Liq-9-RR:CR:DR
229426 CK
Category: Liquidation
Port Director of Customs
Attn: Edward Ellsworth
9901Pacific Highway
Blaine, WA 98230
RE: Protest and AFR No. 3004-01-100104; Post-Importation NAFTA claim; 19 U.S.C. 1520(d); 19 U.S.C. 1514; 18 CFR 181.32(b)(3); 181.33
Dear Sir:
The above-referenced protest, received by your office on December 18, 2001, was forwarded to our office as an Application for Further Review of Protest No. 3004-01-100104. We also received, on February 15, 2002, your transmittal memorandum dated January 4, 2002, regarding this AFR. We have considered the facts and the issue raised; our decision follows.
FACTS:
Protestant, Livingston International, Inc., imported and entered 2 line items of merchandise (Entry # 759-6) on December 12, 2000. The first line item was entered as “struct, stn stl: doors, wnds, frms,” the country of origin was listed as XA, and classified in subheading 7308.30.1000, HTSUS. The second line item of merchandise was described as “Struct, stn stl: doors, wnds, frms,” the country of origin was listed as MX and classified in subheading 7308.30.1000, HTSUS.
On January 24, 2001, Protestant filed with the Port of Blaine, WA a post-importation NAFTA claim (19 U.S.C. 1520(d)), number 3004-01-300047. This 19 U.S.C. 1520(d), post-importation NAFTA claim was received by the port on January 29, 2001. In that claim Protestant states that line item 1 from entry 759-6 should have been “CA7308.30.1000,” and that line item 2 should have been “MX8425.11.0000.” Protestant also made the following certifications:
The merchandise qualified as originating at the time of importation.
A copy of the NAFTA Certificate of Origin is attached.
We are not aware of any claim or refund, waiver of duty reduction of duties relating to the goods under Article 303 of the NAFTA agreement.
No person has filed a petition or protest or requested reliquidation relating to the good under any provision of law.
To the best of our knowledge and belief, the above referenced entry is not the subject of a Drawback claim nor has it been referenced on a Certificate of Delivery or Certificate of Manufacture and Delivery.
Attached to the January 24, 2001 post-importation NAFTA claim is a blanket certificate of origin for the period of January 1, 2000 to December 31, 2000, signed and dated January 1, 2000. The certificate of origin has four line items, three are at issue: the first is “overhead doors, parts and accessories, classifiable as 7308.30, HTSUS; Residential openers c/w rail, classifiable as 8425.11.0000, HTSUS; and commercial door operators and controls, classified as 8425.11.0000, HTSUS.
Also attached is a copy of New York ruling NY F81926 dated February 7, 2000 classifying a Superlift garage door opener in subheading 8428.90.0090, HTSUS.
Attached to the above documents is a second blanket certificate of origin for the period of January 1, 2000 to December 31, 2000, signed and dated January 1, 2000. The certificate of origin has four line items, three are at issue: the first is “overhead doors, parts and accessories, classifiable as 7308.30, HTSUS; Residential openers c/w rail, classifiable as 8428.90, HTSUS; and commercial door operators and controls, classified as 8428.90, HTSUS.
The port denied the post-importation NAFTA claim on March 1, 2001. Claim 3004-01-300047 was denied for claimant’s failure to make the certification found in 19 CFR 181.22(b)(3), which requires a claimant to make a statement whether “the importer of the good provided a copy of the entry summary or equivalent documentation to any other person. If such documentation was so provided, the statement shall identify each recipient by name, Customs identification number and address and shall specify the date on which the documentation was provided.”
The merchandise in entry 759-6 liquidated on October 26, 2001 as entered. Therefore the first line item was liquidated as “struct, stn stl: doors, wnds, frms,” classified as 7308.30.1000, HTSUS. The second line item of merchandise liquidated as “Struct, stn stl: doors, wnds, frms,” classified as 7308.30.1000, HTSUS. The first line item was not given NAFTA preference, and the second line item liquidated with the original classification, and again without NAFTA preference.
