Celebrity Wear of Garments at High-Profile Events Goes Beyond 'Mere Demonstration,' CBP Tells Dior
High-end clothing for celebrities to wear at big events, such as the The Oscars, are not eligible for unused merchandise drawback and also can't be imported as samples, CBP said in a Dec. 16 ruling (here). The ruling, HQ H251771, responded to a ruling request from Christian Dior Couture, represented by Sharretts Paley. The fashion company said it imports haute couture garments for use by celebrities at high-profile events and asked for CBP input on how the agency considers such imports.
Once imported, the clothes are fitted for each particular person so the garments are properly displayed, said Dior. The company told CBP that the garments serve an "important form of advertising for the company because they allow the company to increase its brand awareness and showcase the latest fashions and increase sales." Dior doesn't sell the garments and retains ownership during the time in the U.S., which is typically no more than a week, it said.
The company would like to enter the clothing duty-free under an A.T.A. carnet as a sample, it said. Among the requirements for such imports is that the goods are not put to "use except for purposes of demonstration," said the agency. But "when celebrities wear the pieces of haute couture, it goes beyond mere demonstration of the imported articles to solicit orders," said CBP. Specifically, "wearing a piece of haute couture to an event also serves the purpose of providing a celebrity with a garment to use. This employs the article in a manner beyond that of mere demonstration. This is very different than simply showing the merchandise to potential buyers. The celebrity who receives the piece of haute couture not only displays this piece for the benefit of the brand, but also wears the piece for the duration of the event without any intention of soliciting orders for the item."
Dior also asked whether the garments could be entered under a temporary import bond as articles not for sale or sale on approval to be repaired altered or processed. While heading 9813, which includes some TIB provisions used to cover various activities, would cover the alternations, it would not cover the lending out of the goods, CBP said. The goods may be imported under subheadings 9813.00.05 and 9813.00.10, but that "would not cover the lending the haute couture to clients for them to wear at events," said CBP. That position is supported by 1913 Senate proceedings involving the Tariff Act of 1913, which created the TIB provisions for women's apparel, said the agency.
The clothing is also ineligible for unused drawback purposes, said CBP. Dior argued that the display of the goods at an event "will not constitute use of the merchandise for direct identification of unused merchandise drawback because the pieces are furnished for exhibition at events to generate orders of the goods." The agency disagreed because "the pieces of haute couture are intended to be worn by individuals, and by furnishing these pieces to celebrities for use at events, this constitutes use." Therefore, the garments would not be eligible for unused merchandise drawback, CBP said.