OT:RR:CTF:VS H251086 EE
Port Director
U.S. Customs and Border Protection
1000 2nd Avenue, Suite 2100
Seattle, WA 98104-3629
RE: Protest No. 3001-13-100449; High Frequency Inductive Antenna Coupler; Civil Aircraft Agreement
Dear Port Director:
This is in response to the Application for Further Review (“AFR”) of Protest No. 3001-13-100449, timely filed by the importer, [X] (hereinafter, the “protestant”), on November 13, 2013, concerning the eligibility of a certain high frequency inductive antenna coupler for duty-free treatment under the Agreement on Trade in Civil Aircraft (“the Agreement”), also known in the Harmonized Tariff Schedule of the United States (“HTSUS”) as the Civil Aircraft Agreement (“CAA”).
The protestant has asked that certain information submitted in connection with this AFR be treated as confidential. Inasmuch as this request conforms to the requirements of 19 C.F.R. § 177.2(b)(7), the request for confidentiality is approved. The information contained within brackets and all attachments to this ruling request, forwarded to our office, will not be released to the public and will be withheld from published versions of this ruling.
FACTS:
The protestant states that the high frequency antenna coupler manufactured in Germany by the manufacturer [X] and the [X] high frequency transceiver system comprise a radio communication system designed for use in civil aircraft. The system permits radio communications over long ranges. The antenna coupler can be used in a single or dual high frequency system configuration with one or two antennas. In a typical dual high frequency system with a single antenna, while one antenna coupler is tuning or in the transmit mode, the other coupler is interlocked to prevent simultaneous transmission by both systems. The antenna coupler automatically stores tuning information for up to 1500 Radio Frequency channels. When tuning to a frequency for which valid tuning information is stored in memory, the antenna coupler tunes to the frequency within 20 milliseconds. When tuning to a new frequency for which no information or invalid information is stored in memory, the antenna coupler learns the proper impedance matching settings (tunes) within 1 second. The protestant imported the high frequency antenna coupler to be used as original equipment in the manufacture of aircraft.
The protestant entered the high frequency inductive antenna coupler under subheading 8504.31.40, HTSUS, and U.S. Customs and Border Protection (“CBP”) does not dispute this classification. The importer also entered the high frequency inductive antenna coupler using Special Program Indicator (“SPI”), “C”. SPI “C” is the HTSUS SPI for merchandise for which preferential treatment under the CAA is being claimed. See General Note (“GN”) 3(c)(i), HTSUS. CBP determined that the high frequency inductive antenna coupler did not meet the requirements of the CAA, and therefore, liquidated the entries without preferential treatment on May 24, 2013.
The protestant submitted the following documents: two Technical Standard Order Authorization (“TSOA”) letters issued by the Federal Aviation Administration (“FAA”) to the manufacturer which list the product family/part number; a list of European Technical Standard Order (“ETSO”) authorizations issued by the European Aviation Safety Agency (“EASA”) which lists the manufacturer and the product family/part number; the manufacturer’s affidavit certifying that the high frequency inductive antenna coupler at issue was manufactured by the manufacturer in its plant in Germany; a commercial invoice from [X] to the protestant for the high frequency inductive antenna coupler; and, a purchase agreement between the protestant’s customer and a foreign airline [X] for delivery of [X] aircraft.
ISSUE:
Is the high frequency inductive antenna coupler eligible for preferential tariff treatment under the CAA?
LAW AND ANALYSIS:
The Agreement on Trade in Civil Aircraft was implemented by Title VI, “Civil Aircraft Agreement” of the Trade Agreements Act of 1979 (Sec. 601, Pub. L. 96 39, 93 Stat. 144, 96th Cong., 1st Sess. 1979), effective January 1, 1980, and became headnote 3 to schedule 6, part 6, Tariff Schedules of the United States (“TSUS”). Headnote 3 to schedule 6, part 6, TSUS, became GN 3(c)(iv) when the HTSUS was enacted, and became GN 6, HTSUS, with minimal changes in 1995. GN 6, HTSUS, was then amended by section 12 of the Miscellaneous Trade and Technical Corrections Act of 1996, Pub. L. 104-295, 110 Stat. 3514 (Oct. 11, 1996). Subsection (a) of GN 6, HTSUS, provides:
(a) Whenever a product is entered under a provision for which the rate of duty “Free (C)” appears in the “Special” subcolumn and a claim for such rate of duty is made, the importer--
(i) shall maintain such supporting documentation as the Secretary of the Treasury may require; and
(ii) shall be deemed to certify that the imported article is a civil aircraft, or has been imported for use in a civil aircraft and will be so used.
