Application for Further Review of Protest No. 3901-20-117105; Civil Aircraft Agreement

HQ H313112 October 27, 2020 VAL OT:RR:CTF:VS H313112 EE CATEGORY: Classification Port Director U.S. Customs and Border Protection 5600 Pearl Street Rosemont, IL 60018 RE: Application for Further Review of Protest No. 3901-20-117105; Civil Aircraft Agreement Dear Port Director: This is in response to an Application for Further Review (“AFR”) of Protest No. 3901-20-117105, timely filed by GE Celma Ltda (hereinafter, the “protestant”) on August 11, 2020, concerning the eligibility of a certain conductor fitted with connectors 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”). FACTS: The protestant entered the conductor under subheading 8544.42.90, HTSUS, and U.S. Customs and Border Protection (“CBP”) does not dispute this classification. The protestant claims that at the time of entry summary, the tariff classification was listed without using Special Program Indicator (“SPI”) “C”. SPI “C” is the HTSUS SPI for merchandise for which duty-free treatment under the CAA is being claimed. See General Note (“GN”) 3(c)(i), HTSUS. The protestant conducted a subsequent internal review which indicated that the merchandise at issue qualifies for duty-free treatment under the CAA. In support of this claim, the protestant submitted a copy of the FAA certificate which corresponds to the engine line for the conductor listed on the commercial invoice. CBP determined that the conductor at issue is not eligible for the CAA claim, and therefore liquidated the entries without duty-free treatment on February 14, 2020. ISSUE: Whether the conductor fitted with connectors is eligible 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, the conductor fitted with connectors is classified under subheading 8544.42.9090, HTSUS, which provides for “Insulated (including enameled or anodized) wire, cable (including coaxial cable) and other insulated electric conductors, whether or not fitted with connectors; optical fiber cables, made up of individually sheathed fibers, whether or not assembled with electric conductors or fitted with connectors: Other electric conductors, for a voltage not exceeding 1,000 V: Fitted with connectors: Other: Other: Other.” We note that subheading 8544.42.90, HTSUS, is not a CAA eligible provision. Accordingly, the conductor is not eligible for duty-free treatment under the CAA. HOLDING: Based on the information provided, the conductor fitted with connectors is not eligible for duty-free treatment under the CAA. In conformity with the foregoing, the protest should be DENIED. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (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 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. 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, for Craig T. Clark, Director Commercial and Trade Facilitation Division