HQ 223075: 19 U.S.C. 1313(j); same condition drawback upon transfer ofduty-paid merchandise to a foreign trade zone; 19 U.S.C. 81c(a);merchandise transferred to a foreign trade zone for exportation,destruction or storage considered exported; merchandisetransferred to a foreign trade zone for manufacturing purposesnot eligible to be considered exported for drawback

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 223075

                          July 10, 1991

DRA-2-02-CO:R:C:E 223075 C

CATEGORY:  Drawback

District Director of Customs
U.S. Customs Service
477 Michigan Avenue
Suite 200
Detroit, Michigan  48266

RE:  19 U.S.C. 1313(j); same condition drawback upon transfer of
duty-paid merchandise to a foreign trade zone; 19 U.S.C. 81c(a);
merchandise transferred to a foreign trade zone for exportation,
destruction or storage considered exported; merchandise
transferred to a foreign trade zone for manufacturing purposes
not eligible to be considered exported for drawback

Dear Sir/Madam:

     This responds to a memorandum from the Chief of the Drawback
Branch, New York Region, dated March 8, 1991, transmitting
Protest and Application for Further Review Nos. 3801-0-02552
through 3801-0-02554, dated July 23, 1990 (PRO-2-06:O:C:D BCH). 
We have reviewed the protests and our decision follows.

FACTS:

     The protests pertain to three drawback entries filed at
Detroit for drawback under 19 U.S.C. 1313(j).  The company
imported merchandise, duty-paid, and transferred such merchandise
to a foreign trade subzone where it was used in the further
manufacture of other articles.  It was admitted into the zone in
the same condition it was in when imported.  The company,
invoking the rule of Customs Headquarters letter ruling 218551,
dated January 29, 1986, asserted that the merchandise is
considered exported for drawback purposes upon admission into the
zone.  Consequently, it filed a claim for same condition
drawback.

     Customs at Detroit denied the claim for drawback on the
grounds that T.D. 89-4 revoked the referenced letter ruling,
along with CSD (Customs Service Decision) 84-97 and CSD 85-10. 
(See Treasury Decision 89-4, 23 Cust. Bull., p. 96; CSD 84-97, 18
Cust. Bull., p. 1069; and CSD 85-10, 19 Cust. Bull., p. 509.) 
Consequently, merchandise transferred to a foreign trade zone for
manufacturing is no longer considered exported for drawback
purposes.  The company then filed the instant protests for
further review.  The company's protests request that a decision
be withheld until the United States Court of International Trade
decides the case of Chrysler Motors Corp. v. United States, 89-
5-00252 (CIT).

ISSUE:

     The question at issue in these protests is the same as that
considered by the Court of International Trade in the recently
decided Chrysler Motors Corp. v. United States, No. 89-05-00252,
slip op. 90-130 (CIT December 11, 1990), 25 Cust. Bull. No. 4, p.
4 (appeal pending).  The issue is as follows: Can duty-paid
merchandise be transferred and admitted into a foreign trade zone
for the purpose of further manufacture and be considered exported
for drawback purposes under the fourth proviso of 19 U.S.C.
81c(a)?

LAW AND ANALYSIS:

     The fourth proviso provides that duty-paid merchandise
admitted into a foreign trade zone for the purposes of
exportation, destruction, or storage can be considered exported
for the purposes of the drawback and other laws.  19 U.S.C.
81c(a).  In CSD 84-97, CSD 85-10, and letter ruling 218551,
Customs held that duty-paid merchandise could be admitted into a
foreign trade zone for further manufacturing and be considered
exported for drawback.  Subsequently, Customs, recognizing that
these rulings were based on an erroneous interpretation of the
foreign trade zones law, specifically 19 U.S.C. 81c(a), published
T.D. 89-4 which revoked these rulings as unsupported by law.  The
TD corrected Customs position to be in accordance with law, and
held that merchandise admitted into a foreign trade zone for
manufacturing purposes cannot be considered exported for drawback
under the fourth proviso of 19 U.S.C. 81c(a).

     In the Chrysler Motors case, the Court of International
Trade agreed with Customs position as expressed in T.D. 89-4. 
The court granted the government's motion for summary judgment. 
The drawback entries which form the basis of the instant protests
are essentially the same as the drawback entry that was the
subject of Chrysler Motors.  Based on T.D. 89-4 and the opinion
in Chrysler Motors, the instant protests must be denied.

HOLDING:

     The fourth proviso of 19 U.S.C. 81c(a) applies to deem as
exported imported duty-paid merchandise admitted into a foreign
trade zone solely for exportation, destruction, or storage. 
Merchandise admitted into a zone for manufacturing purposes is
not eligible to be considered exported.  You are hereby
instructed to deny the protests, submit a copy of this decision
to the protesting company, and otherwise comply with section
174.30 of the Customs Regulations.

                               Sincerely,




                               John Durant, Director