HQ 223147: Computer work station reworked for the European marketcannot receive manufacturing drawback; 19 U.S.C. 1313(a)

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 223147

                          July 24, 1991



DRA-4-CO:R:C:E  223147  SR

CATEGORY:  Drawback


Mr. Kevin M. Diran
Armen Cargo Services Inc.
S.F.I.A. BLDG. 8
P.O. Box 280661
San Francisco, CA. 94128

RE:  Computer work station reworked for the European market
cannot receive manufacturing drawback; 19 U.S.C. 1313(a)

Dear Mr. Diran:

     This is in reference to your letter dated April 15, 1991,
concerning manufacturing drawback for computer work stations
imported from Korea that are reworked for the European market.  

FACTS:

     The merchandise at issue is computer work stations that are
imported from Korea.  In the United States they are altered to
conform to European requirements.  The following processes are
performed on the computer work stations prior to their
exportation to Europe:

     1.  A new substantially upgraded logic board is installed
     with a BIOS.  The language displayed on the screen is also
     changed from English to German, French, Spanish or another
     appropriate language.

     2.  The power supply is changed to adapt to European current
     requirements.

     3.  New and appropriate "keyboard characters" are installed
     depending on the foreign language utilized.

ISSUE:

     Whether the reworked computer work stations qualify for
manufacturing drawback.
                               -2-



LAW AND ANALYSIS:

     Drawback for articles that are manufactured or produced in
the United States is provided for in 19 U.S.C. 1313(a) which
reads as follows:

     (a)  Upon the exportation of articles manufactured or
     produced in the United States with the use of imported
     merchandise, the full amount of the duties paid upon the
     merchandise so used shall be refunded as drawback, less 1
     per centum of such duties.

     In order for a procedure to be considered a manufacture or
production a transformation must occur; a new and different
article must emerge having a distinctive name, character or use
(Anheuser-Busch Brewing Association v. United States, 207 U.S.
556(1907)).  Articles that are reconditioned, reworked, or
adjusted are not considered to be manufactured or produced for
drawback purposes.  An article that is reconditioned, reworked,
or adjusted may have some new functions or uses; however, the
general use of the article is not changed and the new use is not
distinctive.  In the case at issue the computer work stations are
altered so that they can be used in Europe; however, they still
function as computer work stations.

     Headquarters Ruling Letter 221569, dated August 21, 1990,
concerns printers that were imported and then put through a
conversion process which allowed them to perform more functions. 
This ruling held that the process performed was in the nature of
a mechanical adjustment or rework operation that enhances the
capability of a fully manufactured article.  The essential
nature, character, and utility remain unchanged; therefore the
printers were not manufactured or produced for drawback purposes.

     In C.S.D. 89-73, ultrasound units from Japan are imported
and altered to bring them into compliance with European
regulatory requirements.  All labels were replaced with labels in
German; wiring, external power cord, footswitch and fuses were
all exchanged with compliant parts.  These procedures constituted
a reworking or reconditioning and were not considered a
manufacture or production for drawback purposes.

HOLDING:

     The procedures performed to the computer work stations are
considered a reworking.  The altered computer stations do not  -3-


have a distinctive name, character, or use.  They do not qualify
for manufacturing or production drawback under 19 U.S.C. 1313(a).

                                   Sincerely,




                                   John Durant
                                   Director
                                   Commercial Rulings Division