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HQ 226893

BON-1-04 RR:IT:EC 226893 SAJ


Barbara J. Brockman
Fines, Penalties and
Forfeitures Officer
Room 198
511 N.W. Broadway
Portland, OR 97209

RE: Untimely Request for Extension on a Temporary Importation Bond (TIB) under 19 C.F.R. 10.37; 19 C.F.R. 10.39(d)(1); TIB Entry No. F55-00036903; BMW of North America, Inc.

Dear Ms. Brockman:

This office has received the above-referenced request for a TIB extension as provided for under Customs Regulations. The extension is requested by Donnie B. Turbeville on behalf of BMW of North America, Inc. (importer). We have considered the request and have made the following decision.


The importer faxed a letter dated January 27, 1995 to Ronald Vertrees of Customs Clearing Service (broker). The letter is addressed to Customs Denver and states that the imported BMW passenger car would be "used in the United States for endurance and emission tests for approximately two years". Emphasis added. The subject car was entered on January 31, 1995.

On February 13, 1995, an entry summary Customs Form (CF) 7501 was filed, whereby the subject car was entered under subheadings 9813.00.30/Free and 8703.23.00/2.5% of the Harmonized Tariff Schedule of the United States (HTSUS). The TIB bond period expired on January 31, 1996. Accordingly, liquidated damages were assessed at twice the duty due by the issuance of CF 5955A on March 14, 1996. See 19 C.F.R. 10.39(d)(1).

Your office received a letter dated March 25, 1996 from the importer, untimely requesting an extension, in response to receiving the CF 5955A. In that letter, the importer stated that the broker was expected to file for an extension with Customs at the appropriate time. As a result, the importer "assumed that the entry had been made."

As evidence of the importer's reliance of their broker, importer provided two letters indicating that the broker was aware of the importer's need to: 1) conduct testing on the subject car for approximately two years, and 2) request an extension of the one year initial term of the TIB.


Whether an exportation under the bond is warranted under the facts presented.


The basic requirements for a TIB are provided for in U.S. Note 1(a) of Subchapter XIII, Chapter 98, HTSUS. Articles described in this subchapter, "when not imported for sale or for sale on approval, may be admitted into the United States without the payment of duty, under bond for their exportation within 1 year from the date of importation." The U.S. Note provides that the one year period for exportation may be extended for one or more further periods which, when added to the initial year, do not exceed a total of three years. The Customs Regulations pertaining to temporary importations under bond are found in 19 C.F.R. 10.31-10.40.

Section 10.37 of the Customs Regulations provides that extensions of the time for exportation of merchandise under a TIB may be granted by the appropriate port director upon written application on CF 3173. Section 10.37 also maintains that untimely requests for an extension of time for exportation are to be referred to Customs Headquarters.

Generally, extensions based upon untimely requests are only granted under extraordinary circumstances. Untimely requests for TIB extension will be granted only in the following circumstances: (1) the articles covered by the entry remain in this country; (2) there is no evidence indicating the use of the articles for purposes contrary to the terms of the bond; (3) the applicant is not a chronic violator; (4) there is no evidence of lack of due diligence in complying with the law and regulations; and (5) there is a reasonable explanation as to why the application was not timely filed. See, e.g. Headquarters ruling (HQ) 219756 (June 2, 1987) and HQ 218315 (February 28, 1986).

There is no dispute that the importer filed the request for the extension in response to the notice for liquidated damages (CF 5955A). The importer indicates, as an extenuating circumstance for the lateness of the TIB extension request, that the broker "did not live up to the expectations of a professional."

In previous cases, we have held that a misunderstanding between the importer and its broker does not relieve the bond holder of the responsibility to comply with the terms of the bond. HQ 225452/225683 (January 20, 1995). In HQ 223400 (September 24, 1991), we found that the failure of a broker to notify the importer of the requirement to timely export the merchandise and/or request an extension is not evidence demonstrating that the failure to file the application on time was due to extraordinary circumstances. See HQ 224894 (December 8, 1993); HQ 223399 (December 11, 1991); and HQ 221898 (April 1, 1990).

The importer was fully aware of the bond requirements, claimed the duty-free benefits of the TIB, and agreed to comply with them. Regardless of importer's intent, no compelling reason has been put forth to explain the failure to export or destroy the merchandise within one year or timely file a request for an extension of the bond. Consequently, we find a lack of due diligence to comply with the bond terms.

As previously indicated, approvals of untimely requests are granted only sparingly for extraordinary reasons, such as death or serious illness of the employee responsible for making the request for extension. See HQ 219659 (July 8, 1987). The situation in this case does not appear to be one in which circumstances were so extraordinary that relief may be granted. Rather, the circumstances are more in the nature of a lack of due diligence.


Based on the foregoing, the extension of the TIB is not warranted. Accordingly, you should proceed with the claim for liquidated damages. Please note that this ruling addresses only the issue of untimely request for extension and not the applicability of liquidated damages or any petition for relief from those damages, or compliance with procedures under 19 C.F.R. Part 172, concerning liquidated damages.


William G. Rosoff

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