CON-9-04/ENT-6-02-CO:R:C:E SR
TARIFF NO: 9813.00.05
Mr. Thomas R. James
ITER & Technology Division
Office of Energy Research
Department of Energy
Washington, DC 20585
RE: Subheading 9813.00.05, HTSUS; Chapter Note 1, Subchapter
XIII; Temporary Importation Under Bond; 19 CFR 101.1(k),
Exportation Defined; 19 CFR 10.107, Bond Exemption; 19 CFR
141.102(d)
Dear Mr. James:
This is in response to your letter dated July 1, 1994
concerning the importation of jacketed cable free of duty
temporarily under bond.
FACTS:
The Department of Energy (DOE) plans to import jacketed
cable on behalf of the United States as partner in the Agreement
Among the European Atomic Energy Community, the Government of
Japan, the Government of the Russian Federation and the
Government of the United States on Cooperation in the Engineering
Design Activities (EDA) for the International Thermonuclear
Experimental Reactor Agreement (ITER) (ITER EDA Agreement). This
agreement was signed by the four parties (the European Community,
the Government of Japan, the Government of the Russian
Federation, the Government of the United States) on July 21, 1992
and is to be effective for six years. The purpose of the project
is to design an engineering test reactor to demonstrate the
scientific and technical feasibility of magnetic fusion energy.
Over the remaining four and one half years of the Agreement,
the Parties will work together to produce a detailed engineering
design and all technical data necessary for future decisions on
the construction of ITER. Such design and technical data then
will be made available for each of the parties to use either as
part of an international collaborative program or in its own
domestic program. For some of the engineering design activities
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the four equal partners will combine their efforts on common
tasks, rather than each being separately responsible for a
segregated task.
One of these tasks is the model coil program in which two
superconducting magnets will be produced: a central solenoid (CS)
coil and a toroidal field coil (TF). The U.S. and Japan will
work together to build the CS Model Coil, and the European Union
and Russia will build the TF Model Coil. The U.S. is responsible
for fabricating subassemblies of the mechanical structure and
shipping them to Japan for final installation.
Manufacture of the Inner CS Model Coil is a multi-step
process involving contributions from both the United States and
the European Union. Each of the four parties is manufacturing
Niovbium-Tin superconducting strand. In the case of the United
States strand, some of it will be cabled in the United States by
BIW Cabling Systems (North Dighton, MA), while the remainder will
be exported to EM-LME (Italy) for cabling. The portion of the
strand that is cabled in the United States will be exported
through a customs broker for BIW Cabling Systems to Italy. In
addition, INCO Alloys International (Huntington, WV) will
manufacture a nickel-based metallic jacket material (Incoloy 908)
and ship that material to Italy where the cable from the U.S. and
the European Union will be jacketed.
Approximately November 1995, the jacketed cable will be
transferred from Europe to the Department of Energy for coil
winding by Martin Marietta/Westinghouse, the prime industrial
contractor to the U.S. for ITER Magnetics. While in the U.S. the
jacketed cable will be the responsibility of the DOE even when it
is in the custody of Martin Marietta. Martin will be an agent of
the U.S. in performing the work to the directions of the U.S.
Department of Energy. All the jacketed cable will be
incorporated into the coil winding. The coil winding will then
be exported to Japan to be incorporated with the outer coil into
the model coil which will be installed and tested at the CS model
Coil test facility at the Japan Atomic Energy Research
Institute's Naka Fusion Research Establishment.
ISSUE:
Whether the Department of Energy may enter the jacketed
cable that will become part of a coil winding, into the United
States temporarily free of duty under bond under subheading
9813.00.05, Harmonized Tariff Schedule of the United States
(HTSUS), if the Department of Energy employs an agent to do the
actual processing in the United States.
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LAW AND ANALYSIS:
Subheading 9813.00.05, HTSUS, provides for articles to be
admitted free of duty temporarily under bond if they are to be
processed in the United States. This includes processes which
result in articles manufactured or produced in the U.S. Articles
entered under this subheading must also meet the requirements of
Chapter Note 1, Subchapter XIII, which provide as follows:
1) The article must not be imported for sale or sale
on approval and must be exported or destroyed within
one year from the date of importation. (The bond
period may be extended, upon application for one or
more further periods which may not exceed a total of
three years.)
Under Note 2(b), if the article as processed results in
an article manufactured in the United States, the following
must be adhered to:
a) a complete accounting must be made to the Customs
Service for all articles, wastes, and irrecoverable
losses resulting from such processing; and
b) all articles and valuable wastes resulting from
such processing will be exported or destroyed under
customs supervision within the bonded period; except
that in lieu of the exportation or destruction of
valuable wastes, duties may be tendered on such wastes
at the time of importation.
Exportation is defined in 19 CFR 101.1(k) as "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." Because you will
be bringing the articles back and forth from other countries
there is question as to whether an exportation occurs. The
key phrase in the definition is "the intention of uniting
them" to the commerce of some foreign country. The question
arises as to what determines the "intention of uniting".
This is determined by the facts. Shipping of merchandise to
a foreign country with an intention of using that
merchandise in the foreign country, as by manufacture,
manipulation, or repair is strong evidence of an intent to
unite the merchandise to the mass of things belonging to the
foreign country.
The coil winding will be shipped to Japan where it will
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be incorporated with the outer coil, into the model coil
which will be installed and tested at the CS Model Coil test
facility in Japan. Because the coil winding is to be
shipped to another country for further processing and final
installation there is an intent for them to unite with the
mass of things belonging to a foreign country. The articles
are not imported for sale or for sale on approval.
It is not necessary to request a ruling for each
article to be imported under subheading 9813.00.05, HTSUS;
however, you must complete the appropriate paperwork with
each article. The Department of Energy is exempt from
filing a bond under 19 CFR 10.104. Under this provision of
the regulations, the bond shall be waived for articles that
are brought into the United States temporarily under Chapter
98, Subchapter XIII, Heading 9813, HTSUS, by a U.S.
government agency. The entry must be made on Customs Form
7501, and a stipulation must be filed on the form set out in
19 CFR 141.102(d) (copy enclosed). The articles will be
entitled to immediate delivery.
The Department of Energy will be responsible and
exercise control over the cable even while that cable is in
the custody of Martin Marietta. The DOE is responsible to
ensure that the imported articles are in compliance with all
the TIB requirements mentioned above.
HOLDING:
The merchandise may be entered by the Department of
Energy as a part of the International Thermonuclear
Experimental Reactor Agreement temporarily free of duty
under bond under subheading 9813.00.05, HTSUS, both when
initially entering the country and when returning to the
country after having been further processed in another
country. The Department of Energy is exempt from filing a
bond under 19 CFR 10.104.
Sincerely,
John Durant, Director
Commercial Rulings Division
Enclosure