[Federal Register Volume 65, Number 126 (Thursday, June 29, 2000)]
[Proposed Rules]
[Pages 40067-40069]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-16406]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Customs Service

19 CFR Part 10

RIN 1515-AC59


Civil Aircraft

AGENCY: Customs Service, Department of the Treasury.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: This document proposes to amend the Customs Regulations 
concerning the duty-free entry of civil aircraft merchandise to reflect 
amendments to General Note 6 of the Harmonized Tariff Schedule of the 
United States made by the Miscellaneous Trade and Technical Corrections 
Act of 1996. This document invites the public to comment on the 
proposed changes.

DATES: Comments must be received on or before August 28, 2000.

ADDRESSES: Written comments (preferably in triplicate), regarding both 
the substantive aspects of the proposed rule and how it may be made 
easier to understand, may be submitted to and inspected at the 
Regulations Branch, Office of Regulations and Rulings, U.S. Customs 
Service, 1300 Pennsylvania Avenue, NW., 3rd Floor, Washington, DC 
20229.

FOR FURTHER INFORMATION CONTACT: Ms. Dixie Staple, Office of Field 
Operations, at (202) 927-1131.

SUPPLEMENTARY INFORMATION:

Background

    This document proposes to amend Sec. 10.183 of the Customs 
Regulations (19 CFR 10.183), which concerns Customs duty-free treatment 
of civil aircraft merchandise. Section 10.183 implements General Note 6 
of the Harmonized Tariff Schedule of the United States (HTSUS) (19 
U.S.C. 1202), which implements the Agreement on Trade in Civil Aircraft 
(Title VI of the Trade Agreements Act of 1979, Pub. L. 96-39, 93 Stat. 
144, July 26, 1979), to provide duty-free treatment for qualifying 
civil aircraft merchandise upon compliance with certain requirements.
    General Note 6 of the HTSUS was amended by section 12 of the 
Miscellaneous Trade and Technical Corrections Act of 1996 (the Act), 
Pub. L. 104-295, 110 Stat. 3514 (October 11, 1996). Prior to the 
amendment, General Note 6, HTSUS, required that an importer entering 
merchandise duty-free thereunder must file with Customs a written 
statement certifying that the merchandise (i) Is civil aircraft or has 
been imported for use in civil aircraft, (ii) will be so used, and 
(iii) has been approved for civil aircraft use by, or an application 
for approval has been submitted to, the Administrator of the Federal 
Aviation Administration (FAA) (or has been approved by an airworthiness 
authority in the country of exportation if such approval is recognized 
by the FAA). General Note 6 defined the term ``civil aircraft'' as all 
aircraft other than aircraft purchased for use by the Department of 
Defense or the United States Coast Guard.
    Prior to the amendment of General Note 6, HTSUS, Sec. 10.183 of the 
Customs Regulations (19 CFR 10.183) provided that the written statement 
required under General Note 6, HTSUS (referred to in the regulation as 
a certificate or certification), must be filed with each entry summary 
or be on file with Customs at the time of entry as a blanket statement 
at the port where the entry is filed (19 CFR 10.183(c)). The regulation 
also provided that the statement could not be treated as a missing 
document for which a bond could be posted pending its later production 
(under 19 CFR 141.66), and that failure to timely file the statement or 
to have a valid blanket statement on file at the port would result in a 
dutiable entry (19 CFR 10.183(c)(2)).
    The Act amended General Note 6, HTSUS, to eliminate the statement 
(certification) filing requirement and to provide that an importer 
makes a claim for duty-free treatment under the General Note by 
entering the merchandise under a tariff provision for which the program 
indicator ``Free (C)'' appears in the ``Special'' subcolumn of the 
tariff. This is accomplished by

