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HQ 957226

February 27, 1995

CLA-2 CO:R:C:S 957226 DEC


TARIFF NO.: 9811.00.60

Ms. Mary E. Gill
AT&T Corporation
Law Department
Guilford Center 1-3A10
5420 Millstream Road
Greensboro, North Carolina 27420

RE: Digital cordless telephone display units; HRL 555552; United States v. London
Records, Inc.; Italian Drug Importing Co. v. United States

Dear Ms. Gill:

This is in response to your letter dated October 11, 1994, in which you seek a ruling on whether certain digital cordless telephone display units are classified under subheading 9811.00.60, Harmonized Tariff Schedule of the United States (HTSUS).


The AT&T Corporation (AT&T) intends to import cordless telephone display units from China for use in AT&T Phone Center stores. Each display cordless telephone set consists of the plastic housing, buttons, and external markings of an actual digital cordless telephone without the internal operational components. The telephone housing is weighted internally to simulate the actual weight of the completed cordless telephone. You indicate in your submission that while the unit in question may consist of an actual cordless telephone housing, plug receptacles, and buttons, its value is approximately one-tenth of the retail price of the completed cordless telephone set. These units are imported as display units for AT&T Phone Center stores because operational telephones are frequently stolen from retail stores and AT&T has found it to be commercially impractical to continue to incur these losses from theft.


Whether the cordless telephone display units, as described above, are entitled to duty-free treatment under subheading 9811.00.60, HTSUS, when imported into the United States.


Subheading 9811.00.60, HTSUS, provides for the duty-free treatment of any sample either valued at less than $1 each or marked, torn, perforated, or otherwise treated so that it is unsuitable for use otherwise than as a sample to be used in the U.S. only for soliciting orders for products of foreign countries. The controlling factor is whether the importer uses the samples for the purpose of soliciting purchase orders for foreign merchandise and the creation of demand for future orders. If the items at issue are valued at more than $1 each, they may not be entered free of duty under this tariff provision unless they are marked as samples or treated in some way to render them unsuitable for commercial sale or any use other than as samples for obtaining orders for similar articles.

In Headquarters Ruling Letter (HRL) 555552, dated August 10, 1990, Customs determined that non-quota footwear imported for sample use may either have a 1/4-inch hole drilled in each sole or a label with the words "Sample-Not-For-Resale" permanently attached to a readily visible place in order to qualify for free entry under subheading 9811.00.60, HTSUS, provided the district director is satisfied that such treatment renders the shoes unsuitable for use for any purpose other than soliciting orders for foreign merchandise.

In United States v. London Records, Inc., 402 F.2d 1009, 56 C.C.P.A. 14 (1968), sample records with a label stating "Made in England - Not For Sale" were distributed throughout the United States to record reviewers and radio stations free of charge to generate demand for the music. The court held that these articles were entitled to duty-free entry as sample merchandise. In reaching this conclusion, the London Records court cited Italian Drug Importing Co. v. United States, 46 Cust. Ct. 243, C.D. 2263, which held that samples of vitamins distributed to doctors who gave them to their patients qualified as samples. The goods in this case were marked "Sample, not for sale." "The court observed that notwithstanding the fact that a temporary benefit was derived by the patients to whom the vitamins were distributed free of charge, the importations were . . . based upon the object of securing future orders . . .." London Records, 402 F.2d at 1011, 56 C.C.P.A. at 17.

Similarly, the cordless telephone display units that AT&T intends to use as samples in the AT&T Phone Center stores must be marked to indicate that the are samples and not for sale. In addition, duty-free entry under subheading 9811.00.60, HTSUS, is granted to articles that are distributed to generate demand for future orders of the foreign-produced products. We are satisfied that the display units as described are used to solicit orders for foreign merchandise.


If the display units are marked "sample - not for sale", Customs has no objection to allowing the items duty-free entry pursuant to the requirements of subheading 9811.00.60, HTSUS.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer.


John Durant

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