CLA-2-98:OT:RR:NC:N2:206
Edward MacDonald
Senior ICC Administrator
StandardAero
707 Flight Road
Winnipeg, MB, R3H 1C6
Canada
RE: The applicability of subheading 9801.00.10 to various components of aircraft engines from the United States and Canada.
Dear Mr. MacDonald:
In your letter dated February 14, 2018, you requested a ruling on whether various aircraft engine parts/components were eligible for duty-free treatment under subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS).
The items concerned are various parts and components of United States (U.S.) and Canadian manufactured aircraft engines, exported to Canada from the U.S. and imported back into to the U.S. without being advanced in value. You state in your letter that StandardAero, located in the U.S., imports aircraft and industrial engines into Canada for repair and overhaul. When certain parts are deemed beyond repair, they are scrapped on site and shipped back to StandardAero in the U.S. The parts concerned have not been advanced in value after removal from the engine and did not undergo a change in character as a result of the disassembly. You asked if these parts and components are eligible for duty-free treatment under subheading 9801.00.10, HTSUS.
Section 904(b) of the Trade Facilitation and Trade Enforcement Act of 2015 (Pub. L. 114-125, February 24, 2016) amended subheading 9801.00.10, HTSUS, to include any products which are returned within 3 years after having been exported. Previously, subheading 9801.00.10, HTSUS, only applied to products of the United States. Subheading 9801.00.10, HTSUS, now provides for the duty-free treatment of: Products of the United States when returned after having been exported, or any other products when returned within 3 years after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad.
Title 19 Code of Federal Regulations (CFR), Part 10.1 states:
(a) Except as otherwise provided for in paragraph (g), (h), (i) or (j) of this section or elsewhere in this part or in ยง 145.35 of this chapter, the following documents must be filed in connection with the entry of articles in a shipment valued over $2,500 and claimed to be free of duty under subheading 9801.00.10 or 9802.00.20, Harmonized Tariff Schedule of the United States (HTSUS):
(1) A declaration by the foreign shipper
(2) A declaration by the owner, importer, consignee, or agent having knowledge of the facts regarding the claim for free entry. If the owner or ultimate consignee is a corporation, such declaration may be signed by the president, vice president, secretary, or treasurer of the corporation, or may be signed by any employee or agent of the corporation who holds a power of attorney executed under the conditions outlined in subpart C, part 141 of this chapter and a certification by the corporation that such employee or other agent has or will have knowledge of the pertinent facts.
(b) In any case in which the value of the returned articles exceeds $2,500 and the articles are not clearly marked with the name and address of the U.S. manufacturer, the Center director may require, in addition to the declarations required in paragraph (a) of this section, 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 United States, or a U.S. 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.
In HRL 559703, dated August 23, 1996, CBP addressed whether the disassembly of an aircraft engine resulted in a change in the country of origin of the extracted parts for marking purposes. In that case we held that parts of an aircraft engine that were disassembled and imported into the United States for repair or replacement did not undergo a change in character or use as a result of the disassembly, but rather retained their identity as parts of the engine from which they were removed. Therefore, because the parts did not undergo a substantial transformation as a result of the disassembly, CBP determined that the country of origin of the parts remained the country where the engine was produced and the extracted parts must be marked accordingly. In HRL 561541, dated March 13, 2000, HQ determined that removing a part from an article without any additional processing does not result in an advancement in value or improvement in condition of that part, within the meaning of subheading 9801.00.10, HTSUS. As a result, parts removed from U.S. manufactured engines will retain the country of origin as the United States. Parts removed from the Canadian engines will not result in advancement in value or improvement in condition. Therefore, the articles at issue are eligible for duty free treatment under subheading 9801.00.10, provided that the Center Director is satisfied that the engines are of U.S. origin, and that the Canadian engines had previously been imported and duty paid thereon, and the documentary requirements of 19 CFR 10.1 (a) and (b) are satisfied.
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, please contact National Import Specialist Liana Alvarez at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division