ENT-4/ENT-1-01-R:I:EC 226254 CC
Jeff Newman
Retail Operations Manager
Leafsport
60 Carlton Street
Toronto, Ontario M5B 1L1
Canada
RE: Entry of noncommercial textile shipments valued less than $200; 19 U.S.C. 1321; 19 CFR 10.151
Dear Mr. Newman:
This is in response to your letter of June 23, 1995,
requesting a ruling concerning the importation of shipments of
textile articles valued at less than $200.
FACTS:
You state that Leafsport, located in Toronto, Canada,
markets various merchandise by mail order. You have U.S.
customers who order by mail, fax, and phone. You state that
these orders are typically made by individuals for their own
personal use. After these orders are placed, they are shipped by
you to them by U.P.S.
You state that typically the orders placed are for
merchandise valued at less than $200, and include textile
articles such as hockey jerseys, baseball hats, and T-shirts.
You have included samples of purchase orders for such orders.
You have requested a ruling concerning the treatment of
shipments you make, via U.P.S., that are of textile articles
valued at less than $200 and are noncommercial. Specifically,
you request that such shipments be exempt from duty and allowed
informal entry, pursuant to the administrative exemption of 19
U.S.C. 1321 and section 10.151 of the Customs Regulations (19 CFR
10.151).
ISSUE:
Is the subject merchandise permitted the administrative
exemption from duty pursuant to 19 U.S.C. 1321 and 19 CFR 10.151?
Is formal entry required for the subject merchandise?
LAW AND ANALYSIS:
Section 651 of Title VI (Customs Modernization) of the North
American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2209 (1993) amended 19 U.S.C. 1321. As
amended, section 321 authorized the Secretary of the Treasury to
promulgate regulations relating to administrative exemptions from
duty for certain articles, including gifts, and personal and
household goods. In all other cases, the Secretary was
authorized to promulgate regulations providing for a duty
exemption for a specific amount, not to be less than $200. The
prior law provided for a duty exemption for those articles valued
less than $5.
Interim regulations were published in the Federal Register
on June 13, 1994, T.D. 94-51 (59 FR 30289), which included
amending regulations concerning certain duty exemptions, e.g.,
Section 10.151 of the Customs Regulations (19 CFR 10.151). These
regulations became effective on August 23, 1994. See, T.D. 94-71
(59 FR 43283); see, also, T.D. 95-31 (60 FR 18983).
19 CFR 10.151, as amended, provides that, subject to section
10.153, any shipment of merchandise imported by one person on one
day and having a fair retail value not exceeding $200 will be
exempt from duty, provided all other conditions of the regulation
are met. 19 CFR 10.151 also provides that the fair retail value
must be evidenced by the bill of lading (or other document filed
as the entry) or manifest listing each bill of lading.
19 CFR 10.153(g) provides that the exemption referred to in
section 10.151 is not to be allowed in the case of any
merchandise of a class or kind provided for in any absolute or
tariff-rate quota, whether the quota is open or closed.
Generally, textile articles are subject to quota and visa
restraints. Although quota/visa requirements may apply to
commercial shipments of textiles of any value, textile and
textile products imported for the noncommercial, personal use of
the individual importing the merchandise are not subject to
quota/visa restraints. See, e.g., T.D. 80-38. Consequently, the
exception of 19 CFR 10.153(g) does not apply if the textile
merchandise is for the noncommercial, personal use of the
individual importing it, and, in such a case, the administrative
exemption of section 10.151 may apply.
You state that your typical U.S. customer is an individual
who orders less than $200 worth of merchandise. In addition,
these orders are typically for personal use of the purchaser, and
are not for resale. You have submitted sample purchase orders
from U.S. customers to support your claims. Assuming that an
order is under $200, noncommercial, and for the personal use of
the individual making the purchase, the administrative exemption
of 19 U.S.C. 1321 and 19 CFR 10.151 would apply, and no duty
would be applicable. For any shipments you make that do not meet
these requirements, the above-cited administrative exemption
would not apply.
We note concerning the amendments of the regulations
relating to administrative exemptions, as authorized by section
1498, that they provide the person who may make entry of
shipments covered by section 321(a)(2) is the owner, purchaser,
or consignee of the merchandise or, when appropriately designated
by one of these persons, a Customs broker licensed under 19
U.S.C. 1641. See T.D. 94-51.
In this case, orders are placed by individual U.S. customers
by phone, fax, or mail. Orders are paid at the time they are
placed by credit card or certified check. Included with the
payment are shipping charges, which are agreed to at the time the
order is placed.
In J.L. Wood v. U.S., 62 CCPA 25, 33, C.A.D. 1139 (1974),
the court defined the term sale as the "transfer of property from
one party to another for consideration." Section 2-106(1) of the
Uniform Commercial Code (U.C.C.) similarly defines sale as "the
passing of title from the seller to the buyer for a price." In
this case, it is clear that the above definitions of sale are
met. In addition, since consideration is the sales price of the
goods which is paid at time the order is placed and includes
shipping costs, the sale takes place at the time the order is
placed. The individual U.S. customer, therefore, is the
purchaser and the shipper, U.P.S., has been designated as the
consignee. Consequently, the administrative exemption of section
321 and 19 CFR 10.151 is permitted.
19 CFR 10.151 also provides that merchandise subject to this
exemption shall be entered under the informal entry procedures
(see subpart C, part 143, and sections 128.24, 145.31, 148.12,
and 148.62, of this chapter).
You state the shipments you make will be made via U.P.S. 19
CFR 128.24, which concerns informal entry procedures for imported
merchandise carried by express consignment, states that informal
entry procedures may be used generally when the shipment does not
exceed $1250 in value. Informal entry procedures may not be
used, however, for prohibited or restricted merchandise,
merchandise which is subject to quota or quantitative restraints,
or any articles precluded from informal entry procedures by
virtue of section 498, Tariff Act of 1930, as amended (19 U.S.C.
1498).
As stated above, in the factual situation you pose, quota
and visa restraints do not apply. In addition, the subject
merchandise is not prohibited or restricted, nor is it precluded
from informal entry procedures under 19 U.S.C. 1498.
Consequently, for the factual situation you pose, informal entry
is permitted.
HOLDING:
For the factual situation you pose, assuming that a shipment
is under $200, noncommercial, and for the personal use of the
individual making the purchase, the administrative exemption of
19 U.S.C. 1321 and 19 CFR 10.151 would apply, and no duty would
be applicable. In addition, for this factual situation, informal
entry is permitted.
Sincerely,
William G. Rosoff
Chief
Entry and Carrier Rulings Branch