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HQ 223592

April 1, 1992

BAG-5-09-PRO-2 CO:R:C:E 223592 TLS


District Director
U.S. Customs Service
Portway Plaza Suite 400
1717 East Loop
Houston, Texas 77029

RE: Protest #5301-1-100241 concerning denial of exemption of duty on automobile returned to this country; Harmonized Tariff Schedule of the United States (HTSUSA) subheading 9805.00.50.

Dear Sir:

The above-referenced protest has been forwarded to this office for further review. We have considered the points raised by the protestant and your office. Our decision follows.


You received a request for duty-free treatment under HTSUSA subheading 9805.00.50 for a vehicle returned to this country through your district. The request was made by the lienholder on the automobile. The vehicle was purchased in the United States, having been manufactured to all U.S. government standards. The buyer had shipped the automobile to Germany subsequent to the purchase after having received the assignment orders from the U.S. Air Force. The shipment had been approved by the lienholder.

The lienholder makes a request for duty-free treatment of the automobile because it was an involved and interested party in shipment of the auto overseas and has secured its return to the U.S. at the owner's expense. The auto has been repossessed because of the buyer's default on the finance contract. After receiving a denial of it request from your district, the lienholder submits this protest of that decision.


Whether the lienholder of a vehicle returned to the United States after having been shipped to a foreign country may enter the vehicle duty free under HTSUSA subheading 8705.00.50.


Chapter 98 of HTSUSA provides for, inter alia, personal exemptions from duty for individuals returning to this country with certain items. With regards to the vehicle in question, the relevant provision reads as follows:

9805.00.50 The personal and household effects... of any person in the service of the United States upon the termination of assignment to extended duty... at a post or station outside of the customs territory of the United States, or of returning members of his family who have resided with him at such post or station, or of any person evacuated to the United States under Government orders or instructions.................Free
(Emphasis added.)

The protestant is a financing corporation that holds a lien on the subject vehicle. The company made arrangements to repossess the vehicle and have it returned to the U.S. after the buyer defaulted on the finance contract. The protestant now wishes to enter the auto free of duty.

As noted above, duty free treatment under 9805.00.50 is available to 1) any person 2) in the service of the United States 3) who returns to the United States 4) upon termination of assignment to extended duty 5) at a post or station outside the customs territory of the United States. Setting aside the question of whether the protestant qualifies as a "person" under this provision, we find that the finance company does not meet the other requirements for the exemption. Of course, it is quite obvious that the protestant could not possibly have been in the service of the U.S. at a post outside the customs territory of the U.S. (or inside the customs territory, for that matter). The protestant's request for exemption under the subject provision implies that we should grant such because the expenses for the shipment of the auto back to the U.S. were incurred by the buyer, who is in fact in the service of the U.S. at a post outside the customs territory. We disagree.

The buyer is not the party entering the vehicle into the customs territory, even if he paid the expenses for its return. The protestant is the party of record in this entry transaction and the buyer's involvement is only incidental. Furthermore, even if the buyer was the party of record in this entry transaction, he also has not met all of the requirements of 9805.00.50. While he has met some of the requirements, the buyer has not returned to the United States and has not had his assignment to extended duty terminated. Thus, even if he were a party to this transaction, the buyer is not eligible for exemption from duty under 9805.00.50, or any other duty-free provision under HTSUSA (if the buyer was eligible for the exemption, the automobile would have to be entered on his behalf). The protestant of course is not eligible either. Therefore, we find the district's decision to deny duty-free treatment to the protestant on the entry of the subject vehicle to be proper.


The protestant is not eligible for exemption from duty under HTSUSA subheading 9805.00.50. The assessment of duties on the vehicle entered by the protestant for its own benefit should stand. This protest is denied in full. Form 19, Notice of Action, should be attached to this ruling.


John Durant, Director

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