[[Page 40068]]

placing the program indicator C'' on the entry summary. This claim, in 
accordance with General Note 6 as amended by the Act, is deemed the 
importer's certification that the merchandise being entered is civil 
aircraft or has been imported for use in civil aircraft and will be so 
used. Although the amendment eliminated the statement filing 
requirement, it requires that an importer maintain documentation to 
support the claim. It also provides that an importer may amend an entry 
or file a written statement to claim duty-free treatment under General 
Note 6, HTSUS, any time before the liquidation of the entry becomes 
final.
    These statutory amendments to General Note 6, HTSUS, establish the 
basis for the amendments to Sec. 10.183 proposed in this document. The 
proposed amendments to the regulation expand its coverage, eliminate 
the requirement that supporting documentation be filed with each entry 
summary, require that supporting documentation be maintained in the 
importer's records, eliminate the statement (certification) filing 
requirement, allow an importer to make a claim under General Note 6, 
HTSUS, after the filing of an entry but before its liquidation becomes 
final, and provide that no interest attaches to refunds of duty 
resulting from post-entry claims.

Comments

    Before adopting this proposal as a final rule, consideration will 
be given to any written comments timely submitted to Customs. Comments 
submitted will be available for public inspection in accordance with 
the Freedom of Information Act (5 U.S.C. 552), Sec. 1.4 of the Treasury 
Department Regulations (31 CFR 1.4), and Sec. 103.11(b) of the Customs 
Regulations (19 CFR 103.11(b)) on regular business days between the 
hours of 9 a.m. and 4:30 p.m. at the Regulations Branch, Office of 
Regulations and Rulings, U.S. Customs Service, 1300 Pennsylvania 
Avenue, NW., 3rd Floor, Washington, DC

Eexcutive Order 12866

    This document does not meet the criteria for a ``significant 
regulatory action'' as specified in E.O. 12866.

Regulatory Flexibility Act

    Adoption of the proposed amendments regarding civil aircraft will 
make importations of such merchandise less burdensome for importers 
than is the case under current regulations. Accordingly, pursuant to 
the provisions of the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.), it is certified that the proposed amendments to the Customs 
Regulations, if adopted, will not have a significant economic impact on 
a substantial number of small entities. The proposed amendments are not 
subject to the regulatory analysis or other requirements of 5 U.S.C. 
603 and 604.

Paperwork Reduction Act

    The collection of information contained in this notice has 
previously been reviewed and approved by the Office of Management and 
Budget (OMB) under OMB control number 1515-0065 (Entry Summary), 1515-
0069 (Immediate Delivery Application), and 1515-0144 (Customs Bond 
Structure). This rule does not propose any substantive changes to the 
existing approved information collection.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless the collection of 
information displays a valid control number.

Drafting Information

    The principal author of this document was Bill Conrad, Office of 
Regulations and Rulings, U.S. Customs Service. However, personnel from 
other offices contributed in its development.

List of Subjects IN 19 CFR Part 10

    Aircraft, Customs duties and inspection, Entry, Reporting and 
recordkeeping requirements.

Proposed Amendments to the Regulations

    For the reasons stated in the preamble, part 10 of the Customs 
Regulations (19 CFR Part 10) is proposed to be amended as follows:

PART 10--ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE, 
ETC.

    1. The general authority citation for part 10 continues to read, 
and the specific authority citation for Sec. 10.183 is added, as 
follows:

    Authority: 19 U.S.C. 66, 1202 (General Note 20, Harmonized 
Tariff Schedule of the United States (HTSUS)), 
1321,1481,1484,1498,1508,1623, 1624, 3314;
* * * * *
    Section 10.183 also issued under 19 U.S.C. 1202 (General Note 6, 
HTSUS);
* * * * *
    2. Section 10.183 is revised to read as follows:


Sec. 10.183  Duty-free entry of civil aircraft, aircraft engines, 
ground flight simulators, parts, components, and subassemblies.

