OT:RR:CTF:ER – H155515 CSO
Port Director, San Francisco
San Francisco Port of Entry
555 Battery Street
San Francisco, California 94111
Attn: Ms. Alice Lau, Drawback Specialist
Re: Application for Further Review of Protest 2809-11-100065 regarding proof of export to Canada for 19 U.S.C. § 1313(j)(1) drawback claims.
Dear Port Director:
This letter is in response to the application for further review (AFR) for Protest 2809-11-100065, filed with U.S. Customs and Border Protection (CBP) by DHL Drawback Services on behalf of MiniTec Framing Systems, Inc. (MiniTec) that we received on March 22, 2011. We apologize for the delay in our response.
FACTS
MiniTec filed drawback claims pursuant to 19 U.S.C. § 1313(j)(1) on July 1, 2009. On July 10, 2009, the Drawback Office of San Francisco (Drawback Office) conducted a desk review of MiniTec’s claims and asked for additional documents. In response to the inquiry, MiniTec provided additional documentation on August 6, 2009, for proof of export for exports 11676-404201511, 11676-404235270 and 11676-405892827. The Drawback Office liquidated, without benefit of drawback, on August 13, 2010, because it concluded that the documents for proof of export were neither originals nor certified copies and insufficient to show proof of export. MiniTec filed the above-referenced protest and AFR involving the denial of drawback claim AA6-0321674-5 on February 4, 2011. Below is a summary of the documents that MiniTec provided for each export.
Export 11676-404201511
For export 11676-404201511 MiniTec provided a Canadian B3 summary also referred to as a “recap sheet”; a signed confirmation of receipt by MiniTec’s customer referencing Invoice 34719; Purchase Order PO001805; and Commercial Invoice 34719 that references Purchase Order PO001805. See MiniTec’s August 6, 2009, submission. The confirmation of receipt references invoice #34719 and shows the date of receipt as December 14, 2006. It was signed by the president of MiniTec’s customer on June 1, 2007.
Export 11676-404235270
For export 11676-404235270 MiniTec provided: Canadian B3 recap sheet; a signed confirmation of receipt of merchandise by MiniTec’s customer referencing Invoice 35071; Purchase Order PO001931; and Commercial Invoice 35071 that references Purchase Order PO001931. See MiniTec’s August 6, 2009, submission. The confirmation of receipt references Invoice #35071 and shows the date of receipt as February 5, 2007. It was signed by the president of MiniTec’s customer on June 1, 2007.
Export 11676-405892827
For export 11676-405892827, MiniTec provided Canadian B3 recap sheet; a signed confirmation of receipt from MiniTec’s customer referencing Invoice 38265; a Purchase Order PO002666; and Commercial Invoice 38265 that references PO002666. See MiniTec’s August 6, 2009, submission. The confirmation of receipt references Invoice #38265 and shows the date of receipt as April 4, 2008. It was signed by the president of MiniTec’s customer on October 3, 2008.
MiniTec provided B3 recap sheets rather than B3 forms in order to demonstrate date and time of export. A B3 recap sheet is accepted, although not required by Canadian Customs. It is a summary that correlates information on the B3 form to invoices with multiple lines. The B3 recap sheet is created by a drawback claimant’s broker and includes some data elements from the B3 form, such as the importer’s name, Canadian importer’s number, release date, classification codes, duty rate and other Canadian customs codes. Unlike the B3 form, the B3 recap sheet does not include a declaration stating that the information is true, accurate and complete. A B3 form, on the other hand, is required by the Canadian Customs and Revenue Agency (Canadian Customs) to report imports to the Canadian government. See, e.g., “Importing Commercial Goods Into Canada” http://www.cbsa-asfc.gc.ca/publications/pub/bsf5079-eng.html.
In its protest and supplemental arguments, MiniTec argues that, although certified Canadian B3 forms were not provided, the invoices, purchase orders, Canadian B3 recap sheets and the signed confirmation of receipt from its customer, in total, fully establish the date and fact of exportation. MiniTec also argues that as long as the date of delivery is within the relevant statutory period, that is sufficient to satisfy the requirement for movement from the United States. Additionally, in its protest, MiniTec states that the documents submitted for this claim are identical to those included in the sample documents that accompanied MiniTec’s drawback accelerated payment privilege application. A privilege application is submitted to the Drawback Office and allows the applicant to receive privileges, such as accelerated payment for drawback claims. The Drawback Office asserts that these documents, taken together, do not fully establish the date and fact of export because MiniTec failed to provide original certified copies of the necessary documents.
ISSUE
Whether MiniTech provided sufficient proof of exportation.
ANALYSIS
Initially, we note that the refusal to pay a claim for drawback is protestable pursuant to 19 U.S.C. § 1514(a)(6). The Drawback Office denied drawback in full when it liquidated the subject entries on August 13, 2010, without drawback. The protest was timely filed on February 4, 2011, within the 180–day filing deadline set forth under 19 U.S.C. § 1514(c)(3). MiniTec states that the application for further review should be granted because it believes CBP’s rulings on point are inconsistently applied to it. CBP’s rulings are not inconsistently applied however, MiniTec’s facts are novel therefore, further review is granted. See 19 C.F.R. § 174.24(a).
