CLA-2 CO:R:C:S 557193 RA
District Director
U.S. Customs Service
880 Front St.
San Diego, California 92188
RE: Internal Advice Request No. 10/93; applicability of
duty-free provision to forklift trucks reimported after
having been exported under lease
Dear Sir:
This is in reference to your memorandum of January 6, 1993,
forwarding a request for Internal Advice from United Customhouse
Brokers, Inc. ("United") of Otay Mesa, California under date of
December 7, 1992, concerning the eligibility of certain forklift
trucks from Mexico for duty-free treatment under subheading
9801.00.20, Harmonized Tariff Schedule of the United States
(HTSUS).
FACTS:
Three forklift trucks -- two made in Great Britain and one
in South Korea -- were leased by Hawthorne Lift Systems of
Escondido, California, to Hyundai de Mexico for a period of eight
months. When returned to the U.S., the forklifts were imported
by Hyundai Precision America, Inc., the parent company of Hyundai
de Mexico. It is claimed that the trucks should be accorded free
entry under subheading 9801.00.20, HTSUS, even though they were
not reimported by the same person who originally imported them
into the U.S., as required by the statute. United has submitted
various documentation, including the rental agreement, in support
of its contention that Hyundai Precision America, Inc. and
Hawthorne "in effect" had a principal-agent relationship.
According to information provided by the Chief, NIS
Machinery Branch, in an undated memorandum received in
Headquarters on March 12, 1993 (copy enclosed), the forklift
trucks involved here were originally imported by Caterpillar Inc.
of Peoria, Illinois.
ISSUE:
Whether the forklift trucks are entitled to free entry under
subheading 9801.00.20, HTSUS.
- 2 -
LAW AND ANALYSIS:
Subheading 9801.00.20, HTSUS, provides, in pertinent part,
for the duty-free treatment of articles, previously imported,
with respect to which duty was paid upon such previous
importation, if (1) reimported, without having been advanced in
value or improved in condition while abroad after having been
exported under lease or similar use agreements, and (2)
reimported by or for the account of the person who imported it
into, and exported it from, the U.S.
The information available to us indicates that the forklift
trucks in question were originally imported by Caterpillar, Inc.
There is no indication that either Hyundai Precision America,
Inc. or Hawthorne was acting on behalf of Caterpillar when the
forklifts were exported and reimported. Therefore, because the
trucks were not reimported by or for the account of the person
who imported them into, and exported them from, the U.S.,
subheading 9801.00.10, HTSUS is inapplicable in this case.
However, forklift trucks are subject to a free rate of duty under
subheading 8427.00.20, HTSUS.
HOLDING:
Based on the information provided, the forklift trucks are
ineligible for duty-free treatment under subheading 9801.00.20,
HTSUS, because they were not reimported by or for the account of
the person who imported them into, and exported them from, the
U.S., as required by the statute.
Sincerely,
John Durant, Director
Commercial Rulings Division