BAG-5-02-CO:R:C:E 224446 PH
Terence C. Heverin, Director
Office of Inspection & Control Training
U.S. Customs Service Academy, Building 70 - FLETC
Glynco, Georgia 31524
RE: Internal Advice; Returning Resident; Administrative Waiver;
19 U.S.C. 1321(a)(2)(B); Subheadings 9804.00.65; 9804.00.72;
9816.00.20, HTSUSA
Dear Mr. Heverin:
In your memorandum of January 19, 1993 (Your File: PER 3-
10 IC:TR FEC) to the Director, Office of Regulations and Rulings,
you requested an official agency position relating to the
returning resident exemptions under subheading 9804.00.72,
Harmonized Tariff Schedule of the United States Annotated
(HTSUSA), and 19 U.S.C. 1321. You included correspondence
between your office and the Office of the Chief Counsel regarding
this matter, including a memorandum dated December 22, 1992, from
the latter office setting forth its opinions on the issues raised
and noting that only the Office of Regulations and Rulings could
issue the official agency position on the issues.
We have been requested to respond to your request. We are
treating your request as a request for internal advice under 19
CFR 177.11. Our ruling on the issues raised follows. (We are
not ruling on the question of whether a returning resident must
arrive "directly" from a beneficiary country to qualify for the
duty-free treatment under subheading 9804.00.72, HTSUSA, because
this issue is in the rulemaking process (see Notice of Proposed
Rulemaking published in the Federal Register on July 27, 1993 (58
FR 40095) and the Customs Bulletin and Decisions on August 4,
1993 (Vol. 27, No. 31, page 7).)
FACTS:
In 1991, your office was reviewing its lesson plans for the
Basic Inspector Training Program. In the course of this review,
you noted possible discrepancies in 19 U.S.C. 1321 and the
Customs Regulations issued thereunder (19 CFR 148.51(a)(1) and
(2)), and in certain related provisions. You requested advice on
the questions set forth in the ISSUES portion of this ruling.
ISSUES:
(1) May a returning resident who is entitled to the duty-
free treatment under subheading 9804.00.65 or 9804.00.72, HTSUSA,
also receive the duty-free treatment in 19 U.S.C. 1321(a)(2)(B)?
(2) May a returning resident arriving from other than an
insular possession, who does not meet the requirements to receive
the duty-free treatment under subheading 9804.00.65 or
9804.00.72, HTSUSA, receive the duty-free treatment in 19 U.S.C.
1321(a)(2)(B)?
(3) When collecting duties for unaccompanied merchandise
entered under the duty-free provisions of subheading 9804.00.72,
HTSUSA (i.e., when the articles are valued at more than the
permitted aggregate dollar amount), should the 10% "flat rate" of
duty under subheading 9816.00.20, HTSUSA, be used, or should the
specific tariff provision be used?
LAW AND ANALYSIS:
Subheading 9804.00.65, HTSUSA, provides for the duty-free
treatment of articles, not over $400 in aggregate fair retail
value in the country of acquisition, accompanying a returning
United States resident. The provision contains certain
limitations for alcoholic beverages and tobacco products.
Subheading 9804.00.70, HTSUSA, provides for the duty-free
treatment of articles, not over $1200 in aggregate fair market
value in the country of acquisition, whether or not accompanying
a returning United States resident, if the returning United
States resident "arrives directly or indirectly" from American
Samoa, Guam or the Virgin Islands of the United States. Of the
allowed $1200, not more than $400 may have been acquired
elsewhere than in the insular possession, or not more than $600
may have been acquired in one or more beneficiary countries (see
U.S. Note 4, Subchapter IV, Chapter 98, HTSUSA). Articles which
were acquired elsewhere than in one of the named insular
possessions may not be entered under this provision if they do
not accompany the returning United States resident. This
provision also contains certain limitations for alcoholic
beverages and tobacco products.
Subheading 9804.00.72, HTSUSA, provides for the duty-free
treatment of articles, not over $600 in aggregate fair market
value in the country of acquisition, whether or not accompanying
a returning United States resident, if the returning United
States resident arrives directly from a beneficiary country (see
U.S. Note 4, Subchapter IV, Chapter 98, HTSUSA). Of the allowed
$600, not more than $400 may have been acquired elsewhere than in
beneficiary countries. Articles which were acquired elsewhere
than in beneficiary countries may not be entered under this
provision if they do not accompany the returning United States
resident. This provision also contains certain limitations for
alcoholic beverages and tobacco products. Also, in addition to
certain restrictions applicable to each of the foregoing
provisions, a returning resident may claim exemption under only
one of these provisions on his or her arrival and may not have
claimed an exemption from any of the provisions within 30 days
preceding his or her arrival.
Subheading 9816.00.20, HTSUSA, provides for a 10% flat rate
of duty on the fair retail value of articles for personal or
household use, or as bona fide gifts, not imported for the
account of another person, valued in the aggregate at not over
$1,000 fair retail value in the country of acquisition
"[a]ccompanying a person, arriving in the United States
(exclusive of duty-free articles and articles acquired in
American Samoa, Guam or the Virgin Islands of the United
States)". This provision is restricted by the condition that the
person claiming the benefit of the provision may not have
received the benefits of subheading 9816.00.20 or 9816.00.40,
HTSUSA, within the 30 days immediately preceding his or her
arrival.
