OT-RR:CTF:VS H047375 GOB
Frank J. Schuchat, Esq.
Schuchat, Herzog & Brennan, LLC
1900 Wazee Street
Suite 300
Denver, CO 80202
RE: Jade; Jade Jewelry; Prohibited Merchandise; the JADE Act; 19 CFR § 12.151
Dear Mr. Schuchat:
This is in response to your correspondence of November 7, 2008 to the National Commodity Specialist Division of U.S. Customs and Border Protection (“CBP”) in which you request a ruling on behalf of Mason-Kay, Inc. (“Mason-Kay” or the “requester”). The National Commodity Specialist Division forwarded your request to this office by memorandum of December 8, 2008. Our ruling follows.
FACTS:
You describe the pertinent facts as follows. Mason-Kay has been in the wholesale jade business since 1976, selling fine jade jewelry and loose jade. It has a longstanding relationship with a Hong Kong firm which performs work with jade and jade jewelry and whose expertise is not available in the United States. You describe the work to be performed on certain jade jewelry products as follows: (1) the repair and/or restoration of cracked and broken bangles in jade jewelry; (2) the replacement of a small, jade stone in the clasp of an article; (3) the pinning and gluing of a section in a jade bracelet; (4) the replacement of a frame surrounding a jade slab in a pendant; and (5) the replacement of a jade carving in an article.
You “request a ruling that, notwithstanding the provisions of the Tom Lantos Block Burmese J.A.D.E. (Junta Anti-Democratic Effort) Act, Mason-Kay may temporarily export damaged jade jewelry products from the United States to its workshop in Hong Kong for restoration there, and then return the items to the United States.”
You state that “[t]he activity which will take place in Hong Kong is merely to restore the jewelry items to a state which is as close as possible to the original condition, without advancing the value of the items.”
You also request a ruling as to the classification under the Harmonized Tariff Schedule of the United States (“HTSUS”) of the jade jewelry after restoration.
In your submission of November 7, 2008, you did not state the country of origin of the subject jade jewelry products. In some instances, you state that jade will be made into a jewelry article in Hong Kong. In response to our request for information on this issue, you stated in pertinent part as follows:
The importer Mason Kay will not necessarily know the origin of the jade in a customer’s jewelry which is exported for repair, or the date of original importation, but the original import date will always be before September 27, 2008.
If the repair item was originally sold to the customer by Mason Kay, Mason Kay may know where the jade was mined and in some cases that may be Burma. For other customer’s jewelry where Mason Kay was not the original seller, Mason Kay probably would not know the origin of the jade or the exact date the item originally entered the US.
ISSUE:
Whether, under the stated facts, the requester may enter into the United States certain jade jewelry products?
LAW AND ANALYSIS:
On July 29, 2008, the President signed into law the JADE Act (Pub. L. 110-286).
Section 3A of the JADE Act provides in pertinent part as follows:
(a) Definitions. In this section:
. . .
(2) Burmese Covered Article. The term ‘Burmese covered article’ means-
(A) jadeite mined or extracted from Burma;
(B) rubies mined or extracted from Burma; or
(C) articles of jewelry containing jadeite described in subparagraph (A) or rubies described in subparagraph (B).
. . .
(b) Prohibition on Importation of Burmese Covered Articles.
(1) In General. Notwithstanding any other provision of law, until such time as the President determines and certifies to the appropriate congressional committees that Burma has met the conditions described in section 3(a)(3), beginning 60 days after the date of the enactment of the Tom Lantos Block Burmese Jade (Junta’s Anti-Democratic Efforts) Act of 2008, the President shall prohibit the importation into the United States of any Burmese covered article.
In CBP Dec. 09-01, published in the Federal Register on January 16, 2009 (74 FR 2844), CBP published an interim final rule entitled “Prohibitions and Conditions for Importation of Burmese and Non-Burmese Covered Articles of Jadeite, Rubies, and Articles of Jewelry Containing Jadeite or Rubies.” The interim final rule was effective on January 16, 2009. Section 12.151, CBP Regulations (19 CFR § 12.151) provides in pertinent part as follows:
General. The importation into the United States of jadeite, rubies, and articles of jewelry containing jadeite or rubies is prohibited or conditioned as described in this section pursuant to the Tom Lantos Block Burmese JADE Act of 2008 (Pub. L. 110-286). For purposes of this section, the following definitions apply:
(1) Jadeite. “Jadeite” means any jadeite classifiable under heading 7103 of the Harmonized Tariff Schedule of the United States (HTSUS);
(2) Rubies. “Rubies” means any rubies classifiable under heading 7103 of the HTSUS;
(3) Articles of jewelry containing jadeite or rubies. “Articles of jewelry containing jadeite or rubies” means any article of jewelry classifiable under heading 7113 of the HTSUS that contains jadeite or rubies, or any article of jadeite or rubies classifiable under heading 7116 of the HTSUS; . . .
Prohibited Articles. The following articles are prohibited from importation into the United States (see 31 CFR Part 537):
Jadeite mined or extracted from Burma;
Rubies mined or extracted from Burma; and
Articles of jewelry containing jadeite or rubies mined or extracted from Burma.
(c) Regulated articles. Jadeite, rubies, or articles of jewelry containing jadeite or rubies may not be imported into the United States unless the importer certifies (see paragraph (d) of this section) that those jadeite or rubies were mined or extracted from a country other than Burma and possesses the documents described in paragraph (e) of this section.
(d) Certification of importer. Pursuant to Additional U.S. Note 4(a), Chapter 71, HTSUS, if an importer enters any good (or withdraws any good from warehouse for consumption) under heading 7103, 7113, or 7116 of the HTSUS, the presentation of the entry serves as a certification by the importer that any jadeite or rubies contained in such good were not mined or extracted from Burma.
