HQ 560807
May 6,1998
CLA-2 RR:CR:SM 560807 KSG
Tariff No.: 9801.00.10
Port Director of Customs
U.S. Customs Service
San Francisco, California
RE: Application for Further Review of Protest No. 2809-97-100296 concerning denial of duty-free entry of
computer systems; subheading 9801.00.10, HTSUS; 19
CFR 10.1; documentary requirements
Dear Madam:
This is in reference to Protest No. 2809-97-100296 and
the Application for Further Review dated February 20, 1997,
timely submitted by Scott Kohn/ Western Components
contesting the denial of duty-free treatment under
subheading 9801.00.10, Harmonized Tariff Schedule of the
United States ("HTSUS"), for three entries of imported
computer workstations from Hong Kong and China.
FACTS:
The articles subject to this protest consist of one
entry of new (unused) computer workstations and two entries
of refurbished computer workstations. The entry documents
reflect that the shipment of new workstations and one
shipment of refurbished workstations were exported to the
U.S. from Hong Kong, while the other shipment of refurbished
workstations were exported from China. The protestant
stated that all of the workstations were originally
manufactured by Sun Microsystems in the U.S. and that the
refurbished units were refurbished by Sun Microsystems in
the U.S.
With respect to the entry of new workstations, the
protestant has submitted as evidence that the articles are
of U.S. origin: 1)the foreign invoice from a Chinese company
to the importer; 2) the packing list stating that the
country of origin of the product is the U.S.; 3) a letter
from the importer stating that the country of origin of the
CPU's is the U.S.; and 4) copies of seven "customer
information sheets" with no identification of who prepared
the documents, which state that the origin of a workstation
with particular part numbers and serial numbers is the U.S.
For the other two entries, the protestant has submitted
copies of an identification plate that it states is attached
to the computers. The identification plate states
"Assembled in U.S."
The protestant states that these imported workstations
are gray market goods and therefore, it has been unable to
obtain a manufacturer's certification from Sun Microsystems
concerning the origin of the merchandise.
Sun Microsystems manufactures work stations in both
Scotland and the United States. The protestant alleges that
the workstations involved in this case were made in the U.S.
and that the imported articles are eligible for duty-free
treatment under subheading 9801.00.10, HTSUS.
Your office issued CF 29's to the protestant requesting
U.S. manufacturer's affidavits for the articles subject to
this protest pursuant to 19 CFR 10.1(b). No affidavits were
submitted.
ISSUE:
Whether the computer systems are eligible for duty-free
treatment under subheading 9801.00.10, HTSUS.
LAW AND ANALYSIS:
Subheading 9801.00.10, HTSUS, provides for the free
entry of products of the United States 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 (19 CFR
10.1), are satisfied.
Section 10.1(a) outlines the necessary documentation
required for duty-free treatment under subheading
9801.00.10, HTSUS. The documentation consists of a
declaration by the foreign shipper in substantially the form
described in 19 CFR 10.1(a)(1) and a declaration by the
owner, importer, consignee, or agent having knowledge of the
facts regarding the claim for free entry in substantially
the form described in
19 CFR 10.1(a)(2).
Section 10.1(b) states that in addition to the
documentation requirements of 19 CFR 10.1(a), in any case in
which the value of the returned goods exceeds $1,250 and the
articles are not clearly marked with the name and address of
the U.S. manufacturer, the port director may require such
other documentation or evidence as may be necessary to
substantiate the claim for duty-free treatment. Such other
documentation or evidence may include a statement from the
U.S. manufacturer verifying that the articles were made in
the U.S. or an export invoice, bill of lading, or airway
bill evidencing the U.S. origin of the articles and/or the
reason for the exportation of the articles.
Under 19 CFR 10.1(d), if Customs is reasonably
satisfied, because of the nature of the articles or
production of other evidence, that the articles are imported
in circumstances meeting the requirements of subheading
9801.00.10, the requirements for producing the documents
under 19 CFR 10.1(a) may be waived.
While an article that is marked "Made in the USA"
supports the assertion that the article is a product of the
U.S., such marking alone is not a basis upon which duty-free
entry under subheading 9801.00.10, HTSUS, may be granted.
Customs also requires additional evidence that supports a
port director's ability to trace the exportation and
subsequent importation of the article as well as
documentation supporting the importer's claim that the
article was not advanced in value or improved in condition
abroad. See Headquarters Ruling Letter ("HRL") 559719,
dated July 11, 1996. For instance, in HRL 224447, dated
September 26, 1996, Customs held that the documentation
requirements were satisfied for imported magnets where the
protestant submitted a statement by the U.S. manufacturer
verifying that the parts were made in Michigan and copies of
shipping and other documents tracing the merchandise from
the Michigan company to a Mexican company and back to the
U.S. There were also documents evidencing the reason for
return of the merchandise to the U.S.
In this case, your office has denied classification
under subheading 9801.00.10, HTSUS, on the basis that there
is a lack of physical and documentary proof that the
imported computer systems are of United States origin. The
protestant argues that evidence, other than a manufacturer's
affidavit, should be accepted to show that an article was
made in the U.S.
The Customs Service requires that sufficient
documentation be submitted to establish that the imported
articles are in fact of U.S. origin. In this case, we find
that the protestant has not submitted such documentation.
There is evidence in the record that Sun Microsystems
manufactures computer systems in both the U.S. and Scotland.
For two of the three entries, the protestant submitted a
copy of a nameplate that states "Assembled in the U.S.A." on
it as proof that the goods were made in the U.S. We note
that the part numbers of the imported articles subject to
this protest do not match the part number on the nameplate.
Further, neither the serial number nor the part number on
the nameplate matches the serial numbers or the part numbers
on the submitted customer information sheets. Based on the
documentation submitted, Customs cannot verify that these
goods were made in the U.S.
With regard to the third entry, the protestant
submitted an invoice, a packing sheet, a letter to the
importer from the broker and copies of "customer
information sheets". The customer information sheets do not
include a U.S. manufacturer's name, logo, or address or any
other indication that the sheets were prepared by a U.S.
manufacturer. Moreover, the part numbers for the imported
articles covered by this entry do not correspond to the part
numbers on the submitted customer information sheets. Based
on a review of the documentation submitted, we find that the
protestant has not shown to Customs satisfaction that the
goods are of U.S. origin. Therefore, we find that the
computer systems are not entitled to subheading 9801.00.10,
HTSUS, treatment.
HOLDING:
On the basis of the information submitted, there has
not been sufficient documentation presented to show that the
computer systems are products of the United States.
Therefore, the computer systems are not eligible for duty-free treatment under subheading 9801.00.10, HTSUS.
Accordingly, this protest should be denied in full.
In accordance with Section 3A(11)(b) of Customs
Directive 099 3550-065 dated August 4, 1993, this decision
should be attached to Customs Form 19, Notice of Action, to
be mailed by your office to the protestant no later than 60
days from the date of this letter. Any reliquidation of the
entry in accordance with the decision must be accomplished
prior to mailing of the decision. Sixty days from the date
of the decision the Office of Regulations and Rulings will
take steps to make the decision available to Customs
personnel via the Customs Rulings Module in ACS and the
public via the Diskette Subscriptions Service, Freedom of
Information Act and other public access channels.
Sincerely,
John Durant, Director
Commercial Rulings Division