were previously exported from
the U.S. to be admitted free of duty. The tractors are crawler
or track-laying tractors classifiable under subheading
8701.30.50, HTSUS.
ISSUE:
Whether the tractors which were previously exported from the
U.S. with drawback paid may be reimported to the U.S. free of
duty under subheading 9801.00.80, HTSUS.
LAW AND ANALYSIS:
Subheading 9801.00.80, HTSUS, provides as follows:
Articles previously exported from the United States which--
except for U.S. note 1 of this subchapter--would qualify for
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free entry under one of the foregoing items and are not
otherwise free of duty . . .
U.S. note 1 of the subchapter states that the provisions in
the subchapter (except subheadings 9801.00.70 and 9801.00.80)
shall not apply to any article that is exported with the benefit
of drawback.
Concerning the requirements of subheading 9801.00.80, HTSUS,
the merchandise at issue has been previously exported from the
United States and, except for U.S. note 1 of the subchapter,
would qualify for free entry under the foregoing subheading
9801.00.1087, HTSUS. Subheading 9801.00.1087, HTSUS, provides
for products of the United States when returned after having been
exported, without having been advanced in value or improved in
condition by any process of manufacture or other means while
abroad, other, articles provided for in chapter 87.
Subheading 9801.00.80, HTSUS, also states that the articles
must be "not otherwise free of duty". Since it is assumed that
the tractors at issue meet the requirements of the Canadian Free
Trade Agreement rules of origin then the tractors would be free
of duty under heading 8701.30.50, HTSUS. If they are free of
duty under heading 8701.30.50, HTSUS, then they do not meet the
qualifications of subheading 9801.00.80, HTSUS, and would be
classifiable under the appropriate subheading under heading
8701.30.50, HTSUS. The only U.S.-Canada Free Trade Agreement
goods that would qualify for a free rate under 9801.00.80, HTSUS,
are originating goods which are not yet reduced to duty-free
under the current rate for the specific tariff rate subheading.
Generally, merchandise for which duty drawback has been paid
cannot also be reimported as articles exported and returned
without repayment of the drawback. The terms of the Canadian
Free Trade Agreement allows this for qualifying merchandise.
Therefore, if the tractors do not meet the requirements of the
Canadian Free Trade Agreement, and are not otherwise free of
duty, then they may be classified under subheading 9801.00.80,
HTSUS. However, they will be assessed a duty (in lieu of any
other duty or tax) equal to the sum of any duty and internal-
revenue tax imposed upon the importation of like articles not
previously exported, but in no case in excess of the sum of (a)
any customs drawback proved to have been allowed upon such
exportation of the article, and (b) any internal revenue tax
imposed, at the time such article is entered, upon the
importation of like articles not previously exported.
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HOLDING:
If the tractors meet the requirements of the U.S.-Canada
Free Trade Agreement and are therefore free of duty under the
appropriate tractor classification heading, then they cannot be
entered under subheading 9801.00.80, HTSUS, and must be entered
under subheading 8701.30.50, HTSUS. If the tractors do not meet
the requirements of the U.S.-Canada Free Trade Agreement the
tractors may be entered under subheading 9801.00.80, HTSUS, with
repayment of the drawback.
Sincerely,
John Durant, Director