CON-9-CO:R:C:E 223491 PH

Assistant District Director
Commercial Operations Division
U. S. Customs Service
Champlain, New York 12919

RE: Use of Temporary Importation Bonds (TIB's) for Merchandise subject to Countervailing or Antidumping Duty Dear Sir:

In your letter of October 7, 1991, you requested our advice with regard to TIB entries of merchandise subject to countervailing or antidumping duty. Our advice follows.


You state that recently a Customs broker attempted to file a TIB entry on merchandise subject to countervailing duty. Citing Treasury Decision 54802(54), your office took the position that a TIB is a consumption entry and, therefore, in addition to a bond for double the duty due, a cash deposit was also required for the countervailing duty. You state that it is the position of your office that upon exportation of the article, the bond for the duty would be cancelled but that the cash deposit would be held until resolution of the countervailing duty case, at which time they would be finalized, increased, or decreased.

With your letter, you enclosed a copy of a letter from a law firm stating that it represents a Customs broker (apparently the broker referred to above). In this letter, it is contended that merchandise subject to dumping duties or countervailing duties may be admitted under a TIB without the payment of the dumping duties or countervailing duties and that they (the dumping duties or countervailing duties) should be included in the bond.


Are TIB entries of merchandise subject to countervailing or antidumping duty considered consumption entries?


Subchapter XIII, Chapter 98, HTSUSA, provides for the admission of certain articles temporarily free of duty under bond (i.e., TIB's). The Customs Regulations pertaining to TIB's are found in 19 CFR 10.31 - 10.40. Under 19 CFR 10.31(f), unless otherwise provided, a bond is required for a TIB entry in an amount equal to double the duties which it is estimated would accrue "... had all the articles covered by the entry been entered under an ordinary consumption entry." Under 19 CFR 10.31(h), after the entry and bond for a TIB entry have been accepted, the merchandise may be released to the importer but "[t]he entry shall not be liquidated as the transaction does not involve liquidated duties." Cancellation of a TIB bond is provided for in 19 CFR 10.39. Failure to export or destroy merchandise admitted under a TIB results in a demand for the payment of liquidated damages equal to double the estimated duties applicable to the entry (unless the bond was for a lesser amount) (19 CFR 10.39(d)(1)).

Customs has consistently held that a TIB entry is not an entry for consumption. See 19 CFR 141.0a(f), defining "entered for consumption" and 19 CFR 10.31(f), quoted above, which clearly distinguishes between a TIB entry and "an ordinary consumption entry"; note also that a TIB entry is not liquidated (19 CFR 10.31(h) cited above, see also 19 CFR 159.2). Court decisions interpreting the term entry for consumption support this position (see A. W. Fenton Co., Inc. v. United States, 55 CCPA 54, C.A.D. 933 (1968); Excel Shipping Corp. v. United States, 44 Cust. Ct. 55, C.D. 2153 (1960); Korlis, Ltd. v. United States, 56 Cust. Ct. 365, 367, C.D. 2660 (1966), in which merchandise entered for consumption is described as that "which goes immediately into the commerce of the United States, as distinguished from merchandise entered for storage in a warehouse, for exhibition, for transportation, etc.").

An exception to the above is that TIB entries are considered to be consumption entries for purposes of administering quotas (see Treasury Decisions (T.D.'s) 54802(53) and 54802(54) and ruling 306885, dated June 29, 1979). The rationale for so deeming TIB entries to be consumption entries for purposes of administering quotas is that to rule otherwise could allow the circumvention of the quota laws (i.e., otherwise merchandise subject to quota for which no visa could be obtained could be entered under a TIB entry and, if consumed in the United States, subject only to liquidated damages).

The provisions of the countervailing duty law and the antidumping law are applicable to merchandise "entered, or withdrawn from warehouse, for consumption" (see 19 U.S.C. 1671b(d)(1), 1671b(e)(2), 1671c(d)(3), 1671d(c)(4)(B), 1671d(c)(4)(C), 1671e(a)(1), 1671e(b)(2), 1671f(a), 1671f(b), and 1671h; 19 U.S.C. 1673b(d)(1), 1673b(e)(2), 1673c(i)(1)(A)(ii), 1673d(c)(4)(B), 1674d(c)(4)(C), 1673e(a)(1)(A), 1673e(b)2), 1673e(c)(1)(C), 1673f(a), 1673f(b), and 1673g(a); 19 U.S.C. 1675(c) and 1675(e); see also 19 U.S.C. 1516a(c)(1), 1516a(e)(1), and 1516a(g)(5)(B); see also ruling 550990 dated September 21, 1977). Therefore, antidumping duty and countervailing duty would not be applicable to TIB entries unless the latter were "considered" to be consumption entries, as is done for purposes of administering quotas. However, the rationale for considering TIB entries to be consumption entries for purposes of administer- ing quotas does not exist with regard to the countervailing duty law and the antidumping law. In the case of these laws, the TIB bond may be set in an amount to take into account countervailing or antidumping duties in order to protect the revenue (see 19 CFR 10.31(f)). As stated in the letter which you enclosed with your request for advice, we have so held in the past with regard to antidumping duties (see memorandum 201949 dated September 26, 1974, and ruling 208418 dated November 14, 1977).

We have consulted with the Office of Trade Operations, in the Office of Commercial Operations, about this matter. By copy of this ruling, we are alerting that Office to the possibility that guidelines may be necessary on the sufficiency of TIB bonds covering TIB entries of merchandise subject to countervailing or antidumping duty. We understand that the Office of Trade Operations may be considering the requirement for a single entry bond in such situations.


TIB entries of merchandise subject to countervailing or antidumping duty are not consumption entries. In the case of such TIB entries, the TIB bond should be set in an amount to take into account countervailing or antidumping duty in order to protect the revenue.


John Durant, Director