Application for further review of protest; exclusion fromconsumption entry of an importation of certain long rangecordless telephones

HQ 456502 December 17, 1993 CATEGORY: Restricted Property Regional Commissioner of Customs c/o Protest and Control Section 6 World Trade Center Room 761 New York, New York 10048-0945 RE: Application for further review of protest; exclusion from consumption entry of an importation of certain long range cordless telephones Dear Sir: This is in response to the above mentioned protest. We have reviewed all relevant information and our response follows. FACTS: PROTESTANT is an importer of long range cordless telephones. The protest states that the merchandise can properly be entered for consumption because it complies with the applicable rules and regulations of the Federal Communications Commission (FCC). The protest also states that the merchandise, in its condition as imported, is incapable of causing harmful interference to radio communications in the United States. ISSUE: Whether the cordless telephones were properly excluded from entry for consumption. LAW AND ANALYSIS: There has apparently been some confusion as to the FCC's treatment of radio frequency devices which are entered for export only, such as the long range cordless telephones here at issue. As the result of a long standing practice PROTESTANT has been allowed to use a consumption entry for goods which are intended for export only. It recently came to the attention of the U.S. Customs Service that this practice prevents effective monitoring of the exportation of the devices. It is the opinion of Customs that items intended for export only should be entered into a Foreign Trade Zone (FTZ) or bonded warehouse. - 2 - Title 19, United States Code, section 3109(b), provides that any product of a foreign country that is subject to approval or registration may be entered only if the product conforms to FCC rules and regulations and the information required on form 740 is provided to Customs at the time of such entry in such form and manner as the Secretary of the Treasury may prescribe. PROTESTANT states that the importation here in question does comply with the FCC requirements. The record indicates that the issue of compliance has been raised with the FCC. It is within the authority of the FCC to determine whether a product conforms to the rules and regulations of the FCC. We have received information that the FCC has not yet ruled on the issue of conformity of the items here in question. The record indicates that the PROTESTANT was informed by a letter from the FCC, dated June 25, 1992, that under no circumstances would it be permitted to deliver cordless telephones that do not meet the FCC's technical requirements and certification to any customer in the United States, including dealers or distributors. The letter further states that the physical transfer of any sales in the United States of such articles must take place in a foreign trade zone or bonded warehouse or by an arrangement acceptable under Customs statutes and regulations. In a letter from the FCC dated October 6, 1992, the requirements and provisions of the June 25, 1992, letter were "held in abeyance" pending final action on a petition the PROTESTANT filed with the FCC. In a letter dated October 21, 1993, the FCC informed Customs that current FCC regulations do not require the use of a foreign trade zone or bonded warehouse for the importation of devices intended for export, even when the devices are not in compliance with the requirements set for devices to be used in the United States. The letter further indicated that the FCC was aware that entry for exportation can only be properly monitored by Customs if such entry is into a foreign trade zone or bonded warehouse. HOLDING: In light of the FCC's opinion that its regulations do not require the use of a FTZ or bonded warehouse, the protest should be granted. You are hereby instructed to grant the protest in full. Please provide a copy of this ruling and CF 19, Notice of Action, to PROTESTANT. - 3 - In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject Revised Protest Directive, this decision should be mailed by your office to the PROTESTANT no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to the mailing of the decision. Sixty days from the date of this decision the Office of Regulations and Rulings will take steps to make the decision available to customs personnel via the Customs Rulings Module and to the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels. Sincerely, Stuart P. Seidel Director, International Trade Compliance Division