CLA-2 RR:TC:SM 560356 JML
Ms. Ethel Simonetti
The Tuba Exchange, Inc.
1825 Chapel Hill Road
Durham, NC 27707
RE: Eligibility of nickel-plated tubas from Russia for duty-free
treatment under the Generalized System of Preferences; musical
instruments.
Dear Ms. Simonetti:
This is in response to your letter dated March 13, 1997,
wherein you requested a binding ruling concerning the eligibility
of certain nickel-plated tubas for duty-free treatment under the
Generalized System of Preferences ("GSP"), 19 U.S.C. 2463(b).
Although no sample was provided, the circumstances involved in
the proposed transactions were described in your submission.
FACTS:
Your company, The Tuba Exchange, Inc., intends to import at
least sixteen (16) low brass nickel-plated tubas per month from
the J.S. Company in St. Petersburg, Russia. The J.S. Company
manufactures the tubas in its St. Petersburg, Russia factory.
Specifically, the tuba to be imported is the model #201N, which
is a four (4) rotary valve tuba. Displayed on the bell of each
instrument is a medallion which indicates the J.S. Company seal,
as well as an inscription of the location of manufacture (which
is St. Petersburg, Russia).
The tubas are to be freight-forwarded from St. Petersburg,
Russia by KLM Royal Dutch Airlines. The destination indicated on
the air waybill is Durham, North Carolina.
ISSUE:
Whether, upon their importation into the U.S., the Russian-origin tubas are eligible for duty-free treatment under the GSP?
LAW AND ANALYSIS:
Under the GSP, articles the growth, product or manufacture
of a designated beneficiary country ("BC") which are imported
directly into the customs territory of the United States may
receive duty-free treatment if the sum of (1) the cost or value
of the materials produced in the BC, plus (2) the direct costs
involved in processing the eligible article in the BC, is not
less than 35 percent of the appraised value of the article at the
time it is entered into the United States. See 19 U.S.C.
2463(b); 19 CFR 10.176(a).
An article is considered a "product of" a BC if it is made
entirely of materials originating in the BC (or an association of
countries treated as one BC), or, if made of materials imported
into the BC, those materials must be substantially transformed
into a new and different article of commerce during production of
the final article. See 19 CFR 10.176(a). To determine if an
article will be eligible for duty-free treatment under the GSP it
must be classified in the Harmonized Tariff Schedule of the
United States ("HTSUS") under a tariff provision for which a
duty rate of "Free" appears in the "Special" subcolumn followed
by the symbol "A" or "A*." For qualifying merchandise, a claim
for exemption from duty under the GSP is usually made by a
written claim on the entry document showing the symbol "A" as a
prefix to the HTSUS subheading for each article for which such
treatment is claimed. See 19 CFR 10.172.
In addition, a claim for duty-free treatment under the GSP
must meet the applicable documentary requirements of 19 CFR
10.176. For merchandise requiring a formal entry which is not
wholly the growth, product, or manufacture of a single BC, the
exporter of the merchandise or other appropriate party having
knowledge of the relevant facts shall be prepared to submit
directly to the port director, upon request, a declaration
setting forth all pertinent detailed information concerning the
production or manufacture of the merchandise. 19 CFR
10.173(a)(1)(i) For commercial merchandise requiring a formal
entry which is wholly the growth, product, or manufacture of a
BC, a statement to that effect must be included on the commercial
invoice provided to Customs.
Currently, Russia is a designated BC for GSP purposes. See
HTSUS General Note 4(a). As a general matter, Customs notes
that the tubas you intend to import are classifiable under
subheading 9205.10.00, HTSUS, (Other wind musical instruments:
Brass-wind instruments). Articles classifiable in that provision
are eligible for GSP treatment as a duty rate of "Free" appears
in the "Special" subcolumn followed by the symbol "A."
Therefore, the tubas are entitled to duty-free treatment under
the GSP provided they comply with the "product of," "imported
directly," and value content requirements of 19 U.S.C. 2463(b)
and 19 CFR 10.176(a).
Please note, however, that the GSP program expired on May
31, 1997, although we understand that Congress currently is
giving consideration to reinstating the program.
HOLDING:
The nickel-plated low brass tubas, classified in subheading
9205.10.00, HTSUS, and manufactured in Russia are eligible for
GSP treatment. Assuming compliance with the "product of,"
"imported directly," documentary and value content requirements,
the tubas will be entitled to duty-free treatment. We have
enclosed a copy of the GSP Customs Regulations (19 CFR 10.171-10.178).
A copy of this ruling letter should be attached to the entry
documents filed at the time the merchandise is entered. If the
documents have been filed without a copy, this ruling should be
brought to the attention of the Customs officer handling the
transaction.
Sincerely,
John
Durant, Director
Tariff Classification Appeals Division