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HQ 221702


December 27, 1989

CON-9-CO:R:C:E 221702, 221710 L

CATEGORY: OTHER

Mr. James B. Clawson
Executive Vice President
International Business-Government Counsellors, Inc. 818 Connecticut Avenue, NW.
Washington, D.C. 20006

RE: Eligibility of Cinematography Equipment for Entry Temporarily Free of Duty Under Bond or Under an A.T.A. Carnet

Dear Mr. Clawson:

You ask whether cinematography cameras and related equipment may be imported under temporary importation under bond (TIB) procedures pursuant to subheading 9813.00.50, Harmonized Tariff Schedule of the United States (HTSUS) or under an A.T.A. carnet in accordance with the Customs Convention on the Temporary Importation of Professional Equipment.

FACTS:

An American corporation is the United States importer and distributor of cinematography cameras and related equipment . The importer purchases the equipment from a related foreign manufacturer, enters them for consumption, and then places the duty-paid cameras in inventory in either its Resale Division or its Rental Division. Cameras purchased for the Resale Division are resold to buyers in the United States; cameras purchased for the Rental Division are leased to motion picture producers and directors in the United states for use in the production of films for theatrical release.

The importer proposes to abolish its Rental Division and the related foreign manufacturer will establish its own Rental Corporation abroad. Cameras would be purchased and owned by the foreign Rental Corporation. The foreign Rental Corporation would then lease the equipment to foreign nationals who have been engaged to work in the production of commercial films in the United States. The foreign nationals would then import the equipment into the United States, acting as importers of record, under subheading 9813.00.50, HTSUS, temporarily free of duty under bond, or under cover of an A.T.A. carnet.

The cameras would be used in the United States by the foreign nationals or under their supervision. After completion of filming the films would be edited, scored, printed and distributed in the United States, The copyrights would be owned by the United States production company, which would also own all other property rights in the film.

ISSUES:

The following issues are presented:

1. May foreign-origin cinematography equipment which is intended for use in the production of motion pictures for United States persons and corporations be imported temporarily free of duty under cover of an A.T.A. carnet?

2. May foreign-origin cinematography equipment which is intended for use in the production of motion pictures for United States persons and corporation be imported temporarily free of duty under a temporary importation bond in accordance with subheading 9813.00.50 of the HTSUS?

LAW AND ANALYSIS:

Annex B to the Customs Convention on the Temporary Importation of Professional Equipment (the "Professional Equipment" Convention) relates to the conditions of grant of temporary admission of cinematographic equipment, which includes cameras of all kinds, under an A.T.A. carnet.

The conditions of temporary admission are that the equipment:

(a) shall be owned by a natural person resident abroad or by a legal person established abroad;

(b) shall be imported by a natural person resident abroad or by a legal person established abroad;

(c) shall be capable of identification on re-exportation; provided that in the case of blank image or sound recording media the most flexible means of identification shall be applied;

(d) shall be used solely by or under the personal supervision of the visiting person, provided that this condition shall not apply in the case of equipment imported for the production of a film under a co-production contract to which a person resident or established in the country of temporary importation is a party and which is approved by the competent authorities of that country under an inter-government agreement concerning cinematographic co-production;

(e) shall not be the subject of a hire contract or similar arrangement to which a person resident or established in the country of temporary importation is a party.

Pursuant to 19 CFR 114.22(a) the A.T.A. carnet is acceptable for goods to be temporarily entered under the Customs Convention on the Temporary Importation of Professional Equipment.

Subheading 9813.00.50, HTSUS, provides for the admission temporarily free of duty under bond, as prescribed in U.S. note 1 to subchapter XIII, chapter 98, HTSUS, of professional equipment, tools of trade, repair components for equipment or tools admitted under this subheading and camping equipment; all the foregoing imported by or for nonresidents sojourning temporarily in the United States and for the use of such nonresidents.

It is suggested that if a leased cinematography camera were imported by a foreign national it would qualify for duty-free temporary entry only if used exclusively by or for the foreign national or foreign corporate entry. If the foreign national employed a cameraman or cinematographer who was a United States resident the use of a carnet or TIB entry would be improper, since the equipment would be used in furthering the profession of a United States resident rather than a temporary sojourner from abroad.

This suggestion is not necessarily true. The requirement under either the carnet or TIB entry is that the article be used solely by or under the personal supervision of the nonresident. The person operating the article, if under the personal supervision of the nonresident, need not be a nonresident. See, for example, paragraph IV 3. "Use of equipment" in the Text and Commentary to the Customs Convention on the Temporary Importation of Professional Equipment (September 1962), wherein it is noted that the provision "... does not preclude the possibility of assistance by nationals, whatever their professional qualifications".

It is further suggested that where a United States person or corporation uses or benefits from the imported equipment, the use of a carnet or TIB entry is inappropriate. That is, equipment rented by a foreign rental corporation to a foreign national working on a United States film production would not be imported "for a person visiting a country in order to make a specified film", as specified in the definition of "cinematographic equipment" in Annex B to the "Professional Equipment Convention".

Both the "Professional Equipment" Convention and subheading 9813.00.50 provide that professional equipment may be imported by a nonresident for use solely by or under the personal supervision of the nonresident. If the foreign national working on the United States film in the above example is a nonresident of the United States and the equipment imported by him is being used solely by him or under his personal supervision, it is being imported "for a person visiting a country in order to make a specified film or films" and a carnet or TIB entry is appropriate, assuming all other requirements are met. Of course, the nonresident could not use these provisions for the purpose of importing equipment to be held in inventory for subsequent lease or rent to third parties in the United States.

HOLDINGS:

1. Foreign - origin cinematography equipment which is owned by a natural person resident abroad or by a legal person established abroad and which is intended for use in the production of motion pictures in the United States for United States persons or corporations and which will be used solely by or under the personal supervision of the nonresident importer may be imported under cover of an A.T.A. carnet.

2. Foreign-origin cinematography equipment which is intended for use in the production of motion pictures in the United States for United States persons or corporations and which will be used solely by or under the personal supervision of the nonresident importer may be imported temporarily free of duty under bond under subheading 9813.00.50, HTSUS.

Sincerely,

John Durant, Director

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