HQ 224997: 19 U.S.C. 1313(j)(2); Section 632(j)(2) NAFTA ImplementationAct; Section 632(u) NAFTA Implementation Act.

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 224997

                        February 18, 1994

DRA-4-CO:R:C:E 224997 AJS

CATEGORY: Drawback

Mr. Edward P. Denninger, Jr.
J.G. Eberlein & Co., Inc.
90 West Street
New York, NY 10006

RE: 19 U.S.C. 1313(j)(2); Section 632(j)(2) NAFTA Implementation
Act; Section 632(u) NAFTA Implementation Act.

Dear Mr. Denninger:

     This is in reply to your request of October 6, 1993,
concerning foreign trade zones and drawback under 19 U.S.C.
1313(j)(2).

FACTS:

     Your request states that imported merchandise will be
brought into a Foreign Trade Zone (FTZ) under Privileged Foreign
status.  Subsequently, this merchandise is withdrawn and exported
from the United States under a Transportation and Exportation
entry.  

ISSUE:

     Assuming commercial interchangeability and all other
applicable requirements in the statutes and regulations are met,
may the exportation of the subject merchandise be substituted as
the basis of drawback claims against previously imported duty-
paid merchandise under 19 U.S.C 1313(j)(2).

LAW AND ANALYSIS:

     19 U.S.C. 1313(j)(2) has been amended by section 632(j)(2)
of the North American Free Trade Agreement (NAFTA) Implementation
Act of 1993.  The name of this provision has been changed from
"same condition drawback" to "unused merchandise".  It order to
qualify for unused merchandise drawback the "other merchandise"
referred to in this provision must be exported or destroyed under
Customs supervision.  


                               -2-

     Section 1313(j)(2) was also amended by section 632(u) of the
NAFTA Implementation Act to provided that "[i]mported merchandise
that has not been regularly entered or withdrawn for consumption
shall not satisfy any requirements for use, exportation, or
destruction under this section."  The legislative history to
section 632 states that this provision codifies current Customs
practice against "piggybacking" other duty exemption benefits
(foreign-trade zones, bonded warehouses and duty-free temporary
importation) onto drawback benefits.  

     Your request claims that the subject merchandise will be
withdrawn and exported from a FTZ under a Transportation and
Exportation entry.  Such merchandise is not considered regularly
entered or withdrawn for consumption.  Therefore, the subject
merchandise would not be exported as required under section
1313(j)(2).  Consequently, this merchandise may not be used as
the basis for drawback claims.  

HOLDING:

     The subject merchandise is not exported for the purposes of
19 U.S.C. 1313(j)(2) and thus may not be substituted as the basis
for drawback claims against previously imported duty-paid
merchandise.  


                                 Sincerely,


                                 John Durant, Director