CON-5 CO:R:C:E 225429 TLS
Mr. Jorge Cintron
U.S. State Department
Office of Foreign Missions
State Annex 33
3507 International Drive
Washington, D.C. 20008
RE: Request for refund of duties paid on merchandise entered by
an organization listed under Customs regulations as an
international organization; Harmonized Tariff Schedule of the
United States Annotated (HTSUSA) subheading 9809.00.40; 19 CFR
148.87(a); Customs ruling HQ 224894 (December 8, 1993); HQ 224728
(November 23, 1993).
Dear Mr. Cintron:
This is in reference to a letter to your office dated May
12, 1994, from the International Maritime Satellite Organization
(INMARSAT) requesting a refund of duties it paid on imported
merchandise.
FACTS:
The importer in this case is among the international
organizations listed under section 148.87, Customs regulations
(19 CFR 148.87) that are conditionally eligible for duty-free
treatment of merchandise it enters into the Customs territory.
The merchandise at issue is a Timeplex Rack, which is used for
controlling a satellite and is part of an international telephone
link with the importer's London, England, office. The purpose of
the Timeplex Rack is to enable the importer to communicate with
its satellites that are currently in space. The importer states
that the equipment is in the United States on a temporary basis
only and will be shipped back to the London office in probably
three or four years.
The Timeplex Rack was entered on July 13, 1993, under HTSUSA
subheading 8803.90.30, a duty-free provision, for other parts of
communications satellites. On September 1, 1993, New York
Customs sent the importer's broker a Customs Form 29, Notice of
Action, to notify the importer that Customs was reclassifying the
merchandise under HTSUSA subheading 8525.10.6080, a duty-paid
provision that provides for transmitters. The importer claims
that it never received the notice. The importer's broker was
sent the notice and apparently made efforts to send it to the
importer to no avail. The non-receipt of the notice is the
reason cited as to why the reclassification was never challenged.
The entry was liquidated on April 4, 1994.
The importer now requests a cancellation of the bill for
$2453.16 in duties and a reclassification of the merchandise
under HTSUSA subheading 9809.00.40, which provides for duty-free
entry of articles which are the property of a public
international organization.
ISSUE:
Whether the entry may be reliquidated, pursuant to 19 CFR
148.87, with the merchandise being reclassified under subheading
9809.00.40, HTSUSA, which provides for
[a]rticles which, while in the United States, will
remain the property of [a public international
organization] and will be used only in connection with
noncommercial functions of [such organization],
including exhibitions which are sponsored by or
participated in by [such organization] and which are
not commercial in character or connected with
commercial undertakings.
LAW AND ANALYSIS:
We have considered a similar case recently where an
international organization in the business of satellite
communications that was listed under 19 CFR 148.87 had requested
a refund of duties paid on satellite equipment entered into the
Customs territory. In that case, HQ 224728 (November 23, 1993),
it was decided that the equipment entered was not eligible for
duty-free treatment under subheading 9809.00.40 because it was to
be used for commercial purposes. Thus, the fact that the
organization was listed in 19 CFR 148.87 was by itself not enough
to establish duty-free treatment for the equipment.
In this case, the equipment is to be used to further
communications with its satellites currently in space. The
equipment will be ground-based, however, and will not be used in
space. This was the determining factor in New York Customs
decision to reclassify the subject equipment. Subheading
8803.90.30 requires that the entry be intended for use in space
as part of a satellite apparatus. See HTSUSA subheading
8803.90.30; HTSUSA Explanatory Note (EN) 88.03.
Just as in HQ 224728, the equipment here will be used in a
satellite communications system. Just as we required a showing
of non-commercial use before equipment could be entered under
subheading 9809.00.40 in HQ 224728, we require the same in this
case. No evidence has been submitted which would establish that
the subject equipment would be used for non-commercial purposes.
With regard to the importer's broker not notifying it of
Customs initial actions in this case, we have been presented with
no evidence that absolves the importer of its ultimate
responsibility. In at least one previous case, we concluded
under similar circumstances that the broker's failure to notify
the principal of pending Customs action did not relieve the
principal of the responsibility to timely respond to such action.
HQ 224894 (December 8, 1993). Thus, the broker's failure to
notify the principal in this case did not relieve the principal
of the responsibility to timely respond to the Notice of Action
in this case.
HOLDING:
In light of the commercial nature of IMMARSAT's business,
the merchandise in this case is not eligible for duty-free
treatment under HTSUSA subheading 9809.00.40. The importer is
not entitled to a refund of duties.
The failure of an importer's broker to notify it of pending
Customs action does not relieve the importer of the
responsibility to timely respond to such action.
Sincerely,
John Durant, Director
Commercial Rulings Division
cc: Ms. Alice Hopkins,
Office of International Affairs,
U.S. Customs Service