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HQ 557035

February 8, 1993

CLA-2 CO:R:C:S 557035 MLR


TARIFF NO.: 9801.00.10, 9802.00.50

Mr. John Maxymuik
Ambience Images
3502 King Street
Windsor, Ontario, Canada N9C 1P3

RE: Applicability of duty exemption under HTSUS subheading 9801.00.10 and 9802.00.50 to photographic prints made in U.S.; signed, titled, numbered, and copyrighted in Canada.

Dear Mr. Maxymuik:

This is in reference to your letter of October 15, 1992, addressed to the Area Director of the New York Seaport, concerning the eligibility of photographic prints from Canada for a complete or partial duty exemption under subheadings 9801.00.10 and 9802.00.50, Harmonized Tariff Schedule of the United States (HTSUS), and requesting reconsideration of New York Ruling Letter 877942 dated September 22, 1992. Your request was forwarded to this office for a response.


A representative sample of the photographic prints in question was submitted to the New York Seaport for classification. The photographic print is unmounted, in color on a non-transparent base, measures about 7 1/2 x 10 inches, and depicts a scenic view of a park at dawn or sunset. It is titled "Alexander Park", numbered (1/25), signed by yourself and copyrighted. These prints will be offered for sale at fine art galleries in Detroit, Michigan. These buyers will matte, mount, frame and glass the prints, and offer them for re-sale to their respective art clients and collectors who, in turn, use them primarily for wall decor purposes in private residences, offices, public buildings, etc.

New York Ruling Letter 887942 dated September 22, 1992, held that the applicable tariff classification of the photographic prints will be subheading 4911.91.4040, HTSUS, which provides for: Other printed matter, including printed pictures and photographs: Other (than certain enumerated classes or kind). This classification determination was made on the basis that the prints were the product of Canada. Rather, it is now stated that the prints are made by a photo-lab in Detroit. You personally bring the prints from this photo-lab through Canadian Customs to your studio in Windsor, Ontario, where you sign, title, number and copyright each print. When the prints are returned to the United States for sale at Detroit art galleries, it is contended that the prints will be merchandise of the United States entitled to duty-free treatment as American Goods Returned, or as articles exported for alterations.


Whether the photographic prints of U.S. origin are entitled to free entry under subheading 9801.00.10, HTSUS, or a partial duty exemption under subheading 9802.00.50, HTSUS, when re- imported to the United States.


Subheading 9801.00.10, HTSUS, provides for the free entry of products of the United States that have been exported and returned without having been advanced in value or improved in condition by any process of manufacture or other means while abroad, provided the documentary requirements of section 10.1, Customs Regulations (19 CFR 10.1), are met. Some change in the condition of the product while it is abroad is permissible. However, operations which either advance the value or improve the condition of the exported product render it ineligible for duty- free treatment upon return to the United States. Border Brokerage Company, Inc. v. United States, 314 F.Supp. 788 (1970), appeal dismissed, 58 CCPA 165 (1970).

Articles returned to the United States after having been exported to be advanced in value or improved in condition by repairs or alterations may qualify for the partial duty exemption under HTSUS subheading 9802.00.50, provided the foreign operation does not destroy the identity of the exported articles or create new or commercially different articles through a process of manufacture. See A.F. Burstrom v. United States, 44 CCPA 27, C.A.D. 631 (1956), aff'g C.D. 1752, 36 Cust. Ct. 46 (1956); Guardian Industries Corp. v. United States, 3 CIT 9 (1982). Accordingly, entitlement to this tariff treatment is precluded where the exported articles are incomplete for their intended purpose prior to the foreign processing. Guardian; Dolliff & Company, Inc. v. United States, 455 F.Supp. 618 (CIT 1978), aff'd, 599 F.2d 1015 (Fed. Cir. 1979). Articles entitled to this partial duty exemption are dutiable only upon the cost or value of the foreign repairs or alterations when returned to the United States, provided the documentary requirements of section 10.8, Customs Regulations (19 CFR 10.8), are satisfied. We have held that foreign stamping or printing of a product to identify the manufacturer and describe the product does not advance its value or improve its condition so as to preclude entry under 9801.00.10, HTSUS. See Headquarters Ruling Letter (HRL) 071449 dated October 17, 1983 (surgical drapes stamped in ink with the name of the company, size, and model number were not precluded from item 800.00, Tariff Schedule of the United States (TSUS) (now 9801.00.10, HTSUS), treatment); see also, HRL 555183 dated February 15, 1989, (printing dental floss dispensers with the company name and description of the floss type, flavor and length, did not preclude subheading 9801.00.10, HTSUS, treatment for the dispensers). We have also ruled that marking or affixing a label to a product constitutes an alteration. See T.D. 56320(1) dated September 17, 1964 (electrical diodes exported to Mexico for inspection, evaluation, and stamping of their electrical diode characteristics were entitled to treatment under 806.00, TSUS (now 9802.00.50, HTSUS); see also HRL 071159 dated March 2, 1983 (diodes exported to Mexico for marking and packaging operations were entitled to treatment under 806.20, TSUS, as the printing operation had no more significance than a label for identification purposes).

