H312266

90 K Street N.E., Washington, DC 20229 U.S. Customs and Border Protection HQ H312266 October 29, 2021 ENT 1-03 OT:RR:CTF:ER H312266 SMS Ms. Lauren Wyszomierski White & Case LLP 701 Thirteenth Street, NW Washington, DC 20005-3807 Re: Request for a determination of the right to act as importer of record by Marmen, Inc. Dear Ms. Wyszomierski: This is in response to your request for a ruling, dated June 22, 2020, on behalf of Marmen, Inc. (“Marmen”). Your request is regarding whether Marmen meets the criteria of “Importer of Record” as defined in Customs Directive No. 3530-002A, in connection with utility scale wind towers. We note that Marmen asserts that its customers are non-public business proprietary information. Accordingly, to preserve confidentiality, we refer to these entities, i.e., Marmen customers, collectively as “Company X.” FACTS: In your letter, you request confirmation that Marmen may act as the importer of record for utility scale wind towers. You explain that typical wind towers are shipped in sections because of their extreme heavy weight. Marmen manufactures and sells “up to 7-section towers” for exportation to the United States to Company X. Marmen invoices Company X after production is complete; title and risk of loss pass to Company X after payment or 30 days after invoicing, whichever occurs first. You explain that typically the payment or 30-day post invoice occurs prior to exportation of the wind towers to the United States. Marmen also stores the completed wind tower sections until Company X retrieves them, prior to importation. Company X is responsible for all transportation cost, but Marmen provides a warranty and guarantee on the imported merchandise, as well as maintains responsibility for any expense for repairs of any defective towers after delivery to the United States. In addition to the above listed responsibilities, Marmen presents two specific payment scenarios for consideration. Company X would make full payment of the invoiced amount before importation into the United States. In this scenario, title would pass to Company X prior to importation, and Marmen would only be responsible for any costs related to potentially defective towers, post-importation. Marmen would only require Company X to make a partial payment, 98 %, of the invoiced value, after production and prior to importation. After importation, specifically the day after cargo release from U.S. Customs and Border Protection (“CBP”), Company X would then pay the remaining 2% balance owed. Marmen explains, it would maintain a “security interest” in the wind towers at the time of their importation, which will expire upon Company X’s full payment. Additionally, Marmen is still responsible for the cost to repair for any defective towers, post-importation. On July 7, 2021, Regulations and Rulings reached out to Marmen for clarification on the two proposed agreements and the extent of the need for post-importation repair. On September 22, 2021, Marmen responded with further details. Due to their size, the towers are imported in sections, and Company X, the customer of the wind towers, assembles them in the United States. You explain that Marmen maintains insurance on “its products” and is obligated to fix any defective merchandise. Specifically, you explain that less than 1% of all imported towers are defective and would need Marmen provided repairs. Repairs are normally minor, such as paint-touch ups or replacing components, such as lights, and would be done by Company X. Under the terms of its guarantee, Marmen reimburses Company X for any needed repairs. However, in rare circumstances Marmen sends a technician to handle the repairs. Most defects are discovered weeks, if not months or years, after importation. Marmen’s warranty is valid until 24 months after the towers are placed in operation or 48 months after delivery to the customer’s project site. Lastly, you explain that Marmen is responsible for paying all customs duties, taxes, and fees; however, the cost of such entry requirements is included in the invoiced price of the tower, paid by Company X. Marmen asserts that it typically enters into an annual agreement with Company X, which governs the terms of their purchase orders, payments, and warranty policy. Company X issues Marmen purchase orders, covering multiple towers, on a monthly reoccurring basis. Marmen contends that due to its warranty policy that guarantees the merchandise after importation, and the fact that it produces wind towers subject to regular purchase orders, it “has an ongoing financial incentive after importation to continue ‘operations as arranged with regard to the goods’ and maintain its business with the customer.” Thus, Marmen believes it has sufficient financial interest in the imported wind towers, under both payment agreements, to make entry as the importer of record under 19 U.S.C. §1484(a)(1). ISSUE: Whether Marmen has sufficient financial interest in the goods, at the time of