BOR-7-03-CO:R:IT:C 111449 GEV
Mr. M. J. Redman
World Wide Customs Brokers, Ltd.
#200, 3016 - 19th Street, N.E.
Calgary, Alberta, Canada T1Y 5E1
RE: Railroad Equipment; 19 U.S.C. 1322; 19 U.S.C. 1202, as
amended
Dear Mr. Redman:
This is in response to your letter dated December 17, 1990,
on behalf of your client, regarding railroad equipment (tank
cars) exported to Canada and subsequently imported into the
United States. Our ruling on this matter is as follows.
FACTS:
Railroad tank cars, manufactured in the United States and
exported to Canada for varying periods of time, are subsequently
imported into the United States. While in Canada the cars are
not advanced in value or improved in condition and do not undergo
any repairs with the exception of routine maintenance. Their use
in Canada is the same as that in the United States; the
transportation of petroleum products.
ISSUE:
Whether U.S-manufactured railroad tank cars exported to
Canada and not advanced in value or improved in condition are
entitled to duty-free treatment under HTSUS subheading
9801.00.10 when returned to the United States.
LAW AND ANALYSIS:
Subheading 9801.00.10, Harmonized Tariff Schedule of the
United States (HTSUS) provides for the duty-free entry of
products of the United States that are returned after having been
exported, without having been advanced in value or improved in
condition by any process of manufacture or other means while
abroad, provided there has been compliance with the documentary
requirements of section 10.1, Customs Regulations (19 CFR 10.1).
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Accordingly, since the subject railroad tank cars are not
advanced in value or improved in condition while in Canada, we
find they are entitled to duty-free entry under HTSUS subheading
9801.00.10.
We note the reference in your letter to section 123.12(d),
Customs Regulations which provides, in part, that for purposes of
designation as instruments of international traffic, railroad
equipment shall be considered "domestic" if it is
"...manufactured in, or regularly imported into the United
States...if not subsequently formally entered and cleared through
foreign customs into another country..." While it may appear
that section 123.12(d) conflicts with HTSUS subheading
9801.00.10, both provisions are reconcilable. While U.S.-
manufactured railroad equipment entered and cleared through
Canadian Customs would appear to be considered "foreign" per
section 123.12(d), it can nonetheless regain its "domestic"
status by being imported into the U.S. via HTSUS subheading
9801.00.10 and the requisite entry documentation set forth in
section 10.1, Customs Regulations.
HOLDING:
U.S.-manufactured railroad tank cars exported to Canada and
not advanced in value or improved in condition are entitled to
duty-free treatment under HTSUS subheading 9801.00.10 when
returned to the United States provided the documentary
requirements of 19 CFR 10.1 are satisfied.
Sincerely,
B. James Fritz
Chief
Carrier Rulings Branch