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HQ 545666

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June 14, 1994

VAL CO:R:C:V 545666 ILK

CATEGORY: VALUATION

Sandra Liss Friedman, Esq.
Barnes, Richardson & Colburn
475 Park Avenue South
New York, NY 10016

RE: Ruling request on behalf of B.Z. Apparel Group, Ltd.

Dear Ms. Friedman;

This is in response to your ruling request dated June 3, 1994, written on behalf of your client B.Z. Apparel Group, Ltd. ("B.Z."). You state that B.Z. is preparing to change its name to Gallery Direct Services, Ltd. ("Gallery").

You request that we confirm that Headquarters Ruling Letter ("HRL") 544676 dated July 24, 1991, which we issued regarding B.Z., applies to Gallery just as it has to B.Z. In HRL 544676, we ruled that commissions paid to B.Z. to perform the services of purchasing merchandise from manufacturers, are to be considered bona fide buying commissions. We also ruled that commissions received by B.Z. from the manufacturers for performing certain services will not impact on the nondutiability of the buying commissions as long as the agent continues to work at the direction of his importers with the importers maintaining the requisite degree of control over the actions of their agent. You state in your ruling letter that Gallery will continue to abide by all the terms and conditions of the buying agency agreement which was submitted to Customs in conjunction with HRL 544676.

In HRL 544676 we specifically noted that the degree of control asserted over the agent is factually specific and could vary with each importation, and any actual determination as to a buying agency will be made by the appraising officer, upon entry. We further noted that the acceptance of an 8% buying agency fee was subject to the approval of the appraising officer.

Subject to the above considerations, and subject to the express understanding that all of the facts and other representations made to Customs previously in connection with HRL 544676 are unchanged, HRL 544676 is applicable to Gallery.

Sincerely,

John Durant, Director
Commercial Rulings Division

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