OT:RR:CTF:VS H198036 CMR
Port Director
U.S. Customs and Border Protection
6601 NW 25th Street
Room 272
Miami, FL 33122
RE: Protest and Application for Further Review No. 5201-11- 100306
Dear Mr. Suliveras:
On November 23, 2011, this office set aside the denial of further review issued by your port for Protest Nos. 5201-11-100306 and voided the denials of the protest. The protest was filed by Sandler, Travis & Rosenberg, P.A., on behalf of their client, Motionwear, LLC. We set aside the denial of further review because we found that the port failed to follow the April 26, 2006 memorandum issued by the Executive Director, Trade Enforcement and Facilitation, Office of Field Operations, entitled “Amendments to the U.S. – Dominican Republic – Central America Free Trade Agreement Implementation Instructions” regarding the information to be contained in the proposed and final Customs and Border Protection (CBP) Form 29s. We found that the application for further review met the requirements of 19 CFR § 174.24(b). We have reviewed the protest and the port’s comments. Our decision on the protest is set forth below.
FACTS:
The protest involves one entry of apparel claiming preferential tariff treatment under the U.S. – Dominican Republic – Central America Free Trade Agreement (DR-CAFTA). On October 22, 2010, the port issued a CBP Form 29 proposing to rate advance the merchandise and requesting affidavits of origin from the producers of the yarn, fabric and sewing thread used in producing the goods. In addition, the port requested payment records for the goods and for the fabric sent abroad as well as invoices for the fabric and/or any elastomeric components. After reviewing materials submitted in response to the proposed CBP Form 29, the port issued a CBP Form 29, notifying the importer of a negative DR-CAFTA determination. The notice indicated that valid DR-CAFTA certificates of origin were not submitted and a fabric affidavit needed to show the full address of both yarn producers.
The entry was liquidated on December 3, 2010 without benefit of DR-CAFTA treatment. A protest was timely filed on June 1, 2011. The port denied the application for further review and the protest. In denying the protest, the port cited ambiguous language in affidavits, such as, “sold (or to be sold)”; that one affidavit was a copy of a notarized affidavit with a statement on it that “Any photocopies will void this affidavit”; and that the tariff codes reflected on two affidavits presented from the producer and finisher of sewing thread reflected different Harmonized Tariff Schedule of the United States (HTSUS) classification subheadings.
As noted above, this office set aside the denial of further review and voided the denial of the protest. The port identified deficiencies it believed were present in the submitted documentation and which it believed resulted in a failure to substantiate the claim for preferential treatment. We will address the deficiencies in documentation cited by the port.
ISSUE:
Are the documents cited by the port deficient and, if so, do they warrant denial of the DR-CAFTA claim with regard to the entries at issue?
LAW AND ANALYSIS:
The DR-CAFTA is implemented in the HTSUS in General Note (GN) 29. However, at issue in this case is not the question of whether the merchandise met the terms of the GN 29 per se, but whether the information submitted was sufficient to substantiate the claim that the merchandise met the terms of GN 29 and that certain materials used in the manufacture of the merchandise originated within the territory of one or more of the DR-CAFTA parties.
The CBP Regulations applicable to the DR-CAFTA are contained in 19 CFR § 10.581 to § 10.625. Section 10.616 specifically addresses “Verification and justification of claim for preferential tariff treatment.” With regard to verification of a claim by a port, the regulation references different methods how verification may be conducted, including written requests for information. In the case of both entries at issue, that is what the port did; it issued CBP Form 28s requesting specific information. The DR-CAFTA claims were denied because the port felt the documentation submitted in response was deficient to support the claims.
When the importer filed protests against the port’s liquidation of the entries without benefit of the DR-CAFTA claims, the importer submitted additional information to support the claims for preferential tariff treatment. The port reviewed the submitted documentation and concluded the documentation provided was still insufficient to support the claim.
Importers are required to maintain records and documents which support their preference claims for a minimum of five years after the date of importation of the good in accordance with 19 CFR § 10.587. If an importer fails to comply with any requirements under Subpart J of Part 10 of the CBP Regulations, the port director may deny preferential treatment to the imported goods for which preference is claimed.
Further in reviewing documents submitted to support a claim for preferential tariff treatment for purposes of DR-CAFTA, we consider the memorandum regarding “Amendments to the U.S. – Dominican Republic – Central America Free Trade Agreement Implementation Instructions,” dated April 26, 2006, which was issued by the Executive Director, Trade Enforcement and Facilitation, Office of Field Operations; Textile Book Transmittal (TBT)-07-019, “Documents Used to Verify Free Trade Agreement and Legislated Trade Program Claims for Textiles and Wearing Apparel,” which was issued by the Executive Director, Trade Policy and Programs, Office of International Trade on October 10, 2007; and TBT-11-004, “Additional Documents Used to Verify Free Trade Agreement and Legislated Program Claims for Textiles and Wearing Apparel,” which was issued by the Executive Director, Trade Policy and Programs, Office of International Trade on March 31, 2011.
