CLA-2 CO:R:C:S 557668 MLR
Mr. Robert Habgood
Allders International (Ships) Limited
1510 S.E. 17th Street, Suite 450
Fort Lauderdale, Florida 33316
RE: Applicability of duty exemption under HTSUS subheading
9801.00.10 to jewelry; consignment; documentary requirements;
19 CFR 10.1
Dear Mr. Habgood:
This is in reference to your letter of October 29, 1993,
requesting a ruling on the applicability of subheading 9801.00.10,
Harmonized Tariff Schedule of the United States (HTSUS), to jewelry
returned to the U.S.
FACTS:
Allders International (Allders) operates gift shops on board
cruise ships sailing from U.S. ports. The shops sell a variety of
merchandise to passengers while the ship is sailing in
international waters. The passengers declare the value of their
purchases on board as part of their allowance when they leave the
ship at a U.S. port. Some of the merchandise offered for sale is
jewelry consigned to Allders by Amsterdam Sauer of New York, who
owns the jewelry until it is sold. The jewelry is all made in the
U.S., is stamped with "AS" (Amsterdam Sauer), and is stated to be
fully described on the consignment forms so that easy
identification is possible.
Sometimes it is necessary to return certain pieces to
Amsterdam Sauer. In the past, each piece was registered with U.S.
Customs officials at the port at which the merchandise was placed
on board the ship, and the original documents were kept to prove
that the merchandise originated in the U.S. in case it needed to
be returned to Amsterdam Sauer. You state that you have followed
this practice for many years, but have experienced some
difficulties at Port Everglades where you have been denied the
opportunity to register further merchandise until you receive a
ruling.
ISSUE:
What documentation is required for the U.S. merchandise to
receive duty-free treatment under subheading 9801.00.10, HTSUS, if
it is returned to the U.S.
LAW AND ANALYSIS:
Subheading 9801.00.10, HTSUS, provides for the free entry of
products of the U.S. that have been exported and returned without
having been advanced in value or improved in condition by any
process of manufacture or other means while abroad, provided the
documentary requirements of section 10.1, Customs Regulations are
satisfied. While some change in the condition of the product while
it is abroad is permissible, operations which either advance the
value or improve the condition of the exported product render it
ineligible for duty-free entry upon return to the U.S. Border
Brokerage Company, Inc. v. United States, 314 F. Supp. 788 (1970),
appeal dismissed, 58 CCPA 165 (1970).
Section 10.1(a), Customs Regulations {19 CFR 10.1(a)},
outlines the necessary documentation required for duty-free entry
under subheading 9801.00.10, HTSUS. The first documentary
requirement is a declaration by the foreign shipper (if the value
of the returned articles exceed $1,000), which includes the
quantity, description and value of the returned articles, the U.S.
port of export, and the date of exportation from the U.S. 19 CFR
10.1(a)(1). A certificate from the master of a vessel stating that
products of the U.S. are returned without having been unladen from
the exporting vessel may be accepted in lieu of the declaration of
the foreign shipper. 19 CFR 10.1(c).
The second documentary requirement is a certification of
exportation on the bottom portion of Customs Form (CF) 3311
executed by the district director at the port from which the
merchandise was exported, which similarly provides for a
description of the articles and their value, the reason for the
return, whether drawback was claimed on the articles, and whether
the articles were previously imported under subheading 9813.00.05,
HTSUS. 19 CFR 10.1(a)(3). Pursuant to 19 CFR 10.1(a)(3), the
certificate of exportation on CF 3311 shall be issued on
application of the importer; however, it is not required if the
merchandise has been exported from the port at which entry is made
and the fact of exportation appears on the records of the
customhouse.
The third documentary requirement is a declaration for free
entry by the owner, importer, consignee, or agent on the top
portion of CF 3311 that the information provided is true and
correct and that the articles meet the statutory requirements for
duty-free entry under subheading 9801.00.10, HTSUS. 19 CFR
10.1(a)(2).
Consequently, if you plan to return the merchandise to the
U.S. under subheading 9801.00.10, HTSUS, you should file a
declaration by the foreign shipper if the value of the merchandise
exceeds $1,000, or a certificate from the master of the vessel if
the U.S. products are returned to the U.S. without having been
unladen from the exporting vessel. You should also file the
certificate of exportation executed by the district director at the
port of exportation; however, it is possible that it was not
required at Port Everglades if the merchandise was exported from
and will be returned to that port, and the fact of exportation
appears on the records of the customhouse. Lastly, as the
consignee, you should file a declaration for free entry attesting
that the information submitted is correct to claim 9801.00.10
treatment.
You should also be aware that in 58 Fed. Reg. 4615, January
15, 1993 (copy enclosed), we published a notice of a proposed
rulemaking to amend 19 CFR 10.1 to remove the requirement of
executing and filing the certificate of exportation as long as the
other documents or evidence that are required substantiate the
claim for duty-free entry under subheading 9801.00.10, HTSUS. In
particular, Customs is proposing to eliminate the basic requirement
in sections 10.1(a)(2) and (3) that the owner, importer, consignee
or agent file CF 3311 (including the certificate of exportation)
because some of the information provided on CF 3311 already appears
on the declaration of the foreign shipper. However, it is proposed
to amend section 10.1(a) further by requiring submission of a
declaration by the owner, importer, consignee or agent setting
forth those essential elements presently incorporated on CF 3311
which do not duplicate information required on the foreign
shipper's declaration (such as whether drawback was previously
claimed on the articles, whether the merchandise was previously
imported under subheading 9813.00.05, HTSUS, and the signed
declaration of the owner or ultimate consignee). This new
declaration, which would refer to the foreign shipper's
declaration, could either be included as an addendum to that
declaration or submitted separately and would have to substantially
follow the format set forth in the proposed regulatory text. We
expect that a final rule concerning these proposals will be
published in the near future.
HOLDING:
On the basis of the information submitted, the U.S.-origin
merchandise exported from a port of the U.S. is eligible for duty-
free treatment under subheading 9801.00.10, HTSUS, upon its return
to the U.S., provided you submit a declaration by the
foreign shipper or a certificate from the master of the vessel if
the merchandise is not unladen from the exporting vessel, a
certificate of exportation (bottom portion of CF 3311), and a
declaration for free entry by the owner, importer, consignee, or
agent (top portion of CF 3311) attesting that the information
submitted is true and correct and that the articles meet the
statutory requirements for duty-free entry under subheading
9801.00.10, HTSUS.
Sincerely,
John Durant, Director
Commercial Rulings Division