CLA-2-98:RR:NC:3:353 M86159
Mr. Larry Ordet
Sandler, Travis & Rosenberg, P.A.
551 Fifth Avenue
New York, NY 10176
RE: The applicability of tariff classification in subheading 9801.00.2000, HTS, to shirts and footwear from China, Indonesia, Pakistan and Vietnam, warehoused in Mexico.
Dear Mr. Ordet:
In your letter dated August 25, 2006, on behalf of Aramark Uniform & Career Apparel, Inc., you requested a ruling on whether shirts and footwear were eligible for treatment in subheading 9801.00.2000, Harmonized Tariff Schedule of the United States (HTSUS).
The imported product consists of shirts and footwear. The shirts and footwear are made in China, Indonesia, Pakistan and Vietnam and imported into the United States by Aramark Uniform & Career Apparel, Inc., who will pay the appropriate duties upon entry and supply required visas for any merchandise subject to quota. Following importation, Aramark Uniform & Career Apparel, Inc. will export the shirts and footwear to a company in Mexico, who under terms of an agreement will warehouse the merchandise; there will be no finishing or repacking of the goods in Mexico. Aramark Uniform & Career Apparel, Inc. will then re-import the merchandise as needed into the United States.
A warehousing agreement will be executed between the parties. You state that Aramark Uniform & Career Apparel, Inc. will enter into a bailment agreement with a company in Mexico.
Section 141.2 of the Customs Regulations (19 CFR 141.2) states that "Dutiable merchandise imported and afterwards exported even though duty thereon may have been paid on the first importation, is liable to duty on every subsequent importation into the Customs territory of the United States" unless specifically exempted. Subheading 9801.00.2000, HTS, provides for duty-free treatment for "articles previously imported, with respect to which the duty was paid upon such previous importation or which were previously free of duty pursuant to the Caribbean Basin Economic Recovery Act of Title V of the Trade Act of 1974 if (1) reimported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad, after having been exported under lease or similar use agreements, and (2) reimported by or for the account of the same person who imported it into, and exported it from, the United States.”
Section 10.108, Customs Regulations (19 CFR 10.108), provides, in relevant part, that free entry shall be accorded under subheading 9801.00.20, HTS, whenever it is established to the satisfaction of the district director that the article for which free entry is claimed was exported from the United States under a lease or similar use agreement. According to Black's Law Dictionary 179 (5th ed. 1979), a bailment is "a delivery of goods of personal property, by one person to another, in trust for the execution of a special object upon or in relation to such goods, beneficial to either the bailor or bailee or both, and upon a contract, express or implied, to perform the trust and carry out such object, and thereupon either to redeliver the goods to the bailor or otherwise dispose of the same in conformity with purpose of the trust.” Headquarters ruled, in HRL 560511, dated November 18, 1997, that "bailment" is a "similar use agreement" for the purposes of subheading 9801.00.2000, HTS.
You assert that your client’s transaction meets all the requirements for consideration of duty free entry under subheading 9801.00.2000, HTS. Specifically, you indicate that all of the shirts and footwear, being previously imported and duty paid where applicable, would be subject solely to storage and would not be otherwise advanced in value or improved in condition by any process or manufacture while in Mexico. Further, the subject shirts and footwear would be exported under conditions that would constitute exportation pursuant to a lease or similar use agreement and that your client, Aramark Uniform & Career Apparel, Inc., would be the importer, exporter and reimporter of the merchandise.
Based on the information submitted, the shirts and footwear that are manufactured in China, Indonesia, Pakistan and Vietnam and packaged in Mexico will be eligible for duty-free treatment under subheading 9801.00.2000, HTS, when returned to the United States, provided that the district director at the port of entry is satisfied that Aramark Uniform & Career Apparel, Inc. previously imported the shirts and footwear and paid duty thereon; they are reimported by or for the account of Aramark Uniform & Career Apparel, Inc.; Aramark Uniform & Career Apparel, Inc. exported the shirts and footwear from the U.S. under a lease or a similar use agreement; and the documentary requirements of section 10.108, Customs Regulations, are satisfied.
Based on directives from the Committee for the Implementation of Textile Agreements (CITA), if entered under subheading 9801.00.2000, HTSUS, the shirts and footwear are exempt from quota/visa requirements.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Kenneth Reidlinger at 646-733-3053.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division