Pursuant to 19 U.S.C. § 1313(l), drawback is permitted only upon compliance with the CBP regulations concerning drawback, which include the requirement of proof of export. Under the drawback regulations, there are two requirements for proof of export. The first requirement is evidence of intent for the merchandise at issue to unite with "the mass of things belonging to some foreign country." See 19 C.F.R. § 101.1. The second requirement is evidence that the merchandise exited the United States. See 19 C.F.R. § 191.72. Specifically, 19 C.F.R. § 191.72 requires that "[s]upporting documentary evidence shall establish fully the date and fact of exportation and the identity of the exporter."
In addition to the requirements set forth in 19 C.F.R. § 191.72, allowance of drawback based on exportations to Canada or Mexico, is also subject to the regulations implementing the North American Free Trade ("NAFTA") Act in 19 C.F.R. Part 181. See, e.g., H008953 (February 17, 2010). Under 19 C.F.R. § 181.47(b)(2)(ii)(G), there is an additional requirement that supporting documentation must establish the identity and location of the ultimate consignee of the exported goods. Finally, 19 C.F.R. § 181.47(b)(2)(ii)(G) provides that all proof of export documents issued by the carrier, must be either originals or certified copies of originals:
Acceptable documentary evidence of exportation to Canada or Mexico shall include a bill of lading, air waybill, freight waybill, export ocean bill of lading, Canadian customs manifest, cargo manifest, or certified copies thereof, issued by the exporting carrier.
(emphasis added). This regulation by its terms does not require a specific document for proof of export. See, e.g., HQ 228272 (November 8, 1999) (indicating that for drawback claims subject to 19 C.F.R. 181.47, alternative methods may be used to establish date and fact of export other than those listed at 19 C.F.R. § 191.72(a) through (e) as long as the alternative methods firmly establish date and fact of export). Rather, this regulation, along with 19 C.F.R. 191.72, describes examples of acceptable documentary evidence.
First, we address whether a B3 recap sheet is sufficient documentation to establish date and time of export. A B3 recap sheet, unlike the B3 form, is not required to be submitted to the Canadian government for entry of merchandise. Rather, the B3 recap sheet is a report created by a drawback claimant’s broker. It correlates invoice and B3 form information on a recap sheet and includes, but is not limited to, data elements such as the importer name, the Canadian importer number, release date, purchase order number, classification number, description of merchandise, the duty rate and various Canadian customs codes. Further, the B3 summaries were not certified by a Canadian or U.S. entity and provide no declaration stating the information is true and accurate. For 19 U.S.C. § 1313(j)(1) NAFTA drawback claims, CBP accepts B3 forms for demonstrating date and time of export. See, e.g., HQ H008953 (February 17, 2010) (finding that a B3 form showing a release date of February 24, 2005 was sufficient evidence of exportation); and HQ 230089 (May 26, 2004) (stating that “for purposes of accountability, CBP requires either an original signed B3 or certified copy thereof”). CBP also requires that B3 forms be certified by a U.S. entity. See HQ 229941 (Oct. 14, 2003) (stating that CBP would require certification of a B3 by a U.S. entity). However, the B3 recap sheet is neither an official entry form for the Canadian government, nor is it certified. Thus, it may not be used to establish date and time of export.
Second, we discuss whether the confirmations of receipt, signed by MiniTec’s customer, are sufficient to demonstrate date and time of export. The confirmation of receipt for Export 11676-404201511 states that the date of receipt for invoice # 34719 was December 14, 2006; however, it was signed on June 1, 2007. This indicates that it was not made at or near the time of export. Additionally, there is nothing to indicate that confirmation of receipts are records kept in the ordinary course of business. CBP has held that customer declarations that are not made at or near the time of the transaction and kept in the ordinary course of business are not sufficient documents to demonstrate date and time of export. See, e.g., HQ 228736 (February 6, 2002) (finding that customer declarations were not made at the time of the transaction and not kept in the course of business); HQ230089 (May 26, 2004) (finding that “certified documents submitted by the Canadian purchasers which list all of the purchases…are insufficient to establish the date and fact of exportation of the merchandise.”). Therefore, we cannot rely on the confirmation of receipt to show date and time of export as it was not kept in the ordinary course of business and was not created at the time of the transaction. Moreover, affidavits, statements made under oath before an authorized officer, which are not supported by other documentation and issued well after the transaction date, are entitled to little weight for purposes of proof of export. See HQ 229566 (September 17, 2002) (citing Andy Mohan, Inc. v. United States, 63 CCPA 104, 107 (1976)).
Finally, the invoices and purchase orders demonstrate an intent to unite the hinges with the goods of a foreign country. However by themselves, they do not show date and time of export. For example, in H046997, dated November 17, 2011, for proof of export of titanium products, an invoice, packing list and an express bill of lading were provided and were sufficient to show an intent to unite the titanium products with the mass of things belonging to another country, but not date and fact of export. For documentation to show date and fact of export, it must demonstrate the goods physically left the United States. Id. Hence, invoices and purchase orders by themselves, may not be used to show date and fact of export. We do not address whether the supporting documentation must establish the identity and location of the ultimate consignee of the exported goods because the threshold requirement for NAFTA proof of export, establishing date and time of export, was not met.
HOLDING
The protest should be DENIED because MiniTec did not provide adequate proof of export documentation. No later than 60 days from the date of this letter, the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon
Director
Commercial and Trade Facilitation Division