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 225339 - HQ 226123 > HQ 225429

Previous Ruling Next Ruling
HQ 225429




October 26, 1994

CON-5 CO:R:C:E 225429 TLS

CATEGORY: ENTRY

Mr. Jorge Cintron
U.S. State Department
Office of Foreign Missions
State Annex 33
3507 International Drive
Washington, D.C. 20008

RE: Request for refund of duties paid on merchandise entered by an organization listed under Customs regulations as an international organization; Harmonized Tariff Schedule of the United States Annotated (HTSUSA) subheading 9809.00.40; 19 CFR 148.87(a); Customs ruling HQ 224894 (December 8, 1993); HQ 224728 (November 23, 1993).

Dear Mr. Cintron:

This is in reference to a letter to your office dated May 12, 1994, from the International Maritime Satellite Organization (INMARSAT) requesting a refund of duties it paid on imported merchandise.

FACTS:

The importer in this case is among the international organizations listed under section 148.87, Customs regulations (19 CFR 148.87) that are conditionally eligible for duty-free treatment of merchandise it enters into the Customs territory. The merchandise at issue is a Timeplex Rack, which is used for controlling a satellite and is part of an international telephone link with the importer's London, England, office. The purpose of the Timeplex Rack is to enable the importer to communicate with its satellites that are currently in space. The importer states that the equipment is in the United States on a temporary basis only and will be shipped back to the London office in probably three or four years.

The Timeplex Rack was entered on July 13, 1993, under HTSUSA subheading 8803.90.30, a duty-free provision, for other parts of communications satellites. On September 1, 1993, New York Customs sent the importer's broker a Customs Form 29, Notice of Action, to notify the importer that Customs was reclassifying the merchandise under HTSUSA subheading 8525.10.6080, a duty-paid provision that provides for transmitters. The importer claims that it never received the notice. The importer's broker was sent the notice and apparently made efforts to send it to the importer to no avail. The non-receipt of the notice is the reason cited as to why the reclassification was never challenged. The entry was liquidated on April 4, 1994.

The importer now requests a cancellation of the bill for $2453.16 in duties and a reclassification of the merchandise under HTSUSA subheading 9809.00.40, which provides for duty-free entry of articles which are the property of a public international organization.

ISSUE:

Whether the entry may be reliquidated, pursuant to 19 CFR 148.87, with the merchandise being reclassified under subheading 9809.00.40, HTSUSA, which provides for

[a]rticles which, while in the United States, will remain the property of [a public international organization] and will be used only in connection with noncommercial functions of [such organization], including exhibitions which are sponsored by or participated in by [such organization] and which are not commercial in character or connected with commercial undertakings.

LAW AND ANALYSIS:

We have considered a similar case recently where an international organization in the business of satellite communications that was listed under 19 CFR 148.87 had requested a refund of duties paid on satellite equipment entered into the Customs territory. In that case, HQ 224728 (November 23, 1993), it was decided that the equipment entered was not eligible for duty-free treatment under subheading 9809.00.40 because it was to be used for commercial purposes. Thus, the fact that the organization was listed in 19 CFR 148.87 was by itself not enough to establish duty-free treatment for the equipment.

In this case, the equipment is to be used to further communications with its satellites currently in space. The equipment will be ground-based, however, and will not be used in space. This was the determining factor in New York Customs decision to reclassify the subject equipment. Subheading 8803.90.30 requires that the entry be intended for use in space as part of a satellite apparatus. See HTSUSA subheading 8803.90.30; HTSUSA Explanatory Note (EN) 88.03.

Just as in HQ 224728, the equipment here will be used in a satellite communications system. Just as we required a showing of non-commercial use before equipment could be entered under subheading 9809.00.40 in HQ 224728, we require the same in this case. No evidence has been submitted which would establish that the subject equipment would be used for non-commercial purposes.

With regard to the importer's broker not notifying it of Customs initial actions in this case, we have been presented with no evidence that absolves the importer of its ultimate responsibility. In at least one previous case, we concluded under similar circumstances that the broker's failure to notify the principal of pending Customs action did not relieve the principal of the responsibility to timely respond to such action. HQ 224894 (December 8, 1993). Thus, the broker's failure to notify the principal in this case did not relieve the principal of the responsibility to timely respond to the Notice of Action in this case.

HOLDING:

In light of the commercial nature of IMMARSAT's business, the merchandise in this case is not eligible for duty-free treatment under HTSUSA subheading 9809.00.40. The importer is not entitled to a refund of duties.

The failure of an importer's broker to notify it of pending Customs action does not relieve the importer of the responsibility to timely respond to such action.

Sincerely,

John Durant, Director

Previous Ruling Next Ruling

See also: