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HQ 229101

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January 9, 2002

DRA-2-02
RR:CR:DR 229101 IDL

CATEGORY: DRAWBACK

Port Director of Customs
Attn: Lawrence Ryan
1210 Corbin Street
Elizabeth, NJ 07201

RE: Protest No. 1001-01-100117; 19 CFR 191.5; 19 CFR 101.1; 19 U.S.C. 1313(j); insular possessions

Dear Mr. Ryan:

This is in response to your correspondence dated March 8, 2001, concerning Riverside Specialty Chemicals (“Riverside”), Protest No. 1001-01-100117.

FACTS:

On March 10, 1999, Riverside entered Sodium Ammonium Vanadate (“SAV”), Entry No. 557-xxxx374-9. Riverside imported the SAV, a catalyst used for processing in oil refining, before shipping it to St. Croix, Virgin Islands-an insular possession of the U.S. On April 6, 1999, Riverside filed CF 7553 Notice of Intent to ExportMerchandise for Purposes of Drawback. On January 21, 2000, the port liquidated the import entry.

On September 25, 2000, Riverside filed for unused merchandise drawback under 19 U.S.C. 1313(j)(1), Drawback Entry No. 557-xxxx670-0. On October 18, 2000, the port sent Riverside a Notice of Action, indicating that the drawback entry is in the liquidation process. On November 13, 2000, citing 19 CFR 191.5, the port liquidated the drawback entry, “No Drawback.”

On January 18, 2001, arguing that the port should have allowed for drawback on a shipment to the Virgin Islands, Riverside filed a CF 19 Protest and Application for Further Review, pursuant to 19 CFR 174.24(b) and 174.25(2)(i)(ii) [sic].

ISSUE:

Whether protestant is eligible for 1313(j) drawback on shipments to the U.S. Virgin Islands?

LAW AND ANALYSIS:

Initially, we note that the protest was timely filed under the statutory and regulatory provisions for protests (see 19 U.S.C. § 1514). The drawback entry liquidated on November 13, 2000, and the subject protest was filed on January 18, 2001.

However, Protestant based his right to further review on 19 CFR 174.24(b), claiming issues involving “questions of law or fact which have not been ruled upon by the Commissioner of Customs, or his designee, or of the Customs Courts.” In fact, the Customs Courts have already ruled upon similar questions of law or fact. Mitsubishi v. United States, 55 Cust. Ct. 319 (1965). Since, Mitsubishi addressed the issue before us, the port should have denied Protestant’s request for further review. Nevertheless, we will continue to discuss the issue.

19 CFR 191.5 Guantanamo Bay, insular possessions, trust territories. Under 19 U.S.C. 1313, drawback of Customs duty is not allowed on articles shipped to Puerto Rico, the U.S. Virgin Islands, American Samoa, Wake Island, Midway Islands, Kingman Reef, Guam, Canton Island, Enderbury Island, Johnston Island, or Palmyra Island. 19 CFR 191.5 (2000).

Mitsubishi held that “it is clear that Guam [an insular possession] is not in fact a foreign country but is an unincorporated territory of the United StatesCongress did not intend to regard Guam as a foreign country in connection with exportationThere is no indication of an intent to broaden the allowance of drawback to shipments to an insular possession of merchandise manufactured in the United States from imported materials.”

The Supreme Court defined what constitutes “export” in Swan and Finch Co. v. the United States, 23 Sup. Ct. 702; 190 U.S. 143 (1903). The Court considered “whether goods placed on board a vessel bound for a foreign port, to be used and consumed on board the vessel during its voyage, and in fact so used and consumed, are exported.” The appellant argued that it was not essential that goods reach a foreign country to qualify as an exportation. The Court disagreed, ruling that “’export’, as used in the Constitution and laws of the United States, generally means the transportation of goods from this to a foreign country. ‘As the legal notion of emigrating is a going abroad with an intention of not returning, so that of exportation is a severance of goods from the mass of things belonging to some foreign country or other.’” See 17 Op. Attys. Gen. 583.

19 CFR 101.1 (2000) defines exportation, in accordance with the holding in Swan.

19 CFR 101.1

Exportation is defined as a severance of goods from the mass of things belonging to this country with the intention of uniting them to the mass of things belonging to some foreign country. The shipment of merchandise abroad with the intention of returning it to the United States with a design to circumvent provisions of restriction or limitation in the tariff laws or to secure a benefit accruing to imported merchandise is not an exportation. Merchandise of foreign origin returned from abroad under these circumstances is dutiable according to its nature, weight, and value at the time of its original arrival in this country. 19 CFR 101.1 (2000); see also Swan and Finch Co. v. United States, 23 Sup. Ct. 702; 190 U.S. 143 (1903).

Riverside imported SAV, with the apparent intention of uniting it to the mass of things belonging to the U.S. Virgin Islands. Since, the U.S. Virgin Islands are not a foreign country, no exportation has occurred. Therefore, protestant is not eligible for 1313(j) drawback on SAV shipments to the U.S. Virgin Islands.

HOLDING:

Accordingly, the Protest should be DENIED.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.

Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

John A. Durant
Director, Commercial Rulings Division

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