However, we have also held that t-shirts that were hand- painted with a design abroad were not eligible for item 806.20, TSUS, treatment. See HRL 554974 dated July 27, 1988. The rationale was that the hand-painting imparted substantially new and different characteristics to the exported t-shirts, resulting in new and different articles of commerce with unique, specialized appeal. In HRL 554371 dated December 10, 1986, we stated that although garments may be worn either design-painted or not, hand-painting is considered neither a repair nor an alteration under the provisions of item 806.20, TSUS. Moreover, we stated that the foreign hand-painting operations constituted a finishing of the garment performed in the course of manufacture (i.e, the last step in the total process of producing hand- painted sweatshirts). We have also determined that etching glass mugs exceeded an alteration since the etching created a commercially different product with new characteristics and enhanced appearance. C.S.D. 89-49(9).

Therefore, the issue is whether signing, titling, numbering, and copyrighting each print advances the value of the prints and if so, whether these operations create new or commercially different articles, or complete the prints for their intended purpose. We find that the processes in question do advance the value of the prints because numbering and copyrighting the prints indicates to collectors how many prints were produced and, therefore, how rare each print may be since the copyright disallows illegal reproduction. Therefore, duty-free treatment under subheading 9801.00.10, HTSUS, is precluded.

In determining whether the operations performed in Canada create new and different articles of commerce or complete the prints for their intended purpose, precluding the partial duty exemption under subheading 9802.00.50, HTSUS, HRL 046234 dated October 8, 1976, is relevant. In HRL 046234 a picture and inscription, commemorating the first United Nations regular stamp series issued in Swiss francs, was lithographed in the left corner of an envelope, and an unstamped United Nations stamp was pasted in the right corner to create what is known as a first- day cover by philatelists. The first-day covers were shipped to Europe where the stamps were cancelled. It was held that item 800.00, TSUS, did not apply since the addition of a stamp cancellation was at least an improvement in the condition of the articles, if not an outright advance in their value. Item 806.20, TSUS, also did not apply because the foreign cancellation of the stamps was the last step required to complete the first- day covers, and this significantly changed the basic commercial character of the envelopes to such an extent that the cancellation was considered to go beyond the contemplation of the term "alteration."

In this case, we find that while signing, titling, numbering, and copyrighting each print advances the value of the prints, these operations do not change the character of the prints or complete them for their intended purpose. Rather, the operations are analogous to marking operations which identify the artist and topic of the print in question. Unlike the first-day covers, the prints are complete for their intended purpose as wall decor when exported from the United States, and are only advanced in value by the operations abroad.


On the basis of the information submitted, since the photographic prints will be advanced in value as a result of the foreign operations they will not qualify for free entry under subheading 9801.00.10, HTSUS; however, the operations do not create new or commercially different articles or complete the prints for their intended purpose, thereby entitling them to the partial duty exemption under 9802.00.50, HTSUS. New York Ruling Letter 877942, is hereby modified in accordance with this holding.


John Durant, Director

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