Newly Released CBP HQ Rulings for Aug. 7-16
The Customs Rulings Online Search System (CROSS) was updated Aug. 7-16 with the following headquarters rulings (ruling revocations and modifications will be detailed elsewhere in a separate article as they are announced in the Customs Bulletin):
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H302509: Protest No. 4601-18-100646; Reliquidation; Wooden Bedroom Furniture
| Ruling: The protested entries were properly reliquidated under 19 U.S.C. § 1504, and antidumping duties and interest thereto were properly assessed. |
| Issue: Were the protested entries reliquidated timely on Feb. 28, 2018, and, at reliquidation, did CBP properly determine the entries were subject to the AD Order? |
| Item: Hospitality Purchasing Group International (HPG) on April 25, 2018, contested the timeliness of reliquidation on three entries of wooden bedroom furniture (“WBF”) from China, the assessment of antidumping duties at the China-wide rate, and the assessment of interest for underpayment of duties. HPG made three entries of WBF from China in March and April 2014, all of which were exported by Shanghai Jian Pu Import & Export Co. These entries were subject to an antidumping duty order on WBF from China. |
| Reason: For its part, CBP has a merely ministerial role in liquidating antidumping duties, and therefore, merely follows Commerce’s instructions in assessing and collecting duties. Here, CBP fulfilled its “ministerial role” by following Commerce’s liquidation instructions in message 7150306 and properly assessing the antidumping duties at the China-wide rate on all three entries, which were entered by HPG as Type 03 and subject to the AD Order. HPG does not make any substantive arguments as to why its entered merchandise is not subject to the AD Order as entered. Accordingly, CBP properly assessed antidumping duties and pursuant to 19 U.S.C. § 1677g(a), interest is owed on underpaid estimated antidumping duties, such that CBP also properly assessed the interest owed at reliquidation. |
| Ruling Date: April 18, 2024 |
H283420: Internal Advice; Country of origin marking requirements for repackaged prescription medication sold by CVS Health; ultimate purchaser
| Ruling: Pursuant to 19 U.S.C. § 1304 and 19 C.F.R. Part 134, the ultimate purchaser of the medication in this case is the customer who buys the medication at retail, and not the retail pharmacy that purchases the medication from the importer. Further, importers of medication that sell to retail pharmacies, which repackage and sell the medication to the ultimate purchasers, must comply with the certification and notice requirements of 19 C.F.R. § 134.25(a) and (d). |
| Issue: Are CVS, as the repackager/dispenser/seller, or consumers at retail, the ultimate purchasers of imported prescription medication, pursuant to 19 C.F.R. § 134.1(d)? |
| Item: A drug known as omeprazole, which is manufactured abroad and imported by Sandoz, a division of the pharmaceutical company Novartis, into the United States, where it is repackaged and sold by CVS to retail purchasers. Sandoz’s original packaging consisted of an opaque white plastic container and an orange translucent plastic container. The product was then repackaged by CVS. Sandoz’s original packaging for omeprazole is marked with the country of origin as “Product of India.” However, CVS’s repackaged containers of omeprazole do not contain any country of origin marking. |
| Reason: Sandoz and other importers of medications that are repackaged and sold to retail pharmacies for sale to customers may argue that such retail pharmacies are the ultimate purchasers because a licensed pharmacist is providing a service by dispensing the medication to provide correct quantities, strengths, indications, instructions, and warnings. However, a retail customer’s purchasing decision is not based on a particular service provided by the pharmacist, as such services are uniform from pharmacy to pharmacy. Instead, a retail customer as the ultimate purchaser is deciding whether or not to purchase medication from a pharmacy based on factors such as the medication’s country of origin and/or manufacturer. CBP further noted that even if the country of origin were listed on a loose product information sheet that is sometimes distributed with prescription medication, this would not be considered sufficient marking in a conspicuous place for purposes of 19 U.S.C. 1304 and 19 C.F.R. 134.41. A product information sheet accompanying medication is not conspicuous or permanent, as it may get lost or separated from the container at the time the ultimate purchaser receives the medication. |
| Ruling Date: June 14, 2024 |
H326262: Substitution unused merchandise drawback under 19 U.S.C. § 1313(j)(2); drawback calculation; foreign status components of articles produced within a Foreign Trade Zone
| Ruling: The Company can't deduct the value and weight of foreign status components from the finished exported merchandise classified under subheading 8507.60.00 for purposes of calculating its claim for unused merchandise drawback pursuant to 19 U.S.C. § 1313(j)(2). |
| Issue: May the unnamed Company, for purposes of calculating drawback pursuant to 19 U.S.C. § 1313(j)(2) for exports from a foreign trade zone, deduct both the value and weight of foreign status components from a finished and exported product and use the remaining value and weight for purposes of filing a distinct drawback claim? |
| Item: The Company produces merchandise in a FTZ that contains domestic and foreign status components. According to the Company, the foreign status components are previously imported and not duty paid, while the domestic status components are either domestically produced or previously imported and duty paid. The Company seeks to claim drawback with regard to the finished merchandise, classified under subheading 8507.60.00, which is withdrawn for exportation and was manufactured with foreign status components classified under subheading 8507.60.00. |