    (a) Applicability. Except as provided in paragraph (b) of this 
section, this section applies to aircraft, aircraft engines, and ground 
flight simulators, including parts, components, and subassemblies 
thereof, that qualify as civil aircraft under General Note 6 of the 
Harmonized Tariff Schedule of the United States (HTSUS) by meeting the 
following requirements:
    (1) The aircraft, aircraft engines, ground flight simulators, or 
parts, components, and subassemblies thereof, are used as original or 
replacement equipment in the design, development, testing, evaluation, 
manufacture, repair, maintenance, rebuilding, modification, or 
conversion of aircraft; and
    (2) They are either:
    (i) Manufactured or operated pursuant to a certificate issued by 
the Administrator of the Federal Aviation Administration (FAA) under 49 
U.S.C. 44704, or pursuant to the approval of the airworthiness 
authority in the country of exportation, if such approval is recognized 
by the FAA as an acceptable substitute for the FAA certificate;
    (ii) Covered by an application for such certificate, submitted to 
and accepted by the FAA, filed by an existing type and production 
certificate holder pursuant to 49 U.S.C. 44702 and implementing 
regulations (Federal Aviation Administration Regulations, title 14, 
Code of Federal Regulations); or
    (iii) Covered by an application for such approval or certificate 
which will be submitted in the future by an existing type and 
production certificate holder, pending the completion of design or 
other technical requirements stipulated by the FAA (applicable only to 
the quantities of parts, components, and subassemblies as are required 
to meet the stipulation).
    (b) Department of Defense or U.S. Coast Guard use. If purchased for 
use by the Department of Defense or the United States Coast Guard, 
aircraft, aircraft engines, and ground flight simulators, including 
parts, components, and subassemblies thereof, that qualify as civil 
aircraft under General Note 6 of the HTSUS are subject to this section 
only if they are used as original or replacement equipment in the 
design, development, testing, evaluation, manufacture, repair, 
maintenance, rebuilding, modification, or conversion of aircraft and 
meet the requirements of either paragraph (a)(2)(i) or (a)(2)(ii) of 
this section.
    (c) Claim for admission free of duty. Merchandise qualifying under 
paragraph (a) or paragraph (b) of this section is entitled to duty-free 
admission in accordance with General Note 6, HTSUS, upon meeting the 
requirements of this section. An

[[Page 40069]]

importer makes a claim for duty-free admission under this section and 
General Note 6, HTSUS, by properly entering qualifying merchandise 
under a provision for which the rate of duty ``Free (C)'' appears in 
the ``Special'' subcolumn of the HTSUS and by placing the special 
indicator ``C'' on the entry summary. The fact that qualifying 
merchandise has previously been exported with benefit of drawback does 
not preclude free entry under this section.
    (d) Importer certification. In making a claim for duty-free 
admission as provided for under paragraph (c) of this section, the 
importer is deemed to certify, in accordance with General Note 
6(a)(ii), HTSUS, that the imported merchandise is civil aircraft as 
described in paragraph (a) or paragraph (b) of this section or has been 
imported for use in civil aircraft and will be so used.
    (e) Documentation. Each entry summary claiming duty-free admission 
for imported merchandise in accordance with paragraph (c) of this 
section must be supported by the written order or contract and any 
additional documentation Customs may require to verify the claim for 
duty-free admission, including evidence of compliance with the FAA 
certification requirement of paragraph (a)(2)(i), (a)(2)(ii), or 
(a)(2)(iii) of this section. This required documentation need not be 
filed with the entry summary, but must be maintained in accordance with 
the recordkeeping provisions of part 163 of this chapter. An importer 
not in possession of the required supporting documentation at the time 
of entry may not then claim duty-free admission under this section but 
may later make a duty-free claim after entry in accordance with 
paragraph (f) of this section. Customs may request production of 
supporting documentation at any time to verify the claim for duty-free 
admission. Proof of end use of the entered merchandise need not be 
maintained.
    (f) Post-entry claim. An importer may file a claim for duty-free 
treatment under General Note 6, HTSUS, after filing an entry that made 
no such duty-free claim, by filing a written statement with Customs any 
time prior to liquidation or prior to the liquidation becoming final. 
When filed, the written statement constitutes the importer's deemed 
certification. In accordance with General Note 6, HTSUS, any refund 
resulting from a claim made under this paragraph will be without 
interest, notwithstanding the provision of 19 U.S.C. 1505(c).
    (g) Verification. The port director will monitor and periodically 
audit selected entries made under this section.

    Approved: June 7, 2000.
 Raymond W. Kelly,
Commissioner of Customs.
John P. Simpson,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 00-16406 Filed 6-28-00; 8:45 am]
BILLING CODE 4820-02-P