DRA-2-02- RR:CR:DR 228427BJB
Port Director of Customs
U.S. Customs Service
610 South Canal Street
Chicago, IL 60607-4523
Attn: Ms. Anita Terry-McDonald
RE: Request for Internal Advice concerning statutory requirements under successorship,
19 U.S.C. §1313(s); 19 C.F.R. §1313(a); 19 C.F.R. §191.7; Change of name; MEGTEC Systems, Inc.; Thermal Emission Control Systems, Inc.; Thermal Energy Control Systems, Inc.
Dear Sir or Madam:
This is in response to your request for internal advice of April 19, 1999 [DRA-1-09.6-TC:D RF], forwarding a June 25, 1998 request from MEGTEC Systems, Inc., for a manufacturing drawback ruling. We have considered the request and have made the following decision.
FACTS:
The controller of MEGTEC Systems, Inc., Ms. Francine M. Gaie, submitted a letter request to the United States Customs Service, Regional Commissioner of Customs, Chicago, Illinois, on June 25, 1998, for a General Manufacturing Drawback Ruling under 19 U.S.C. §1313(a) (T.D. 81-234) See 19 C.F.R. Part 191, app. A. (II). Along with this letter, MEGTEC Systems, Inc., filed the following documentation:
1. Letter dated, December 30, 1997, from the Internal Revenue Service to MEGTEC Systems, Inc., providing an Employer Identification Number 39-1900032 (Signed Ron Manville, Manager, Tele-Tin);
2. Internal Revenue Form SS-4, Application for Employer Identification Number, from Thermal Emission Control Systems, Inc., dated July 22, 1997, and marked with EIN (Employer Identification Number) 39-1900032;
3. List of corporate officers for Thermal Emission Control Systems, Inc.;
4. State of Delaware, Office of the Secretary of State, certification of true and correct copy of the Certificate of Incorporation of “Thermal Energy Control Systems, Inc.,” filed with the Office of the Secretary of State, State of Delaware;
5. Certificate of Amendment of “Thermal Energy Control Systems, Inc.,” changing its name to “Thermal Emission Control Systems, Inc.,” dated July 15, 1997, State of Delaware;
6. State of Delaware, Office of the Secretary of State, certification of true and correct copy of the Certificate of Amendment of “Thermal Emission Control systems, Inc.;”
7. Certificate of Amendment, State of Delaware, changing the name from “Thermal Emission Control Systems, Inc.” to “MEGTEC Systems, Inc.,” dated September 9, 1997;
8. State of Delaware, Office of the Secretary of State, certification of true and correct copy of Certificate of Amendment of “MEGTEC SYSTEMS, Inc., attached;
9. Certificate of Amendment of Certificate of Incorporation, State of Delaware, wherein “MEGTEC Systems, Inc.,” adopted a resolution affecting the total number of shares of stock in the corporation and their value, dated September 9, 1997;
10. Letter dated September 2, 1997, from “W.R. Grace & Co.,” to “Green Bay Abstract &Title Company, Inc.,” escrow company concerning the closing of a real estate transaction.
Although MEGTEC Systems, Inc., (“MSI”), does not specifically cite its reliance upon
19 U.S.C. §1313(a) or its implementing regulations, 19 C.F.R. §191.7, it does, however, reference its intention to comply with General Drawback Contract 81-234.
ISSUE:
Whether 19 U.S.C. § 1313(s) is applicable or implied in the documentation provided, thereby requiring a ruling from Headquarters.
LAW AND ANALYSIS:
MSI presents its letter of June 25, 1998, as an application to Customs for manufacturing drawback. MSI states that it “intends to comply with the General Drawback Contract 81-234. General Drawback is provided for pursuant to 19 U.S.C. §1313(a), and implemented by Customs regulations pursuant to 19 C.F.R. Part 191. Under 19 C.F.R. §191.7, “General manufacturing drawback ruling,” a manufacturer or producer “engaged in an operation that falls within a published general manufacturing drawback ruling may submit a letter of notification of intent to operate under that general ruling. Section 191.7(b) details the procedures for filing for and qualifying for general manufacturing drawback rulings.