| Reason: The proposed drawback calculation methodology by the Company is not permissible. In this case, duties, taxes, and/or fees paid on the imported merchandise is determined by an ad valorem percentage. Imports classified under subheading 8507.60.00 are subject to a duty rate of 3.4% ad valorem plus additional duties assessed pursuant to Section 301, which are also assessed on an ad valorem basis. Upon importation of any merchandise under subheading 8507.60.00, the Company is required to report both units of quantity, but the first unit of quantity shown -- in this case the numerical quantity (“No.”) -- is that which establishes the entered value per unit for purposes of substitution drawback. Allowing the Company’s proposed methodology could result in either the over-refund or under-refund of certain drawback claims. Further, the proposal could ultimately result in the inconsistent treatment of drawback claims. Accordingly, weight cannot be used as the basis for computing the value of the duties, taxes, and fees potentially eligible for drawback with respect to imports classified under 8507.60.00. |
| Ruling Date: July 5, 2024 |
H295516: Request for Ruling under 19 C.F.R. Part 177 regarding Temporary Importation of Automobiles by Nonresidents
| Ruling: CBP found that an automobile temporarily imported duty free under subheading 9804.00.35, HTSUS, that undergoes a sale prior to being auctioned for export is subject to forfeiture. Forfeiture is not required, however, if, prior to the time of sale, payment is made to a port director of the duty which would have been payable at the time of entry if the article had been entered without the benefit of the applicable exemption. |
| Issue: Is an automobile temporarily imported duty free under subheading 9804.00.35, HTSUS, that undergoes a sale prior to being auctioned for export subject to forfeiture? |
| Item: The ruling request concerns situations wherein a nonresident of the United States enters a personal automobile duty free under subheading 9804.00.35. While in the United States, the automobile is damaged. Insurance Auto Auctions (IAAI) requests that the automobiles may be sold to a nonresident without requiring the payment of duties. They also request that the importation of the automobile, once totaled, be treated as a transportation and exportation entry with the filing of a Transportation Entry and Manifest of Goods Subject to CBP Inspection and Permit Form (“CBP Form 7512”). They also request that for automobiles destroyed in the United States, U.S. Customs and Border Protection (“CBP”) only needs to be notified of the destruction and offered the opportunity to supervise or witness the destruction. |
| Reason: At issue in this ruling request is whether there is a sale resulting in forfeiture under the circumstances described where the car is considered “totaled” by the insurance company and auctioned prior to exportation. The relevant statutory and regulatory provisions governing personal declarations and exemptions for nonresidents do not define the term “sale.” Merriam-Webster, however, defines a sale as “the transfer of ownership of and title to property from one person to another for a price.” CBP's rulings have distinguished importation of vessels for sale or for charter to a resident from a nonresident for historical reasons that pertain only to vessels, such as 696.05, Tariff Schedule of the United States (predecessor to the HTSUS), which provided for the tariff rate of vessels imported “for sale or charter to a resident” of the United States. This historical distinction does not apply to importations of automobiles. Therefore, an automobile imported duty free under 9804.00.35 is subject to the provisions of 19 C.F.R. § 148.46, whether it is sold to a nonresident or resident. The requester also asks about the required documentation that would need to be filed with CBP during this process. Under the circumstances of this ruling request, the totaled vehicle has already departed the origination port and, therefore, CBP Form 7512 cannot be later filed to create a transportation and exportation entry at that time. |
| Ruling Date: Aug. 15, 2024 |
H326274: Application for Further Review of Protest No. 3801-21-107713; Tariff classification of aluminum extrusion line; Accounting for international freight expenses in valuation
| Ruling: 8462.91.40, “Machine tools (including presses) for working metal by forging, hammering or die-stamping; machine tools (including presses) for working metal by bending, folding, straightening, flattening, shearing, punching or notching; presses for working metal or metal carbides, not specified above: Other: Hydraulic presses: Numerically controlled” The general, column one rate of duty is 4.4%. Based upon the information provided, the importer may deduct expenses related to international freight. |
| Issue: Should the Press, Handling System, and Furnace be classified together and, if so, should the items be classified under heading 8462, HTSUS, or heading 8479, HTSUS? |
| Item: Entry No. 788-1712468-4 contained the Press, Handling System, and Furnace to construct an aluminum extrusion line for converting aluminum logs into parts for motor homes. The subject entry was one of three shipments containing the aluminum extrusion line’s components with the other two containing an Automatic Line for Ageing and Packing (Automatic Line) and various accessories, respectively. The Press, Handling System, and Furnace comprise 56.3% of the aluminum extrusion line and 66% of its value. The Furnace also includes a Hot Logs Shear and the Handling System. |
| Reason: Although imported unassembled and without the Automatic Line, the Press, Handling System, and Furnace have the essential character of a completed aluminum extrusion line under GRI 2(a). The subject merchandise, in its condition as imported, performs all the requisite steps of aluminum extrusion: the Furnace heats the metal, the Press forces the metal through the die, and the Handling System facilitates the movement of billets as well as shears, cools, stretches and saws. The Automatic Line is not necessary to this process, it simply performs secondary functions, such as artificially aging the extruded aluminum to the desired hardness and packing the finished product. Furthermore, the subject merchandise comprises over half the line and two-thirds of its value, further evincing the essential character of a completed aluminum extrusion line. As a result, the Press, Handling System, and Furnace will be classified together as an aluminum extrusion line. Also, on the basis of the documents provided, it is possible to confirm that the cost of international freight was €131,947.80, that it was included in the price actually paid or payable, and that payment was made by Extral for this amount. |
| Ruling Date: June 17, 2024 |