ENT-1-07-CO:R:C:E 223230 GG
Timothy C. Berndt
Supervisor - Purchasing
Allied-Signal Inc.
Westwood Road
P.O. Box 697
Pottsville, PA 17901
RE: Toshiba sanctions; importation of merchandise manufactured
by Toshiba; spare parts exception; Public Law 100-418; 19 CFR
12.141, 142 & 143
Dear Mr. Berndt:
This is in response to your letters, dated April 22 and May
14, 1991, in which you request that the U.S. Customs Service
issue a binding ruling on the admissibility of spare parts
manufactured by Toshiba Machine Company, which you are attempting
to procure through Unitika Ltd. of Osaka, Japan. Our decision
follows.
FACTS:
Allied-Signal Inc. ("Allied"), is attempting to import parts
for the proper servicing and maintenance of its plastic film
manufacturing equipment. The parts are procured through Unitika
Ltd. of Osaka, Japan, but are manufactured by the Toshiba Machine
Company of Japan ("Toshiba"). Products of Toshiba are currently
subject to import sanctions. The parts are:
Purchase Order # Items
79-68000 001 Oilless bearing
79-68000 002 O-ring
79-68000 003 Oil seal
79-70741 001 T-die side plates
79-23249 001 Heater
79-22620 001 Heater cartridge
79-22557 002 Adjust bolt
79-22557 003 Collar
79-22557 004 Taper pin
79C-71366 T-die type TDS-1680
79C-71366 Polymer line
79C-72817 Filter elements for polymer transfer
line
79C-72817 Filter element spacers
79C-72817 Filter element gaskets
79C-72817 Filter element hollow o-ring
Allied states that because of the proprietary design of the
equipment that uses the Toshiba parts, it has been unable to
obtain the parts from another supplier. The company also notes
that a failure to acquire these parts would jeopardize its
ability to continue operating in the event of a problem.
ISSUE:
Whether the spare parts Allied seeks to import fall under an
exception to the prohibition on imports of products manufactured
by Toshiba?
LAW AND ANALYSIS:
Executive Order 12661 of December 27, 1988, implemented the
Omnibus Trade and Competitiveness Act of 1988 (P.L. 100-418, 102
Stat. 1107) ("Omnibus Trade Act"). Section 2443(a)(2) of the
Omnibus Trade Act imposed import sanctions on products of the
Toshiba Machine Company (Toshiba) and Kongsberg Trading Company
(Kongsberg) for a period of three years following December 28,
1988. To minimize the collateral impact of sanctions on U.S.
companies, several exceptions to the import prohibition were
made; among these was an exception for spare parts. See Section
2443(c)(2)(B) of the Omnibus Trade Act. The Customs Service
adopted regulations, found in 19 CFR 12.140 - 12.143, to
implement the import prohibition and to provide the necessary
definitions and procedures whereby parties can import products
exempted from the sanctions. The spare parts exception is listed
in 19 CFR 12.141(b).
The term "spare part" means any individual piece, part, or
subassembly which is intended for the logistic support or repair
of a finished product and not as a finished product itself. 19
CFR 12.142(c). Allied's statement that the various parts are
necessary for the proper servicing and maintenance of the
company's plastic film manufacturing equipment places these items
within this definition. None of the listed parts is intended to
be used, by itself, as a finished product. Accordingly, Allied's
parts qualify as spare parts whose importation is not, per se,
prohibited.
The ability to import merchandise under an exception to the
sanctions is conditioned upon the importer filing with the U.S.
Customs Service, at the time of making entry, a declaration
stating that the merchandise is being imported under a particular
exception. See 19 CFR 12.143. Allied therefore must file a
signed declaration with each entry stating that it is importing
the parts under the spare parts exception (19 CFR 12.141(b)). In
addition, the company may file only formal entries on these
importations and must submit a copy of the contract for the
merchandise to Customs prior to its release from Customs'
custody. All documents and statements are subject to
verification by the U.S. Customs Service at the port of entry.
HOLDING:
Merchandise manufactured by the Toshiba Machine Company and
intended for use as spare parts may be imported pursuant to the
spare parts exception to the import prohibition imposed on
products of that company, subject to the the procedures set forth
in 19 CFR 12.143.
Sincerely,
John Durant, Director
Commercial Rulings Division