- Type : HTSUS :
CON 9; CON 10 OT:RR:CTF:ER
George R. Tuttle, Esq.
One Embarcadero Center, Suite 730
San Francisco, CA 94111-4044
Re: Porsche Cars North America, Inc., export of vehicles to Canada that are entered into the United States under TIB, cancellation of TIB upon export.
Dear Mr. Tuttle:
This is in response to your letter of February 11, 2013, requesting a ruling on behalf of Porsche Cars North America, Inc. (PCNA). Our response follows.
You state that PCNA enters vehicles under subheading 9813.00.75, Harmonized Tariff Schedule of the United States (HTSUS), as a Temporary Importation Under Bond (“TIB”), to be displayed in auto shows in the United States. While the vehicle is in the United States under a TIB entry, PCNA may export the vehicle to Canada for trade shows. After the trade show in Canada is completed, the automobile will be reimported back into the United States for additional shows. You query whether it is possible to export the vehicles to Canada without breaching or cancelling the TIB.
Whether transporting cars to Canada for a trade show is considered an “export” that would cancel the TIB.
LAW AND ANALYSIS
Note I (a) of Subchapter XIII HTSUS provides that when not imported for sale or sale on approval, articles may be admitted into the United States without the payment of duty, under bond for their importation. Articles imported under heading 9813.00.75 HTSUS are admitted under bond for their exportation within 6 months from the date of importation and such a 6-month period shall not be extended. See Subchapter XIII, Note I (a)(1) HTSUS. Subheading 9813.00.75 HTSUS provides for entry under TIB for:
Automobiles, automobile chassis, automobile bodies, cutaway portions of any of the foregoing and parts for any of the foregoing, finished, unfinished or cutaway, when intended solely for show purposes.
The CBP regulations at 19 C.F.R. §10.31(f) require that the importer post a bond in an amount equal to double the duties, including fees, which it is estimated would accrue had all the articles covered by the entry been entered under an ordinary consumption entry.
Further, CBP’s regulation, 19 C.F.R. §10.38, requires that an application for exportation be made on CBP form 3495 when the goods are exported. This provides CBP the opportunity to examine the merchandise to be exported. If PCNA fails to file the CBP Form 3495, it will breach the terms of the TIB. Cancellation of bond charges is made upon export of the merchandise pursuant to 19 C.F.R. §113.55(a)(1). Once the merchandise is exported and the TIB bond is cancelled, it may not be reentered under the same TIB. If PCNA wishes to re-enter the goods into the United States, a new entry would be required.
It is therefore necessary to determine whether an export occurs in the situation you describe. Exportation is defined in 19 C.F.R. § 101.1 as “…a severance of goods from the mass of things belonging to this country with the intention of uniting them to the mass of things belonging to some foreign country.” See also, Swan and Finch Co. v. United States, 190 U.S. 143, 145 (1903) (explaining that “‘[a]s the legal notion of emigrating is a going abroad with an intention of not returning, so that of exportation is a severance of goods from the mass of things belonging to this country with an intention of uniting them to the mass of things belonging to some foreign country or other’”) (internal citations omitted). Based on this definition, an exportation is established by a two-pronged analysis: 1) that the goods were severed from the mass of things belonging to this country; and 2) that there was an intent to unite the goods to the mass of things belonging to some foreign country.
The first prong is construed to mean that “the goods in question have been physically carried out of the country of exportation.” See National Sugar Refining Co. v. United States, 488 F. Supp. 907, 908 (Cust. Ct. 1980) (citing to United States v. National Sugar Refining Co., 39 C.C.P.A. 96, 101 (1951)), aff’d, 666 F.2d 566 (C.C.P.A. 1981). In the transaction you describe, the vehicles are removed from the United States and imported into Canada. The vehicles will thus be “physically carried out of the country.” Consequently, the vehicles are severed from the mass of things belonging to the United States, satisfying the first prong of the analysis.
To evaluate whether there was an intent to unite the goods with the mass of things belonging to a foreign country, “so long as an immediate bona fide purpose to seek a foreign market coincides with a bona fide act of shipment” it is an exportation. See Nassau Distributing Co., Inc. v. United States, 29 Cust. Ct. 151, 154 (1952) (quoting United States v. National Sugar Refining Co., 39 C.C.P.A. 96, 100 (1951)).” In this case, PCNA’s intent in exporting the vehicles is for use as demonstration vehicles in auto shows. As both prongs of the analysis are met, we find that the transaction described constitutes an export. Therefore, the TIB must be closed upon export of the vehicles from the United States into Canada.
You argue that the export is not “permanent” and such does not qualify as an export. However, we have previously explained that there is no requirement that the exportation be permanent. In HQ223701, dated May 28, 1992, tablets were shipped to Canada for packaging and then returned to the United States. We concluded that “the merchandise in this case was shipped abroad for a legitimate commercial purpose independent of obtaining drawback.” Id. Thus, an export does not have to be permanent to be an export under 19 CFR §101.1. Finally, you claim that “further assembly” is required for it to be a “legitimate commercial purpose” but cite no legal authority supporting this position, nor does CBP interpret “legitimate commercial purpose” in such a narrow manner. As explained, above, we find that exporting cars for use in a trade show is a bona fide purpose and as such, constitutes an “export.”
Transporting vehicles to Canada, which have had been previously entered into the United States under a TIB, for use in a trade show is an exportation. Therefore, the importer of record must file the CBP Form 3495 to close out the TIB entry in the United States.
Please note that 19 C.F.R. §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 ruing letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.”
Carrie L. Owens, Chief
Entry Process and Duty Refunds Branch