HQ 223458: Ruling request concerning status under drawback laws ofmerchandise shipped from the 50 states of the United States tothe U.S. Virgin Islands; 19 CFR 191.8; 19 CFR 191.13; C.S.D 81-225.

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 223458

                         March 31, 1992


DRA-2-02 CO:R:C:E 223458  TLS

CATEGORY: Entry

Ms. Nancy Woo
Citizen Watch Company of America
8506 Osage Avenue
Los Angeles, California  90045

RE: Ruling request concerning status under drawback laws of
merchandise shipped from the 50 states of the United States to
the U.S. Virgin Islands; 19 CFR 191.8; 19 CFR 191.13; C.S.D 81-
225.


Dear Ms. Woo:

     The above-referenced ruling request has been received by
this office for consideration.  We have considered the points
raised and our decision follows.

FACTS:

     You state that you need information on whether drawback can
be obtained on merchandise shipped from the 50 states to the U.S.
Virgin Islands.  Apparently there has been some conflict about
this issue.

ISSUE:

     Whether a shipment of merchandise from this country to the
U.S. Virgin Islands is considered an exportation for drawback
purposes.

LAW AND ANALYSIS:

     The subject issue has been addressed before in court cases. 
It has been held that "exportation", as the term is used in
Customs laws, means the transportation of goods from this country
to a foreign country.  Rothschild & Co. v. United States, 16 Ct.
Cust. App. 442, 446, T.D. 43190 (1929).  The court went on to
find that U.S. territories such as the Virgin Islands, Guam,
etc., are not foreign countries within the meaning of that
definition.  Id.  That ruling was followed in a more recent
Customs Court case on the same issue.  In that case, it was held
that while U.S. territories might sometimes be recognized as
distinct from the states under certain Customs laws (tariff
duties, for instance), shipments to those territories nonetheless
do not constitute exportation to a foreign country for drawback
purposes.  Mitsubishi International Corp. v. United States, 55
Cust. Ct. 319,324, C.D. 2597 (1965).

     The law has become more defined under Customs regulations
recently.  Under 19 CFR 191.8, the following is provided for:

     (c) Merchandise in continuous Customs custody. 
     Drawback shall be allowed on imported merchandise which
     is exported, or shipped from continuous Customs custody
     to the Virgin Islands, American Samoa, Wake Island,
     Midway Islands, Kingman Reef, Johnston Island, or Guam,
     only if exported or shipped within 5 years after the
     date of importation.  (Emphasis added.)

Under 19 CFR 191.13, the following is further provided for:

     Guantanamo Bay, insular possessions, trust territories. 
     Guantanamo Bay Naval Station shall be considered
     foreign territory for drawback purposes.  However,
     under 19 U.S.C. 1313, there is no authority of law for
     the allowance of drawback of Customs duty on articles
     manufactured or produced in the United States and
     shipped to Puerto Rico, the Virgin Islands, American
     Samoa, Wake Island, Midway Islands, Kingman Reef, Guam,
     Canton Island, Enderbury Island, Johnston Island, or
     Palmyra Island.  (Emphasis added.)

Reading these regulations literally, drawback may be obtained on
merchandise shipped from this country to the Virgin Islands only
if it had already been previously imported to this country and
remained in continuous Customs custody.  If the goods are
manufactured in this country, then the shipment is not an
exportation to the Virgin Islands for the purposes of drawback. 
The Virgin Islands is an insular possession of the United States
and as such does not retain the status of foreign country within
the meaning of our tariff acts.  See Customs ruling HQ 221990
(January 8, 1990), citing Mitsubishi.

     We also refer to a Customs Service decision on a similar set
of facts.  Customs ruled in a 1981 case that goods shipped to the
Virgin Islands from this country are eligible for same condition
drawback if they were originally shipped from the Virgin Islands. 
C.S.D. 81-225 (June 4, 1981); Customs ruling HQ 213073.  Thus, if
the goods in this case are shipped from the U.S. Virgin Islands
to this country and then back to the Virgin Islands, then the
exporter may successfully claim drawback on the goods. 
Therefore, drawback may be obtained on duty-paid imported
merchandise shipped to the Virgin Islands only if it remains in
continuous Customs custody and it is shipped within five years of
the date of importation, or, alternatively, when the goods were
originally shipped from the Virgin Islands to this country and
are shipped back to the Virgin Islands.  Only under these
circumstances may drawback be obtained on shipments to the Virgin
Islands from this country.

HOLDING:

     Drawback is eligible on duty-paid imported merchandise
shipped to the Virgin Islands only if it remains in continuous
Customs custody and it is shipped within five years of the date
of importation, pursuant to 19 CFR 191.8(c), or if the
merchandise was originally shipped from the Virgin Islands to
this country and subsequently shipped back to the Virgin Islands,
pursuant to C.S.D. 81-225.  Under no other circumstances is
drawback allowed on shipments to the Virgin Islands from this
country.

                               Sincerely,




                               John Durant, Director