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HQ 557774




August 17, 1994

CLA-2 CO:R:C:S 557774 WAS

CATEGORY: CLASSIFICATION

District Director
U.S. Customs Service
511 N.W. Broadway
Portland, OR 97209

RE: Application for Further Review of Protest No. 2904-93- 100203; eligibility of fans from Thailand for duty-free treatment under the GSP

Dear Sir:

This is in response to your memorandum forwarding an Application for Further Review of Protest No. 2904-93-100203 made by K Mart Corporation, concerning the eligibility for duty-free treatment under the Generalized System of Preferences (GSP) (19 U.S.C. 2461-2466), with respect to fans imported from Thailand.

FACTS:

The protestant claims that the merchandise was originally imported into the U.S. from Thailand duty-free under the GSP. However, upon liquidation, protestant states that your office advanced the rate of duty to 4.7 percent ad valorem because a GSP Form A and Thailand manufacturer's invoice was not presented at the time of entry. On May 7, 1993, Customs issued a Request For Information (CF 28) asking the importer to produce the Thailand manufacturer's invoice. Subsequently, on July 7, 1993, Customs issued a Notice of Action (CF 29) proposing to classify the fans under subheading 8414.51.00, HTSUS, at the duty rate of 4.7 percent ad valorem, as the requested Thailand invoice had not been submitted by the importer. The entry was liquidated dutiable at that rate on August 20, 1993. A protest was timely filed on November 17, 1993.

On June 20, 1994, a telephone conversation took place between a representative from this office and Mr. Herbert J. Lynch, counsel for Duracraft Corp., regarding the above-referenced matter. At this time, Mr. Lynch stated that he would submit a copy of the Thailand manufacturer's invoice that Customs had requested in the CF 29 dated May 7, 1993. Customs received a copy of Invoice PNC 034/93, dated February 2, 1993 from PNC Industrial Co. Ltd. of Thailand to Duracraft Hong Kong Ltd., for the items sold by Duracraft Hong Kong Ltd. to K-Mart Corp. (Payless Stores Division) on July 19, 1994. The invoice number on the Thailand manufacturer's invoice corresponds with the invoice number referenced on the GSP Certificate of Origin Form A for this protest. A cost breakdown for the Duracraft stand fan (DS-1502) ('92-93 season) was also forwarded to this office on July 19, 1994. Upon receipt, a copy of the Thailand invoice and cost breakdown information was forwarded to your office on July 19, 1994.

Based on the information submitted by the protestant on July 19, 1994, Mr. J.T. Yoshida, of your office, stated that the protestant has submitted all of the information requested in Customs' Request for Information, dated May 7, 1993. Thus, your office is satisfied that the protestant has met all of the documentation requirements and the fans are eligible for duty-free treatment under the GSP.

ISSUE:

Whether the fans are eligible for duty-free treatment under the GSP.

LAW AND ANALYSIS:

Under the GSP, eligible products the growth, product or manufacture of a designated beneficiary developing country (BDC) which are imported directly into the U.S. qualify for duty-free treatment if the sum of (1) the cost or value of the material produced in a BDC, plus (2) the direct costs involved in processing the eligible article in the BDC, is not less than 35% of the appraised value of the article at the time it is entered into the U.S. See section 101.76(a), Customs Regulations (19 CFR 10.176(a)).

As stated in General Note 3(c)(ii)(A), Harmonized Tariff Schedule of the United States (HTSUS), the Thailand is a designated BDC for purposes of the GSP. In addition, it appears from your description of the merchandise that the product at issue is classified under subheading 8414.51.00, HTSUS, which provides for fans. Articles classified under this provision are eligible for GSP treatment provided, the "product of," 35% value-content and "imported directly" requirements are satisfied.

We have been advised that your office is now satisfied that the fans subject to Protest No. 2904-93-100203 are entitled to duty-free treatment under the GSP. We concur. Therefore, this protest should be granted in full.

HOLDING:

For the reasons set forth above, Protest No. 2904-93-1000203 should be granted in full.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision together with the Customs Form 19, should be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director

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