CLA OT:RR:CTF:VS H080835 RSD
Mr. Salvatore V. Meleleo
Giorgio Gori,
80 River Street, 3rd Floor
Hoboken, New Jersey 07030
RE: Eligibility of imported wines from Argentina transshipped through Chile under the Generalized System of Preferences (“GSP”); imported directly, 19 CFR 10.175
Dear Mr. Meleleo:
This is in response to your letter dated October 14, 2009, requesting a ruling concerning the eligibility of wines imported from Argentina for the GSP.
FACTS:
Your letter states that your company imports Chilean and Argentinean wines. The wines come in a variety of colors and types. Most of the wines are under 14 percent alcohol and are valued at a range of approximately 16 to 55 US dollars per case of either 12/750ml bottles or 6/1.5L bottles. One wine will be a red wine with a 14.8 percent alcohol content. Sample labels and commercial invoices were submitted for our review.
According to your letter, wines produced in Argentina and intended for export to the United States are sometimes trucked and stored at Giorgio Gori’s warehouse in Chile before they are loaded into a container with other Chilean wines destined to the United States. When the Argentinean wines arrive in Chile, they are already labeled to show that they are intended to be sold in the United States. The wine does not enter a foreign trade zone at any time and it does not enter into the commerce of Chile. The Argentinean wine is stored in a temperature controlled warehouse in Chile. It is already shrink wrapped and palletized when it arrives at the Chilean border. When the wine crosses the border into Chile, it clears Customs for export, and documentation is signed stating that this is a temporary importation and that the wine is destined for the United States. The wine is then loaded on a vessel bound for the United States.
ISSUE:
Whether the subject wine from Argentina which is transshipped through Chile for warehousing before being shipped to the United States is eligible for preferential duty treatment under the GSP.
LAW AND ANALYSIS:
Title V of the Trade Act of 1974, as amended (19 U.S.C. §§ 2461-65), authorizes the President to establish a Generalized System of Preferences to provide duty-free treatment for eligible articles imported directly from beneficiary developing countries ("BDCs"). Articles produced in a BDC may qualify for duty-free treatment under the GSP if the goods are imported directly into the customs territory of the United States from the BDC and the sum of the cost or value of materials produced in the BDC, plus the direct costs of the processing operations performed in the BDC or member countries, is equivalent to at least 35 percent of the appraised value of the article at the time of entry into the United States. See 19 U.S.C. § 2463(a)(2) and (3), and the implementing Bureau of Customs and Border Protection ("CBP") Regulations at 19 C.F.R. § 10.171-178.
In the present case, we will assume that the country of origin of the bottles of wine under consideration is Argentina. Argentina has been designated as a BDC for purposes of the GSP and may be afforded preferential treatment under 2010 Harmonized Tariff Schedule of the United States (HTSUS). General Note 4(b)(ii) and (c), HTSUS, provides, in part, that special tariff treatment under the GSP is indicated in the "Special" subcolumn in the tariff by the symbols "A," "A*" or "A+." Wines that are being imported with an alcoholic strength by volume not over 14 percent are classifiable in subheading 2204.21.50, HTSUS, which is annotated for GSP in the Special Rates of Duty column with the symbol “A+”. This symbol indicates that preferential duty treatment under this subheading is extended only to countries designated as “least developed developing countries”. General Note 4(b)(i), HTSUS contains a list of countries designated as “least developing countries”. Argentina is not included on this list of countries, and therefore products from Argentina are not eligible for the preferential duty treatment under the GSP if they are classifiable under subheading 2204.21.50, HTSUS.
You indicate that you import a red wine called Golden Malbec with an alcoholic volume of 14.8 percent. The applicable classification for wine with an alcoholic strength by volume over 14 percent vol. is subheading 2204.21.80, HTSUS. Subheading 2204.21.80, HTSUS is annotated for GSP in the Special Rates of Duty column with the symbol “A”. This symbol indicates that preferential duty treatment is extended to products classified under the applicable subheading from the countries listed in General Note 4(a), HTSUSA, as a
designated beneficiary developing country. Argentina is listed as a designated beneficiary country in General Note 4(a), HTSUS. Thus, because the Golden Malbec is classified in subheading 2204.21.80, HTSUS, it is eligible for the preferential tariff treatment under the GSP provided that the other criteria for the GSP are met.
The main issue in this case concerns whether the bottles of wine from Argentina will be considered to be "imported directly" from Argentina to the United States, when they are first trucked from Argentina to Chile to be warehoused before they are shipped to the U.S. The "imported directly" requirement is defined in 19 C.F.R. § 10.175, in pertinent part, as follows:
(a) Direct shipment from the beneficiary country to the U.S. without passing through the territory of any other country; or
(b) If the shipment is from a beneficiary developing country to the U.S. through the territory of any other country, the merchandise in the shipment does not enter into the commerce of any other country while en route to the U.S., and the invoice, bills of lading, and other shipping documents show the U.S. as the final destination; or
(c) If shipped from the beneficiary developing country to the U.S. through a free trade zone in a beneficiary developing country, the merchandise shall not enter into the commerce of the country maintaining the free trade zone, and
(1) the eligible articles must not undergo any operation other than:
(i) sorting, grading, or testing,
(ii) packing, unpacking, changes of packing, decanting or repacking into other containers,
(iii) affixing marks, labels, or other like distinguishing signs on articles or their packing, if incidental to operations allowed under this section, or
(iv) operations necessary to ensure the preservation of merchandise in its condition as introduced into the free trade zone.
