CLA-2 RR:CR:SM 560720 RSD
Mr. Charles C. Danache, President
Danache & Associates
One World Trade Center
Long Beach, California 90831-1870
RE: Eligibility of imported rifle scopes under the
Generalized System of Preferences ("GSP"); imported directly;
19 CFR 10.175
Dear Mr. Danache:
This is in response to your letter dated October 17, 1997,
on behalf of Ninon, Inc. (Ninon) requesting a ruling regarding
the eligibility of certain rifle scopes for duty-free treatment
under the Generalized System of Preference ("GSP"). We have also
received a supplemental letter dated November 3, 1997, clarifying
the name of your client.
Nikon intends to import rifle scopes from the Philippines,
Thailand, and other countries into the United States. You claim
that all the countries in which the rifle scopes are made will be
GSP beneficiary developing countries. Before the rifle scopes
are shipped from the beneficiary developing country to the United
States, they are temporarily stored in a warehouse in an
intermediary country, such as Japan. While the rifle scopes are
in the intermediary country, they will not be sold, manipulated,
offered for sale at retail, undergo a change of title,
repackaged or subdivided into lots and allocated to different
customers in the United States or other countries. You further
claim that the rifle scopes will meet all of the requirements for
GSP duty-free treatment. The invoices, shipping documents and
bill of lading will all show the United States as the final
destination for the merchandise.
Whether the rifle scopes originating in the Philippines,
Thailand, or another beneficiary developing country are "imported
directly" for purposes of the GSP when they are shipped through
an intermediary country to the United States as described above.
LAW AND ANALYSIS:
Under the GSP, eligible articles the growth, product or
manufacture of a designated beneficiary developing country (BDC)
which are imported directly into the customs territory of the
U.S. from a BDC may receive duty-free treatment if the sum of (1)
the cost or value of materials produced in the BDC, plus (2) the
direct costs of the processing operations performed in the BDC,
is equivalent to at least 35 percent of the appraised value of
the article at the time of entry into the U.S. See 19 U.S.C.
2463(b)(1). The phrase "imported directly" is defined in
section 10.175 of the Customs Regulations (19 C.F.R. 10.175).
For purposes of this ruling, we will assume that the articles are
GSP eligible, they are "products of" the GSP country, and the
minimum local value-content requirement is met. However no
evidence has been presented to support the claim for GSP
Section 10.175, Customs Regulations (19 C.F.R. 10.175)
defines the term "imported directly" for purposes of the GSP.
Under 19 C.F.R. 10.175(b), merchandise shipped from a BDC
through any other country to the U.S. is "imported directly" if
the merchandise does not enter into the commerce of any other
country while en route to the U.S., and the invoices, bills of
lading, and other shipping documents show the U.S. as the final
In HQ 556079 dated July 2, 1991, ethylene glycol was
produced in the Czech and Slovak Federal Republic
(Czechoslovakia). However, as Czechoslovakia had no outlet on
the sea, the produce had to be shipped overland from
Czechoslovakia to Rotterdam, Netherlands, where it was held in
storage tanks before being loaded onto a U.S.-bound ocean carrier
and shipped to the U.S. In HQ 556079, it was possible that the
ethylene glycol could be stored in the Netherlands for as long as
30 days. At no time did the ethylene glycol enter the commerce
of the Netherlands or any other country of transshipment.
Moreover, from the Czechoslovakia border until the goods were
loaded on board the U.S.-bound ship, the merchandise was held
under bond in storage. We held in HQ 556079 that if the invoice,
bill of lading, GSP certificate, certificate of origin and other
original shipping documents issued in Czechoslovakia showed the
U.S. as the final destination, the ethylene glycol would be
considered "imported directly" pursuant to 19 C.F.R. 10.175(b).
We stated that this requirement is intended both to establish a
connection between the imported merchandise and its country of
origin and to show that the passage of the merchandise through
the intermediate country involved a mere transshipment rather
than entry into the commerce of the intermediate country.
Furthermore, we noted that whereas this requirement does not
preclude multiple modes of transportation such as air, sea or
different carriers of the same type, the documents presented as
evidence of compliance with this requirement must include the
original shipping documents issued in the BDC, showing the U.S.
as the final destination.
In HRL 559535 dated September 20, 1996, we held that
calculators shipped from Thailand and Malaysia through Japan or
other intermediary country before importation into the United
States would satisfy the "imported directly" requirement under 19
assuming that the commercial invoices, bills of lading, and other
shipping documents show the United States as the final
destination for the merchandise, and the calculators did not
enter the commerce of the immediate country.
In HRL 560688 dated January 26, 1998, we found that
operations consisting only of consolidating merchandise by
unloading and reloading it into a container for shipping purposes
would not constitute the entry of the merchandise into the
commerce of the foreign country.
Similarly, in the instant case, if the rifle scopes are
merely unloaded in the intermediary country, stored temporarily
in a warehouse, and reloaded for shipment to the U.S., they will
not have entered into the commerce of the intermediate country.
In addition, if all the commercial invoices, bills of lading, and
other shipping documents show the United States as the final
destination of the merchandise then the "imported directly"
requirement of 19 C.F.R. 10.175(b) will be met.
Please note that, pursuant to 19 C.F.R. 10.174, the port
director may require that appropriate shipping papers, invoices,
or other documents be submitted within 60 days of the date of
entry as evidence that the articles were "imported directly". In
addition, this provision states that any evidence of direct
shipment required by the port director shall be subject to such
verification as the port director deems necessary. Furthermore,
because you have not provided any evidence regarding the other
requirements of a claim for GSP, we cannot rule whether the
merchandise, is in fact, entitled to duty-free treatment under
Assuming that the rifle scopes are only temporarily stored
in a warehouse in an intermediate country and the commercial
invoices, bills of lading, and other shipping documents show the
United States as the final destination of the merchandise, the
rifle scopes would not enter the commerce of the immediate
country. Accordingly, the rifle scopes originating from
Philippines, Thailand, or another beneficiary developing country
which are first shipped through an intermediary country before
being shipped to the U.S., would be considered "imported
directly" from the BDCs for purposes of qualifying for treatment
under the GSP.
A copy of this ruling letter should be attached to the entry
documents filed at the time the goods are entered. If the
documents have been filed without a copy, this ruling should be
brought to the attention of the Customs officer handling the
John Durant, Director
Commercial Rulings Division