CLA-2 RR:TC:SM 560630 MLR
Steven S. Weiser, Esq.
Arthur W. Bodek, Esq.
Siegel, Mandell & Davidson, P.C.
One Astor Plaza
1515 Broadway, 43rd Floor
New York, NY 10036-8901
RE: Applicability of duty exemption under HTSUS subheading
9801.00.20 to apparel; accessories; footwear; loan;
foreign exhibition
Dear Mr. Weiser and Mr. Bodek:
This is in response to your letter of August 26, 1997,
requesting a ruling on behalf of Liz Claiborne, Inc. ("LCI"),
concerning the free entry of apparel, accessories, and
footwear.
FACTS:
It is stated that various articles of LCI merchandise,
primarily apparel, accessories, and shoes, will be exported
to the United Kingdom under cover of a carnet, for display at
the "Liz Claiborne International Partnership Conference", a
company fashion show which is to take place from September
29, 1997 through October 2, 1997. It is stated that all of
the articles to be displayed at the conference have either
been previously imported into the U.S. by LCI or were made in
the U.S. With respect to the previously imported articles, it
is stated that all import duties were paid and, where
applicable, all textile export visas were presented.
LCI plans to loan the articles to its related company in
the United Kingdom, Liz Claiborne U.K., Ltd. ("LC -UK"),
pursuant to a restricted use agreement, the anticipated
format of which is enclosed with the ruling request. The use
agreement will provide that title to the property shall
remain with LCI at all times and that the articles are to be
returned to LCI in the U.S. after the conference. The
articles will be either shipped to LCI by vessel or aircraft
or hand-carried by LCI representatives.
ISSUE:
Whether the apparel, accessories, and shoes previously
imported by LCI, shipped to LC-UK in the United Kingdom for
an exhibition are eligible for the duty exemption under
subheading 9801.00.20, Harmonized Tariff Schedule of the
United States (HTSUS), when returned to the U.S.
LAW AND ANALYSIS:
Subheading 9801.00.20, HTSUS, provides duty-free
treatment for:
[a]rticles, previously imported, with respect to which
the duty was paid upon such previous importation ... if
(1) reimported, without having been advanced in value or
improved in condition by any process of manufacture or
other means while abroad, after having been exported
under lease or similar use agreements, and
(2) reimported by or for the account of the person who
imported it into, and exported it from, the United
States.
Section 10.108, Customs Regulations (19 CFR 10.108),
provides, in relevant part, that free entry shall be accorded
under subheading 9801.00.20, HTSUS, whenever it is
established to the satisfaction of the port director that the
requirements of the subheading have been met.
The predecessor of subheading 9801.00.20, HTSUS, was
item 801.00 of the Tariff Schedules of the United States
(TSUS). That particular provision was amended in 1984 to
provide for, inter alia, articles that had been exported
under "similar use agreements" and leases to entities other
than foreign manufacturers. Trade and Tariff Act of 1984,
Pub. L. No. 98-573, 118, 98 Stat. 4922 (1984). Before the
amendment, duty-free treatment applied only to merchandise
that had been exported under lease to foreign manufacturers.
In this case, Customs is asked to assume that each of
the foreign-origin articles was previously imported by LCI
with duty paid. It is claimed that LCI is maintaining the
relevant initial import entries. Based upon the use
agreement presented, we find that the articles will be
exported to the United Kingdom from the U.S. pursuant to a
lease or similar use agreement. See Werner & Pfleiderer
Corp., v. United States, 17 CIT 916, 918 (1993).
Furthermore, we find that the merchandise will not advanced
in value or improved in condition if they are merely
exhibited at the conference abroad. Accordingly, the
apparel, accessories, and shoes will qualify for duty-free
treatment under subheading 9801.00.20, HTSUS, provided LCI
previously imported the foreign-origin articles and paid duty
thereon, the articles are reimported by LCI or for its
account, and the documentary requirements of 19 CFR 10.108
are satisfied. Textile and apparel products imported under
this tariff provision are not subject to visa/quota
requirements. 59 FR 14392 (March 28, 1994).
In addition, subheading 9801.00.10, HTSUS, provides for
the free entry of products of the U.S. that have been
exported and returned without having been advanced in value
or improved in condition by any process of manufacture or
other means while abroad. We find that any U.S.-origin
merchandise exported, exhibited abroad, and returned to the
U.S. may, in the alternative, be entered under subheading
9801.00.10, HTSUS, provided the documentary requirements of
19 CFR 10.1 are satisfied.
HOLDING:
Based on the information submitted, we find that the
apparel, accessories, and shoes shipped by LCI to LC-UK for
exhibition purposes will be eligible for the duty exemption
under subheading 9801.00.20, HTSUS, when returned to the U.S.
provided they are reimported by or for the account of LCI,
LCI previously imported the merchandise and paid duty
thereon, and the documentary requirements of 19 CFR 10.108
are satisfied. In the alternative, any articles which are of
U.S. origin and exported for exhibition and returned, will be
eligible for duty-free treatment under subheading 9801.00.10,
HTSUS, provided the documentary requirements of 19 CFR 10.1
are satisfied.
A copy of this ruling letter should be attached to the
entry documents filed at the time the goods are entered. If
the documents have been filed without a copy, this ruling
should be brought to the attention of the Customs officer
handling the transaction.
Sincerely,
John Durant, Director
Tariff Classification Appeals
Division