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HQ 221211

April 29, 1991

ENT-4-02 CO:R:C:E 221211 C


Colonel Verlin D. Dickman
General Counsel
Army & Air Force Exchange Service
Departments of the Army and Air Force
Dallas, Texas 75266-0202

RE: Mail importation; 19 CFR 145.12(a)(2); formal entry; 19 CFR 145.35; subheading 9801.00.10, HTSUSA, 19 USC 1498(a)(1)

Dear Colonel Dickman:

This responds to your January 31, 1989 letter concerning the entry of United States origin merchandise upon its return to the United States from Army & Air Force Exchange Service (AAFES) locations overseas. You requested a waiver of the formal entry procedure and the informal entry limit of $1,250 (formerly $1,000), in order to facilitate the duty-free importation of this merchandise under subheading 9801.00.10 of the Harmonized Tariff Schedule of the United States (HTS)(item 800.00 of the formerly applicable Tariff Schedules of the United States).

You explained that certain merchandise of United States manufacture, such as rings, watches, gold chains, and other jewelry, is purchased in the United States by the Specialized Distribution Activity (SDA) of the AAFES Distribution Region, located at Ft. Gillem, Georgia. Delivery of the merchandise is made to SDA, where it is inspected and sorted. The merchandise is then exported and distributed to AAFES locations overseas, called "exchanges." The merchandise is there sold to United States military personnel and their families.

Each year, some of the exported merchandise is returned by overseas exchanges to the SDA for various reasons. Since your question is limited to the entry procedure issue, we will not make a determination as to the applicability of subheading 9801.00.10, HTS, to these importations. (If you desire such a determination, contact the Special Classification Branch of the Office of Regulations and Rulings (202/566-2938).) An attachment to your letter lists various shipments of merchandise by date and mail registration number. The shipments to the United States are from exchanges in the United Kingdom, Japan, Germany, and Guam. The value for each shipment is listed, with the lowest being $4,000 and the highest $94,179. Of the 29 shipments listed, the value for 21 shipments is in excess of $10,000.

Because these shipments were made through the mail, part 145 of the Customs Regulations governs these importations. (See Title 19, Code of Federal Regulations, Part 145.) Section 145.12(a)(2) provides that formal entry shall be required for every mail importation that exceeds $1,250 in value. The regulation provides exceptions which include, in relevant part, that contained in section 145.35, pertaining to United States products returned under 9801.00.10, HTS. This section provides that products of the United States returned (to the United States) after having been exported, which have not been advanced in value or improved in condition, may be admitted into the United States duty-free and without entry, provided that the value of the shipment does not exceed $1,250. In fact, then, this is not much of an exception since this section also contains a $1,250 limitation. In any event, the two sections taken together require formal entry for shipments valued in excess of $1,250, even if the merchandise qualifies for duty-free treatment under 9801.00.10, HTS.

The $1,250 limit of sections 145.12(a)(2) and 145.35 implements the $1,250 limit of Section 498 of the Tariff Act of 1930, 19 U.S.C. 1498. (See 19 U.S.C. 1498(a)(1).) That statutory provision authorizes the Secretary of the Treasury to prescribe regulations for the entry of merchandise imported through the mail, or otherwise, when the aggregate value of the shipment does not exceed an amount not greater than $1,250. This authorizes the Secretary to provide for a less formal entry procedure than that required for importations generally in section 484 of the Tariff Act of 1930, 19 U.S.C. 1484. Because the $1,250 limit is statutorily prescribed, it cannot be waived by Customs.

The significance of the foregoing is that formal entry will be required for the shipments you described. The entry requirements are contained in parts 141 and 142 of the regulations. See also section 10.1 for the requirements concerning merchandise that has been exported and returned. Please note section 10.1(d) which gives the district director the authority to waive the documentary requirements of sections 10.1(a) and 10.1(b), provided he/she is satisfied that the merchandise qualifies for treatment under subheading 9801.00.10, HTS. This is a matter to be referred to the district director.

As stated previously, because the shipments in question are made through the mail, the regulations governing mail importations control. Thus, the application of the $1,250 limitation of sections 145.12(a)(2) and 145.35. However, you may want to consider importing the merchandise in question by means other than the mail, in order to qualify for the informal entry procedure of section 143.21(k). (See also 19 U.S.C. 1498(a)(2).) The limit imposed in this provision is $10,000: shipments of products of the United States which do not exceed $10,000 can be entered informally if the products are imported for repair/alteration and reexport, or after having been rejected or returned by the foreign purchaser to the United States for credit. If this provision applies to any of the merchandise you import, it may be worthwhile to consider restructuring your importations to take advantage of this provision. Based on the information you provided, however, it may not apply to all your importations.

An alternative to the foregoing, is the temporary importation under bond (TIB) provision of 9813.00.05, HTS. It provides for duty-free admission, under bond, for merchandise that will be exported within one year of importation, after having been repaired, altered, or processed. Using the TIB provision would eliminate any concerns over the value of the shipments; however, it appears that only some of your importations would qualify.

In summary, Customs is without authority to waive the statutory formal entry procedure required for the importations you described. Compliance with the required procedures will ensure duty-free entry. We apologize for the delay in responding. If you have any further questions, please contact our office.


John Durant, Director

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