Section 191.7(b), states, “General manufacturing drawback rulings are contained in appendix A to this part.” Appendix A, Section II, provides for “General Manufacturing Drawback Ruling under 19 U.S.C. 1313(a) (T.D. 81-234; T.D. 83-123).” MEGATEC Systems, Inc.’s application is for a General Manufacturing Drawback pursuant to T.D. 81-234 (MSI Letter, June 25, 1998, para.3).
Among the pages of documentation filed by MEGATEC Systems, Inc., ostensibly in compliance with 19 C.F.R. §191.7 and appendix A, are a Certificate of Incorporation of “Thermal Energy Control Systems,” a Certificate of Amendment of Certificate of Incorporation Before Payment of Capital, which changed the name of the corporation to “Thermal Emission Control Systems, Inc.,” and a Certificate of Amendment of the Articles of Incorporation for “Thermal Emission Control Systems, Inc.,” changing its name to “MEGTEC Systems, Inc.” All of the documents were filed in, and pursuant to, the laws of the State of Delaware.
The Port has requested internal advice as to whether 19 U.S.C. §1313(s) is applicable or implied in the information provided. The answer is no. Successorship questions pursuant to
19 U.S.C. § 1313(s), are generally relevant to drawback under 19 U.S.C.§1313(b), and not to
19 U.S.C. §1313(a), where successorship rights are not at issue.
The MEGATEC Systems, Inc. documentation submitted, does reflect a change in the corporation’s name. This, however, again, is not a case of successorship. Corporations change their names for a variety of reasons, and are permitted to do so within the context of both a general or a specific manufacturing drawback ruling. MEGATEC Systems, Inc., has requested a general manufacturing ruling covered by the provisions of 19 U.S.C. §1313(a) and 19 C.F.R. Part 191, appendix A, section II (T.D. 81-234). Insofar as MEGATEC Systems, Inc. has complied with 19 C.F.R. §191.7(b)(2), and properly submitted the documentation required, the port should accept the application for a general manufacturing ruling. Under section 191.7(b)(2), “[l]etters of notification of intent to operate under a general manufacturing drawback ruling shall be submitted to any drawback office where drawback entries will be filed and liquidated, provided that the general manufacturing drawback ruling will be followed without variation.” It is within the port’s jurisdiction to review the application for compliance with the procedures set out in the regulations (19 C.F.R. §191.7).
In the present case, the corporation registered in the State of Delaware on July 7, 1997, as Thermal Energy Control Systems, Inc., changed its name to Thermal Emission Control Systems, Inc., by “Certificate of Amendment of Certificate of Incorporation Before Payment of Capital,” on July 15, 1997. Thermal Emission Control Systems, Inc, then changed its name to MEGTEC Systems, Inc., under a “Certificate of Amendment of Certificate of Incorporation,” again, pursuant to the laws of the State of Delaware, on September 9, 1997. Some confusion may have arisen with respect to which corporate entity was filing for the general drawback ruling insofar as MEGATEC Systems Inc., received an Internal Revenue Service employer identification number pursuant to an application (SS-4) originally filed by Thermal Emission Control Systems, Inc., (filed on July 7, 1997). This confusion is dispelled by tracking the name changes and series of filings of amendments to the corporation’s articles of incorporation with the Secretary of the State, State of Delaware, culminating with the adoption of the coporation’s name as MEGATEC Systems, Inc. being recognized by the Secretary of the State of Delaware, on September 8, 1997. This was further validated by the Internal Revenue Service’s issuance of an employer identification number to MEGTEC Systems, Inc., on December 30, 1997.
HOLDING:
Section 1313(s) is not relevant to MSI’s application for a general manufacturing ruling. Thus, the port, and not Headquarters should review the application for sufficiency and issue the ruling. Customs should ensure that MSI, has adequately complied with the provisions of 19 U.S.C. §1313(a), the filing instructions of 19 C.F.R. §191.7, and the “General Instructions” provided in 19 C.F.R. Part 191, App.A, II. at 535. Under general manufacturing drawback, the ports have the authority to review a change of name.
You are to mail this decision to the internal advice applicant no later than 60 days from the date of this letter. On that date, 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.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John Durant, Director
Commercial Rulings Division