CLA-2 CO:R:C:S 557193 RA

District Director
U.S. Customs Service
880 Front St.
San Diego, California 92188

RE: Internal Advice Request No. 10/93; applicability of duty-free provision to forklift trucks reimported after having been exported under lease

Dear Sir:

This is in reference to your memorandum of January 6, 1993, forwarding a request for Internal Advice from United Customhouse Brokers, Inc. ("United") of Otay Mesa, California under date of December 7, 1992, concerning the eligibility of certain forklift trucks from Mexico for duty-free treatment under subheading 9801.00.20, Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

Three forklift trucks -- two made in Great Britain and one in South Korea -- were leased by Hawthorne Lift Systems of Escondido, California, to Hyundai de Mexico for a period of eight months. When returned to the U.S., the forklifts were imported by Hyundai Precision America, Inc., the parent company of Hyundai de Mexico. It is claimed that the trucks should be accorded free entry under subheading 9801.00.20, HTSUS, even though they were not reimported by the same person who originally imported them into the U.S., as required by the statute. United has submitted various documentation, including the rental agreement, in support of its contention that Hyundai Precision America, Inc. and Hawthorne "in effect" had a principal-agent relationship.

According to information provided by the Chief, NIS Machinery Branch, in an undated memorandum received in Headquarters on March 12, 1993 (copy enclosed), the forklift trucks involved here were originally imported by Caterpillar Inc. of Peoria, Illinois. ISSUE:

Whether the forklift trucks are entitled to free entry under subheading 9801.00.20, HTSUS. - 2 -

LAW AND ANALYSIS:

Subheading 9801.00.20, HTSUS, provides, in pertinent part, for the duty-free treatment of articles, previously imported, with respect to which duty was paid upon such previous importation, if (1) reimported, without having been advanced in value or improved in condition while abroad after having been exported under lease or similar use agreements, and (2) reimported by or for the account of the person who imported it into, and exported it from, the U.S.

The information available to us indicates that the forklift trucks in question were originally imported by Caterpillar, Inc. There is no indication that either Hyundai Precision America, Inc. or Hawthorne was acting on behalf of Caterpillar when the forklifts were exported and reimported. Therefore, because the trucks were not reimported by or for the account of the person who imported them into, and exported them from, the U.S., subheading 9801.00.10, HTSUS is inapplicable in this case. However, forklift trucks are subject to a free rate of duty under subheading 8427.00.20, HTSUS.

HOLDING:

Based on the information provided, the forklift trucks are ineligible for duty-free treatment under subheading 9801.00.20, HTSUS, because they were not reimported by or for the account of the person who imported them into, and exported them from, the U.S., as required by the statute.

Sincerely,

John Durant, Director
Commercial Rulings Division