OT:RR:CTF:VS H350673 EE
Mr. Cristopher M. Kane
Simon Gluck & Kane LLP
55 Front Street, Suite 8
Rockville Centre, New York 11570
RE: Subheading 9813.00.50, HTSUS; 9801.00.10, HTSUS; Appraisement
Dear Mr. Kane:
This is in response to your letter, dated June 18, 2025, on behalf of your client
Mosti Mondiale Inc., in which you request a ruling concerning the applicability of
subheading 9813.00.50, Harmonized Tariff Schedule of the United States (“HTSUS”),
and 9801.00.10, HTSUS, to a certain wine bottling, washing, and disgorging machine
and the appraisement of the machine. Our ruling is set forth below.
FACTS:
You state that Mosti Mondiale is a non-resident importer. The merchandise at
issue is a wine bottling, bottle washing, and disgorging machine owned by Mosti
Mondiale. The machine is transportable via truck on a flatbed trailer to locations where
the machine will be used in the bottling process after wine has been made. You state
that the machine is classified under subheading 8422.30.91, HTSUS. You indicate that
the machine will be used in wineries in Canada and the United States several times a
year as the need arises. As such, there will be multiple border crossings. You inquire
about applicability of subheading 9813.00.50, HTSUS, to the machine. In the
alternative, you inquire about the eligibility of the machine for duty-free treatment under
subheading 9801.00.10, HTSUS. Lastly, you inquire about the appraisement of the
machine based on the fallback method with allowance for depreciation for the period it
was used abroad.
ISSUES:
I. Whether the bottling, washing, and disgorging machine at issue is eligible for
duty-free treatment under subheading 9813.00.50, HTSUS.
II. Whether the bottling, washing, and disgorging machine at issue is eligible for
duty-free treatment under subheading 9801.00.10, HTSUS.
III. Whether the proposed method of appraisement of the imported bottling, washing,
and disgorging machine based on the fallback method with allowance for
depreciation for the period it was used abroad is appropriate.
LAW AND ANALYSIS:
I. Subheading 9813.00.50, HTSUS
Pursuant to General Note 1, HTSUS, all merchandise imported into the United
States is subject to duty unless specifically exempted. Subheading 9813.00.50,
HTSUS, provides for the temporary entry, duty-free and under bond, of:
Professional equipment, tools of trade, repair components for equipment
or tools admitted under this heading and camping equipment; all the
foregoing imported by or for nonresidents sojourning temporarily in the
United States and for the use of such nonresidents...
U.S. Note 1(a) of Subchapter XIII, Chapter 98 of the HTSUS provides:
The articles described in the provisions of this subchapter, when not
imported for sale or for sale on approval, may be admitted into the United
States without the payment of duty, under bond for their exportation within
1 year from the date of importation, which period, in the discretion of the
Secretary of the Treasury, may be extended, upon application, for one or
more further periods which, when added to the initial 1 year, shall not
exceed a total of 3 years…
U.S. Note 1(b) of Subchapter XIII, Chapter 98 of the HTSUS provides:
For articles admitted into the United States under heading 9813.00.50,
entry shall be made by the nonresident importing the articles or by an
organization represented by the nonresident which is established under
the laws of a foreign country or has its principal place of business in a
foreign country.
The CBP regulations pertaining to temporary importations under bond (“TIB”) are
found in 19 C.F.R. §§ 10.31-10.40. Section 10.37, CBP Regulations, provides that
extensions of the time for exportation of merchandise under a TIB may be granted by
the appropriate Center Director upon written application on CBP Form 3173. Pursuant
to 19 C.F.R. § 10.31(f) a bond shall be given on Customs Form 301, containing the
bond conditions set forth in 19 C.F.R. § 113.62. For professional equipment, tools of
trade and repair components entered under subheading 9813.00.50, HTSUS, the bond
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required to be given shall be in an amount equal to 110 percent of the estimated duties,
including fees, determined at the time of entry. See 19 C.F.R. § 10.31(f).
Subchapter XIII of the HTSUS and the CBP regulations do not define
“professional equipment” or “tools of trade.” See Headquarters Ruling Letter (“HQ”)
H256982, dated November 30, 2016. In HQ 223970, dated September 22, 1992, CBP
held that “equipment under subheading 9813.00.50, HTSUS, is intended to be
necessary for the exercise of the calling, trade, or profession of a person visiting this
country to perform a specific task.” The type of articles allowed have been varied due to
the liberal construction given to the terms “professional equipment” and “tools of trade.”
