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HQ 223635

June 18, 1992

FOR-2-01-CO:R:C:E 223635 CB

CATEGORY: ENTRY

Mr. Robert J. Schott
Airschott
P. O. Box 17377
Washington, D.C. 20041

RE: Ruling request on the mounting of ordnance and sighting system to a 105mm light artillery gun in an FTZ; 19 U.S.C. 81c(a); prohibition of manufacture of firearms in an FTZ

Dear Mr. Schott:

This is in response to your letter of December 18, 1991, wherein you requested a ruling regarding the assembly of 105mm artillery cannons in a foreign trade zone (FTZ).

FACTS:

According to your letter, your client proposes to bring finished component parts for approximately four hundred 105mm light artillery guns through the Port of Baltimore and admitted into an FTZ. The finished and assembled imported components will consist of the trail and spades, suspension, platform, elevating mass and saddle and controls. Each of the foregoing components will be fully manufactured and assembled in a foreign country into a single wheeled unit prior to shipment to the United States.

Once admitted into the FTZ, the guns will be fitted with U.S. manufactured ordnance (barrel, breech & muzzle brake) and with a U.S. manufactured sighting system. You state that the operations to be conducted are very similar to those operations which would be conducted by the gun crew in a field exercise. Once assembled, each gun will be tested by cycling all moving components including the firing mechanism (without ammunition). After completion of the testing, the completed 105mm guns, together with the U.S. ordnance and sighting system, will be exported to a foreign country.

ISSUE:

Whether the subject light artillery guns may be admitted into a foreign trade zone?

LAW AND ANALYSIS:

The statute governing the creation and operation of foreign trade zones is the Foreign Trade Zones Act of 1934, as amended (48 Stat. 998; 19 U.S.C. 81a through 81u). Pursuant to the provisions of section 3 of the Foreign Trade Zones Act, as amended (19 U.S.C. 81c), merchandise of every description may be brought into a zone without being subject to the Customs laws for the purposes set forth in the statute. Merchandise may "be brought into a zone and may be stored, sold, exhibited, broken up, repacked, assembled, distributed, sorted, graded, cleaned, mixed with foreign or domestic merchandise, or otherwise manipulated, or be manufactured...." 19 U.S.C. 81c (1982).

Under 19 U.S.C. 81c(a), operations which are subject to any provision(s) of section 1807 of Title 26 and chapters 15 to 17, 21 to 26 or 32 of Title 26 are not permitted in a zone. Section 4181, Title 26, United States Code (formerly chapter 25, Title 26) imposes a tax on firearms. The regulations relating to the administration of the tax on the sale of firearms imposed by 26 U.S.C. 4181 are contained in 27 CFR Part 53. The Bureau of Alcohol, Tobacco and Firearms has informed us, by way of letter dated May 15, 1992, that it is their opinion that the 105mm artillery cannon is not a firearm as defined in 27 CFR part 53; thus, it is not subject to the federal excise tax provided for in Chapter 53 of the Internal Revenue Code. Consequently, it is Customs position that the proposed assembly of the 105mm artillery cannon is a permissible operation under the Foreign Trade Zones Act because it is not a firearm subject to the excise tax.

HOLDING:

The subject 105mm artillery guns may be admitted into a foreign trade zone and assembled provided all other State Department and Bureau of Alcohol, Tobacco and Firearms requirements have been met.

Sincerely,

John A. Durant, Director

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