CON-9-07-R:C:E 225785 GOB
Vito A. Pipitone
John F. Kilroy Co., Inc.
One World Trade Center
Suite 1569
New York, N.Y. 10048
RE: Temporary Importation Bond; Subheading 9813.00.20, HTSUSA; Absolute Quota; Visa; A.T.A. Carnet; T.D. 54802(53); 19 CFR 114.31(b)
Dear Mr. Pipitone:
This is in response to your letter dated October 17, 1994.
FACTS:
You ask for a ruling with respect to the importation of certain full-size rug samples under a temporary importation bond ("TIB"). You state that the rugs were made in the People's Republic of China and would ordinarily be classified under the following subheadings of the Harmonized Tariff Schedule of the United States ("HTSUSA"): 5703.10.00; 5703.30.00.10; 5703.30.00.90; and 9813.00.20. You state that at the time of your letter, the rugs could not be entered for consumption because quota was not available for the appropriate categories. The questions you ask are stated under ISSUES, infra.
ISSUES:
1. May the rug samples be entered into the United States under subheading 9813.00.20, HTSUSA, as "samples," for the sole purpose of taking orders and not intended for sale, sale on approval, or resale?
2. May the rug samples be entered under a TIB if a visa is required?
3. If importation under a TIB is not permitted, may the rug samples be entered under an A.T.A. carnet?
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LAW AND ANALYSIS:
Issue One
Subheading 9813.00.20, HTSUSA, provides that samples solely for use in taking orders for merchandise may be imported duty-free, under bond, as prescribed in U.S. note 1 to Subchapter XIII of Chapter 98, HTS.
U.S. Note 1. (a) states in pertinent part as follows:
The articles described in the provisions of this subchapter, when not imported for sale or for sale on approval, may be admitted into the United States without the payment of duty, under bond for their exportation within 1 year from the date of importation, which period, in the discretion of the Secretary of the Treasury, may be extended, upon application, for one or more further periods which, when added to the initial 1 year, shall not exceed a total of 3 years...
The quota which you refer to is an absolute quota, as defined in 19 CFR 132.1(a). An absolute quota limits the quantity of goods that may enter the commerce of the U.S. in a specific time period. When an absolute quota is filled, further entries are prohibited during the remainder of the quota period.
In Ruling 225642 dated April 3, 1995, which pertained to tariff-rate quotas, we discussed the applicability of quotas to merchandise entered under a TIB.
In Ruling 225642, we cited T.D. 54802(53), which stated:
An article entered under section 308, Tariff Act of 1930, as amended [the predecessor statute to the current TIB provisions], is "entered for consumption" and subject to quotas such as that relating to lead and zinc under Proclamation No. 3257 (T.D. 54705).
The cited basis for T.D. 54802(53) is a letter dated February 11, 1959 from the Chief, Division of Classification and Drawbacks, which stated, in pertinent part:
Entries under section 308 [the predecessor to the current TIB provisions] are considered as entries for consumption and the merchandise concerned would be subject to existing quotas. Accordingly, pig lead would be permitted entry under section 308(1), as amended, only if the quota applicable to that commodity is open at the time the entry is presented.
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In a July 13, 1972 letter from the Acting Commissioner of Customs to Senator Jacob K. Javits, Customs explained the reason for the position taken in T.D. 54802(53) as follows:
[Customs] has previously published notification in [T.D.] 54802 that merchandise entered on a temporary importation under bond under section 308, Tariff Act of 1930 (superseded by Schedule 8, Part 5C, TSUS), is considered entered for consumption. Unless a visa is required on merchandise entered under a temporary importation bond, a considerable loophole would exist for avoiding the quantitative controls on cotton textiles. Without the requirement, importers, unable to obtain visas once quota allotments were filled, would be able to make entry under the temporary importation bond provisions and could keep the merchandise in the United States merely by paying liquidated damages. Thus, in order to prevent the circumvention of agreements limiting importations of cotton textiles, it is necessary to require a visa on temporary importations under bond.
As the above-cited references make clear, if there is no quota available for the subject merchandise, it may not be entered under a temporary importation bond.
Issue Two
The subject merchandise may be entered under a TIB if a visa is required, provided that quota is available and a valid visa is obtained. The mere fact that a visa is required does not create a prohibition to the use of the TIB provisions.
Issue Three
The merchandise which could not be entered for consumption because quota was not available may not be entered under an A.T.A. carnet.
19 CFR 114.31(b) provides:
(b) Temporary importations. Merchandise not entitled to temporary importation under bond shall not be imported under cover of an A.T.A. carnet.
HOLDINGS:
If there is no quota available for merchandise, it may not be entered under a TIB.
Merchandise may be entered under a TIB if a visa is required, provided that quota is available and a valid visa is obtained.
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Merchandise which could not be entered for consumption because quota was not available may not be entered under an A.T.A. carnet.
Sincerely,
John Durant
Director
Commercial Rulings Division