Eligiblity for duty-free treatment as American goods returned of life rafts used in an exchange program

HQ 556058 July 29, 1991 CLA-2 CO:R:C:S 556058 RA CATEGORY: Classification TARIFF NO.: 9801.00.10 Cathy Burgess, Esq. Winston & Strawn 1400 L Street, NW. Washington, D.C. 20005-3502 RE: Eligiblity for duty-free treatment as American goods returned of life rafts used in an exchange program Dear Ms. Burgess: This is in response to a letter of January 15, 1991, from your firm, requesting a ruling on behalf of Unitor Ships Service, Inc. concerning the eligibility for duty-free treatment of certain life rafts used in an exchange program. In Headquarters Ruling Letter 111468 dated May 20, 1991, the Carrier Rulings Branch addressed the issue of whether the life rafts are entitled to free treatment as instruments of international traffic (IIT). FACTS: Your client is a shore service company that performs inspections and certification of ships' fire and safety equipment, including life rafts. Unitor intends to utilize a life raft exchange program to facilitate the receipt of serviced rafts to supplant outdated ones taken from its customers' ships. A supply of serviced rafts would be maintained in stock at servicing stations which could be immediately exchanged for those taken off ships and in need of service. The imported outdated rafts received in exchange would, in turn, be serviced for use on other ships. ISSUE: Whether life rafts imported pursuant to the life raft exchange program are entitled to duty-free treatment as American goods returned under subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS). - 2 - LAW AND ANALYSIS: Subheading 9801.00.10, HTSUS, provides for the duty-free treatment of products of the U.S. which are exported and returned without having been advanced in value or improved in condition by any process of manufacture or other means while abroad, provided there is compliance with the documentation requirements of section 10.1, Customs Regulations (19 CFR 10.1). Accordingly, life rafts made in the U.S which are imported pursuant to the life raft exchange program may receive duty-free treatment under this tariff provision if they have not been advanced in value or improved in condition abroad, the district director of Customs is satisfied of the U.S. origin of the rafts, and the the documentation requirements of 19 CFR 10.1 are satisfied. Life rafts of foreign manufacture used in the exchange program are ineligible for free entry as American goods returned. HOLDING: Life rafts of U.S. origin taken from ships to be serviced under an exchange program may be accorded duty-free treatment under subheading 9801.00.10, HTSUS, assuming compliance with the conditions and requirements of this tariff provision. Sincerely, John Durant, Director Commercial Rulings Division