In order to be considered a “civil aircraft” under GN 6(a)(ii), the product must meet the description of “civil aircraft”, as laid out in GN 6(b)(i), HTSUS:
For purposes of the tariff schedule, the term “civil aircraft” means any aircraft, aircraft engine, or ground flight simulator (including parts, components, and subassemblies thereof) - -
(A) that is used as original or replacement equipment in the design, development, testing, evaluation, manufacture, repair, maintenance, rebuilding, modification, or conversion of aircraft; and
(B) (1) that is manufactured or operated pursuant to a certificate issued by the Administrator of the Federal Aviation Administration under [49 U.S.C. § 44704], or pursuant to the approval of the airworthiness authority in the country of exportation, if such approval is recognized by the FAA as an acceptable substitute for such an FAA certificate; . . .
The regulations implementing GN 6, HTSUS, are enumerated in 19 C.F.R. § 10.183, and the documentation requirements are in subsection 10.183(e). Subsection 10.183(e) provides that each entry claiming duty-free treatment under GN 6 as “civil aircraft” must be supported by documentation verifying that claim, including the written order or contract and other evidence. The regulation states that:
Evidence that the merchandise qualifies under the general note includes evidence of compliance with paragraph (a)(1) of this section concerning use of the merchandise and evidence of compliance with the airworthiness certification requirement of paragraph (a)(2)(i), (a)(2)(ii), or (a)(2)(iii) of this section, including, as appropriate in the circumstances, an FAA certification; [and/or] approval of airworthiness by an airworthiness authority in the country of export and evidence that the FAA recognizes that approval as an acceptable substitute for an FAA certification. . . .
19 C.F.R. § 10.183(e). The regulation further provides that this documentation does not need to be filed with the entry, but must be maintained in accordance with the general note and the recordkeeping requirements of 19 C.F.R. Part 163. CBP may also request production at any time to verify the CAA claim. See 19 C.F.R. § 10.183(e).
In accordance with GN 6(a), HTSUS, the high frequency inductive antenna coupler was imported under subheading 8504.31.40, HTSUS, which is designated with the SPI “C”. This classification is not disputed by CBP. The issue in this case is whether the imported high frequency inductive antenna meets the requirements of GN 6(b)(i), HTSUS, as “civil aircraft,” or “ for use in a civil aircraft and will be so used” under GN 6(a)(ii).
In the instant case, the high frequency inductive antenna is used as original equipment in the manufacture of aircraft. To support this, the protestant submitted a purchase agreement between the protestant’s customer and a foreign airline [X]. The purchase agreement lists all original equipment in the aircraft as delivered to the foreign airline, including the high frequency inductive antenna at issue. The part number of the high frequency inductive antenna at issue matches the one listed in the purchase agreement.
Additionally, as previously noted, the protestant submitted two TSOA letters issued by the FAA to the manufacturer; a list of ETSO authorizations issued by the EASA which lists the manufacturer and the product family/part number for the merchandise at issue; an affidavit from the manufacturer; and, a commercial invoice from [X] to the protestant as evidence that the merchandise qualifies under GN 6(b)(i)(B)(1). A TSO issued by the FAA is a minimum performance standard for specified articles used on civil aircraft. See 14 C.F.R. § 21.601(b)(1). A Technical Standard Order Authorization (“TSOA”) is an FAA design and production approval issued to the manufacturer of an article that has been found to meet a specific TSO. See 14 C.F.R. § 21.601(b)(2). The first TSOA submitted by the protestant lists the TSO number [X]; TSO title (high frequency radio communications transmitting equipment operating within the radio frequency range 1.5-3.0 megahertz); TSO holder’s name (the manufacturer); TSO holder’s address in Germany; latest update (January 1, 1994); and, the product family/part number for the high frequency inductive antenna coupler at issue. The second TSO lists the TSO number [X]; TSO title (high frequency radio communications receiving equipment operating within the radio frequency range 1.5-3.0 megahertz); TSO holder’s name (the manufacturer); TSO holder’s address in Germany; latest update (January 1, 1994); and, the product family/part number for the high frequency inductive antenna coupler at issue. The information on the TSOAs matches the commercial invoice from [X] to the protestant, including the product family/part number and description of merchandise. Further, the list of ETSO authorizations submitted by the protestant includes an ETSO authorization issued by EASA to the manufacturer; the approval number [X]; date of last issue (November 12, 2002); description; product family/part number for the high frequency inductive antenna coupler at issue; and, the ETSO standard number [X]. The information on the authorization matches the information listed on the invoice from [X] to the protestant.
Based on the information presented, we find that the high frequency inductive antenna is used as original equipment in the manufacture of aircraft and is manufactured pursuant to the TSOAs issued by the FAA under 14 C.F.R. Part 21, the FAA regulations which govern the certification procedures for products and parts. As such, we find that the high frequency inductive antenna coupler meets the definition of “civil aircraft” provided in GN 6(b).
HOLDING:
The protest should be ALLOWED. The high frequency inductive antenna coupler is entered under a provision for which the SPI “C” is present and meets the definition of “civil aircraft” provided in GN 6(b).
In accordance with the Protest/Petition Processing Handbook (CIS HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than sixty days from the date of this letter. Sixty days from the date of the decision Regulations and Rulings of the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division