Application for Further of Review of Protest No. 4701-17-100844 Subheading 9801.00.10, HTSUS; Jewelry

HQ H295849 July 5, 2018 OT:RR:CTF:VS H295849 EGJ Port Director U.S. Customs and Border Protection John F. Kennedy International Airport Bldg #77 Jamaica, NY 11430 Attn: Joseph A. DiSalvo, Supervisory Liquidation Specialist RE: Application for Further of Review of Protest No. 4701-17-100844: Subheading 9801.00.10, HTSUS; Jewelry Dear Port Director: This is in response to the Application for Further Review (“AFR”) of Protest No. 4701-17-100844, filed on December 8, 2017, by counsel on behalf of Richemont North America, Inc. dba Cartier (“Protestant”) concerning the dutiable status of 12 pieces of jewelry. FACTS: Between September 15, 2014, and July 11, 2016, the Protestant exported 12 pieces of jewelry from the U.S. to Canada for display and sale in Canadian boutiques. None of the jewelry was manufactured in the U.S. At exportation, all of the jewelry was in brand new condition. After arriving in Canada, the Protestant notes that the Canadian boutiques did not perform any repair work or other work on the jewelry. When Canadian buyers cannot be found, the Protestant routinely returns pieces to the U.S. for inventory or for display in U.S. boutiques.  This is the case for all 12 pieces covered by Protest No. 4701-17-100844. Between August 5, 2016, and September 14, 2016, the Protestant re-entered the 12 pieces back into the U.S. Upon review, the Protestant determined that a claim under subheading 9801.00.10, HTSUS, should have been made and thus this Protest was filed. As each piece is engraved with a unique serial number or alpha-numeric code, the Protestant asserts that the pieces returned to the U.S. are the exact same pieces which were exported to Canada. The pieces are not subject, or potentially subject, to any duty drawback claims. The Protestant has confirmed this by reviewing each piece against a master database of all Cartier pieces claimed in drawback since 2012. With the filing of this claim, all of these pieces are being placed on Protestant’s drawback ineligible list. Additionally, each piece of jewelry has an entered value greater than $2,500. ISSUE: Whether the 12 pieces of jewelry are eligible for duty-free treatment under subheading 9801.00.10, HTSUS. LAW AND ANALYSIS: The subject entries liquidated between June 16 and July 28, 2017. On December 8, 2017, the Protestant timely filed the instant Protest and AFR. We note that the matter is protestable as a decision on classification. 19 U.S.C. §1514(a)(2). The Protestant’s AFR satisfies application criteria because the Protestant alleges that classification of the subject merchandise raises questions of fact which have not been ruled upon by CBP. 19 C.F.R. § 174.24(b). Namely, the Protestant asserts that the jewelry qualifies for duty free treatment under 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. 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 (emphasis added). Although the 12 pieces of jewelry are not products of the U.S., they may still qualify for duty free treatment under the amended text of subheading 9801.00.10, HTSUS. The instant scenario is similar to the facts set forth in Headquarters Ruling Letter (HQ) HQ H278564, dated September 8, 2016. In that ruling, high-end cars were exported from the U.S. to be sold at auction overseas. The cars were not manufactured in the U.S. The cars were neither advanced in value nor improved in condition while overseas. The cars which were not sold were returned to the U.S. within three years. In that ruling, we determined that the high-end cars were eligible for duty-free treatment under subheading 9801.00.10, HTSUS. Like the cars in HQ H278564, the instant jewelry was not produced in the U.S. After arriving in Canada, the jewelry was neither advanced in value nor improved in condition. Additionally, all of the jewelry was returned within three years of export. For all of these reasons, we find that the 12 pieces of jewelry imported by the Protestant qualify for duty free treatment under subheading 9801.00.10, HTSUS. For articles in a shipment valued over $2,500, Section 10.1, Code of Federal 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. While portions of the regulations are no longer pertinent, some portions of 19 C.F.R. § 10.1 still remain valid. For example, 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 advanced in value or in condition by any process of manufacture or other means. We note that the Protestant has provided us with the foreign shipper’s declaration and that the declaration includes all of the required information. Further, Section 10.1(a)(2), Code of Federal 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 exported without benefit of drawback. We note that the Protestant has provided a declaration from the import/export manager for Richemont North America attesting that the foreign shipper’s statement is true and that the articles were exported from the U.S. without benefit of drawback. For all of these reasons, we find that the Protestant has provided sufficient documentation to support its claims for duty free treatment of the 12 pieces of jewelry under subheading 9801.00.10, HTSUS. HOLDING: The 12 pieces of jewelry are eligible for duty-free treatment under subheading 9801.00.10, HTSUS. You are instructed to ALLOW the protest. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel, and to the public on the Customs Rulings Online Search System (CROSS) at https://rulings.cbp.gov/  which can be found on the U.S. Customs and Border Protection website at http://www.cbp.gov  and other methods of public distribution. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division