United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1995 HQ Rulings > HQ 113529 - HQ 224789 > HQ 224711

Previous Ruling Next Ruling
HQ 224711




November 12, 1993

CON-9-09 CO:R:C:E 224711 TLS

CATEGORY: ENTRY

Ms. Marlene Antoku
Nippon Express USA, Inc.
Los Angeles Air Cargo Branch
2233 East Grand Avenue
El Segundo, California 90245

RE: Ruling request concerning conversion of a temporary importation bond (TIB) to a duty-free consumption entry; 19 CFR 10.31; 19 CFR 10.37; 19 CFR 10.39; Harmonized Tariff Schedule of the United States Annotated (HTSUSA) subheading 9813.00.30.

Dear Ms. Antoku:

This office has received the above-referenced request for a ruling as provided for under Customs regulations. We have considered the request and have made the following decision.

FACTS:

An experimental model of an automobile was imported under TIB on January 14, 1992 under HTSUSA subheading 9813.00.30. An extension of the bond was requested and approved on January 27, 1993. The importer now wishes to cancel the TIB and waive any bond charges or penalties that would incur if the automobile remained in the United States after bond cancellation. The automobile is currently on display at a public museum in Chicago and has been donated to the museum as a gift from the owner.

ISSUE:

Whether the TIB may cancelled without the merchandise being exported or destroyed and whether Customs may waive any bond charges or penalties that might incur as a result.

LAW AND ANALYSIS:

HTSUSA subheading 9813.00.30 allows an importer to enter merchandise under TIB solely for testing, experimental, or review purposes. As provided for in 19 CFR 10.37, the original bond period may be extended upon an approved application for another one-year period. No more than two extensions may be given on any TIB entry.

A TIB entry may not be substituted for a consumption entry unless the merchandise has not yet been released from Customs custody or the importer can establish that a mistake of fact, clerical error, or inadvertence caused the merchandise to be mistakenly entered under TIB. 19 CFR 10.31(g). The importer here does not assert that either is the case, however.

The TIB should be cancelled in accordance with 19 CFR 113.55, which provides a number of ways an export bond may be cancelled. An export bond may be cancelled upon exportation under Customs supervision of course, upon the payment of liquidated damages as noted above, with a foreign landing certificate, and in cases where the ordinary estimated Customs duty on the merchandise does not exceed $10 and the merchandise has been exported under Customs supervision. Under 19 CFR 10.39(d)(1), if an article entered under TIB has not been exported or destroyed within the lawful time period it may remain in the United States under the bond, then the director of the Customs district holding the bond "shall make a demand in writing under the bond for the payment of liquidated damages equal to double the estimated duties applicable to such entry, unless a lower amount is prescribed by [section] 10.31(f)." Section 10.31(f) does not apply to the present case.

In this case, the merchandise has not been exported at all, liquidated damages have not been assessed, and a foreign landing certificate is not applicable. There is no authority that would allow the lawful cancellation of a TIB in the manner that you suggest. Furthermore, there is no provision under law that would allow Customs to waive any charges that might incur under bond in this circumstance. Thus, the importer would remain liable for any liquidated damages assessed under bond if the merchandise remained in the United States after the bond period expired, including any extensions. Finally, we have ruled before that the donation of an article entered under TIB would not cancel the bond and the importer may still be liable for liquidated damages. Customs ruling HQ 208966 (May 16, 1978). We are compelled to follow that ruling in this case, as the cases are similar.

HOLDING:

A temporary importation bond cannot be lawfully cancelled without the merchandise being exported or destroyed within the bond period, including any extensions. Customs does not have the
authority to waive any liquidated damages assessed under bond that might incur if the merchandise remains in the United States beyond the bond period.

Sincerely,

John Durant, Director

Previous Ruling Next Ruling

See also: