HQ 222852: Toshiba-Kongsberg Sanctions; Contract or Binding Agreement Exception (19 CFR 12.142(b)(2))

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 222852

                        February 14, 1991

ENT-1-07-CO:R:C:E 222852

CATEGORY:  Entry

Evelyn M. Suarez, Esq.
Akin, Gump, Strauss, Hauer & Feld
1333 New Hampshire Avenue, NW.
Washington, D.C. 20036

RE:  Toshiba-Kongsberg Sanctions; Contract or Binding Agreement
     Exception (19 CFR 12.142(b)(2))

Dear Ms. Suarez:

     In your letters of November 27, 1990, and January 10 and 18,
1991, you requested a binding ruling on the applicability of the
contract exception, provided for in 19 CFR 12.141(a), to the
Toshiba-Kongsberg Sanctions for certain injection molding
machines manufactured by Toshiba Machine Company.  Our decision
follows.

FACTS:

     In 1985, two injection molding machines manufactured by
Toshiba Machine Company were purchased for a Canadian automotive
parts plant and imported into Canada.  With your letter you
included copies of purchase orders for two Toshiba reciprocating
screw injection molding machines, one with a capacity of 40.9
ounce shot and the other with a capacity of 125.9 ounce shot, and
invoices, dated August and June of 1985, for the shipment of two
Toshiba injection molding machines of the same model to the
Canadian automotive parts plant.  The Canadian automotive parts
plant has now been closed and the owner of the plant wishes to
transfer the Toshiba injection molding machines to its automotive
parts plant in Tennessee.  You request a ruling on the
applicability of the Toshiba-Kongsberg Sanctions to the
importation into the United States of the injection molding
machines.

ISSUE:

     Are the Toshiba-Kongsberg Sanctions applicable in this
case?

LAW AND ANALYSIS:

     Under section 2443 of the Omnibus Trade and Competitiveness
Act of 1988 (Public Law 100-418; 102 Stat. 1365; note following
50 U.S.C. App. 2410a) ("the Act"), "The President shall impose,
for a period of 3 years ... a prohibition on the importation into
the United States of all products produced by Toshiba Machine
Company ...."  Under paragraph (c) of this provision, "The Presi-
dent shall not apply sanctions under this section ... (2) to ...
products or services provided under contracts or other binding
agreements (as such terms are defined by the President in
regulations) entered into before June 30, 1987 ...."

     In Executive Order 12661, dated December 27, 1988, the
President ordered that importation into the United States of
products produced by Toshiba Machine Company is prohibited for 3
years from the date of the Executive Order.  The Secretary of the
Treasury was directed to make determinations with respect to
exceptions under section 2443(c)(2) (see above) of the Act.

     Interim regulations were issued under the authority of the
Act and Executive Order by Treasury Decision 89-20 (published in
the Federal Register on January 31, 1989 (54 FR 4780)).  Final
Regulations were issued by Treasury Decision 90-72 (published in
the Federal Register on September 13, 1990 (55 FR 37704)).  The
Customs Regulations pertaining to the Toshiba-Kongsberg Sanctions
are found in 19 CFR 12.140-12.143.  Under section 12.141(a), the
prohibition on the importation into the United States of products
produced by Toshiba Machine Company does not apply to "[p]roducts
provided under contracts or other binding agreements entered into
before June 30, 1987."  Under section 12.142(b)(2), the term
"contracts or other binding agreements entered into before June
30, 1987" means:

        With respect to used products imported by or for
        the primary user, written obligations performed
        before June 30, 1987, whether or not they provide
        for delivery in the United States ....

     In this case, there were written obligations performed
before June 30, 1987, assuming, as we do for purposes of this
ruling, that the purchase orders and invoices were for the same
Toshiba injection molding machines.  The machines would be
imported into the United States by the owner of the Canadian
plant for use in its Tennessee plant.  Therefore, the importation
of the machines as described in this ruling and your letters is
exempt from the Toshiba-Kongsberg Sanctions pursuant to 19 CFR
12.142(b)(2)).

HOLDING:

     The Toshiba-Kongsberg Sanctions are not applicable in this
case (19 CFR 12.142(b)(2)).

                              Sincerely,




                              Harvey B. Fox
                              Director, Office of
                              Regulations and Rulings