CLA-OT:RR:CTF:VS H254785 RSD
Ms. Sue Cerankoski
Specialist, Regulatory Services
FedEX Trade Networks Transport & Brokerage, Inc.
128 Dearborn Street
Buffalo, NY 14207
RE: Applicability of subheading 9802.00.50, HTSUS for Soiled Uniformed Garments and Floor Mats Sent to Canada for Cleaning; NAFTA; 19 C.F.R.181.64
Dear Ms. Cerankoski:
This is in reference to your letter dated May 30, 2014, on behalf of Canadian Uniform, Ltd., (Canadian Uniform), requesting a ruling regarding the applicability of subheading 9802.00.50, Harmonized Tariff Schedules of the United States (HTSUS), for prospective shipments of uniform garments and floor mats that will be exported from the United States to Canada and returned to the United States after having been cleaned.
FACTS:
Canadian Uniform is planning to import new uniform garments, which consists of coveralls, bib overalls, and floor mats. The products will be imported directly into the United States from China, Haiti, the Dominican Republic, and Mexico. You state that the coveralls are classified in subheadings 6211.32.0010 and 6211.33.0010, HTSUS; the bib overalls are classified in subheading 6203.42.0010, HTSUS; and the floor mats are classified in subheading 5702.20.2010, HTSUS. The uniform garments and the floor mats will be rented to U.S. companies. After the uniform garments and floor mats are soiled, they will be exported from the United States to Canada where they will be cleaned. After the soiled uniform garments and floor mats are cleaned in Canada, they will be exported from Canada and returned back to United States through several different ports.
ISSUE:
Whether the returned uniform garments and floor mats will be eligible for duty preference under subheading 9802.00.50, HTSUS, upon their return from Canada.
LAW AND ANALYSIS:
Articles exported from and returned to the U.S., after having been advanced in value or improved in condition by repairs or alterations in Canada, may qualify for a duty exemption under HTSUS subheading 9802.00.50, provided the foreign operation does not destroy the identity of the exported articles or create new or commercially different articles through a process of manufacture. Tariff treatment under subheading 9802.00.50, HTSUS, is also precluded where the exported articles are incomplete for their intended use prior to the foreign processing.
Section 181.64(a), CBP Regulations, (19 C.F.R. § 181.64(a)), states that:
Repairs or alterations means restoration, addition, renovation, redyeing, cleaning, resterilizing, or other treatment which does not destroy the essential character of, or create a new and commercially different good from, the good exported from the United States.
We have previously held that cleaning and sanitizing soiled U.S. linens in a Mexican or Canadian laundry facility qualified as an alteration under subheading 9802.00.50, HTSUS. See Headquarters Ruling Letter (HQ) 221046 dated May 11, 1989. We reached the same result in HQ 559072 dated June 21, 1995, which involved the laundering or cleaning of wearing apparel in Canada.
As in our prior decisions, we find that the cleaning process in the present case is an alteration, thereby entitling the uniform garments and the floor mats to the duty exemption under subheading 9802.00.50, HTSUS.
The documentary requirements to qualify for the duty exemption under subheading 9802.00.50, HTSUS, for goods re-entered after repair or alteration in Canada are set forth in Section 181.64(c), CBP Regulations (19 C.F.R. § 181.64(c)). 19 C.F.R. § 181.64(c)(1)(i) requires the importer to file with CBP a declaration of the person who performed the repairs or alterations stating, in "substantially the following form" that:
the goods herein specified are the goods which, in the condition in which they were exported from the United States, were received by me (us) on _________________, 19 [sic] __, from _______________ (name and address of owner or exporter in the United States); that they were received by me (us) for the sole purpose of being repaired or altered; that only the repairs or alterations described below were performed by me (us); that such repairs or alterations were (were not) performed pursuant to a warranty; that the full cost or (when no charge is made) value of such
repairs or alterations is correctly stated below; and that no substitution whatever has been made to replace any of the goods originally received by me (us) from the owner or exporter thereof mentioned above.
The regulation also requires that the declaration also must include the "marks and numbers" relating to the goods as well as a description of the articles. See id. In addition, 19 C.F.R. § 181.64(c)(1)(ii) requires the filing of a declaration by the "owner, importer, consignee, or agent, in "substantially the following form" that:
…the (above) (attached) declaration by the person who performed the repairs or alterations abroad is true and correct to the best of my knowledge and belief; that the goods ____ were ____ were not (check one) subject to NAFTA drawback; that such goods were exported from the United States for repairs or alterations from ________ (port) on _____(date); and that the goods entered in their repaired or altered condition are the same goods that were exported on the above date and that are identified in the (above) (attached) declaration.
You inquire as to whether eligibility for the duty preference under subheading, 9802.00.50, HTSUS, requires that the rental uniform garments and the floor mats be numbered and a list of the rental ID numbers be provided with the shipping papers when the garments and floor mats are exported from the United States to Canada and also when they are returned to the United States, after being cleaned in Canada. Essentially, information must be presented which enables CBP to verify that the articles returned are the same as the articles exported. For example, identification marks or numbers, such as serial numbers, for the units must be stated in the repair declaration, when they are available. See HQ 559012 dated May 9, 1995. The above documentation requirements establish that articles that are returned to the U.S. and entered under subheading 9802.00.40 or 9802.00.50, HTSUS, must be traced back to the export shipment and the Certificate of Registration encompassing those specific imported articles. These requirements are designed to prevent, to the extent possible, the substitution of new or remanufactured articles for the articles that were exported from the U.S. for repairs or alterations. See HQ 557661 dated November 14, 1994. However, we also note that 19 C.F.R. § 181.64(c)(3) provides that if the port director concerned is satisfied, because of the nature of the goods or production of other evidence, that the goods are imported under circumstances meeting the requirements of this section, he/she may waive submission of the declarations provided for in paragraph (c)(1) of this section. See HQ H016584 dated November 8, 2007.
HOLDING:
The coveralls, bib overalls, and floor mats sent to Canada to be cleaned will be eligible for the duty exemption under subheading 9802.00.50, HTSUS, upon return to the U.S., upon compliance with the documentary requirements of 19 CFR 181.64(c). A
copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika R. Brenner, Chief,
Valuation & Special Programs Branch