Protestant filed the current protest (3004-01-100104) dated December 13, 2001, it was received by the port on December 17, 2001. Protest is made against the denial of the post-importation NAFTA claim (19 U.S.C. 1520(d)), which resulted in the entry liquidating at a non-NAFTA rate of duty. Second, Protestant makes the following statement: “Therefore, in addition to the facts presented in the January 24, 2001 claim, we hereby certify that in accordance with 19 CFR 181.32(b)(3), to our knowledge, the importer of the good has not provided a copy of the entry summary or equivalent documentation to any person.” Third, Protestant also protests the classification of line item 2, which it claims should have liquidated as “MX8428.90.0090.”
The port states in the CF6445A, that the protest should be denied because the claimant failed to supply the statement in 19 CFR 181.22(b)(3). The port states that protest 3004-01-100104 perfected the 1520(d) claim, but it was filed one year and five days after the date of entry, so it would be untimely as a 1520(d) claim. Additionally, Customs does not have the authority to waive or extend the one-year time period and 19 U.S.C. 1514 cannot be used to extend the one-year time period. However, we also note that the port concedes the classification of the 1 model T5011 door openers and accessories, and 32 residential openers and accessories as classified in subheading 8428.90.0090, HTSUS, and that issue is not in dispute.
ISSUE:
Should the protest under 19 U.S.C. 1514 be granted where the protest is against the denial of a post importation NAFTA claim under 19 U.S.C. 1520(d) which resulted in the liquidation of the merchandise at a non-NAFTA rate of duty?
LAW AND ANALYSIS:
As we noted, the liquidation of the entry occurred on October 26, 2001 and Livingston filed its protest against the denial of its post-importation NAFTA claim (19 U.S.C. 1520(d)) on December 13, 2001. We find, therefore that the protest was timely filed within the ninety-day period pursuant to 19 U.S.C. 1514(b)(5).
A claim for preferential tariff treatment under the NAFTA may only be made either at (1) the time of filing the entry as per 19 C.F.R. 181.21 or (2) after the filing of the entry, as a post- importation claim pursuant to 19 U.S.C. 1520(d). Under Section 1520(d), Customs may reliquidate an entry to refund any excess duties paid on a good qualifying under NAFTA rules of origin for which no claim for preferential tariff treatment was made at the time of importation provided that the request is submitted within one year from the date of importation.
Under 19 C.F.R. section 181.32(b), a post importation duty refund claim must include:
a written declaration stating that the good qualified as an originating good at the time of importation and setting forth the number and date of the entry covering the good;
Subject to 181.22(d) of this part, a copy of each Certificate of Origin (see section 181.11of this part) pertaining to the good;
Written statement indicating whether or not the importer provided a copy of the entry summary or equivalent documentation to any other person. If such documentation was so provided, the statement shall identify each recipient by name, Customs identification number and address and shall specify the date on which documentation was provided;
A written statement indicating whether or not the importer of the good is aware of any claim for refund, waiver or reduction of duties relating to the good within the meaning of Article 303 of the NAFTA (see subpart E). If the importer is aware of any such claim the statement shall identify the person who made the claim by name, Customs identification number and address; and
A written statement indicating whether or not any person has filed a protest or a petition or request for reliquidation relating to the good under any provision of law, and if any such protest, petition or request for reliquidation has been filed, the statement shall identify the protest, petition or request by number and date.
Section 181.31 of the Customs Regulations sets out the right to make a post-importation NAFTA claim. That section provides that the claim shall be made according to the procedures in 181.32, see above, and the claims are subject to the provisions of section 181.23 of this part.
Section 181.23 of the Customs Regulations states that failure to comply with any requirement under this part is cause for the port director to deny preferential tariff treatment to an imported good. Failing to make the certification statements found in 19 CFR 181.32(b) would be a reason to deny a post-importation NAFTA claim, but only if that failure caused the claim to be perfected beyond one-year after the date of importation.
Article 502.3 of the NAFTA provided for a post-importation NAFTA claim. See, H. Doc. 103-159, Vol. 1, 912 (November 4, 1993).
That provision (Article 502.3) was implemented by 19 U.S.C. 1520(d). See, Statement of Administrative Action, H. Doc. 103-159, Vol. 1. 507 (November 4, 1993).