Id. CBP has previously approved a variety of equipment, such as a mobile education
vehicle for dealers; a van with permanently attached equipment of hydraulic tracer
controls for machine tools admitted for demonstration tours in the United States; drilling
equipment temporarily attached to a barge for use in underwater digging operations;
rigging equipment used in the installation of offshore platforms, not permanently affixed
to any vessel, rig or platform; chain saws for pulp or logging operations; diesel tractors
for logging operations; television receivers for showing methods of installation and
servicing; portable transmitter-receivers for broadcasting from an aircraft; photographic
plates for cosmic ray studies; and foreign-origin cinematography equipment intended for
use in the production of motion pictures. Id.
You state that the facts at issue are similar to scenario #1 of HQ 222651, dated
January 7, 1991, insofar as a machine entering the United States from Canada is used
to perform onsite functions at a facility in the United States and returns to Canada. HQ
222651 concerned a mobile shredding unit that was transported from Canada into the
United States for use at locations where document shredding was performed and then
returned to Canada. CBP held that the mobile shredding unit may temporarily be
brought into the United States under subheading 9813.00.50, HTSUS, to perform
shredding services, provided that the conditions in that subheading, in U.S. Note 1(a)
and (b) of Subchapter XIII, HTSUS, and in 19 C.F.R. 10.31-10.41 were met and that the
mobile shredding unit was intended for use by the nonresident making entry
or for use under his or her supervision.
We agree that the bottling, washing, and disgorging machine at issue is
professional equipment and tools of trade necessary for the nonresident to perform a
specific task and thus falls within the scope of subheading 9813.00.50, HTSUS,
provided the conditions in U.S. Note 1(a) and (b) of Subchapter XIII, HTSUS, are met.
We note that CBP has consistently held that entry under subheading 9813.00.50,
HTSUS, is personal to the nonresident, is nontransferable, and terminates when the
nonresident ceases to use the imported merchandise. See, e.g. HQ 225808, dated May
9, 1995; and HQ 223970, dated September 22, 1992.
II. Subheading 9801.00.10, HTSUS
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.
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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.
Section 10.1, U.S. Customs and Border Protection (“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) requires the foreign shipper to 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.”
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.
Further, 19 C.F.R. § 10.1(a)(d) provides that if the Center Director is reasonably
satisfied, because of the nature of the articles or production of other evidence, that the
articles are imported in circumstances meeting the requirements of subheading
9801.00.10, HTSUS, the Center Director may waive the requirements for producing the
documents specified in 19 C.F.R. § 10.1(a).
As previously noted, the bottling, washing, and disgorging machine at issue will
be used in wineries in Canada and the United States several times a year as need
arises. Accordingly, there will be multiple border crossings between the United States
and Canada. The machine at issue would be eligible for duty-free treatment under
subheading 9801.00.10, HTSUS, if is returned to the United States from Canada within
3 years and is not advanced in value or improved in condition while in Canada, provided
the documentary requirements of 19 C.F.R. § 10.1 are satisfied. We note that while the
documents listed in 19 C.F.R. § 10.1(a) are required, it is ultimately within the discretion
of the Center Director whether he or she is reasonably satisfied that the evidence
presented substantiates the importer’s claim that the goods are products of the United
States. Further, we note that duty must be paid upon the initial importation of the
machine into the United States.
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III. Method of Appraisement
Merchandise imported into the United States is appraised in accordance with
Section 402 of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979
(TAA; 19 U.S.C. § 1401a). The primary method of appraisement is transaction value,
which is defined as “the price actually paid or payable for the merchandise when sold
for exportation to the United States,” plus amounts for certain statutorily enumerated
additions to the extent not otherwise included in the price actually paid or payable. See
19 U.S.C. § 1401a(b)(1).
The imported bottling, bottle washing, and disgorging machine will not be sold for
exportation to the United States. Since there is no sale for exportation to the United
States, transaction value is not applicable. When imported merchandise cannot be
appraised on the basis of transaction value, it is appraised in accordance with the
remaining methods of valuation, applied in sequential order. The next basis of
appraisement is the transaction value of identical or similar merchandise; however,
there is no information regarding sales of identical or similar merchandise and this
method is therefore inapplicable. Deductive value is the next applicable method of
appraisement; but as the machine will be imported into the United States to be used by
your client, and as deductive value requires a sale in the United States, this method is
also not applicable. Similarly, computed value is inapplicable since there is no
information relating to the cost of production.
