HQ 223773: Your ruling request concerning theoretical transfer under 19CFR 19.24; 19 USC 1312(b)(5); credit at one port exports fromanother port; 19 CFR 19.23; 19 USC 1312(b)(1)

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 223773

                          June 8, 1992

WAR-3-03 CO:R:C:E; ENT-7-04-CO:R:C:E 223773 C

CATEGORY:  Entry/Liquidation

T.W. Kennard
Senior Vice President
Western Overseas Corporation
813 Pacific Avenue
Tacoma, WA  98409

RE:  Your ruling request concerning theoretical transfer under 19
CFR 19.24; 19 USC 1312(b)(5); credit at one port exports from
another port; 19 CFR 19.23; 19 USC 1312(b)(1)

Dear Mr. Kennard:

     This responds to your letter of February 24, 1992,
concerning the referenced matter.  You presented several possible
transactions that would accommodate your client, Steinweg/Puget
Sound Warehousing Corporation (SPWC), who operates a foreign
trade subzone in Tacoma, WA.  We have reviewed your proposals and
our response follows.  In view of the fact that the answer to
your inquiry is based on Customs long standing interpretation of
the Customs law pertaining to theoretical transfer, a ruling is
not necessary.  This response is an information letter issued
under section 177.1(d)(2) (19 C.F.R. 177.1(d)(2)).

     The facts as we understand them are as follows:  Your
client, SPWC, operates a foreign trade subzone (FTZ) in Tacoma,
WA.  Cerro Sales Corporation (CSC), a client of SPWC, intends to
purchase copper cathode from a domestic supplier and enter that
cathode into the FTZ in zone restricted status for later
exportation.  Cerro Copper Products Company (CCPC), another
client of SPWC, operates a bonded storage warehouse in St. Louis,
MO, wherein imported copper cathode is stored.  CCPC wants to
cancel charges against its storage warehouse bond in St. Louis
upon the entry of the domestic cathode into the FTZ in Tacoma by
CSC.  Alternatively, CCPC would cancel the bond charges upon
exportation of the domestic cathode from the FTZ.  You propose
that this transaction is possible by application of the
theoretical transfer provision of the Customs regulations, 19
C.F.R. 19.24.  That is, CCPC files in St. Louis a CF 7512
withdrawal for exportation as a theoretical transfer of cathode,
identifying the domestic cathode entered into the FTZ (in zone
restricted status) by CSC.  Alternatively, a CF 7512 entry for
immediate exportation from a FTZ is filed in Tacoma, presumably
by CSC, identifying an entry pertaining to cathode entered into
the bonded storage warehouse in St. Louis by CCPC and noting on
the entry the following: "Warehouse withdrawal for exportation
without physical shipment."  A third proposal is to combine
elements of the above two proposals.

     In one of the above ways, you propose that the exportation
of the domestically obtained cathode, either by admission into
the FTZ in zone restricted status or by withdrawal for
exportation from the FTZ, can form the basis for a corresponding
reduction of charges against the bond of the storage warehouse in
St. Louis.

     The theoretical transfer, or transfer of bond charges from
one warehouse bond to another without the physical shipment of
material, is provided under 19 U.S.C. 1312(b)(5) and section
19.24 of the Customs Regulations (19 C.F.R. 19.24).  The
regulation implements the statutory provision.  The statute, 19
U.S.C. 1312, applies to bonded smelting and or refining
warehouses.  The theoretical transfer provision, subsection
1312(b)(5), applies to transfers of bond charges from one
smelting and/or refining warehouse to another.  These statutory
limitations preclude application of the theoretical transfer to
the situation you have presented.

     Under your scenario, there is a bonded storage warehouse and
a foreign trade subzone.  The former is provided for under 19
U.S.C. 1557 and the latter under 19 U.S.C 81a through u.  The
theoretical transfer provision of 19 U.S.C. 1312(b)(5) simply
does not apply to the situation presented.  Neither 19 U.S.C.
1557 nor 19 U.S.C. 81a-u provide for theoretical transfer.

     You also suggested applicability of section 19.23 of the
Customs Regulations pertaining to the crediting of one warehouse
bond at one port for exportations from another warehouse at
another port (19 C.F.R. 19.23).  This cross-crediting for
exportations is provided for in 19 U.S.C. 1312(b)(1).  Again, it
applies only to smelting and/or refining warehouses and has no
application to the situation you presented.  

     You asked that we recommend a means by which the charges
against the bond at the storage warehouse in St. Louis can be
reduced based on the exportation of cathode from the FTZ in
Tacoma.  We are constrained to state that on the facts presented,
the only way to reduce those bond charges is to withdraw the
cathode from the bonded storage warehouse for consumption or
exportation.  Entry of merchandise into a FTZ in zone restricted
status, or the exportation of merchandise from a FTZ, is a
separate and distinct customs transaction.  Whereas the statutory
scheme governing smelting and/or refining warehouses provides for
maneuverability respecting credits for exportations and transfers
of bond charges, no such maneuverability for transactions between
bonded storage warehouses and foreign trade zones exists.

     If you have any further questions, please contact this
office.

                               Sincerely,




                               John Durant, Director
                               Commercial Rulings Division