CSMS Message: 00-001589

TO: ASSISTANT PORT DIRECTORS, TRADE, NATIONAL IMPORT
SPECIALISTS, IMPORT SPECIALISTS, ENTRY OFFICERS,
FINES AND PENALTY OFFICERS, IMPORTERS, BROKERS AND
OTHER INTERESTED PARTIES

FROM: DIRECTOR, TRADE PROGRAMS

SUBJECT: PRODUCT DEVELOPMENT AND TESTING ACT OF 2000

THE TRADE SUSPENSION AND TARIFF ACT OF 2000 HAS SET FORTH A NEW
PROVISION FOR THE IMPORTATION OF "PROTOTYPES."

THE FOLLOWING INTERIM GUIDELINES ARE TO BE FOLLOWED UNTIL REGULATIONS
HAVE BEEN PUBLISHED. PLEASE BE ADVISED THAT THESE ARE INTERIM
GUIDELINES AND FUTURE PUBLISHED REGULATIONS MAY PRESCRIBE FURTHER
REQUIREMENTS FOR PROOF OF ELIGIBILITY.

TARIFF NUMBER 9817.85.01 IS DESCRIBED AS FOLLOWS: "PROTOTYPES TO BE
USED EXCLUSIVELY FOR DEVELOPMENT, TESTING, PRODUCT EVALUATION, OR
QUALITY CONTROL PURPOSES." THE DUTY RATE FOR THIS TARIFF NUMBER IS
FREE, UNLESS IMPORTED FROM A COUNTRY NOT ELIGIBLE FOR A COLUMN 1
DUTY RATE.

THE TERM "PROTOTYPES" MEANS ORIGINALS OR MODELS OF ARTICLES THAT-

- ARE EITHER IN THE PREPRODUCTION, PRODUCTION, OR POSTPRODUCTION
STAGE AND ARE TO BE USED EXCLUSIVELY FOR DEVELOPMENT, TESTING, PRODUCT
EVALUATION, OR QUALITY CONTROL PURPOSES, (AUTOMOBILE RACING FOR
PURSE, PRIZE, OR COMMERCIAL COMPETITION SHALL NOT BE CONSIDERED TO BE
'DEVELOPMENT, TESTING, PRODUCT EVALUATION, OR QUALITY CONTROL'), AND

- IN THE CASE OF ORIGINALS OR MODELS OF ARTICLES THAT ARE EITHER IN
THE PRODUCTION OR POSTPRODUCTION STAGE, ARE ASSOCIATED WITH A DESIGN
CHANGE FROM CURRENT PRODUCTION (INCLUDING A REFINEMENT, ADVANCEMENT,
IMPROVEMENT, DEVELOPMENT, OR QUALITY CONTROL IN EITHER THE PRODUCT
ITSELF OR THE MEANS FOR PRODUCING THE PRODUCT).

PROTOTYPES MAY BE IMPORTED ONLY IN LIMITED NONCOMMERCIAL QUANTITIES IN
ACCORDANCE WITH INDUSTRY PRACTICE.

EXCEPT AS PROVIDED FOR BY THE SECRETARY OF THE TREASURY, PROTOTYPES
OR PARTS OF PROTOTYPES MAY NOT BE SOLD AFTER IMPORTATION INTO THE
UNITED STATES OR BE INCORPORATED INTO OTHER PRODUCTS THAT ARE SOLD.

ARTICLES SUBJECT TO QUANTITATIVE RESTRICTIONS, ANTIDUMPING DUTY ORDERS,
OR COUNTERVAILING DUTY ORDERS MAY NOT BE CLASSIFIED AS PROTOTYPES
UNDER THIS NOTE. ARTICLES SUBJECT TO LICENSING REQUIREMENTS, OR WHICH
MUST COMPLY WITH LAWS, RULES, OR REGULATIONS ADMINISTERED BY AGENCIES
OTHER THAN THE UNITED STATES CUSTOMS SERVICE BEFORE BEING IMPORTED,
MAY BE CLASSIFIED AS PROTOTYPES IF THEY COMPLY WITH ALL APPLICABLE
PROVISIONS OF LAW AND OTHERWISE MEET THE DEFINITION OF "PROTOTYPES"
AS SET FORTH ABOVE.

THIS SHALL APPLY WITH RESPECT TO:

- AN ENTRY OF A PROTOTYPE UNDER HEADING 9817.85.01 ON OR AFTER
NOVEMBER 9, 2000.

- AN ENTRY OF A PROTOTYPE UNDER HEADING 9813.00.30 FOR WHICH THE
TEMPORARY IMPORTATION BOND ENTRY IS STILL OPEN AS OF NOVEMBER 9, 2000.
CUSTOMS WILL ALLOW TIBS THAT ARE OPEN AS OF NOVEMBER 9, 2000, TO BE
CONVERTED TO TYPE 01 CONSUMPTION ENTRIES UNDER 9817.85.01 IF THEY WERE
ENTERED AS A TIB UNDER 9813.00.30.

UPON WRITTEN REQUEST FROM THE FILER TO THE PORT DIRECTOR, AN ENTRY
SUMMARY WHICH WAS SUBMITTED AS A TEMPORARY IMPORTATION BOND, ENTRY
TYPE 23, UNDER THE HEADING 9813.00.30, MAY BE CONVERTED TO A TYPE 01
CONSUMPTION ENTRY IF IT MEETS ALL OF THE FOLLOWING CRITERIA:

1. THE GOODS MUST MEET THE CRITERIA SET FORTH FOR "PROTOTYPE"
ELIGIBILITY.
2. THE TIB MUST HAVE BEEN ORIGINALLY ENTERED AS 9813.00.30.
3. THE TIB MUST BE "OPEN" AS OF NOVEMBER 9, 2000.

THE ENTRY UNIT WILL PERFORM THE NECESSARY FUNCTIONS IN ACS TO CONVERT
THESE TIBS TO CONSUMPTION ENTRIES AND WILL PROVIDE ACKNOWLEDGEMENT
TO THE FILER ONCE THE CONVERSION IS COMPLETE.

PLEASE ENSURE THAT THE LIQUIDATION IS WITHHELD ON ALL "PROTOTYPE"
ENTRIES PENDING PUBLICATION OF FINAL REGULATIONS.

QUESTIONS REGARDING THIS POLICY SHOULD BE ADDRESSED TO BRUCE INGALLS,
CHIEF, ENTRY AND DRAWBACK MANAGEMENT AT (202) 927-1082 OR DON YANDO
AT (202) 927-0234.

ELIZABETH G. DURANT