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HQ 224013


October 19, 1992

CON-2-07-CO:R:C:E 224013 JRS

CATEGORY: CONDITIONALLY FREE

Andrew G. Halpern, Esquire
Strasburger & Price, L.L.P.
901 Main Street, Suite 4300
Dallas, Texas 75202

RE: Civil Aircraft Agreement; turbojet engines; appropriate certifying agency; subheading 8411.11.40005, HTSUS; 19 CFR 10.183; General Note 3(c)(iv), HTSUS

Dear Mr. Halpern:

This is in response to your request for a ruling on behalf of your client, Microturbo, Inc., on the above-reference matter. Our decision follows.

FACTS:

Microturbo designs, develops and produces gas turbine starting systems, turbojet engines and specialized turbine powered products for the U.S. and international defense and aerospace industry. Microturbo imports Model TRI 60-2/074 turbojet engines in unassembled kit form under subheading 8411.11.40, HTSUS, from its parent company in France. After assembling and testing the engines, Microturbo then sells the engines to a U.S. aircraft manufacturer. Thereafter, the U.S. aircraft manufacturer will incorporate the engines into unmanned military target drones for shipment to foreign governments for military applications. All of the imported engines will be used exclusively for foreign military purposes. The TRI 60-2/074 engine model is certified for flight in military aerial target drones by the U.S. military, however, this engine is not certified by the Federal Aviation Authority (FAA).

ISSUES:

(1) Whether the TRI 60-2/074 turbojet engine qualifies as an article for use in "civil aircraft" in order to be entered duty free under the provisions of General Note 3(c)(iv), HTSUS.

(2) Whether the certification issued by the U.S. military is an acceptable substitute for the required FAA certificate of use.

LAW AND ANALYSIS:

Title VI, Civil Aircraft Agreement, of the Trade Agreements Act of 1979 (Section 601, P.L. 96-39, 93 Stat. 144, 96th Cong., 1st Sess. 1979) (the Act), implemented the Agreement on Trade in Civil Aircraft effective January 1, 1980. The Act provided for duty-free treatment of certain aircraft, aircraft parts, flight simulators, etc., sought to be imported for use in civil aircraft. The term "civil aircraft" is defined as "all aircraft other than aircraft purchased for use by the Department of Defense or the United States Coast Guard". See General Note 3(c)(iv), Harmonized Tariff Schedule of the United States (HTSUS), 19 U.S.C. 1202; 19 CFR 10.183; T.D. 84-109 at p. 276.

However, duty-free entry under the Civil Aircraft Agreement is conditioned upon submission of a written statement (certificate) by the importer at the time of the filing of the entry summary which pledges that the imported merchandise 1) has been imported for use in civil aircraft, 2) will be so used, and 3) has been approved for such use by the FAA or by the airworthiness authority of the exporting country, if recognized as an acceptable substitute by the FAA, or that an application for approval for such use has been accepted by the FAA (see 19

The definition of "civil aircraft" under the Act and General Note 3(c)(iv), HTSUS, technically extends duty-free treatment under 19 CFR 10.183 to foreign military aircraft or articles imported for their manufacture for U.S. tariff purposes. See T.D. 84-109 at p. 277; HQ 223408, dated December 26, 1991. However, the Act established duty-free criteria (set forth in General Note 3(c)(iv)) which many military aircraft do not meet, namely, FAA certification. Therefore, the turbojet engine (which is to be utilized in an unmanned military target drone of a foreign military) although technically qualifying as "civil aircraft" parts under the Act, may nevertheless fail to qualify for duty-free treatment due to the lack of FAA certification.

The question of whether the U.S. military could be used to approve imported parts for use in civil aircraft, instead of the FAA, for purposes of the Act was discussed in T.D. 84-109, Customs Regulations Amendments Relating to Civil Aircraft. In T.D. 84-109, Customs stated that:

"[r]ecognizing an independent authority of the military to approve aircraft for purposes of the Act would be beyond the scope of the Act. Only the FAA, or the airworthiness authority in the foreign country recognized by the FAA as an acceptable substitute for the FAA, can approve aircraft and aircraft parts under the Act. If Congress had intended U.S. military departments to approve parts for aircraft for purposes of the Act, it would have so stated." T.D. 84-109 at page 277.

Based on the above statement, it is clear that a U.S. military certification is not an acceptable substitute for the required FAA certificate of use. As a result, many military aircraft do not qualify for duty-free entry under the Civil Aircraft Agreement because they are not subject to certification by the FAA.

It appears that since the importer Microturbo lacks the required approval for use by the FAA or by an appropriate foreign airworthiness authority recognized as such by the FAA, Microturbo fails to qualify for duty-free treatment under subheading 8411.11.40, HTSUS. As a result, we need not discuss whether the importer in good faith can complete a certification acknowledging that the engines will be used in civil aircraft as required under General Note 3(c)(iv) and 19 CFR 10.183.

HOLDING:

(1) Despite the fact that the turbojet engines are technically included within the definition of "civil aircraft" under General Note 3(c)(iv), HTSUS, they are not eligible for free entry under the Civil Aircraft Agreement due to the lack of a certification from the FAA.

(2) A U.S. military certification is not an acceptable substitute for an approval for use in civil aircraft by the FAA or by the airworthiness authority in the country of exportation, if such approval is recognized by the FAA as an acceptable substitute for FAA certification.

Sincerely,

John Durant, Director

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