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HQ 559632




February 5,
1997
CLA-2 RR:TC:SM 559632 BLS

CATEGORY: CLASSIFICATION

Port Director
U.S. Customs Service
P.O. Box 1490
St. Albans, VT. 05478

RE: Application for Further Review of Protest No. 0201-95- 100383; subheading 9801.00.10, HTSUS; Foreign Trade Zone

Dear Sir:

This is in reference to the above-captioned Application for Further Review, timely filed by A.N. Deringer, on behalf of Northeast Motors, protesting your decision to deny duty-free treatment under subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS), to a 1992 GMC Jimmy and a 1994 Chevy Blazer. The GMC Jimmy was entered through St. Albans on November 17, 1995, and the Chevy Blazer was entered through your port on February 17, 1995. The entries were liquidated on May 5, 1995.

FACTS:

The subject vehicles were imported from Canada, and duty-free entry was claimed under subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS). In this regard, the protestant claims that the vehicles were not manufactured in a foreign trade zone (FTZ), and in support thereof, submits an explanation of the manufacturer's VIN system and a written statement from General Motors Corporation (GMC), dated March 7, 1995, which provides that GMC has not and does not intend to manufacture or assemble heavy, medium or light duty trucks in an FTZ using non-privileged foreign material or material on a non-duty paid basis.

Based on the VIN number, and information received from Customs Headquarters, the concerned import specialist believes that the 1992 GMC Jimmy was produced in an FTZ. The import specialist is also of the opinion that protestant has not supported its claim that the 1994 Chevy Blazer is eligible for duty-free treatment under subheading 9801.00.10, HTSUS, since it has failed to provide information as to whether or not this vehicle was produced in an FTZ.

ISSUE:

1) Whether the subject vehicles were produced in an FTZ, and if not, whether they are eligible for duty-free treatment under subheading 9801.00.10, HTSUS, upon importation into the U.S.

LAW AND ANALYSIS:

Subheading 9801.00.10, HTSUS, provides for the free entry of U.S. products that are exported and returned without having been advanced in value or improved in condition by any means while abroad, provided the documentary requirements of section 10.1 Customs Regulations (19 CFR 10.1), are met. Moreover, compliance with section 10.1(a) is mandatory and a condition precedent to recovery unless compliance has been waived or is impossible. Maple Leaf Petroleum, Ltd. v. United States, 25 CCPA 5, T.D. 48976 (1937). The basis of waiver of the required documentation is predicated upon the port director being satisfied by the production of other evidence as to the U.S.-origin of the merchandise and its eligibility under subheading 9801.00.10, HTSUS. See 19 CFR 10.1(d).

The sixth proviso to section 3 of the Foreign Trade Zones Act (19 U.S.C. 81c(a)), states as follows:

That articles produced or manufactured in a zone and exported therefrom shall on subsequent importation into the customs territory of the United States be subject to the import laws applicable to like articles manufactured in a foreign country, except that articles produced or manufactured in a zone exclusively with the use of domestic merchandise, the identity of which has been maintained in accordance with the second proviso of this section may, on such importation, be entered as American goods returned.

Customs has interpreted the sixth proviso to section 3 of the FTZA to mean that any good which is exported from a zone without the payment of duty on the foreign merchandise incorporated into the good is fully dutiable upon any subsequent importation into the U.S. See C.S.D. 95-3, 29 Cust. Bull. 11 (February 8, 1995).

Moreover, a good which is produced in an FTZ will not be considered a good of U.S. origin unless the good is exported, duty paid from a zone, prior to being reimported into the U.S., or unless the good produced in the FTZ is comprised wholly of domestic materials. C.S.D. 95-3. Therefore, if the subject vehicles were produced in an FTZ, they will not be eligible for duty-free treatment under subheading 9801.00.10, HTSUS, unless the foregoing requirements are satisfied.

We have discussed this matter with GMC officials in order to determine whether the subject vehicles were produced in an FTZ. Based on the VIN numbers, GMC has advised that the GMC Jimmy was produced in Pontiac, Michigan, and the Chevy Blazer in Moraine, Ohio. GMC advises that neither of these plants were FTZ facilities during the model years in question. Therefore, neither of the subject vehicles were produced in an FTZ.

Accordingly, the returned vehicles are eligible for duty-free treatment under subheading 9801.00.10, HTSUS, provided the documentary requirements of 19 CFR 10.1 are satisfied, or the requirements are waived pursuant to 19 CFR 10.1(d).

HOLDING:

The protest is granted consistent with the foregoing.

In accordance with Section 3A (11) (b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision 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 Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.

Sincerely,

John Durant,

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