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HQ 958766




December 22, 1995

CLA-2 RR:TC:FC 958766K

CATEGORY: CLASSIFICATION

TARIFF NO.: 7103.10.20; 7103.10.40

Scott Michael Moore, Esq.
H.C. 1 Box 20
Gratiot Lake Road
Mohawk, Michigan 49950-9705

RE: Chippewa of Lake Superior and Exemption From Import Duties; Article III, Jay Treaty

Dear Sir:

In your letters of May 30, 1995 (958020), June 12, 1995 (958089), July 7, 1995 (985185), you requested a ruling as to whether Mr. Joseph G. Waara, as an enrolled member of the Chippewa Tribe of Lake Superior, may import from Canada, free of duty, certain unworked rubies and sapphires that originate from the Peoples Republic of China. You cited Article III of the Jay Treaty of 1794, between Great Britain and the United States which permitted Indians dwelling on either side of the boundary line of Canada and the United States to pass or repass with certain exemption of duties for goods. We responded with informational letters dated June 28 and August 1, 1995. However, in your letters dated August 28, October 1, and December 1, 1995, you waived your request for a meeting to discuss the issue and asked that we issue you a formal ruling in this matter. Our decision follows.

FACTS:

The facts are contained in the above introductory paragraph. ISSUE:

The issue is whether Article III of the Jay Treaty of 1794, between Great Britain and the United States permits native Indians the privilege to enter merchandise from Canada free of duties.

LAW AND ANALYSIS:

The pertinent part of Article III of the Jay Treaty of 1794, -2-
between Great Britain and the United States that is in issue is as follows:

No duty of entry shall ever be levied by either party on peltries brought by land, or inland navigation into said territories respectively, nor shall the Indians passing of repassing with their own proper goods and effects of whatever nature, pay for the same any impost or duty whatever. But goods in bales, or other large packages, unusual among Indians, shall not be considered as goods belonging bona fide to Indians.

The decisions of the U.S. Court of Customs and Patent Appeals (the predecessor of the U.S. Court of Appeals For The Federal Circuit), are dispositive for the issue presented here.

United States v. Mrs. P.L. Garrow, 24 CCPA 410, C.A.D. (1937), concerned a member of the St. Regis Tribe who carried into the United States, 24 baskets made of black ash splints, and dyed in colors. The Court noted "that for some years the protestant, together with others of her tribe, have been manufacturing baskets such as those in question here, for sale..." and "that the protestant was bringing the baskets across the line to dispose of them at the store..." which "was in the business of purchasing such baskets from the Indians for resale." The Court further noted "that the protestant was not carrying these baskets as a part of her household effects but had manufactured the same, and was, importing them for sale." The baskets were classified as baskets under paragraph 411 of the Tariff Act of 1930, as amended, dutiable at 50 percent ad valorem. The protestant claimed duty free status under the terms of the treaty.

Andrew Akins v. United States, 64 CCPA 68 (1977), concerned a Penobscot Indian, who carried a pair of hiking boots into the United States which he had purchased in Canada that were classified as foot wear, in item 700.45, Tariff Schedules of the United States, dutiable at 10 percent ad valorem (for a total of $1.20). The protestant also claimed duty free status under the terms of the treaty.

The Court traced the history of the treaty and the statutory tariff laws enacted by the Congress. The Court noted that subsequent to the Jay Treaty and prior to the War of 1812, a provision closely patterned after the duty exemption of Article III was included in the Tariff Act of 1799 and continued until its repeal in 1897. The Court concluded that the War of 1812 abrogated this specific part of the treaty that was no longer in force and that the repeal of the statutory provision ended the exemption. In both cases, the Court found for the government.

You have raised a constitutional issue as to whether the

Congress can abrogate a provision of a treaty. There are situations in which subsequent statutory law may abrogate a treaty. We need not discuss them. As an administrative agency, we have no authority to declare an enactment of the Congress as unconstitutional. The issue of whether the laws of Congress are constitutional is reserved for the courts and the Federal courts have ruled that the abrogation of the part of Article III of the Jay Treaty in question was in accordance with the Constitution. In the absence of new statutory law, we are bound by the decision of the Federal courts.

You also cited a treaty known as the Treaty With The Wyandot, Etc., 1815, between the United States and several tribes, including the Chippewa as the basis for the duty exemption. We need not consider whether the treaty is in full force and effect. The document that you submitted does not contain an exemption from duties as in the Jay Treaty. We conclude based on the document submitted that the treaty, if in full force and effect, does not provide for the duty exemption. Further, if Article III of the Jay Treaty was included as a privledge in the Wyandot Treaty, commercial transactions were not covered by Article III.

The Jay Treaty exempted from duty "their own proper goods and effects" but "goods in bales, or other large packages, unusual among Indians, shall not be considered as goods belonging bond fide to Indians". The treaty also listed one item that was considered as goods belonging to bona fide Indians as peltries, pelts or fur-bearing skins, an essential necessity of life for Indians at that point in time. "Goods in bales or large packages, unusual among Indians", that is to say, commercial goods, were excluded. Based on the treaty, we conclude, that even if the treaty were still in force and effect, commercial transactions as contemplated here were excluded from the exemption.

The Court in United States v. Garrow, supra, noted "that the protestant was not carrying these baskets as a part of her household effects but had manufactured the same, and was, importing them for sale". The importation concerned a commercial transaction and the Court stated the following at page 413:

Assuming, for the sake of argument, that Article 3 was not abrogated but is still in force and effect, the importation is not within the purview of the language of said Article 3.

The Tariff Act of 1930, as amended, provided for certain exemptions from duties for the goods of residents and non residents and the provisions are now found in Chapter 98 of the Harmonized Tariff Schedule of the United States (HTSUS). However, commercial transactions were always excluded. The personal exemptions were not claimed as a basis for free entry in -4-
the court cases.

Finally, General Note 1, HTSUS, provides, in part, that "all goods provided for in this schedule and imported into the customs territory of the United States from outside thereof...are subject to duty or exempt therefrom as prescribed in general notes 3 through 14, inclusive, and general note 16." There is no exemption in the general notes that would provide an exemption from duty for goods imported by native Indians and/or members of the Chippewa of Lake Superior. Since the contemplated importations are of a commercial nature, the provisions of Chapter 98 are also not applicable. The HTSUS is statutory law enacted by the Congress and it is binding upon the Customs Service. In such circumstances, we must conclude that there is no applicable exemption from duty.

HOLDING:

Article III of the Jay Treaty which provided for exemption from duties on goods belonging to native Indians passing or repassing the borders of Canada and the United States was abrogated by the War of 1812. This section of the treaty is not in force and effect.

Unworked precious and semi-precious stones, are classified in subheading 7103.10.20, HTSUS, with a general free rate of duty, and, if simply sawn or roughly shaped, they are classified in subheading 7103.10.40, HTSUS, with a general rate of duty of 18.9 percent ad valorem.

Sincerely,

John Durant, Director

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