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HQ 225549




December 7, 1994

CON-9-04/ENT-6-02-CO:R:C:E SR

CATEGORY: ENTRY

TARIFF NO: 9813.00.05

Mr. Thomas R. James
ITER & Technology Division
Office of Energy Research
Department of Energy
Washington, DC 20585

RE: Subheading 9813.00.05, HTSUS; Chapter Note 1, Subchapter XIII; Temporary Importation Under Bond; 19 CFR 101.1(k), Exportation Defined; 19 CFR 10.107, Bond Exemption; 19 CFR 141.102(d)

Dear Mr. James:

This is in response to your letter dated July 1, 1994 concerning the importation of jacketed cable free of duty temporarily under bond.

FACTS:

The Department of Energy (DOE) plans to import jacketed cable on behalf of the United States as partner in the Agreement Among the European Atomic Energy Community, the Government of Japan, the Government of the Russian Federation and the Government of the United States on Cooperation in the Engineering Design Activities (EDA) for the International Thermonuclear Experimental Reactor Agreement (ITER) (ITER EDA Agreement). This agreement was signed by the four parties (the European Community, the Government of Japan, the Government of the Russian Federation, the Government of the United States) on July 21, 1992 and is to be effective for six years. The purpose of the project is to design an engineering test reactor to demonstrate the scientific and technical feasibility of magnetic fusion energy.

Over the remaining four and one half years of the Agreement, the Parties will work together to produce a detailed engineering design and all technical data necessary for future decisions on the construction of ITER. Such design and technical data then will be made available for each of the parties to use either as part of an international collaborative program or in its own domestic program. For some of the engineering design activities
the four equal partners will combine their efforts on common tasks, rather than each being separately responsible for a segregated task.

One of these tasks is the model coil program in which two superconducting magnets will be produced: a central solenoid (CS) coil and a toroidal field coil (TF). The U.S. and Japan will work together to build the CS Model Coil, and the European Union and Russia will build the TF Model Coil. The U.S. is responsible for fabricating subassemblies of the mechanical structure and shipping them to Japan for final installation.

Manufacture of the Inner CS Model Coil is a multi-step process involving contributions from both the United States and the European Union. Each of the four parties is manufacturing Niovbium-Tin superconducting strand. In the case of the United States strand, some of it will be cabled in the United States by BIW Cabling Systems (North Dighton, MA), while the remainder will be exported to EM-LME (Italy) for cabling. The portion of the strand that is cabled in the United States will be exported through a customs broker for BIW Cabling Systems to Italy. In addition, INCO Alloys International (Huntington, WV) will manufacture a nickel-based metallic jacket material (Incoloy 908) and ship that material to Italy where the cable from the U.S. and the European Union will be jacketed.

Approximately November 1995, the jacketed cable will be transferred from Europe to the Department of Energy for coil winding by Martin Marietta/Westinghouse, the prime industrial contractor to the U.S. for ITER Magnetics. While in the U.S. the jacketed cable will be the responsibility of the DOE even when it is in the custody of Martin Marietta. Martin will be an agent of the U.S. in performing the work to the directions of the U.S. Department of Energy. All the jacketed cable will be incorporated into the coil winding. The coil winding will then be exported to Japan to be incorporated with the outer coil into the model coil which will be installed and tested at the CS model Coil test facility at the Japan Atomic Energy Research Institute's Naka Fusion Research Establishment.

ISSUE:

Whether the Department of Energy may enter the jacketed cable that will become part of a coil winding, into the United States temporarily free of duty under bond under subheading 9813.00.05, Harmonized Tariff Schedule of the United States (HTSUS), if the Department of Energy employs an agent to do the actual processing in the United States.

LAW AND ANALYSIS:

Subheading 9813.00.05, HTSUS, provides for articles to be admitted free of duty temporarily under bond if they are to be processed in the United States. This includes processes which result in articles manufactured or produced in the U.S. Articles entered under this subheading must also meet the requirements of Chapter Note 1, Subchapter XIII, which provide as follows:

1) The article must not be imported for sale or sale on approval and must be exported or destroyed within one year from the date of importation. (The bond period may be extended, upon application for one or more further periods which may not exceed a total of three years.)

Under Note 2(b), if the article as processed results in an article manufactured in the United States, the following must be adhered to:
a) a complete accounting must be made to the Customs Service for all articles, wastes, and irrecoverable losses resulting from such processing; and
b) all articles and valuable wastes resulting from such processing will be exported or destroyed under customs supervision within the bonded period; except that in lieu of the exportation or destruction of valuable wastes, duties may be tendered on such wastes at the time of importation.

Exportation is defined in 19 CFR 101.1(k) as "a severance of goods from the mass of things belonging to this country with the intention of uniting them to the mass of things belonging to some foreign country." Because you will be bringing the articles back and forth from other countries there is question as to whether an exportation occurs. The key phrase in the definition is "the intention of uniting them" to the commerce of some foreign country. The question arises as to what determines the "intention of uniting". This is determined by the facts. Shipping of merchandise to a foreign country with an intention of using that merchandise in the foreign country, as by manufacture, manipulation, or repair is strong evidence of an intent to unite the merchandise to the mass of things belonging to the foreign country.

The coil winding will be shipped to Japan where it will
be incorporated with the outer coil, into the model coil which will be installed and tested at the CS Model Coil test facility in Japan. Because the coil winding is to be shipped to another country for further processing and final installation there is an intent for them to unite with the mass of things belonging to a foreign country. The articles are not imported for sale or for sale on approval.

It is not necessary to request a ruling for each article to be imported under subheading 9813.00.05, HTSUS; however, you must complete the appropriate paperwork with each article. The Department of Energy is exempt from filing a bond under 19 CFR 10.104. Under this provision of the regulations, the bond shall be waived for articles that are brought into the United States temporarily under Chapter 98, Subchapter XIII, Heading 9813, HTSUS, by a U.S. government agency. The entry must be made on Customs Form 7501, and a stipulation must be filed on the form set out in 19 CFR 141.102(d) (copy enclosed). The articles will be entitled to immediate delivery.

The Department of Energy will be responsible and exercise control over the cable even while that cable is in the custody of Martin Marietta. The DOE is responsible to ensure that the imported articles are in compliance with all the TIB requirements mentioned above.

HOLDING:

The merchandise may be entered by the Department of Energy as a part of the International Thermonuclear Experimental Reactor Agreement temporarily free of duty under bond under subheading 9813.00.05, HTSUS, both when initially entering the country and when returning to the country after having been further processed in another country. The Department of Energy is exempt from filing a bond under 19 CFR 10.104.

Sincerely,

John Durant, Director

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