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HQ 563193




April 5, 2005

CLA-02 RR:CR:SM 563193 EAC

CATEGORY: CLASSIFICATION

Mr. David Alexander
Field Operations Supervisor
CTV Television, Inc. – Newsroom
750 Burrard Street
Suite 300
Vancouver, BC
Canada V6Z IX5

RE: Temporary importation under bond; professional equipment; subheading 9813.00.50; NAFTA Article 305

Dear Mr. Alexander:

This is in response to your letter, dated January 20, 2005, requesting a ruling on behalf of CTV Television, Inc., pertaining to the temporary importation of professional television equipment into the United States.

FACTS:

We are informed that news photographers and reporters from CTV Television in Canada occasionally travel into the United States to obtain and report news stories for the station. CTV Television has traditionally posted a bond to secure entry for the news equipment which the crews bring into the United States to obtain such stories. This equipment generally consists of television cameras, tripods, sound recording equipment, lighting kits and video editing systems. You inquire as to whether CTV must, in fact, post a bond to cover the equipment upon entry into the United States or whether the equipment may be entered without bond.

ISSUE:

Whether a bond must be posted to secure entry for the broadcasting equipment brought into the United States for purposes of obtaining and reporting news stories for CTV Television. LAW AND ANALYSIS:

Article 305(1)(a) & (b) of the NAFTA provides that each NAFTA Party shall grant duty-free temporary admission for:

(a) professional equipment necessary for carrying out the business activity, trade or profession of a business person who qualifies for temporary entry pursuant to Chapter 16 (Temporary Entry for Business Persons),

(b) equipment for the press or for sound or television broadcasting and cinematographic equipment

Under U.S. law, subheading 9813.00.50, Harmonized Tariff Schedule of the United States (“HTSUS”), provides for the temporary entry, duty-free and under bond, of:

Professional equipment, tools of trade, repair components for equipment or tools admitted under this heading and camping equipment; all the foregoing imported by or for nonresidents sojourning temporarily in the United States and for the use of such nonresidents ..

Under subheading 9813.00.50, HTSUS, articles may not be imported for sale or sale on approval and may remain in this country, without the payment of duty, for a period of one year from the date of importation. However, this period may be extended for one or more further periods which, when added to the initial one year, shall not exceed a total of three years. See, U.S. Note 1(a) of Subchapter XIII, Chapter 98, HTSUS. Pursuant to U.S. Note 1(b) of Subchapter XIII, Chapter 98, HTSUS, entry shall be made by the nonresident importing the articles or by an organization represented by the nonresident which is established under the laws of a foreign country or has its principal place of business in a foreign country. U.S. Customs and Border Protection (“CBP”) has consistently held that entry under subheading 9813.00.50, HTSUS, is personal to the nonresident, is nontransferable, and terminates when the nonresident ceases to use the imported merchandise. See, for example, Headquarters Ruling Letter (“HRL”) 225808 dated May 9, 1995; HRL 223970 dated September 22, 1992; HRL 222651 dated January 7, 1991; and HRL 221136 dated June 26, 1989.

Section 10.36(a), Customs Regulations (19 CFR 10.36(a)), provides that professional tools imported in the baggage of the arriving nonresident may be entered on the importer's baggage declaration in lieu of formal entry and examination and may be passed at the place of arrival in the same manner as other baggage. In that case, the bond is without surety or cash deposit. In the discretion of the port director, however, a formal entry under subheading 9813.00.50, HTSUS, with a bond supported by a surety or cash deposit in lieu of surety (which is refunded upon exportation of the article) may be required. The amount of the bond posted under subheading 9813.00.50, HTSUS, is equal to 110 percent of the estimated duty determined at the time of entry.

CBP has previously stated that equipment entered under subheading 9813.00.50, HTSUS, is intended to be necessary for the exercise of the calling, trade, or profession of a person visiting this country to perform a specific task. See, HRL 223970. “The type of articles allowed admittance under this tariff provision have been varied and numerous due to the liberal construction given to the terms ‘professional equipment’ and ‘tools of trade’.” Id. In HRL 223970, it was determined that a mobile x-ray unit (a vehicle with affixed and portable x-ray equipment) could temporarily be entered into the United States pursuant to subheading 9813.00.50, HTSUS. See also, HRL 223946 dated September 8, 1992 (equipment used to repair a pier, such as crane and pile-driving barges, could be entered under subheading 9813.00.50); HRL 222651 (mobile shredding unit, consisting of truck with paper shredding and compacting equipment, eligible for subheading 9813.00.50 treatment); and HRL 221702 dated December 27, 1989 (foreign-origin cinematography equipment intended for use in the production of motion pictures in the U.S. for U.S. persons or corporations and which was used solely by, or under the personal supervision of, the nonresident importer could be imported temporarily free of duty under bond under subheading 9813.00.50, HTSUS).

As applied, it is our opinion that the television equipment in the instant case may be entered into the United States under subheading 9813.00.50, HTSUS. The remaining issue, therefore, is whether the equipment must be entered under bond. In this regard, Article 305(2)(d) of the NAFTA provides, in pertinent part, that a bond for customs duties shall not be required for goods entered pursuant to Article 305(1)(a) or (b) when such goods are “originating”. As regulated under U.S. law, section 10.31(f), Customs Regulations (19 CFR 10.31(f)), provides, in pertinent part, that: “ notwithstanding any other provision of this paragraph, in the case of professional equipment necessary for carrying out the business activity, trade or profession of a business person, equipment for the press or for sound or television broadcasting, cinematographic equipment, articles imported for sports purposes and articles intended for display or demonstration, if brought into the United States by a resident of Canada or Mexico and entered under Chapter 98, Subchapter XIII, HTSUS, no bond or other security shall be required if the entered article is a good originating in Canada or Mexico within the meaning of General Note 12, HTSUS.” (Emphasis added).

Regarding whether goods are considered originating under the NAFTA, General Note 12(b), HTSUS, provides, in pertinent part:

For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as “goods originating in the territory of a NAFTA party” only if –

(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or

(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that –

(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, or

(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or

(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials

Based upon the information presently before us, we are unable to determine whether the broadcasting equipment under consideration in this case is NAFTA originating within the meaning of General Note 12(b), HTSUS. However, assuming the additional requirements of 19 CFR 10.31(f) are otherwise satisfied, it is our opinion that CTV Television would not be required to post a bond on television broadcasting equipment which is considered to be NAFTA originating whereas a bond would be required for that equipment which is non-originating. In cases where a bond is not required, please be advised that the other conditions normally attached to temporary importation under bond remain in effect (for example, the exportation requirements and prohibition on sale). See, for example, HRL 223970.

HOLDING:

Based upon the specific facts of this case, we find that the television broadcasting equipment brought into the United States for purposes of obtaining and reporting news stories for CTV Television in Canada may be entered under the provisions of subheading 9813.00.50, HTSUS. CTV Television would not be required to post a bond on that equipment which is considered to be NAFTA originating pursuant to General Note 12(b), HTSUS, provided the additional requirements of 19 CFR 10.31(f) are otherwise satisfied. Please be advised that, pursuant to 19 U.S.C. §58c(b)(8)(B)(i), goods entered under subheading 9813.00.50, HTSUS, are not subject to a Merchandise Processing Fee (“MPF”).

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.

Sincerely,

Myles B. Harmon, Director

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