entry, to act as importer of record. LAW AND ANALYSIS: Section 484(a)(1) of the Tariff Act of 1930, as amended (19 U.S.C. § 1484(a)(1)) provides that only parties qualifying as the “importer of record” may make entry. Those qualified parties are identified as the “owner” or “purchaser” of the goods or a broker appointed on behalf of an owner, purchaser, or consignee under 19 U.S.C. §1484(a)(2)(B). Owner and purchaser are further defined in Customs Directive, (“C.D.”), 3530-002A, dated June 27, 2001. Section 5.3.1 of the directive provides: 5.3.1 The terms “owner” and “purchaser” include any party with a financial interest in a transaction, including, but not limited to, the actual owner of the goods, the actual purchaser of the goods, a buying or selling agent, a person or firm who imports on consignment, a person or firm who imports under loan or lease, a person or firm who imports for exhibition at a trade fair, a person or firm who imports goods for repair or alteration or further fabrication, etc. Any such owner or purchaser may make entry on his own behalf or may designate a licensed Customs broker to make entry on his behalf and may be shown as the importer of record on the CF 7501. The terms “owner” or “purchaser” would not include a “nominal consignee” who effectively possesses no other right, title, or interest in the goods except as he possessed under a bill of lading, air waybill, or other shipping document. C.D. 3530-002A. Accordingly, C.D. 3530-002A, explains that the terms owner and purchaser include any party with a significant financial interest in the transaction. Owners or purchasers have more than custodial interest in the goods. Id. Owners or purchasers have a financial interest in the goods that goes beyond that of a bailee or nominal consignee. “Financial interest” is defined as a nexus between the financial welfare of the owner or purchaser and the imported goods. See H007168 (Aug. 2, 2007). In Headquarters Ruling Letter (“HRL”) 231255, dated March 28, 2006, CBP explained that a key factor in determining financial interest is whether a party is in some significant way expecting or relying on a financial benefit from the imported merchandise. The focus of the inquiry is whether a reciprocal relationship between the party and the goods exists or whether a nexus between the financial welfare of the would-be importer’s business activities and the imported merchandise can be identified. Id. Therefore, if Marmen has a financial interest in the wind towers at the time of entry, sufficient to constitute a nexus between its financial welfare and the imported goods, it may serve as the importer of record. In Headquarters Ruling (“HQ”) 222020, dated August 1, 1990, we examined the right to make entry of a company that processed sugar, post-entry, also known as “tolling.” In HQ 222020, the company imported the goods, without title, but performed processing on the goods, under a “tolling” agreement. In HQ 222020 there were contractual cond

Section 484(a)(1) of the Tariff Act of 1930, as amended (19 U.S.C. § 1484(a)(1)) provides that only parties qualifying as the “importer of record” may make entry. Those qualified parties are identified as the “owner” or “purchaser” of the goods or a broker appointed on behalf of an owner, purchaser, or consignee under 19 U.S.C. §1484(a)(2)(B). Owner and purchaser are further defined in Customs Directive, (“C.D.”), 3530-002A, dated June 27, 2001. Section 5.3.1 of the directive provides:5.3.1 The terms “owner” and “purchaser” include any party with a financial interest in a transaction, including, but not limited to, the actual owner of the goods, the actual purchaser of the goods, a buying or selling agent, a person or firm who imports on consignment, a person or firm who imports under loan or lease, a person or firm who imports for exhibition at a trade fair, a person or firm who imports goods for repair or alteration or further fabrication, etc. Any such owner or purchaser may make entry on his own behalf or may designate a licensed Customs broker to make entry on his behalf and may be shown as the importer of record on the CF 7501. The terms “owner” or “purchaser” would not include a “nominal consignee” who effectively possesses no other right, title, or interest in the goods except as he possessed under a bill of lading, air waybill, or other shipping document.C.D. 3530-002A. Accordingly, C.D. 3530-002A, explains that the terms owner and purchaser include any party with a significant financial interest in the transaction. Owners or purchasers have more than custodial interest in the goods. Id. Owners or purchasers have a financial interest in the goods that goes beyond that of a bailee or nominal consignee. “Financial interest” is defined as a nexus between the financial welfare of the owner or purchaser and the imported goods. See H007168 (Aug. 2, 2007). In Headquarters Ruling Letter (“HRL”) 231255, dated March 28, 2006, CBP explained that a key factor in determ