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 > 1996 HQ Rulings > HQ 113366 - HQ 225206 > HQ 224426

Previous Ruling Next Ruling
HQ 224426

---

May 12, 1993

DRA-2-02-CO:R:C:E 224426 AJS

CATEGORY: DRAWBACK

Mr. Bruce H. Leeds
RC/R50/J563
Hughes Aircraft Company
Export/Import Operations
P.O. Box 92426
Los Angeles, CA 90009-2426

RE: Communications satellite; 19 U.S.C. 1313(a); exportation; 19 CFR 101.1(k); U.S. v. The National Sugar Refining Co..

Dear Mr. Leeds:

This is in reply to your letter of January 18, 1993, concerning the drawback eligibility of a communications satellite exported from the United States and unsuccessfully launched into outer space from China. A separate letter will be sent to your office regarding the classification issue addressed in your request.

FACTS:

Your requests states that your company received an approved manufacturing drawback contract for a satellite under 19 U.S.C. 1313(a). The satellite was constructed in the U.S. with the use of imported duty paid components and then exported to China. The satellite was subsequently launched, but then was destroyed in an explosion before it reached outer space. As a condition of your export license, a debris recovery plan was required by the U.S. government which stipulated that in case of a launch failure all recoverable debris was to be returned to the U.S. Pursuant to this plan, a container was placed at the launch site which has been used to gather debris for eventual return to the U.S.

ISSUE:

Whether the communications satellite qualifies for drawback under 19 U.S.C. 1313(a). More specifically, whether the satellite satisfies the "exportation" requirement of this provision.

LAW AND ANALYSIS:

19 U.S.C. 1313(a) states that upon the exportation of articles manufactured or produced in the United States with the use of imported merchandise, the full amount of the duties paid upon the merchandise so used shall be refunded as drawback, less 1 per centum of such duties (emphasis added).

19 CFR 101.1(k) defines the term "exportation" as a severance of goods from the mass of things belonging to this country with an intention of uniting them with the mass of things belonging to some foreign country." See also United States v. The National Sugar Refining Co., 39 C.C.P.A. 96, 100 (1951). In our view, the subject transaction satisfies this description. In this case, the subject satellite is severed from the mass of things belonging to the U.S., and united with the mass of things belonging to China. This is an exportation for drawback purposes. The eventual return of the satellite debris because of the unsuccessful launch does not change the fact that there was an intention to unite the satellite with the mass of things belonging to China, and that this intent was carried out by the shipment of the satellite to China.

HOLDING:

The subject satellite qualifies for drawback under 19 U.S.C. 1313(a), as far as the exportation of the satellite is concerned. You must of course follow the other requirements of your approved manufacturing drawback contract.

Pursuant to our January 27, 1993, letter to your office, we remind you that we are treating this entire ruling as confidential. The ruling will not be readily available to Customs field offices through the Customs Ruling Module under the Automated Commercial System (ACS). Accordingly, your company is responsible for providing a copy of this ruling to the pertinent Customs field offices.

Sincerely,

John Durant, Director
Commercial Rulings Division

Previous Ruling Next Ruling