Newly Released CBP HQ Rulings Sept. 21
The Customs Rulings Online Search System (CROSS) was updated Sept. 21 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):
H331481: Partial destruction in a U.S. Foreign Trade Zone; zone-restricted status; exportation under the drawback laws and regulations
| Ruling: It is permissible to admit merchandise into a Foreign-Trade Zone under zone-restricted status for partial destruction and subsequent exportation. Such admission in zone-restricted status is an exportation under the drawback laws and regulations to allow for a 1313(j)(1) claim. |
| Issue: Is it permissible to admit merchandise into a FTZ under zone-restricted status for partial destruction and subsequent exportation, and is such admission in zone-restricted status an exportation under the drawback laws and regulations to allow for a 1313(j)(1) claim? |
| Item: Jewelry sold by Clover II, some of which is returned by consumers to the retailers, and in turn, returned to Clover II. The company intends to establish a foreign trade zone to admit the returned jewelry under zone-restricted status. The returned jewelry will be broken apart into metal scraps that will exported to Italy to be sold in accordance with CBP requirements under 19 C.F.R. §§ 146.67-146.68. Clover II intends to file drawback for unused merchandise on the returned jewelry as it is admitted into the zone. |
| Reason: This process of breaking the jewelry into smaller pieces would not constitute a destruction. The remaining metal pieces, like the gold scrap and precious metals, are articles of commerce and cannot be said to be destroyed. However, the breaking of the jewelry into smaller pieces is a step toward destruction. Consistent with C.S.D. 80-67, this process is permissible under the zone-restricted status of the jewelry as long as the metal pieces are either further destroyed, exported, or stored in the zone. Clover II will export the metal pieces to Italy to be sold, which meets the requirements of the Foreign Trade Zones Act and the Customs regulations for treatment of merchandise in zone-restricted status. The merchandise may be considered “exported” upon admission into the zone under zone-restricted status. The claimant may use this “export” to complete its drawback claim pursuant to 19 U.S.C. 1313(j)(1). |
| Ruling Date: Sept. 18, 2023 |