When merchandise cannot be appraised under the methods set forth in 19
U.S.C. § 1401a(b)-(e), its value is to be determined in accordance with the “fallback”
method of 19 U.S.C. § 1401a(f). This method provides that merchandise should be
appraised on the basis of a value derived from one of the prior methods reasonably
adjusted to arrive at a value. However, there are certain prohibited bases of
appraisement under 19 U.S.C. § 1401a(f). For example, merchandise may not be
appraised on the basis of the price in the domestic market of the country of export, the
selling price in the United States of merchandise produced in the U.S., minimum values,
or arbitrary or fictitious values. 19 U.S.C. § 1401a(f).
Nevertheless, under section 500 of the Tariff Act of 1930, as amended, which
sets forth CBP’s general appraisement authority, the appraising officer may:
Fix the final appraisement of merchandise by ascertaining or estimating
the value thereof, under section 1401a of this title, by all reasonable ways
and means in his power, any statement of cost or costs of production in
any invoice, affidavit, declaration, or other document to the contrary
notwithstanding...
19 U.S.C. § 1500(a).
In this regard, the SAA, which forms part of the legislative history of the TAA,
provides in pertinent part:
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Section 500 allows Customs to consider the best evidence available in
appraising merchandise. It allows Customs to consider the contract
between the buyer and seller, if available, when the information contained
in the invoice is either deficient or is known to contain inaccurate figures or
calculations…. Section 500 authorize [sic] the appraising officer to weigh
the nature of the evidence before him in appraising the imported
merchandise. This could be the invoice, the contract between the parties,
or even the recordkeeping of either of the parties to the contract.
In those transactions where no accurate invoice or other documentation is
available, and the importer is unable, or refuses, to provide such
information, then reasonable ways and means will be used to determine
the appropriate value, using whatever evidence is available, again within
the constraints of section 402.
Statement of Administrative Action, H.R. Doc. No. 153, 96 Cong., 1st Sess., pt 2,
reprinted in, Department of the Treasury, Customs Valuation under the Trade
Agreements Act of 1979 (October 1981), at 67.
Section 152.107 of the CBP regulations (19 C.F.R. § 152.107) provides:
(a) Reasonable adjustments. If the value of imported merchandise cannot
be determined or otherwise used for the purposes of this subpart, the
imported merchandise will be appraised on the basis of a value derived
from the methods set forth in §§ 152.103 through 152.106, reasonably
adjusted to the extent necessary to arrive at a value. Only information
available in the United States will be used.
(b) Identical merchandise or similar merchandise. The requirement that
identical merchandise, or similar merchandise, should be exported at or
about the same time of exportation as the merchandise being appraised
may be interpreted flexibly. Identical merchandise in any country other
than the country of exportation or production of the merchandise being
appraised may be the basis for customs valuation. Customs values of
identical merchandise, or similar merchandise, already determined on the
basis of deductive value or computed value may be used.
(c) Deductive value. The “90 days” requirement for the sale of
merchandise referred to in § 152.105(c) may be administered flexibly.
You state that the wine bottling, bottle washing and disgorging machine is a used
machine that was originally purchased in 2015, delivered to Canada in 2016, and its
components were assembled in early 2017. You claim that the machine should be
appraised based on the depreciated value over 7 years. In prior rulings, we have held
that under the fallback method, the original purchase price of imported merchandise
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may be adjusted downward to reflect depreciation for the time period the merchandise
was used abroad. See HQ H288062, dated September 5, 2017. Similarly, in this case,
the method for appraisement based on adjusting the original purchase price to reflect
reasonable depreciation for the 7-year period that the machine was used is acceptable
as a fallback method pursuant to 19 U.S.C. § 1401a(f) provided it is in accordance with
generally accepted accounting principles (“GAAP”).
HOLDING:
The bottling, washing, and disgorging machine is eligible for preferential tariff
treatment under subheading 9813.00.50, HTSUS.
The bottling, washing, and disgorging machine is eligible for duty-free treatment
under subheading 9801.00.10, HTSUS, if reimported into the United States within 3
years and is not advanced in value or improved in condition while in Canada, provided
the documentary requirements of 19 C.F.R. § 10.1 are satisfied.
The bottling, washing, and disgorging machine may be appraised under the
fallback method pursuant to 19 U.S.C. § 1401a(f) based on adjusting the original
purchase price to reflect reasonable depreciation for the 7-year period it was used
provided it is in accordance with GAAP.
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
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