CON-2-07-CO:R:C:E 224013 JRS
Andrew G. Halpern, Esquire
Strasburger & Price, L.L.P.
901 Main Street, Suite 4300
Dallas, Texas 75202
RE: Civil Aircraft Agreement; turbojet engines; appropriate
certifying agency; subheading 8411.11.40005, HTSUS; 19 CFR
10.183; General Note 3(c)(iv), HTSUS
Dear Mr. Halpern:
This is in response to your request for a ruling on behalf
of your client, Microturbo, Inc., on the above-reference matter.
Our decision follows.
FACTS:
Microturbo designs, develops and produces gas turbine
starting systems, turbojet engines and specialized turbine
powered products for the U.S. and international defense and
aerospace industry. Microturbo imports Model TRI 60-2/074
turbojet engines in unassembled kit form under subheading
8411.11.40, HTSUS, from its parent company in France. After
assembling and testing the engines, Microturbo then sells the
engines to a U.S. aircraft manufacturer. Thereafter, the U.S.
aircraft manufacturer will incorporate the engines into unmanned
military target drones for shipment to foreign governments for
military applications. All of the imported engines will be used
exclusively for foreign military purposes. The TRI 60-2/074
engine model is certified for flight in military aerial target
drones by the U.S. military, however, this engine is not
certified by the Federal Aviation Authority (FAA).
ISSUES:
(1) Whether the TRI 60-2/074 turbojet engine qualifies as an
article for use in "civil aircraft" in order to be entered duty
free under the provisions of General Note 3(c)(iv), HTSUS.
(2) Whether the certification issued by the U.S. military is
an acceptable substitute for the required FAA certificate of use.
LAW AND ANALYSIS:
Title VI, Civil Aircraft Agreement, of the Trade Agreements
Act of 1979 (Section 601, P.L. 96-39, 93 Stat. 144, 96th Cong.,
1st Sess. 1979) (the Act), implemented the Agreement on Trade in
Civil Aircraft effective January 1, 1980. The Act provided for
duty-free treatment of certain aircraft, aircraft parts, flight
simulators, etc., sought to be imported for use in civil
aircraft. The term "civil aircraft" is defined as "all aircraft
other than aircraft purchased for use by the Department of
Defense or the United States Coast Guard". See General Note
3(c)(iv), Harmonized Tariff Schedule of the United States
(HTSUS), 19 U.S.C. 1202; 19 CFR 10.183; T.D. 84-109 at p. 276.
However, duty-free entry under the Civil Aircraft Agreement
is conditioned upon submission of a written statement
(certificate) by the importer at the time of the filing of the
entry summary which pledges that the imported merchandise 1) has
been imported for use in civil aircraft, 2) will be so used, and
3) has been approved for such use by the FAA or by the
airworthiness authority of the exporting country, if recognized
as an acceptable substitute by the FAA, or that an application
for approval for such use has been accepted by the FAA (see 19
CFR 10.183(d)(1) and (2)).
The definition of "civil aircraft" under the Act and General
Note 3(c)(iv), HTSUS, technically extends duty-free treatment
under 19 CFR 10.183 to foreign military aircraft or articles
imported for their manufacture for U.S. tariff purposes. See
T.D. 84-109 at p. 277; HQ 223408, dated December 26, 1991.
However, the Act established duty-free criteria (set forth in
General Note 3(c)(iv)) which many military aircraft do not meet,
namely, FAA certification. Therefore, the turbojet engine (which
is to be utilized in an unmanned military target drone of a
foreign military) although technically qualifying as "civil
aircraft" parts under the Act, may nevertheless fail to qualify
for duty-free treatment due to the lack of FAA certification.
The question of whether the U.S. military could be used to
approve imported parts for use in civil aircraft, instead of the
FAA, for purposes of the Act was discussed in T.D. 84-109,
Customs Regulations Amendments Relating to Civil Aircraft. In
T.D. 84-109, Customs stated that:
"[r]ecognizing an independent authority of the military
to approve aircraft for purposes of the Act would be
beyond the scope of the Act. Only the FAA, or the
airworthiness authority in the foreign country
recognized by the FAA as an acceptable substitute for
the FAA, can approve aircraft and aircraft parts under
the Act. If Congress had intended U.S. military
departments to approve parts for aircraft for purposes
of the Act, it would have so stated." T.D. 84-109 at
page 277.
Based on the above statement, it is clear that a U.S. military
certification is not an acceptable substitute for the required
FAA certificate of use. As a result, many military aircraft do
not qualify for duty-free entry under the Civil Aircraft
Agreement because they are not subject to certification by the
FAA.
It appears that since the importer Microturbo lacks the
required approval for use by the FAA or by an appropriate foreign
airworthiness authority recognized as such by the FAA, Microturbo
fails to qualify for duty-free treatment under subheading
8411.11.40, HTSUS. As a result, we need not discuss whether the
importer in good faith can complete a certification acknowledging
that the engines will be used in civil aircraft as required under
General Note 3(c)(iv) and 19 CFR 10.183.
HOLDING:
(1) Despite the fact that the turbojet engines are
technically included within the definition of "civil aircraft"
under General Note 3(c)(iv), HTSUS, they are not eligible for
free entry under the Civil Aircraft Agreement due to the lack of
a certification from the FAA.
(2) A U.S. military certification is not an acceptable
substitute for an approval for use in civil aircraft by the FAA
or by the airworthiness authority in the country of exportation,
if such approval is recognized by the FAA as an acceptable
substitute for FAA certification.
Sincerely,
John Durant, Director