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HQ 226747





June 18, 1997

DRA-1-06-RR:IT:EC 226747 IOR

CATEGORY: DRAWBACK

Port Director
U.S. Customs Service
ATTN: Associate Chief Counsel
909 SE 1st Avenue
Miami FL 33131

RE: Your file MI-95-0985:CL:HBG; Drawback; Proper drawback claimant; Unincorporated division; 19 U.S.C. ?1313(j)(2)

Dear Sir or Madame:

This is in response to the internal advice request received from your office, dated February 13, 1996, regarding drawback claims involving EG&G Ortec, Inc. (hereinafter referred to as

FACTS:

According to a letter from EG&G Instruments, Inc., dated September 25, 1995, and EG&G. Inc., dated October 5, 1995, on December 31, 1988, Ortec (with its own federal identification number ("FIN")) and EG&G Princeton Applied Research Corporation ("PARC") (with its own FIN) merged and became EG&G Instruments (a new FIN was assigned to EG&G Instruments, Inc.). Upon the merger, Ortec and PARC became unincorporated divisions of EG&G Instruments, Inc. ("EG&G I"). EG&G I is a subsidiary of EG&G, Inc.

Subsequent to the merger of Ortec and PARC, Drawback Entries Covering Same Condition Merchandise (CF 7539), under 19 U.S.C. drawback entry, 445-xxxx053-8, has been submitted. The CF 7539 indicates the following:

-Block 7- Name of person or business paying duty- "EG&G Ortec, Inc."

-Block 8- Importer of record name- "EG&G Ortec, Inc."

- Block 9- Imp. of record ID No.- Ortec's own FIN

- Blocks 21 and 22- Declarant that the drawback statute has been complied with- "K.A.T. Import Brokers, atty in fact" for EG&G Ortec, Inc.

- Block 24- Name of Firm/Address- "EG&G Ortec, Inc." and respective address

- Block 26- Name of person authorized to collect drawback (if other than exporter)-no information provided

- Block 30- Name and address of exporter- "K.A.T. Import Brokers, atty. in fact"

- Block 34- Claimant ID No.- Ortec's own FIN

According to an attachment to the CF 7539, the exported merchandise was exported from October 8, 1992 through January 9, 1993.

The imports which are identified in the representative claim, all indicate, on the entry summary (CF 7501), in Block 11, that the importer of record is "EG&G Ortec Inc." and include Ortec's federal identification number, as the importer number, in Block 12. The invoices for the imported merchandise show that the invoiced amount is to be billed to EG&G I, and the merchandise is to be shipped to Ortec. The importations were made after the formation of EG&G I.

The export documents include air waybills and invoices for the exported merchandise. The air waybills show either EG&G I or PARC as the shipper. The invoices for the exported merchandise are on "EG&G Ortec" letterhead, which shows the "F.E.I.N.", the federal identification number, that is assigned to EG&G I.

The parties involved in the imports and exports are summarized as follows:

IMPORTS EXPORTS

Importer of record: Ortec Shipper: EG&G I or PARC

FIN Ortec FIN: EG&G I

As explanation of why Ortec is identified as the importer and not the shipper, counsel for EG&G, Inc., in the letter dated October 5, 1995, explains as follows:

The use of the names Ortec and PARC since December 31, 1988 in documentation where EG&G Instruments, Inc. should have been referenced, was strictly inadvertent. As previously mentioned, PARC and Ortec are active divisions of EG&G Instruments, Inc. Because both Ortec and PARC had such strong separate corporate identities and customer sets, both the employees of PARC and Ortec as well as the customers of PARC and Ortec tended to continue to identify with and associate themselves with PARC and Ortec even after the corporations were merged into EG&G Instruments, Inc. In fact, EG&G Instruments, Inc. products continue to be advertised and sold under the PARC and Ortec names and both PARC and Ortec are trademarks of EG&G....

We regret any confusion this may have caused and as indicated in the above-referenced letter, appropriate steps have been taken to rectify the situation. In the future, shipments will indicate EG&G Instruments, Inc. as the shipper together with the appropriate ID number.

The September 25, 1995 letter from EG&G I apologizes for any inconvenience caused due to the use of the division names on the exports and imports, and states that the party referred to in the future will only be EG&G I. Counsel for EG&G, Inc. has informed us that the entity that actually paid the duty on the imported merchandise and is liable for payment of all duties and meeting all statutory and regulatory requirements incurred as a result of claims made against the importation and exportation of said merchandise, is EG&G I.