Under 19 U.S.C. 1321(a)(2)(B)--
(a) The Secretary of the Treasury, in order to avoid
expense and inconvenience to the Government
disproportionate to the amount of revenue that would
otherwise be collected, is authorized, under such
regulations as he shall prescribe,
to--
... (2) admit articles free of duty and of any tax
imposed on or by reason of importation, but the aggregate
fair retail value in the country of shipment of articles
imported by one person on one day and exempted from the
payment of duty shall not exceed--
... (B) $25 in the case of articles accompanying, and
for the personal or household use of, persons arriving in
the United States who are not entitled to any exemption
from duty under subheading 9804.00.30 or 9804.00.70 of
section 1202 of this title ... .
The privilege of this subdivision (2) shall not be
granted in any case in which merchandise covered by a
single order or contract is forwarded in separate lots to
secure the benefit of this subdivision (2).
Under subsection (b) of 19 U.S.C. 1321--
The Secretary of the Treasury is authorized by
regulations to diminish any dollar amount
specified in subsection (a) of this section and
to prescribe exceptions to any exemption provided
for in such subsection whenever he finds that
such action is consistent with the purpose of
such subsection or is necessary for any reason to
protect the revenue or to prevent unlawful
importations.
ISSUES (1) and (2)
Insofar as these issues are concerned, we note that it is a
basic tenet of statutory construction that the "starting point in
statutory interpretation is 'the language [of the statute]
itself'" and that "[w]hen ... the terms of a statute [are]
unambiguous, judicial inquiry is complete, except in 'rare and
exceptional circumstances'" (United States v. James, 478 U.S.
597, 604, 606 (1986); see also, 73 Am Jur. 2d (1974), Statutes,
section 194, and cases cited therein; see also Central Soya Co.,
Inc., v. United States, 761 F. Supp. 133, 137 (CIT 1991), aff'd,
953 F.2d 630 (Fed. Cir. 1992)). In this case, the statutory
language (i.e., in 19 U.S.C. 1321(a)(2)(B)) authorizes
regulations to admit free of duty articles the aggregate fair
retail value of which does not exceed $25 if they accompany and
are for the personal or household use of persons arriving in the
United States who are not entitled to any exemption from duty
under subheading 9804.00.30 or 9804.00.70, HTSUSA (assuming the
articles otherwise qualify under the provision).
Thus, under the clear wording of the statute the duty-free
treatment under 19 U.S.C. 1321(a)(2)(B) is not applicable to
persons arriving in the United States who are entitled to any
exemption from duty under subheading 9804.00.30 or 9804.00.70,
HTSUSA, but there is no such restriction with regard to the
subheadings about which you asked (i.e., subheadings 9804.00.65
and 9804.00.72, HTSUSA). The Customs Regulations issued under
the authority of this provision (19 CFR 148.51) are consistent
with the foregoing. Whether a person qualifies for a duty
exemption under subheading 9804.00.65 or 9804.00.72, HTSUSA, is
irrelevant to the application of the duty exemption provided for
in 19 U.S.C. 1321(a)(2)(B). Moreover, as long as the other
provisions of section 1321(a)(2)(B) are met, the applicability or
inapplicability of any tariff provision other than subheadings
9804.00.30 and 9804.00.70, HTSUSA, is irrelevant to the operation
of 19 U.S.C. 1321(a)(2)(B).
ISSUE (3)
Subheading 9816.00.20, HTSUSA, explicitly requires that the
articles subject to that provision accompany the person claiming
the benefit of the provision. This requirement was clearly
intended by Congress (see Senate Report (Finance Committee) 95-
778, 95th Cong., 2nd Sess., on the Customs Procedure Reform and
Simplification Act of 1978, page 27, reprinted at 1978
U.S.C.C.A.N. 2211, 2238-2239). As set forth in the question
presented, the merchandise at issue is not accompanied by a
person and its value exceeds the aggregate fair market value
provided for in subheading 9804.00.72, HTSUSA. We assume that
the question is addressed to the portion of the merchandise which
exceeds the aggregate fair market value provided for in subhead-
ing 9804.00.72, HTSUSA (the merchandise within the aggregate fair
market value provided for would qualify for duty-free treatment
under the provision, assuming it otherwise qualifies with the
requirements therein). Since the merchandise is unaccompanied,
the statutory language of subheading 9816.00.20, HTSUSA,
specifically excludes the merchandise from the "flat rate"
provided for therein. Therefore, the portion of the merchandise
exceeding the aggregate fair market value provided for in
subheading 9804.00.72, HTSUSA, would be subject to the rate of
duty appropriate for the specific tariff provision applicable.
HOLDINGS:
(1) A returning resident who is entitled to the duty-free
treatment under subheading 9804.00.65 or 9804.00.72, HTSUSA, may
also receive the duty-free treatment in 19 U.S.C. 1321(a)(2)(B),
if applicable.
(2) A returning resident arriving from other than an
insular possession, who does not meet the requirements to receive
the duty-free treatment under subheading 9804.00.65 or
9804.00.72, HTSUSA, may receive the duty-free treatment in 19
U.S.C. 1321(a)(2)(B), if applicable.
(3) When collecting duties for unaccompanied merchandise
entered under the duty-free provisions of subheading 9804.00.72,
HTSUSA (i.e., when the articles are valued at more than the
permitted aggregate dollar amount), the specific tariff provision
and not the 10% "flat rate" of duty under subheading 9816.00.20,
HTSUSA, should be used for the portion of the merchandise the
aggregate fair market value of which exceeds the amount provided
for in subheading 9804.00.72.
Sincerely,
John Durant, Director