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HQ 116505





September 21, 2005

ENT-3:RR:IT:EC 116505 TLS

CATEGORY: ENTRY

Mr. Craig Birchall
Group Border Facilitation Advisor
Qantas Airways Ltd.
203 (QCA) Coward Street
Mascot NSW 2020
AUSTRALIA

RE: Entry of civil aircraft parts for repair; Harmonized Tariff Schedule of the United States Annotated (HTSUSA) General Note 3; 19 CFR 10.183; C.S.D. 80-249; 19 CFR 10.31

Dear Mr. Birchall:

This is in response to your letter, dated June 22, 2005, requesting a ruling concerning whether parts removed from a foreign aircraft for repair while in the United States are required to be entered.

FACTS:

Qantas proposes to identify defective parts on aircraft either en route to the United States or upon arrival in the United States. The defective parts would then be shipped directly to a repair vendor in the United States. Once repaired, the parts would then be sent directly back to Qantas to be re-installed on the aircraft. The part is not to enter the commerce of the United States at any time while in this country. Currently, parts that Qantas identifies as defective while in the United States are shipped back to Australia, even if they are eventually repaired in the United States.

ISSUES:

Whether a defective part that is removed from a foreign aircraft after arrival of the aircraft in the United States must be entered if the part is shipped to a United States vendor for repair.

Whether a part that is removed from a foreign aircraft after arrival of the aircraft in the United States is exempt from duty.

LAW AND ANALYSIS:

The basic statute concerning the entry of merchandise is found in section 484, Tariff Act of 1930, as amended (19 U.S.C. § 1484). Under 19 U.S.C. § 1484(a), the right to make entry of merchandise is limited to the owner, purchaser, or consignee of the merchandise, or a licensed customs broker hired by the owner, purchaser, or consignee.

The statutory authority governing the licensing, rights, and responsibilities of customs brokers is found at 19 U.S.C. § 1641. The regulations governing customs brokers are found at 19 CFR 111.

The regulations of U.S. Customs and Border Protection (CBP) promulgated from section 1484 are primarily found in Parts 141, 142, and 143 of Title 19 of the Code of Federal Regulations (CFR). Pursuant to 19 CFR 141.0, the provisions under 19 CFR 141 apply to imported merchandise, with specific exceptions noted for merchandise entered under carnet, merchandise entered under bond for transportation, merchandise designated for a foreign trade zone, and merchandise for use at a trade fair. Pursuant to 19 CFR 141.4(a), all merchandise imported into the United States is required to be entered, unless specifically excepted. The exceptions are noted under 19 CFR 141.4(b) and are as follows:

Exemptions listed in General Note 3(e) of HTSUSA While 19 CFR 141.4(b)(1) refers to “General Note 19 to the [HTSUSA],” it is noted on page 175 of the General Notes for HTSUSA that “General Notes 19 through 24, inclusive, were transferred and designated as subdivisions (e) through (j), respectively, of general note 3 to the tariff schedule.” We also note that while General Note 3(e)(vi) of HTSUSA pertains to civil aircraft parts, that provision is inapplicable in this case because Note 3(e)(vi) only applies to parts removed from a United States-registered aircraft while being used abroad in international traffic.; Vessels;
Instruments of international traffic; and Railway locomotives and freight cars under certain provisions of HTSUSA Chapter 86.

We find that none of the exceptions specifically noted in 19 CFR 141.0 or 19 CFR 141.4(b) is applicable in this case.

Generally, all aircraft coming into the United States from a foreign area must make entry under 19 CFR 122, Subpart E. Exceptions are provided for public and private aircraft, civilian-crewed aircraft chartered by the U.S. Department of Defense (DOD) to transport only cargo that is the property of DOD, and aircraft traveling from airport to airport in the United States under 19 CFR 122, Subpart I, which covers procedures for residue cargo and stopover passengers. See 19 CFR 122.41. None of these exceptions apply in this case. Pursuant to 19 CFR 122.1(a), the term “aircraft” means “any device now known, or hereafter invented, used or designed for navigation or flight in the air.” We do not find that parts of an aircraft are included in that definition.

Pursuant to 19 CFR 122.47(d), 19 U.S.C. § 1446 is applicable to aircraft arriving in the United States from any foreign area. Section 1446 provides that any supplies, ships’ stores, sea stores, or equipment landed and delivered from a vessel arriving in the United States from a foreign port shall be considered and treated as imported merchandise. We find that “equipment,” as the term is used under section 1446, covers parts in the same sense that “part” and “equipment” are used interchangeably under HTSUSA General Note 6, discussed infra. Thus, an aircraft part removed from a foreign vessel upon arrival in the United States for delivery to a United States destination will be considered and treated as imported. Therefore, a part removed from a foreign aircraft after arrival in the United States to be imported is subject to the entry requirements of 19 U.S.C. § 1484 and 19 CFR 141, 142, and 143.

Provisions regarding articles eligible for duty-free treatment pursuant to the Agreement on Trade in Civil Aircraft are found at General Note 6 of HTSUSA. Under HTSUSA General Note 6(b)(i)(A), for the purposes of the tariff schedule, the term “civil aircraft” means, inter alia, any aircraft part that is used as original or replacement equipment in the maintenance or repair of an aircraft.

Pursuant to 19 CFR 10.183(a)(2)(i), aircraft parts that are manufactured or operated pursuant to a certificate issued by the Federal Aviation Administration (FAA) under 49 U.S.C. § 44704, or pursuant to the airworthiness authority of the country of exportation, if the FAA recognizes the approval of the country of exportation’s authority as an acceptable substitute for FAA certification, may be entered free of duty. Alternatively, an existing FAA certificate holder may enter such aircraft parts pursuant to an application for such prospective approval or certification, pending the completion of certain design and other technical requirements of the FAA. See also C.S.D. 80-249 (May 15, 1980) and CBP Ruling HQ 224266 (March 3, 1993).

In C.S.D. 80-249, tires from Canadian aircraft were imported to be retread by a U.S. tire retreading company. The company was certified by the FAA. We ruled that because the tires had previously been approved for use on a civil aircraft and were being imported for repair to be used again on a civil aircraft, the importation of the tires qualified for duty-free entry under the Civil Aircraft Agreement. We also noted in that case that if the tires were subsequently not used as parts of a civil aircraft, that use would be considered a diversion, obligating the importer for the payment of duties on the entry of the tires. We followed this ruling in HQ 224266, as well as in CBP Ruling HQ 223604 (May 28, 1992).

Thus, if the parts at issue are either FAA certified or approved for use on a civil aircraft and are imported for repair to be used in the same manner, then the importation of the parts would qualify for duty-free entry under the Civil Aircraft Agreement.

As we noted in HQ 224266, an alternative to entering the aircraft parts under a consumption entry is to enter the part under a Temporary Importation Bond (TIB). A TIB allows an importer to import an article under bond without paying duties, provided that the article is either exported or destroyed under CBP supervision within one year of the date of importation. See 19 CFR 10.31 and 10.39.

HOLDINGS:

The importation of a civil aircraft part, removed from a foreign aircraft after arrival of the aircraft in the United States and imported for repair, is subject to entry, whether or not such part qualifies for duty-free entry under the Civil Aircraft Agreement.

A civil aircraft part, removed from a foreign aircraft after arrival of the aircraft in the United States and imported for repair, is eligible for duty-free treatment under the Civil Aircraft Agreement if the part is either FAA certified or approved for use on a civil aircraft and will be used in the same manner subsequent to repair.

Sincerely,

William A. Rosoff, Chief


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