HQ 0223408 - Civil Aircraft; Aircraft Parts; 19 CFR 10.183; General Note 3(c)(iv), Harmonized Tariff Schedules of the United States (HTSUS) - United States International Trade Commision Rulings

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HQ 223408
December 26, 1991

CON-1-CO:R:C:E 223408 DHS

CATEGORY: CONDITIONALLY FREE

Mr. John A. Fedell
Manager, Contracts
Chandler Evans
Control Systems Division
Charter Oak Boulevard
Box 330651
West Hartford, CT 06133-0651

RE: Civil Aircraft; Aircraft Parts; 19 CFR 10.183; General Note 3(c)(iv), Harmonized Tariff Schedules of the United States (HTSUS)

Dear Mr. Fedell:

This is in response to your letter, dated July 8, 1991, and the conversation with Deann Seckler, an attorney on my staff, regarding the importation of digital electronic control units.

FACTS:

Textron Lycoming, and the United Kingdom Royal Air Force via the Ministry of Defense, United Kingdom Defense Procurement Office entered into a contract for the sale of engine modification kits for upgrading T-55 engines on the MK-47 helicopter.

Textron entered into a subcontract with Chandler Evans (the importer) to provide the fuel control systems for the kits. The fuel control system is made up of a hydro mechanical control unit (manufactured by the importer) and a digital electronic control unit (DECU)(imported from a corporation in England). These two portions of the fuel control system are assembled and tested by the importer.

After delivery and incorporation of the fuel control systems into the engine modification kits, Textron exports the kits to England by way of the designated carrier of the Royal Air Force.

You have stated that the imported article and the assembled article will be inspected to assure that it meets the qualifications demanded by the U.S. Department of Defense by an on site employee of the Defense Logistic Agency, of the Department of Defense. This person performs the function at the importer's company of monitoring and controlling the inspection process of all parts being manufactured and assembled for the U.S. government contracts.

ISSUES:

Whether the digital electronic control units imported from England to be assembled into fuel control systems and exported for use by the UK Royal Air Force are entitled to duty free entry under 19 CFR 10.183?

Whether an approval from an employee from the Department of Defense, who works on site at the importer's company and performs the function of assuring the quality of all parts being manufactured and assembled by the importer is sufficient to fulfill the certification requirements in 19 CFR 10.183?

LAW AND ANALYSIS:

Section 10.183 of the Customs Regulations (19 CFR 10.183) and General Note 3(c)(iv), HTSUS, provides the authority under which articles may be eligible for the duty-free treatment pursuant to the Agreement on Trade in Civil Aircraft when entering the Customs territory.

"Civil aircraft" is defined under these provisions as all aircraft other than aircraft purchased for use by the Department of Defense or the U.S. Coast Guard. Statistical Note 1 to Chapter 88, HTSUS, restates this definition and incorporates the additional language "for the purposes of exportation means all aircraft other than aircraft for use by the armed forces of a foreign country."

Section 10.183 further provides that the importer must file with the appropriate Customs officer a statement that the imported article has been imported for use in a civil aircraft and will be so used. Additionally, the article(s) specifically identified in the entry summary require approval for use in the civil aircraft by the Administrator of the Federal Aviation Administration ("F.A.A.") or an airworthiness authority in the country of exportation. This approval is recognized by the F.A.A. as an acceptable substitute for F.A.A. approval.

In HRL 088302, dated April 4, 1991, Customs approved a certification as following the provisions of Note 3(c)(iv) when components were imported duty-free under the Civil Aircraft Agreement and used with other components sourced domestically to manufacture passenger jet aircraft which were sold to foreign governments (militaries) for executive transport. The facts, in that case, were not clear whether the planes would be operated abroad by foreign military pilots or by private pilots.

In drawing this conclusion, we surmised that Statistical Note 1 to Chapter 88, HTSUS, would not place any limitation upon the duty-free treatment provided by 19 CFR 10.183 for foreign military aircraft or parts for foreign military aircraft since this provision was strictly enacted for statistical purposes. As stated in HRL 088302, the reference to "exportation" was added by the International Trade Commission under the authority of 19 U.S.C. 1484(e) as a means of enumerating the articles imported into the U.S. and exported from the U.S..

Therefore, the definition and General Note 3(c)(iv), HTSUS, technically avail duty-free treatment under 19 CFR 10.183 to the digital electronic control units eventhough they will be utilized in a foreign military aircraft. However, the importer will be unable to file the required statement that the parts will be used in a civil aircraft since the helicopters in question are clearly military. Furthermore, since the F.A.A. does not certify military aircraft and components as to airworthiness, the importer may be unable to acquire the appropriate certification.

You have also inquired about the propriety of acquiring an approval for airworthiness from the employee of the Department of Defense, employed on site at your company's place of business. While he performs an explicit function for the U.S. government by assuring the quality of the parts and machinery used in U.S. contracts; he is not from an authorized agency for the purpose of determining airworthiness under the Civil Aircraft Agreement.

Questions regarding the certification requirements may be directed to the Federal Aviation Administration at 800 Independence Avenue, N.W. Washington, D.C. 20591, attention: Aircraft Manufacturing Division (AIR 200) ((202)267-8261), or Aircraft Certification Service (AIR 1).

HOLDING:

Based upon the foregoing, eventhough, the digital electronic control units imported into the U.S. to be assembled into fuel control systems by the importer and exported to the UK Royal Air Force to be used to upgrade T-55 engines on the MK-47 helicopter is technically within the provisions of the civil aircraft agreement, they will not qualify for the exemption from duty under 19 CFR 10.183 since a statement can not be filed stipulating that the parts will be used in a civil aircraft. Furthermore, the importer may either find it difficult or impossibile to obtain a certification from the F.A.A. or an airworthiness authority in the country of exportation. Additionally, the authorization obtained from the employee of the Department of Defense, who acts as an on-site quality assurance representative, is insufficent to fulfill the certification requirements under 19 CFR 10.183.

Sincerely,

John Durant, Director
Commercial Rulings Division

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