(d) if the shipment is from any beneficiary developing country to the U.S. through the territory of any other country and the invoices and other documents do not show the U.S. as the final destination, the articles in the shipment upon arrival in the U.S. are imported directly only if they:
(1) remained under the control of the customs authority of the intermediate country;
(2) did not enter into the commerce of the intermediate country except for the purpose of sale other than at retail, and the port director is satisfied that the importation results from the original commercial transaction between the importer and the producer or the latter’s sales agent; and
(3) were not subjected to operations other than loading and unloading, and other activities necessary to preserve the articles in good condition.
CBP has granted GSP duty-free treatment in cases of transshipment when the invoices, shipping documents, and other supporting documents showed the U.S. as the final destination for GSP eligible goods, and the goods met the general requirements of the phrase "imported directly.” See Headquarters Ruling Letter (HQ) 560688, dated January 26, 1998; HQ 559535, dated September 20, 1996; February 11, 1998; and HRL 556079, dated July 2, 1991.
In HQ 556079 dated July 2, 1991, ethylene glycol was produced in the Czech and Slovak Federal Republic (Czechoslovakia). However, as Czechoslovakia had no outlet on the sea, the produce had to be shipped overland from Czechoslovakia to Rotterdam, Netherlands, where it was held in
storage tanks before being loaded onto a U.S.-bound ocean carrier and shipped to the U.S. In HQ 556079, it was possible that the ethylene glycol could be stored in the Netherlands for as long as 30 days. At no time did the ethylene glycol enter the commerce of the Netherlands or any other country of transshipment. Moreover, from the Czechoslovakia border until the goods were
loaded on board the U.S.-bound ship, the merchandise was held under bond in storage. We held in HQ 556079 that if the invoice, bill of lading, GSP certificate, certificate of origin and other original shipping documents issued in Czechoslovakia showed the U.S. as the final destination, the ethylene glycol would be considered "imported directly" pursuant to 19 C.F.R. 10.175(b).
We stated that this requirement is intended both to establish a connection between the imported merchandise and its country of origin and to show that the passage of the merchandise through the intermediate country involved a mere
transshipment rather than entry into the commerce of the intermediate country.
Furthermore, we noted that whereas this requirement does not preclude multiple modes of transportation such as air, sea or different carriers of the same type, the documents presented as evidence of compliance with this requirement must include the original shipping documents issued in the BDC, showing the U.S. as the final destination.
In HQ 559535 dated September 20, 1996, we held that calculators shipped from Thailand and Malaysia through Japan or other intermediary country before importation into the United States would satisfy the "imported directly" requirement under 19 CFR 10.175(b), assuming that the commercial invoices, bills of lading, and other shipping documents showed the United States as the final destination for the merchandise, and the calculators did not enter the commerce of the immediate country.
In HQ 560720, dated February 11, 1998, CBP considered the issue of whether certain rifle scopes were eligible for duty-free treatment under the GSP. The imported rifle scopes originated in the Philippines, Thailand, and other countries and were stored in a warehouse in an intermediary country such as Japan, where they were not sold. The invoices, shipping documents and bill of lading showed the U.S. as the final destination for the merchandise. CBP ruled in HQ 560720 that the rifle scopes satisfied the "imported directly" requirement.
In this case, you claim that the wine does not enter the commerce of Chile. You further indicate that when the wine crosses the border from Argentina into Chile, it clears Customs for export, and documentation is submitted stating this is a temporary importation and that the wine is destined for the United States. We note that when the bottles of wine under consideration are shipped to Chile from Argentina, they will be labeled in English and they are intended for sale in the United States. This is demonstrated by the fact that the seller has filed an application for approval of the labeling on the bottles with the United States Alcohol and Tobacco Tax and Trade Bureau of the Department of Treasury. In addition, the invoice for the wine indicates that it will be shipped from Chile to the United States. Most significantly, two submitted trucking way bills show that the cases of wine will be shipped from Argentina to a port in Chile for loading onto a vessel bound for United States with a destination of either New York or Oakland, California. Although the shipments of wine may contain both GSP eligible wine from Argentina and wine from Chile, which is ineligible for the GSP, you have stated that the wine from the two countries will be segregated such that it will be possible to tell which wines are from Argentina and which wines are from Chile. The country of origin of the wines will be clearly discernable from the invoices as the individual wines will each have a separate line on the invoices which will display their country of origin. Under these circumstances, we conclude that the imported directly requirement of 19 CFR 10.175(b) will be satisfied.
Please note that, pursuant to 19 C.F.R. 10.174, the port director may require that appropriate shipping papers, invoices, or other documents be submitted within 60 days of the date of entry as evidence that the articles were "imported directly". In addition, this provision states that any evidence of direct shipment required by the port director shall be subject to such verification as the port director deems necessary.
HOLDING:
Based on the information provided, we find that the Argentinean origin wine shipped to Chile only for temporarily storage and shipping convenience so that it does not enter the commerce of Chile would be considered "imported directly" from the Argentina to the United States for purposes of qualifying for preferential tariff treatment under the GSP. Therefore, the Argentinean wine classified in subheading in subheading 2204.21.80, HTSUS will be eligible for the preferential duty treatment under the GSP. This finding is applicable only if the port director at the port of importation is satisfied that the commercial invoices, bills of lading, and other shipping documents for the relevant transactions show that the wine will be shipped to the United States as the final destination of the merchandise.
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is 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,
Monika R. Brenner, Chief
Valuation & Special Programs Branch