VES-3-02-OT:RR:BSTC:CCR H335540 DMK
David Forgue, Esq.
Barnes, Richardson & Colburn, LLP
303 East Wacker Drive, Suite 305
Chicago IL 60601
RE: Export, self-propelled vehicles, used vehicles, 19 C.F.R. 192.0-192.4; 19 U.S.C. 1627a.
Dear Mr. Forgue;
This letter is in response to your November 7, 2023, ruling request submitted on behalf of your client, Oshkosh Corporation, requesting a determination of the term "used" and the application of U.S. Customs and Border Protection ("CBP") Regulations located at 19 C.F.R. 192.0-192.4, with respect to certain proposed transactions of motor vehicles.[1] Our decision follows.
FACTS
The following facts are from your client's ruling request and supporting information dated November 7, 2023. Your client has requested CBP to determine whether vehicles exported under certain conditions are subject to the "used self-propelled vehicle" regulations at 19 C.F.R. 192.
Your client is a manufacturer of specialized self-propelled vehicles, which are not sold through dealerships or distributors but are sold directly to customers. To sell these vehicles, your client exports the vehicles and delivers the vehicles to their customers. In general, your client's customers do not take any equitable or legal title until after the vehicle has been delivered and successfully tested. Your client maintains ownership, insurable interest, and risk of loss past the point of export. If modifications or repairs need to be made, your client can own the vehicle abroad for the duration. Typically, your client maintains ownership of the vehicles for days after arrival in the target country, and the customer has no right to enjoy, use, or acquire title until after the vehicle meets the agreed-upon conditions.
ISSUE
Whether the requirements for exports of "used" "self-propelled vehicles" as found in 19 U.S.C. 1627a and 19 C.F.R. 192 apply to the vehicles as described above?
LAW AND ANALYSIS
The relevant statute located at 19 U.S.C. 1627a, provides, in pertinent part:
(c) Definitions. For purposes of this section--
(1) the term "self-propelled vehicle" includes any automobile, truck, tractor, bus, motorcycle, motor home, self-propelled agricultural machinery, self-propelled construction equipment, self-propelled special use equipment, and any other self-propelled vehicle used or designed for running on land but not on rail;
...
(3) the term "used" refers to any self-propelled vehicle the equitable or legal title to which has been transferred by a manufacturer, distributor, or dealer to an ultimate purchaser; and
(4) the term "ultimate purchaser" means the first person, other than a dealer purchasing in his capacity as a dealer, who in good faith purchases a self-propelled vehicle for purposes other than resale. 19 U.S.C. 1627a(c).
The regulations promulgated under this statute, 19 C.F.R. 192.1, provide the same definitions. In HQ H228766 (Oct. 2, 2012) and HQ H235018 (Feb. 20, 2013), CBP examined these definitions in light of a particular exporter. CBP determined that, because the exporter in those cases purchased vehicles from a dealership, received title before export, and clarified that they were "not a licensed dealer", the vehicles were considered used and the above statute and regulations applied. Conversely, in HQ 116263 (July 9, 2004), in a case where vehicles were consigned to a wholly-owned corporate subsidiary, and not sold, we determined that the subject vehicles were not "used" vehicles as that term is defined in 19 C.F.R. 192.1, and, accordingly not subject to the requirements of 19 C.F.R. Part 192. Similarly, in HQ H238308 (Aug. 20, 2013), we determined that rejected imported vehicles which were being returned to the overseas manufacturer were likewise not subject to the provisions of 19 C.F.R. Part 192 because there had been no sale of the vehicles and no transfer of title to an ultimate purchaser. Accordingly, the rejected vehicles were not considered "used" vehicles within the meaning of 19 U.S.C. 1627a and 19 C.F.R. 192.1
With regard to your question as to whether your client's vehicles are considered "used self-propelled vehicles" for the purposes of these definitions, we examine when title has been transferred. In the facts as described above, you clarify that your client maintains title, ownership, insurable interest, and risk of loss after the vehicles have been exported. The customer does not take title, nor has a right to use or enjoy the vehicle until after the export has occurred.
Accordingly, we determine that, when transactions are as described above where customers do not take any equitable or legal title until after the vehicle has been delivered overseas, the subject vehicles are not considered "used self-propelled vehicles" for the purposes of the above statutes, and the requirements therein do not apply. We note, however, that the facts as described above and in your ruling request are "in general." If the facts of a transaction are different from described, such as title being transferred before export, the vehicle could be considered "used" and the relevant rules could apply.
HOLDING
The export requirements of 19 U.S.C. 1627a and 19 C.F.R. Part 192 that apply to "used self-propelled vehicles" do not apply to vehicles when the vehicles are sold directly from the manufacturer to a foreign customer, and title, ownership, insurable interest, risk of loss, and right to use and enjoy does not transfer until after the vehicle is exported and delivered overseas.
Please note that 19 C.F.R. 177.9(b)(1) provides that "[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based." If the terms of the import or export contracts and results of the sampling records vary from the facts stipulated to herein, or CBP ascertains discrepancies based upon a review of any other pertinent information, this decision shall not be binding on CBP as provided for in 19 C.F.R. 177(b)(1), (2) and (4), and 177.9(b)(1) and (2).
Sincerely yours,
W. Richmond Beevers
Chief, Cargo Security, Carriers and Restricted Merchandise Branch
Office of Trade; Regulations and Rulings
U.S. Customs and Border Protection
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[1] You have asked this office for confidential treatment of specific information relating to the identity of your customers, shipping information, and purchase information. CBP Regulations at 19 C.F.R. 177.2(b)(7) provide that the requester of a ruling from our office may ask that privileged or confidential commercial or financial information supplied for purposes of preparing the requested ruling not be disclosed. Such requests will be considered if the information is clearly identified and the reasons for requesting that information not be disclosed are provided. If this office receives a Freedom of Information Act request for your submission, Regulations at 6 C.F.R. 5.12, et seq. regarding the disclosure of business information provide that the submitter of business information will be advised of receipt of a request for such information whenever the business submitter has in good faith designated the information as commercially or financially sensitive information. We accept your request for confidential treatment as a good faith request.
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