H342573

H342573 August 20, 2025 OT:RR:CTF:EPDR H342573 RD Category: Entry Alan Apria, Center Director U.S. Customs and Border Protection Electronics Center of Excellence and Expertise One World Trade Center Long Beach, CA 90831 Re: Further review of Protest No. 3001-10-100233, Denial of Florence Agreement Application; California Institute of Technology Dear Director Apria, This is in response to an application for further review of protest no. 3001-10-100233, forwarded to our office on October 21, 2024, which contests the liquidation of an entry (entry no. xxxxxxx7336) of an “ND: Yag Laser” as dutiable and ineligible for duty-free treatment under subheading 9810.00.60, Harmonized Tariff Schedule of the United States (HTSUS). We note that protest no. 2720-10-100016, designated as the “lead protest” involving the same merchandise and issues was denied as untimely on September 19, 2024. FACTS: On January 22, 2008, the California Institute of Technology (Caltech) entered a 2W Mephisto Lasersystem (also referred to as an “ND: Yag Laser”) under subheading 9810.00.60, HTSUS, which accords duty-free treatment to scientific instruments and apparatus imported by public or private nonprofit institutions pursuant to the Educational, Scientific, and Cultural Materials Importation Act of 1966, Public Law 89-651, 80 Stat. 897 (Oct. 14, 1966) (Florence Agreement). Caltech filed a Request for Duty-Free Entry of Scientific Instruments or Apparatus (ITA Form 338P), also called a Florence Agreement application, for the laser on June 30, 2008. Caltech did not purchase the instrument outright but provided a Memorandum of Understanding (MOU) between the Laser Interferometer Gravitational Wave Observatory (LIGO) and the foreign instrument supplier, the Albert Einstein Institute, Max Planck Institute for Gravitational Physics (AEI). The MOU states that AEI will provide LIGO with a 2W Mephisto Lasersystem to observe gravitational radiation. LIGO is comprised of two organizations, LIGO Laboratory, which is a facility for gravitational wave research primarily operated by Caltech and the Massachusetts Institute of Technology (MIT), and the LIGO Scientific Collaboration, which according to the MOU is an “international consortium of academic and research organizations that contribute to data analysis, the scientific operation of the LIGO observatories, and research and development in support of upgrades to the LIGO observatories.” The MOU notes that all equipment supplied by AEI for installation in Advance LIGO will become property of Caltech. On March 21, 2007, U.S. Customs and Border Protection (CBP) denied the Florence Agreement application. On May 28, 2009, Caltech sought reconsideration of CBP’s decision that the agreement between Caltech and its supplier, AEI, was not a “bona fide order” and highlighted that a purchase is not required for purposes of a “bona fide order” pursuant to the Florence Agreement and as discussed in Headquarters Ruling (HQ) 557701, dated April 7, 1994. Caltech pointed to the MOU with AEI and stated there was an agreement between a qualified institution (Caltech) and a foreign supplier (AEI), thus satisfying the condition that where the agreement constitutes something less than a purchase, it must be directly between the institution and the foreign supplier. On June 19, 2009, CBP denied the request for reconsideration and responded that the laser was not eligible for duty-free treatment under subheading 9810.00.60, HTSUS, because Caltech had not placed an order to purchase the instrument. CBP advised Caltech that the files for HQ 557701, and the letter from CBP to the DOC discussed in that ruling, could not be found. CBP stated that a copy of the October 15, 1974, letter had been obtained, however, and advised that the portion cited by Caltech was mere “dicta.” CBP’s denial letter also discussed and attached several non-public denials of Florence Agreement applications because the “bona fide order” requirement was not met due to the fact that there was no purchase of the instrument. CBP’s liquidated Caltech’s entry with duties on February 5, 2010. On August 4, 2010, Caltech protested the liquidation of an entry of the laser as dutiable on the grounds that the Florence Agreement does not require an actual purchase in order to obtain duty-free treatment under subheading 9810.00.60, HTSUS. Subsequently, CBP reconsidered its position upon reviewing Caltech’s protest. CBP sent Caltech’s application to the U.S. Department of Commerce (Commerce) for consideration. On August 14, 2025, Commerce approved Caltech’s Florence Agreement application. See 90 Fed. Reg. 39181 (Aug. 14, 2025). ISSUE: Whether a Florence Agreement applicant must demonstrate that the qualifying institution intends to purchase the imported instrument or apparatus. LAW AND ANALYSIS: As an initial matter, we find that, pursuant to 19 U.S.C. § 1514(c)(3)(A), this protest was timely filed on August 4, 2010, within 180 days after the liquidation of the protested entry on February 10, 2010. We also find that, pursuant to 19 U.S.C. § 1514(a)(1), a protestable issue was raised by challenging CBP’s decision regarding “the classification and rate and amount of 2 duties chargeable” for the ND: Yag Laser. Finally, pursuant to 19 C.F.R. § 174.24(b), we find that further review of this protest is warranted because it involves questions of law and fact which have not previously been ruled upon – specifically, whether the entered merchandise is eligible for duty-free treatment under subheading 9810.00.60, HTSUS. The Florence Agreement endeavors to promote international understanding and peace by lowering barriers to the exchange of cultural, scientific, and educational materials. The United States became a full party to the agreement when it enacted implementing legislation in 1966. Educational, Scientific, and Cultural Materials Importation Act of 1966, Public Law 89-651, 80 Stat. 897 (Oct. 14, 1966). Pursuant to subheading 9810.00.60, HTSUS, scientific instruments or apparatus can be entered duty free if such instruments or apparatus are not being manufactured in the United States. Generally, the application process is conducted jointly between CBP and Commerce. U.S. Note 6(b)-(c), Subchapter X, Chapter 98, HTSUS; 19 C.F.R. § 10.114; 15 C.F.R. § 301.3(b)-(c). The applicant “must be a public or private nonprofit institution which is established for educational or scientific purposes and which has placed a bona fide order or has a firm intention to place a bona fide order for a foreign instrument within 60 days following a favorable decision on the institution’s application.” 15 C.F.R. § 301.3(a); U.S. Note 6(b) & 6(e), Subchapter X, Chapter 98, HTSUS. The application is made on Commerce form ITA-338P and filed with CBP. 15 C.F.R. § 301.3(b). CBP reviews the application to determine whether the applicant is a qualifying institution, whether the instrument or apparatus falls within the classes of instruments eligible for duty-free entry consideration, and whether the instrument or apparatus is for the exclusive use of the applicant institution and is not intended to be used for commercial purposes. See 15 C.F.R. § 301.4(a). If appropriate, CBP will forward the application to Commerce for review and a determination as to whether the instrument or apparatus is being manufactured in the United States. See 15 C.F.R. §§ 301.4(b); 301.5. Commerce subsequently forwards each decision to the applicant and to the Federal Register for publication. 15 C.F.R. § 301.5(f). Among other qualifying requirements, the institution making an application for duty free treatment under subheading 9810.00.60, HTSUS, must provide a statement “that either the institution has already placed a bona fide order for the instrument or apparatus or has a firm intention.” U.S. Note 6(b), Subchapter X, Chapter 98, HTSUS; 15 C.F.R. § 301.3(a). The term “bona fide order” is not defined in the Florence Agreement, the legislative history of the Florence

