OT:CTF:ER H004009 PTM
Ms. Linda Brick
U.S. Customs and Border Protection
JFK Airport Building 77
Entry Team 3
Jamaica, NY 10431
RE: Jewelry Imported for a Trade Show / Temporary Importation Under Bond
Dear Ms. Brick,
This letter is in response to your to your correspondence dated December 1, 2006, regarding jewelry imported for trade shows pursuant to 19 C.F.R. § 177.11. In your correspondence, you asked for internal advice from this office regarding a temporary importation under bond (hereinafter “TIB”) entry issue that also applies to ATA carnets.
FACTS:
You provided two separate examples in your letter. In both examples, a TIB entry number is submitted to the JFK entry team for release. Both of the examples involve a shipment of jewelry classified under Harmonized Tariff number 9813.00.20 - Samples solely for use in taking orders for merchandise. The entries included the required “Statement of Use” which declared that “The articles covered by the above mentioned entry are not imported for sale, these goods are samples being imported for the sole purpose of taking orders.”
Upon investigation, your office determined that the merchandise was imported for a jewelry trade show. Research of the show, including an examination of the website, revealed that the show advertised itself as a “cash and carry” show. In other words, the show permitted the attendees to purchase merchandise directly from the exhibitors. This information, on its face at least, appeared to conflict with the Statement of Use provided by the importer of the merchandise. Thus, although the importer claimed that the items were not for sale and were brought into the Customs territory of the United States for the sole purpose of serving as a sample from which orders would be taken, the show’s environment promoted financial transactions for the immediate merchandise present at the site. Based upon this evidence, your office disqualified this shipment as eligible for entry under TIB.
ISSUE:
Does an importer’s intent to exhibit samples at a trade show in which sales occur, without more, demonstrate the intent to violate the terms of subheading 9813.00.20, HTSUS, so as to deny an entry under that provision?
LAW AND ANALYSIS
U.S. Note 1 (a), Subchapter XIII, Chapter 98, HTUSA provides that articles may be eligible for TIB entry “when not imported for sale or for sale on approval.” Additionally, pursuant to 19 C.F.R. § 10.31(a)(3) a TIB entry must contain “a statement of the use to be made of the articles in sufficient detail” and “a declaration that the articles are not to be put to any other use and that they are not imported for sale or sale on approval.” In both your examples, the nature of the trade show would appear to contradict the statement of use and declaration that the articles will not be imported for sale or sale on approval.
A review of case law reveals that it is the intent of the importer that is dispositive in a determination of whether an entry should be granted TIB. Rentner v. United States, 15 Ct. Cust. 147 (1927) provides guidance. In that case, the importer entered models of women’s wearing apparel ostensibly for use solely by manufacturers as models in their own establishment, which qualified for duty free importation under bond pursuant to section 308 of the Tariff Act of 1922. The importer submitted an affidavit under oath that the merchandise covered by the entry were models of women’s wearing apparel, imported by them solely as models for use in their establishment and were not imported for sale or sale on approval. A customs agent ascertained that some of the models entered had actually been sold. Not all of the goods were sold, however, and the importer asked permission to export the remaining models without the payment of duty. The collector determined that the importer never intended to keep the goods as models, as evidenced by the fact that the importer had been caught selling some of the goods that had entered duty free in bond. Entry under TIB was denied as the collector determined that the affidavits had been made in bad faith, as evidenced by the fact that some of the items had been sold. The court affirmed the judgment of the United States Customs Court denying the importer’s protest.
American Customs Brokerage Co., Inc., a/c/ Astral Corp v. United States, 72 Cust. Ct. 245 is also illustrative of the principle that the intent of the party entering items under TIB is critical in determining whether that request should be granted. In that case, the owner of a large pleasure yacht was assessed import duties on the yacht when he docked the vessel in the United States to make extensive repairs. The court determined that the yacht was not subject to import duties. In making this determination, the court focused on the intent of the importer. The Court did note that “[e]xpressions of intent, however, may be used for self-serving purposes. Hence, the court must scrutinize them carefully, together with the conduct of the person making them.” Id. at 254. Thus, the Court recognized the difficulty of divining intent and noted that expressions of intent may be made in bad faith. Consequently, the Court directed that statements of intent must be scrutinized carefully considering “the conduct of the person making them, and the external circumstances which might tend to confirm or refute them.” Id.
Applied to the factual situation you have presented, it is difficult to divine exactly whether the intent of the importer as documented in the Statement of Use is made in bad faith. That notwithstanding, absent positive knowledge that the jewelry entered under TIB has actually been sold, it must be permitted to enter under TIB. It is possible that these particular merchants did not intend to sell any of the jewelry they wished to enter under TIB in contravention of the Statement of Use, despite the fact that the respective jewelry expos were advertised as “cash and carry” shows. The fact that the show advertised immediate jewelry sales does not in itself refute the purported intent of the importer.
HOLDING:
The intent of a party to importing jewelry for exhibition at a trade show TIB is the critical factor in determining whether the import qualifies for TIB treatment. The clearest manifestation of intent is the Statement of Use. Absent evidence that the Statement of Use is inaccurate, such as actual sales or a clear history of abuse, the information presented must be presumed to be accurate.
Sincerely,
Myles Harmon, Director
Commercial and Trade Facilitation Division