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 > 1998 HQ Rulings > HQ 560667 - HQ 560810 > HQ 560807

Previous Ruling Next Ruling
HQ 560807




May 6,1998

CLA-2 RR:CR:SM 560807 KSG

CATEGORY: CLASSIFICATION

Tariff No.: 9801.00.10

Port Director of Customs
U.S. Customs Service
San Francisco, California

RE: Application for Further Review of Protest No. 2809-97-100296 concerning denial of duty-free entry of computer systems; subheading 9801.00.10, HTSUS; 19 CFR 10.1; documentary requirements

Dear Madam:

This is in reference to Protest No. 2809-97-100296 and the Application for Further Review dated February 20, 1997, timely submitted by Scott Kohn/ Western Components contesting the denial of duty-free treatment under subheading 9801.00.10, Harmonized Tariff Schedule of the United States ("HTSUS"), for three entries of imported computer workstations from Hong Kong and China.

FACTS:

The articles subject to this protest consist of one entry of new (unused) computer workstations and two entries of refurbished computer workstations. The entry documents reflect that the shipment of new workstations and one shipment of refurbished workstations were exported to the U.S. from Hong Kong, while the other shipment of refurbished workstations were exported from China. The protestant stated that all of the workstations were originally manufactured by Sun Microsystems in the U.S. and that the refurbished units were refurbished by Sun Microsystems in the U.S.

With respect to the entry of new workstations, the protestant has submitted as evidence that the articles are of U.S. origin: 1)the foreign invoice from a Chinese company to the importer; 2) the packing list stating that the country of origin of the product is the U.S.; 3) a letter from the importer stating that the country of origin of the CPU's is the U.S.; and 4) copies of seven "customer information sheets" with no identification of who prepared the documents, which state that the origin of a workstation with particular part numbers and serial numbers is the U.S.

For the other two entries, the protestant has submitted copies of an identification plate that it states is attached to the computers. The identification plate states "Assembled in U.S."

The protestant states that these imported workstations are gray market goods and therefore, it has been unable to obtain a manufacturer's certification from Sun Microsystems concerning the origin of the merchandise.

Sun Microsystems manufactures work stations in both Scotland and the United States. The protestant alleges that the workstations involved in this case were made in the U.S. and that the imported articles are eligible for duty-free treatment under subheading 9801.00.10, HTSUS.

Your office issued CF 29's to the protestant requesting U.S. manufacturer's affidavits for the articles subject to this protest pursuant to 19 CFR 10.1(b). No affidavits were submitted.

ISSUE:

Whether the computer systems are eligible for duty-free treatment under subheading 9801.00.10, HTSUS.

LAW AND ANALYSIS:

Subheading 9801.00.10, HTSUS, provides for the free entry of products of the United States that have been exported and returned without having been advanced in value or improved in condition by any process of manufacture or other means while abroad, provided the documentary requirements of section 10.1, Customs Regulations (19 CFR 10.1), are satisfied.

Section 10.1(a) outlines the necessary documentation required for duty-free treatment under subheading 9801.00.10, HTSUS. The documentation consists of a declaration by the foreign shipper in substantially the form described in 19 CFR 10.1(a)(1) and a declaration by the owner, importer, consignee, or agent having knowledge of the facts regarding the claim for free entry in substantially the form described in
19 CFR 10.1(a)(2).

Section 10.1(b) states that in addition to the documentation requirements of 19 CFR 10.1(a), in any case in which the value of the returned goods exceeds $1,250 and the articles are not clearly marked with the name and address of the U.S. manufacturer, the port director may require such other documentation or evidence as may be necessary to substantiate the claim for duty-free treatment. Such other documentation or evidence may include a statement from the U.S. manufacturer verifying that the articles were made in the U.S. or an export invoice, bill of lading, or airway bill evidencing the U.S. origin of the articles and/or the reason for the exportation of the articles.

Under 19 CFR 10.1(d), if Customs is reasonably satisfied, because of the nature of the articles or production of other evidence, that the articles are imported in circumstances meeting the requirements of subheading 9801.00.10, the requirements for producing the documents under 19 CFR 10.1(a) may be waived.

While an article that is marked "Made in the USA" supports the assertion that the article is a product of the U.S., such marking alone is not a basis upon which duty-free entry under subheading 9801.00.10, HTSUS, may be granted. Customs also requires additional evidence that supports a port director's ability to trace the exportation and subsequent importation of the article as well as documentation supporting the importer's claim that the article was not advanced in value or improved in condition abroad. See Headquarters Ruling Letter ("HRL") 559719, dated July 11, 1996. For instance, in HRL 224447, dated September 26, 1996, Customs held that the documentation requirements were satisfied for imported magnets where the protestant submitted a statement by the U.S. manufacturer verifying that the parts were made in Michigan and copies of shipping and other documents tracing the merchandise from the Michigan company to a Mexican company and back to the U.S. There were also documents evidencing the reason for return of the merchandise to the U.S.

In this case, your office has denied classification under subheading 9801.00.10, HTSUS, on the basis that there is a lack of physical and documentary proof that the imported computer systems are of United States origin. The protestant argues that evidence, other than a manufacturer's affidavit, should be accepted to show that an article was made in the U.S.

The Customs Service requires that sufficient documentation be submitted to establish that the imported articles are in fact of U.S. origin. In this case, we find that the protestant has not submitted such documentation. There is evidence in the record that Sun Microsystems manufactures computer systems in both the U.S. and Scotland. For two of the three entries, the protestant submitted a copy of a nameplate that states "Assembled in the U.S.A." on it as proof that the goods were made in the U.S. We note that the part numbers of the imported articles subject to this protest do not match the part number on the nameplate. Further, neither the serial number nor the part number on the nameplate matches the serial numbers or the part numbers on the submitted customer information sheets. Based on the documentation submitted, Customs cannot verify that these goods were made in the U.S.

With regard to the third entry, the protestant submitted an invoice, a packing sheet, a letter to the importer from the broker and copies of "customer information sheets". The customer information sheets do not include a U.S. manufacturer's name, logo, or address or any other indication that the sheets were prepared by a U.S. manufacturer. Moreover, the part numbers for the imported articles covered by this entry do not correspond to the part numbers on the submitted customer information sheets. Based on a review of the documentation submitted, we find that the protestant has not shown to Customs satisfaction that the goods are of U.S. origin. Therefore, we find that the computer systems are not entitled to subheading 9801.00.10, HTSUS, treatment.

HOLDING:

On the basis of the information submitted, there has not been sufficient documentation presented to show that the computer systems are products of the United States. Therefore, the computer systems are not eligible for duty-free treatment under subheading 9801.00.10, HTSUS. Accordingly, this protest should be denied in full.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065 dated August 4, 1993, this decision should be attached to Customs Form 19, Notice of Action, to 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 Subscriptions Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

Previous Ruling Next Ruling

See also: