DRA-4
OT:RR:CTF:ER
HQ H260927 MES
Chuck Eldridge, Assistant Treasurer
Sasol Chemicals (USA) LLC
900 Threadneedle, Suite 100
Houston, TX 77224-9029
Dear Mr. Eldridge:
This is in reference to your request concerning Sasol Chemicals (USA), LLC, being the drawback successor to Sasol North America, Inc., pursuant to 19 U.S.C. §1313(s). Our decision follows.
FACTS:
In a letter dated November 7, 2014, Sasol Chemicals (USA), LLC (“Sasol Chemicals”), requested a ruling identifying it as the drawback successor to Sasol North America, Inc. On July 1, 2014, Sasol North America Inc., converted from a corporation to a limited liability company and changed its name to Sasol North America LLC. As support, the file contains a certificate of conversion converting Sasol North America Inc., to Sasol North America LLC, and a certificate from the Secretary of State of the State of Delaware, dated July 1, 2014, certifying the conversion. The file contains a certificate of formation of Sasol North America LLC, and a certificate from the Secretary of State of the State of Delaware, dated July 1, 2014, certifying that the attached is a true and correct copy of certificate of formation of Sasol North America LLC.
Sasol Chemicals, was formed on July 1, 2014, as the result of a merger of four companies, with and into Sasol North America LLC, and a subsequent name change. The IRS number provided for Sasol North America is the same as the IRS number provided for Sasol Chemicals (USA) LLC. As part its successorship application, Sasol Chemicals provided a copy of the certificate of merger of Merisol USA LLC, Merisol Antioxidants LLC, Sasol Chemicals (USA) LLC, and Sasol Wax North America Corp., with and into Sasol North America LLC. The certificate indicates that the surviving limited liability company is Sasol North America LLC, and that the certificate of formation of the surviving entity shall be amended in the merger to change the name of the surviving limited liability company to Sasol Chemicals. Additionally, a certificate from the Secretary of State of the State of Delaware, dated July 1, 2014, was provided certifying that the attached certificate of merger is a true and correct copy indicating that Merisol Antioxidants, LLC, Merisol USA LLC, Sasol Chemicals, and Sasol Wax North America Corp., merged with and into Sasol North America LLC, under the name Sasol Chemicals. The file contains a certificate from the Secretary of State of the State of Delaware certifying that Sasol Chemicals is duly formed under the laws of the state of Delaware, as of July 1, 2014. Sasol Chemicals made further certifications in its November 7, 2014, letter, which are discussed below.
Issue:
Whether Sasol Chemicals has established itself as the drawback successor to Sasol North America, Inc., pursuant to 19 U.S.C. §1313(s).
LAW AND ANALYSIS:
Section 313 of the Tariff Act, as amended (19 U.S.C. §1313(s)(2)), provides that for purposes of §1313(j)(2), a drawback successor may designate: (1) imported merchandise that the predecessor, before the date of succession, imported; or (2) imported merchandise, commercially interchangeable merchandise, or any combination of imported and commercially interchangeable merchandise for which the predecessor received, before the date of succession, from the person who imported and paid any duty due on the imported merchandise a certificate of delivery transferring to the predecessor such merchandise; as the basis for drawback on merchandise possessed by the drawback successor after the date of succession. A “drawback successor” is an entity to which another entity (referred to as the “predecessor”) has transferred by written agreement, merger, or corporate resolution all or substantially all of the rights, privileges, immunities, powers, duties, and liabilities of the predecessor; or the assets and other business interests of a division, plant, or other business unit of such predecessor, but only if in such transfer the value of the transferred realty, personalty, and intangibles (other than drawback rights, inchoate or otherwise) exceeds the value of all transferred drawback rights, inchoate or otherwise. 19 U.S.C. § 1313(s)(3).
In order to claim drawback under 19 U.S.C. §1313(s), there is the requirement that either the predecessor or the drawback successor (who shall also certify that it has the predecessor's records) certifies that the transferred merchandise was not and will not be claimed by the predecessor, and the predecessor did not and will not issue any certificate to any other person that would enable that person to claim drawback. The implementing regulations require that the predecessor or successor must certify in an attachment to the drawback claim that the successor is in possession of the predecessor's records that are necessary to establish the right to drawback under the law and regulations with respect to the imported and/or commercially interchangeable merchandise and the predecessor or successor must certify in an attachment to the drawback claim, that the predecessor has not and will not designate, nor enable any other person to designate, the imported and/or commercially interchangeable merchandise as the basis for drawback. See 19 CFR § 191.32(f)(3)(i) and (ii). In instances in which assets and other business interests of a division, plant, or other business unit of a predecessor are transferred, the predecessor or successor must specify, and maintain supporting records to establish, the value of the drawback rights and the value of all other transferred property. See 19 CFR § 191.32(f)(3)(iii). Further, the written agreement, merger, or corporate resolution, and the records and evidence, must be retained by the appropriate entity for three years from the date of payment of the related claim and are subject to review by CBP upon request. See 19 CFR § 191.32(f)(3)(iv).
The documents provided indicate that Sasol North America Inc., converted from a corporation to a limited liability company named Sasol North America LLC. The above listed entities merged with and into Sasol North America LLC, with all of the rights, privileges, and powers of each entity being transferred, and that the name of the surviving entity was changed from Sasol North America LLC, to Sasol Chemicals. Additionally, in its successorship application, Sasol Chemicals indicated that the transfer of realty, personalty, and intangibles (other than drawback rights) exceeded the value of all of the transferred drawback rights. Therefore, based upon an analysis of the merger documents, we find that Sasol Chemicals is the drawback successor to Sasol North America Inc., pursuant to 19 U.S.C. § 1313(s)(3).
In its letter dated November 7, 2014, Sasol Chemicals certified that the transferred merchandise was not and will not be claimed by the predecessor and that the predecessor did not and will not issue any certificate to any other person that would enable that person to claim drawback. Accordingly, it has made the required certifications per 19 U.S.C. § 1313(s)(4). Sasol Chemicals also certified that it is in possession of predecessor’s records that are necessary to establish the right to drawback with respect to the merchandise or drawback product, that the predecessor has not designated and will not designate, nor enable any other person to designate, such merchandise or product as the basis for drawback and that the predecessor maintains supporting records to establish the value of the drawback rights and other transferred property. Further, Sasol Chemicals certified that the predecessor will specify, and maintain supporting records to establish, the value of the drawback rights and the value of all other transferred property. Accordingly, Sasol Chemicals has made the certifications required in 19 CFR § 191.32(f)(3).
Please be aware that this response does not address whether the exported merchandise is commercially interchangeable with the designated imports under 19 U.S.C. § 1313(j)(2). That determination would need to be made before the ultimate approval of any drawback claim under 19 U.S.C. §1313(j)(2). Additionally, please note that Sasol Chemicals, must attach the certifications contained in 19 CFR § 191.32 (f)(3)(i) and (ii) to each drawback claim filed involving the subject merchandise.
HOLDING: Sasol Chemicals has proven its right of successorship, pursuant to 19 U.S.C. §1313(s), to designate merchandise which was in fact imported by predecessor Sasol North America, Inc. However, before drawback will be paid under 19 U.S.C. §1313(j)(2), Sasol Chemicals will need to prove the commercial interchangeability of its export with the designated imports.
Please note that 19 CFR § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect.”
Sincerely,
Carrie L. Owens, Chief
Entry Process and Duty Refunds Branch