ISSUE:

Whether Ortec, the unincorporated division, is a proper drawback claimant?

LAW AND ANALYSIS:

The drawback law was substantially amended by section 632 of Title VI (Customs Modernization) of the North American Free Trade Agreement (NAFTA) Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2192 (1993). As amended, 19 U.S.C. ?1313(j)(2) provides that drawback may be granted if, among other requirements, there is, with respect to imported duty-paid merchandise, any other merchandise that is commercially interchangeable with the imported merchandise. To qualify for drawback, the other merchandise must be exported or destroyed within 3 years from the date of importation of the imported merchandise. The issue raised in this case is whether Ortec may collect drawback for the claims in which it is not shown to be the exporter. As other issues pertaining to the drawback claims have not been raised, they are not addressed herein.

With respect to the proper drawback claimant, 19 U.S.C. before the exportation or destruction:

(ii) is in the possession of, including ownership while in bailment, in leased facilities, in transit to, or in any other manner under the operational control of, the party claiming drawback under this paragraph, if that party--

(I) is the importer of the imported merchandise, or

(II) received from the person who imported and paid any duty due on the imported merchandise a certificate of delivery transferring to the party the imported merchandise, commercially interchangeable merchandise, or any combination of imported and commercially interchangeable merchandise (and any such transferred merchandise, regardless of its origin, will be treated as the imported merchandise and any retained merchandise will be treated as domestic merchandise);

In view of the express language in 1313(j)(2)(C)(ii), the party claiming drawback must have been in possession of the substituted merchandise, and be either the importer of the merchandise or have received from the importer a certificate of delivery transferring the imported merchandise, substituted merchandise or combination thereof. In this case, there is no indication that any certificates of delivery have been provided. Therefore, only the importer of the imported merchandise, Ortec, may claim drawback. The possession requirement is satisfied whether the merchandise was in the possession of Ortec, PARC or EG&G I, as they are all one and the same corporate identity. However, the proper party to claim drawback under these facts, is EG&G I, as the corporation of which Ortec, the named importer of the imported merchandise, is a division.

On the CF 7539, the identification number for Ortec was inserted in items number 9 (Importer of Record ID No.), 34 (Claimant ID no.), and Ortec's name was inserted in items number 7 (name of person or business paying duty), 8 (importer of record name) and 24 (name of firm/address whom the declarant represents). The Instructions For Use of Same Condition/Rejected Merchandise Drawback Form ("Instructions"), require that item 7 contains "the name(s) of the person or business who paid the duties due on the import entry(s) on which drawback is now being claimed," and that item 8 contains "the name of the person/firm/claimant liable for payment of all duties and meeting all statutory and regulatory requirements incurred as a result of claims made against the importation and exportation of said merchandise." As the business paying the duties due on the import entries on which drawback is being claimed, and the firm liable for payment of all duties and meeting all statutory and regulatory requirements incurred as a result of claims made against the importation and exportation of said merchandise, is EG&G I, items 7 and 8 should reflect EG&G I, and items 9 and 34 should reflect EG&G I's Internal Revenue Service, or "FIN."

We recommend that EG&G I be permitted to correct the CF 7539 as necessary, so that the company name and identification number discrepancies are corrected, and that EG&G I's address is reflected. Corrections which only perfect a drawback claim may be permitted after the 3-year period provided for in 19 CFR 191.61. See, e.g. HQ 224107 dated February 23, 1993. However, a claim may not be amended by expanding the scope of the claim after the expiration of the 3-year period.

You ask whether it is appropriate for Ortec to use its own FIN. Under Customs Regulations 24.5 (19 CFR 24.5), the Customs Service accepts the Internal Revenue Service Identification number as an identification number for Customs Transactions. The statute (26 U.S.C. ?6109) and regulations (26 CFR 1.6109-1 and 301.6109-1) are within the jurisdiction of the Internal Revenue Service. Consequently, requests for interpretation must be directed to that agency. Similarly, your question with respect to consequences arising from submission of false identifying information should be directed to a Fraud, Penalties and Forfeiture office.

HOLDING:

Under 19 U.S.C. ?1313(j)(2), under the facts presented, the proper drawback claimant is a corporation, as opposed to an unincorporated division of the corporation.

The Office of Regulations and Rulings will take steps to make this decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels 60 days from the date of this decision.

Sincerely,

Director,
International Trade
Compliance Division

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