The statute (19 U.S.C. 1520(d)) was implemented by the Interim Rule, 58 F.R. 69460, 69476, and the Final Rule, 60 F.R. 46334 (September 6, 1995), following consideration of comments received on the interim rule. In response to one of the comments regarding the certification statements, Customs stated:
The written statement requirements for post-importation claims are designed to prevent an overpayment of a duty refund such as drawback. Customs notes that there are parallel NAFTA requirements for drawback and duty deferral program participants under Part 181 (see §§181.47(b) and (c) and §181.53(a)(3)). Accordingly, Customs believes that these requirements must be retained.
Customs was within its authority when it added the five certification statements in its regulations (19 CFR 181.32(b)). Section 1520(d) of Title 19 of the United States Code states that Customs may require any additional documents that are necessary to the claim. Regulations promulgated by Customs to implement and administer statutes, specifically where Congress has granted an exception for an importer, have been held to be a reasonable exercise of Customs authority. Additionally, numerous courts have agreed with Customs that strict compliance with the regulations is a condition precedent for an importer who seeks to avail themselves of statutory exceptions.
In Nestle's Food Co. (Inc.) v. United States, 16 Ct. Cust. Appl. 451, 455 (1929), a drawback claimant failed to comply with the Customs Regulations requiring notice of exportation, and Customs denied the drawback claim. The court in agreeing with Customs that Customs may promulgate regulations that interpret and implement statutes so as to administer such statutes stated:
In the case of Spencer, Kellogg & Sons (Inc.) v. United States, 13 Ct. Cust. App. 612, T.D. 41459, we said: Reasonable regulations of the Secretary of the Treasury made in pursuance of law, have the force and effect of law. Penick & Ford (Ltd., Inc.) v. United States, 12 Ct. Cust. App. 432, T. D. 40611, and cases therein cited; Lunham v. United States, 1 Ct. Cust. App. 220, T. D. 31258; Stone & Co. v. United States, 7 Ct. Cust. App. 439, T. D. 37009; United States v. Bracher et al., 13 Ct. Cust. App. 432, T.D. 41344. The appellant does not contend that the involved regulations of the Secretary of the Treasury are unreasonable, but contends that they have been substantially complied with. In our opinion, the regulations requiring notice of intent to export are mandatory and compliance therewith is a condition precedent to the right of the appellant to recover under the drawback provisions. Such regulations may not be disregarded and proof of exportation made in some other manner than that required by them. Lunham v. United States, supra; Agency Canadian Car & Foundry Co. v. United States, 10 Ct. Cust. App. 172, T. D. 38547; [*456] Agency Canadian Car & Foundry Co. v. United States, 11 Ct. Cust. App. 19 T.D. 38637.
The Court in United States v. Gruen Watch Co., 21 C.C.P.A. 225, 229 (1933), which involved a case where a drawback claim was denied for failure to export the merchandise within the two years required by statute stated:
Congress has evidenced a disposition to rely very largely, in customs legislation, upon the Treasury Department for the promulgation of rules and regulations which would make possible the proper application of the laws.
* * * * * * * * * *
The regulations so promulgated should not be stricken down or held invalid unless it clearly appears that they are unreasonable or made outside of the authority granted. Fawcus Machine Co. v. United States, 282 U.S. 375, 378, 75 L. Ed. 397, 51 S. Ct. 144.
Id.
The Court when on further to say that:
[T]he rule is deduced that where the Congress has offered some special grace or exemption to an importer, under regulations to be promulgated, the importer must strictly comply with such regulations, so long as they be reasonable and do not seek to alter, add to, or detract from the statute itself.
Id. at 230.
Another case in which Customs and the courts enforced strict compliance with statutory and regulatory requirements is Washington International Insurance Co. v. United States, 13 CIT 112, 707 F. Supp. 561 (1989). The court in that case found the requirement for this certification (that a protest under 19 U.S.C. 1514 is not being filed collusively with a surety) to be an absolute, jurisdictional requirement, noting that "[it (i.e., the Court) was] hard-pressed to conceive of what such a reason [i.e., for not complying with the certification requirement] might be." (13 CIT at 115; see also Note 8, id, "This court finds no per se rule allowing omission of certification in such circumstances [i.e., when the importer was not locatable].")
