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HQ 116364




December 20, 2004

ENT-1-03-RR:IT:EC 116364 GOB

CATEGORY: ENTRY

Port Director
Customs and Border Protection
6747 Engle Road
Middleburg Heights, Ohio 44130

RE: Protest 4101-04-100125; 19 U.S.C. 1677(20); Antidumping Duties

Dear Port Director:

This is in response to your forwarding for our review the protest (No. 4101-04-100125) filed on behalf of Pratt & Whitney Canada with respect to the entry of certain radial ball bearings. We received the file on December 6, 2004. Our ruling follows.

FACTS:

The file indicates the following. The subject entry of radial ball bearings was filed on March 27, 2003, and was liquidated on December 19, 2003. The protest was filed on February 25, 2004.

The ball bearings were classified under subheading 9808.00.30, Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for: “Articles for military departments: Materials certified to the Commissioner of Customs by the authorized procuring agencies to be emergency war material purchased abroad.”

The protestant has submitted a “certification of duty-free entry” pursuant to subheading 9808.00.30, HTSUS, provided by the Defense Contract Management Agency.

The protestant states “[a]t time of entry summary, we were unclear as to whether or not to file this entry as an antidumping (ADA) entry or as a government contract entry. . . . CBP advised that we pay the ADA duties but file the entry as a government contract. We followed this advice when filing the entry summary.” ISSUE:

Whether the subject radial ball bearings are subject to antidumping duties?

LAW AND ANALYSIS:

Initially, we note that the protest, with application for further review, was timely filed under the statutory and regulatory provisions for protests. 19 U.S.C. 1514(c)(3) and 19 CFR 174.12(e). We also note that the rate and amount of duties chargeable are protestable pursuant to 19 U.S.C. 1514(a)(2).

Title 19, United States Code, section 1677(20) (19 U.S.C. 1677(20)) provides as follows:

Application to governmental importations

In general

Except as otherwise provided by this paragraph, merchandise imported by, or for the use of, a department or agency of the United States Government (including merchandise provided for under chapter 98 of the Harmonized Tariff Schedule of the United States) is subject to the imposition of countervailing duties or antidumping duties under this subtitle or section 1303 of this title.

(B) Exceptions

Merchandise imported by, or for the use of, the Department of Defense shall not be subject to the imposition of countervailing or antidumping duties under this subtitle if—
the merchandise is acquired by, or for the use of, such Department—
from a country with which such Department had a Memorandum of Understanding which was in effect on January 1, 1988, and has continued to have a comparable agreement (including renewals) or superceding agreements, and in accordance with terms of the Memorandum of Understanding in effect at the time of importation, or

(ii) the merchandise has no substantial nonmilitary use.

The record reflects that the subject goods are subject to antidumping duties unless one of the two exceptions in 19 U.S.C. 1677(20)(B) applies.

The second exception (19 U.S.C. 1677(20)(B)(ii) – if the merchandise has no substantial nonmilitary use) has not been claimed, and, we are informed, is not applicable, i.e., the subject radial ball bearings are considered to have a substantial nonmilitary use.

Therefore, the crucial issue is the applicability of the exception in 19 U.S.C. 1677(20)(B)(i). Customs and Border Protection (“CBP”) has had this issue under discussion since shortly after the protest was filed in February 2004. CBP has contacted the Department of Defense, which would be involved in a Memorandum of Understanding (“MOU”) pursuant to 19 U.S.C. 1677(20)(B)(i) if such an MOU was in existence and effect. CBP has also contacted the Department of Commerce on this matter. Neither the Department of Defense nor the Department of Commerce has confirmed the existence and currency of such an MOU. We therefore conclude that an MOU under 19 U.S.C. 1677(20)(B)(i) is not in effect. Accordingly, we find that the protestant does not have an exemption from antidumping duties under 19 U.S.C. 1677(20)(i). Therefore, we determine that the subject radial ball bearings are subject to antidumping duties under 19 U.S.C. 1677(20)(A).

HOLDING:

The subject radial ball bearings are subject to antidumping duties under 19 U.S.C. 1677(20)(A).

You are instructed to DENY the protest.

In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), 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 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 make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Glen E. Vereb
Chief

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