Certification of exporter. If an importer enters (or withdraws from warehouse for consumption) jadeite, rubies, or jewelry containing jadeite or rubies:
The importer must have in his possession a certification from the exporter (exporter certification) certifying that the jadeite or rubies were not mined or extracted from Burma, with verifiable evidence from the exporter that tracks the jadeite or rubies: In rough form, from mine to exportation; and for finished jadeite, polished rubies, and articles of jewelry containing jadeite or rubies, to the place of final finishing; and
The importer must maintain, for a period of not less than 5 years from the date of entry of the good, a full record of, in the form of reports or otherwise, complete information relating to any act or transaction related to the purchase, manufacture, or shipment of the good.
Requirement to provide information. An importer who enters any good (or withdraws any good from warehouse for consumption) under heading 7103, 7113, or 7116 of the HTSUS must provide all documentation to support the certifications described in paragraphs (d) and (e) of this section to CBP upon request or be subject to recordkeeping penalties under part 163 of the chapter.
Inapplicability. This section does not apply to the following articles:
(1) Jadeite, rubies, and articles of jewelry containing jadeite or rubies that are reimported into the United States after having been previously exported from the United States, including those that accompanied an individual outside the United States for personal use, if they are reimported into the United States by the same person who exported them, without having been advanced in value or improved in condition by any process or other means while outside the United States; . . .
See also Additional U.S. Note 4 to Chapter 71, HTSUS.
The National Commodity Specialist Division advises that jade jewelry is classified in heading 7116, HTSUS.
As stated in the Facts section of this ruling, you state that Mason Kay will not necessarily know the origin of the jade in a customer’s jewelry which is exported for repair. You state that “[i]f the repair item was originally sold to the customer by Mason Kay, Mason Kay may know where the jade was mined and in some cases that may be Burma.”
Based upon the facts presented, we note the following. If Mason-Kay seeks to enter any good under heading 7103, 7113, or 7116, HTSUS, the presentation of the entry serves as a certification by the importer that any jadeite or rubies contained in such good were not mined or extracted from Burma. See 19 CFR § 12.151(d). As stated above, jade jewelry is classified in heading 7116, HTSUS. See also 19 CFR § 12.151(e) concerning the certification of the exporter that the importer must have in his possession certifying that the jadeite or rubies were not mined or extracted in Burma, as well as certain verifiable evidence from the exporter. We note that this requirement applies even if the jadeite is made into an article of jewelry in Hong Kong if the jadeite used is mined or extracted from Burma.
The exception of 19 CFR § 12.151(g) will apply if the jade jewelry products are reimported into the U.S. after having been previously exported from the U.S., if they are reimported by the same person who exported them without having been advanced in value or improved in condition by any process or other means while outside the U.S. The critical inquiry here is whether the repair and/or restoration of the jade jewelry products constitutes an advancement in value or improvement in condition.
Subheading 9802.00.50, HTSUS, provides for a partial duty exemption for: “Articles returned to the United States after having been exported to be advanced in value or improved in condition by any process of manufacture or other means: Articles exported for repairs or alterations: Other[.]” The terms of subheading 9802.00.50, HTSUS, clearly indicate that, within the scope of this provision, a repair or alteration constitutes an advancement in value or improvement in condition.
In Press Wireless, Inc. v. United States, 6 Cust. Ct. 102 (1941), the court found that radio tubes or valves replaced with heavier filaments were repaired within the meaning of the predecessor provision to subheading 9802.00.50, HTSUS. The court found that the tubes or valves, via the repairs, were “restored to their original efficiency so as to prolong their usefulness.”
Accordingly, we find that the work to be performed on the subject articles, as described in (1) - (4) in the Facts section of this ruling, constitutes an advancement in value and/or an improvement in condition of such articles. Therefore, we find that the exception of 19 CFR § 12.151(g) does not apply here because the jade jewelry products will be advanced in value and/or improved in condition by the work to be performed by the Hong Kong firm. Furthermore, the work to be performed in (5) in the Facts section of this ruling will also not fall within the exception of 19 CFR § 12.151(g) and may constitute a new and different article.
If the subject jade jewelry articles contain jadeite or rubies mined or extracted from Burma, they are prohibited from importation into the United States pursuant to section 3A(b) of the JADE Act and 19 CFR § 12.151(b). Pursuant to 19 CFR § 12.151(d), if Mason-Kay enters any good under heading 7103, 7113, or 7116, HTSUS, the presentation of the entry serves as a certification by the importer that any jadeite or rubies contained in the goods were not mined or extracted from Burma. If Mason-Kay enters jewelry containing jadeite or rubies, it must have in its possession a certification from the exporter that the jadeite or rubies were not mined or extracted from Burma with verifiable evidence as specified in 19 CFR § 12.151(e).
HOLDING:
If the subject jade jewelry articles contain jadeite or rubies mined or extracted from Burma, they are prohibited from importation into the United States pursuant to section 3A(b) of the JADE Act and 19 CFR § 12.151(b).
The exception of 19 CFR § 12.151(g) is not applicable under the stated facts.
The presentation of an entry of a good under heading 7103, 7113, or 7116, HTSUS, serves as an importer certification as described in 19 CFR § 12.151(d).
If Mason-Kay enters jewelry containing jadeite or rubies, it must have an exporter certification as described in 19 CFR § 12.151(e).
A copy of this ruling letter should be attached to the entry documents filed at the time the subject goods are entered. If the documents have been filed without a copy of this ruling letter, the ruling letter should be brought to the attention of CBP official at the port of entry.
Sincerely,
Monika R. Brenner
Chief
Valuation & Special Programs Branch