In contrast however, there are several judicial decisions, which limit the scope of Customs authority under 19 U.S.C. §1313 to the plain language of the statute. In The B.F. Goodrich Company v. United States, 794 F. Supp. 1148, 16 CIT 333 (1992), the Court of International Trade concluded that Customs cannot infer a purpose from the design of the drawback statute taken as a whole. In B.F. Goodrich, the court rejected Customs interpretation that the drawback statute, 19 U.S.C. §1313(j)(2), required actual possession of the imported merchandise based on a reading of the clear language of the statute because the statutory text contains no such provision. See also Central Soya Co., Inc. v. United States, 761 F. Supp. 133, 15 CIT 105 (1991) (Customs cannot require that the drawback claimant be the exporter of the substituted merchandise because no such text was present in the statute); and 718 Fifth Avenue v. United States, supra (Customs cannot restrict attempts to claim drawback by a series of importation/exportation cycles because the court found that Customs had stipulated that the good on that last export met every textual requirement of the statute).
Section 1520(d) (19 U.S.C. 1520(d)), and the implementing regulations, 19 CFR 181.32 provides an exception to the usual entry requirements for an importer in that a claimant may make a post-importation NAFTA claim. Strict compliance with the certification statements, as stated above, under the holdings in Nestle’s Food Co., Gruen Watch Co., and Washington International, are a condition precedent to the granting of a claim.
Applying the analysis to the current case, the regulatory provision (19 CFR 181.32(b)(3)) requires the claimant to certify whether a copy of the entry summary or equivalent documentation was provided to any other person. The only language in the claim papers filed on January 29, 2001 that might cover the requirement is item 5: “To the best of our knowledge and belief the above-referenced entry is not the subject of a drawback claim nor has it been referenced on a certificate of delivery or certificate of manufacture and delivery.” The regulatory requirement calls for a broader certification than the one given by the claimant, a certification is required that states, “Written statement indicating whether or not the importer provided a copy of the entry summary or equivalent documentation to any other person. If such documentation was so provided, the statement shall identify each recipient by name, Customs identification number and address and shall specify the date on which documentation was provided.”
A claimant who does not make the required certification could provide a copy of the entry to another person and truthfully state the entry is not the subject of a drawback claim. That other person could thereafter file a drawback claim without the claimant’s knowledge.
In any event, the claimant in the protest concedes that the required certification was not made on the papers filed January 29, 2001. The protest contains the statement: “Therefore, in addition to the facts presented in the January 24, 2001 claim, we hereby certify that in accordance with 19 CFR 181.32(b)(3), to our knowledge, the importer of the good has not provided a copy of the entry summary or equivalent documentation to any person.”
In summary, a post-importation NAFTA claim was submitted and upon review of the import specialist, the claim was denied because it lacked the certification statement required under section 181.32(b)(3). The statement was eventually submitted with the CF19 protest form. The submission was complete on the date the CF 19 was received by Customs on December 17, 2001. Consequently a complete post-importation NAFTA claim was not perfected until one year and five days after the importation. Therefore, the perfected 1520(d) claim was not made within one year of importation and is therefore untimely. Failing to make a timely post-importation NAFTA claim is a valid reason to deny a claim under 19 CFR 181.33(d)(1). The protest under 19 U.S.C. 1514 of the denial of the post-importation NAFTA claim should be denied because the perfected post-importation NAFTA claim was untimely.
HOLDING:
The Protestant in this case failed to perfect its claim within one-year of December 12, 2000. Instead, the claim was perfected on December 17, 2001, one year and five days after the date of importation, and therefore, the post-importation NAFTA claim under 19 U.S.C. 1520(d) is untimely. The protest under 19 U.S.C. 1514 of the denial of the post-importation NAFTA claim should be denied because the perfected post-importation NAFTA claim was untimely.
The protest is denied. In accordance with Section 3A(11)(b) of Customs Directive 099 3550 065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Regulations and Rulings
will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles Harmon, Acting Director
Commercial Rulings Division