OT:RR:CTF:VS H319817 EE
Ms. Michelle L. Garrow
Metro Customs Brokers Inc.
1 Lincoln Blvd
Champlain, NY 12919
RE: 9801.00.10, HTSUS; Household Products
Dear Ms. Garrow:
This is in response to your letter, dated March 29, 2021 on behalf of your client, Artika for Living Inc. (“Artika”), concerning the applicability of subheading 9801.00.10, Harmonized Tariff Schedule of the United States (“HTSUS”), to certain household products.
FACTS:
Artika is an importer, wholesaler and distributor of household products
including lighting fixtures and sinks purchased from unrelated vendors abroad primarily in China and Cambodia. You state that currently, the merchandise is sold for exportation to the United States and is delivered to a port of entry in the United States, where it is entered for consumption and duties are paid. The goods are appraised on the basis of transaction value according to the prices paid to the unrelated Chinese vendors. In rare instances where the imported goods have been resold to United States purchasers, the goods are unloaded from the carriers in the United States and shipped to the purchasers. Most goods, however, are exported to Canada, without benefit of drawback, where they are stored in a duties relief warehouse engaged by Artika. You state that Artika’s inventory is arranged by product code and all the inventory is traceable to a particular United States import entry, export bill of lading, and Canadian B-3 Customs’ entry for consumption transaction. When customers in the United States order merchandise, Artika ships it to the United States customer from the Canadian warehouse.
You state that Artika will not perform any processes or alterations to the merchandise while abroad. They will be subjected to simple storage operations and, in some cases, the master cartons will be opened and products removed for repacking in smaller cartons in Canada. You state that the goods will not be advanced in value or improved in condition while in Canada and they will be imported into the United States within three years after been exported to Canada.
ISSUE:
Whether the merchandise is eligible for duty-free treatment under subheading 9801.00.10, HTSUS.
LAW AND ANALYSIS:
Section 904(b) of the Trade Facilitation and Trade Enforcement Act of 2015 (Pub. L. 114-125, February 24, 2016) amended subheading 9801.00.10, HTSUS, to include any products which are returned within 3 years after having been exported. Previously, subheading 9801.00.10, HTSUS, only applied to products of the United States. Subheading 9801.00.10, HTSUS, now provides for the duty-free treatment of:
Products of the United States when returned after having been exported, or any other products when returned within 3 years after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad.
In the instant case, you state the household products are not products of the United States. Although we have not been provided with any information on the value of your shipments, we assume for purposes of your inquiry that they would be valued at over $2,500. Section 10.1, CBP Regulations (19 C.F.R. § 10.1) sets forth the documentary requirements for entry under subheading 9801.00.10, HTSUS. We note that CBP has not yet amended the regulations to implement the change to subheading 9801.00.10, HTSUS. Nonetheless, 19 C.F.R. § 10.1(a)(1) provides that the foreign shipper declare the following information with regard to articles in a shipment valued over $2,500: the port of exportation, the date of exportation, the quantity, the description of the merchandise, the value of the merchandise, the date of the declaration, and whether the articles were returned without having been advanced in value or improved in condition by any process of manufacture or other means. In addition, the documentation is to be filed “in connection with the entry.”
Section 10.1(a)(2), CBP Regulations (19 C.F.R. § 10.1(a)(2)), requires the owner, importer, consignee, or agent having knowledge of the facts regarding the claim for free entry to declare that the foreign shipper’s statement is true, and, that the articles were not manufactured or produced in the United States under subheading 9813.00.05, HTSUS, and that the articles were exported from the United States without benefit of drawback. The information required also pertains to the name of the manufacturer, the location of the manufacturer, and the date of the declaration.
You state that the merchandise will be imported into the United States within three years after been exported to Canada. Further, you state that the goods will be exported from the United States to Canada without the benefit of drawback. You also provide that while the merchandise is in Canada, it is stored in a duties relief warehouse and Artika’s inventory tracks the merchandise by shipment, product, and all of the merchandise can be traced back to specific U.S. Customs entries, export bill of lading, and Canadian B-2 Customs entry for consumption transaction which would help verify that the returned article is the same article that was exported from the United States, which is absolutely essential in order to qualify for subheading 9801.00.10, HTSUS, treatment. You also state that the household goods exported to Canada do not undergo any operations, other than storage and repacking the shipments.
In United States v. John V. Carr & Sons, Inc., 347 F. Supp. 1390 (Cust. Ct. 1972), 496 F.2d 1225 (CCPA 1974), the court stated that absent some alteration or change in the item itself, the mere repackaging of the item, even for the purpose of resale to the ultimate consumer, is not sufficient to preclude the merchandise from being classified under item 800.00, Tariff Schedules of the United States (TSUS) (now subheading 9801.00.10, HTSUS). Since mere repackaging does not advance in value or improve in condition the household goods at issue, the merchandise will be eligible for duty-free treatment under subheading 9801.00.10, HTSUS, provided the documentary requirements of 19 C.F.R. § 10.1 are satisfied.
HOLDING:
Based on the information presented, the household products at issue are eligible for duty-free treatment under subheading 9801.00.10, HTSUS, provided the documentary requirements of 19 C.F.R. § 10.1 are satisfied.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.”
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 CBP officer handling the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation and Special Programs Branch