As an initial matter, we find that, pursuant to 19 U.S.C. § 1514(c)(3)(A), this protest was timely filed on August 4, 2010, within 180 days after the liquidation of the protested entry on February 10, 2010. We also find that, pursuant to 19 U.S.C. § 1514(a)(1), a protestable issue was raised by challenging CBP’s decision regarding “the classification and rate and amount of 2 

 duties chargeable” for the ND: Yag Laser. Finally, pursuant to 19 C.F.R. § 174.24(b), we find that further review of this protest is warranted because it involves questions of law and fact which have not previously been ruled upon – specifically, whether the entered merchandise is eligible for duty-free treatment under subheading 9810.00.60, HTSUS. The Florence Agreement endeavors to promote international understanding and peace by lowering barriers to the exchange of cultural, scientific, and educational materials. The United States became a full party to the agreement when it enacted implementing legislation in 1966. Educational, Scientific, and Cultural Materials Importation Act of 1966, Public Law 89-651, 80 Stat. 897 (Oct. 14, 1966). Pursuant to subheading 9810.00.60, HTSUS, scientific instruments or apparatus can be entered duty free if such instruments or apparatus are not being manufactured in the United States. Generally, the application process is conducted jointly between CBP and Commerce. U.S. Note 6(b)-(c), Subchapter X, Chapter 98, HTSUS; 19 C.F.R. § 10.114; 15 C.F.R. § 301.3(b)-(c). The applicant “must be a public or private nonprofit institution which is established for educational or scientific purposes and which has placed a bona fide order or has a firm intention to place a bona fide order for a foreign instrument within 60 days following a favorable decision on the institution’s application.” 15 C.F.R. § 301.3(a); U.S. Note 6(b) & 6(e), Subchapter X, Chapter 98, HTSUS. The application is made on Commerce form ITA-338P and filed with CBP. 15 C.F.R. § 301.3(b). CBP reviews t