Parts Imported for Repair; Civil Aircraft Agreement

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H302111 December 13, 2018 OT:RR:CTF:VS H302111 EE CATEGORY: Classification Bryan King Barfield Precision Electronics, LLC. 5000-A Clark Howell Highway Atlanta, GA 30349 RE: Parts Imported for Repair; Civil Aircraft Agreement Dear Mr. King: This is in response to your request dated November 19, 2018, requesting a ruling on whether civil aircraft parts must be airworthy at the time of entry to qualify for duty-free treatment under the Civil Aircraft Agreement (“CAA”). FACTS: You indicate that Barfield Precision Electronics, LLC. (“Barfield”) is a Federal Aviation Administration (“FAA”) repair station located in Atlanta, GA. Barfield regularly imports civil aircraft parts for repair into the United States. After making them airworthy, the parts are returned to the shipper. You inquire whether the civil aircraft parts which are being imported to be repaired must be airworthy at the time of entry in order to qualify for duty-free treatment under the CAA. ISSUE: Whether the civil aircraft parts imported for repair must be airworthy at the time of entry in order to qualify for duty-free 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. 9639, 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 Harmonized Tariff Schedule of the United States (“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 the instant case, if the aircraft parts imported for repair meet the requirements under GN 6, HTSUS, and the documentary requirements under 19 C.F.R. § 10.183, they will be eligible for duty-free treatment the CAA. There is no requirement that the imported civil aircraft parts must be airworthy at the time of entry to be eligible for duty-free treatment under the CAA. See Headquarters Ruling Letter (“HQ”) H300627, dated October 4, 2018 and HQ 224266, dated March 3, 1993. HOLDING: Civil aircraft parts imported for repair, which are not airworthy at the time of entry, may be eligible for duty-free treatment under the CAA if they meet the requirements under GN 6, HTSUS, and the documentary requirements under 19 C.F.R. § 10.183. 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