As to the issues the port raised in the CBP Form 29, negative DR-CAFTA determination, the protestant filed amended documents with the protest to address the ports concern. Therefore, we will only address the reasons the port gave for denying the protest.
The port cited ambiguous language, such as, “sold (or to be sold),” which appear on blanket certificates of origin, because the affidavits do not clearly state the product was sold. The port also stated that “[c]opies of associated invoices/purchase orders, etc. are required to confirm that the product was actually sold.”
TBT-07-019, “Documents Used to Verify Free Trade Agreement and Legislated Trade Program Claims for Textiles and Wearing Apparel,” clearly indicates that blanket certificates of origin are acceptable. Furthermore, in the April 26, 2006, memorandum regarding “Amendments to the U.S. – Dominican Republic – Central America Free Trade Agreement Implementation Instructions,” we addressed “Certification or Other Information Requirements.” The information therein addresses the certification of the imported good, and the port here is concerned with material used in producing the imported good, but we believe the guidance provided applies to both situations. In the memorandum, CBP stated:
If the certification serves as the basis for the claim, it does not need to be in a prescribed format, may be submitted electronically and may cover a single shipment or multiple shipments of identical goods not to exceed the time period of 12 months. The certification must not only include the reason the good qualifies as originating, but must contain the required data elements pertaining to the importation of the good, as outlined in Attachment A. . . .
* * *
If the basis for the claim is not a certification but rather is supported by other information, that information must also include the required data elements outlined in Attachment A, but does not need to include the certifying statement or the blanket period. However, the information must sufficiently support the claim for preference.
Attachment A to the memorandum lists the required data elements. These elements are: the names and addresses of the importer, exporter and producer (including telephone and email), a description of the good, the Harmonized Tariff Schedule of the United States (HTSUS) classification number (to six or more digits), the applicable preference criterion, for a single shipment the commercial invoice number needs to be provided, for multiple shipments of identical goods the blanket period needs to be provided, and the document needs to be signed by someone authorized to legally bind the company and with access to the underlying records. The signature block should include not only the signature, but the company name, individual’s title, telephone, fax and email.
The submitted yarn and fabric affidavits contain the name and address of the producer in the United States (U.S.), name of the buyer of the material, a description of the yarn or fabric; in the case of the yarn affidavits, the HTSUS classification subheadings for the yarns, the blanket period during which the goods were sold or to be sold to the buyer, and a signature by a company representative with contact information. The documents meet the requirements of Attachment A when considered in the context of material inputs.
As to the ambiguous language of the affidavits, the port is correct as to the ambiguity and the need for supporting documentation to show a sale occurred. While the protestant failed to submit such documentation to the port, this office received purchase orders and invoices to support the sales of materials relevant to the imported goods.
The port rejected a submitted affidavit because it was a copy of a notarized affidavit and the notary’s stamp stated:
This affidavit must have the original notary seal from North Carolina, USA. Any
photocopies will void this affidavit.
TBT-07-019 and TBT-11-004 are clear that documentation, other than affidavits, is acceptable provided it contains the elements described in TBT-07-019. Specifically, TBT-07-019 refers to affidavits or declarations. TBT-11-004 broadens the scope by not
characterizing the documentation by name, but simply requires it to contain the elements necessary to substantiate a claim for preferential treatment referenced in TBT-07-019. Therefore, the port should not have rejected the copy of the affidavit with the notary’s stamp simply because it was a copy. The copy was sufficient for the purpose of conveying the relevant information to support the preference claim.
Finally, the port objects to a difference in the HTSUS tariff codes reflected on two affidavits presented from the producer and finisher of sewing thread. In addition, the port noted that these affidavits referred to “trim components,” “greige thread yarn,” “greige (unfinished) yarn,” “thread yarn,” “sewing thread,” and “industrial sewing thread.”
Amended affidavits were submitted to this office to address the concerns raised by the port. However, as to the affidavits which were submitted to the port initially, the use of the terms “greige thread yarn,” “greige (unfinished) yarn,” “thread yarn,” “sewing thread,” and “industrial sewing thread,” in the affidavits from the producer of yarn which will become sewing thread upon being finished by the finisher, we have no concerns with the use of these terms in these documents. Sewing thread is a yarn and, depending on the stage of the production process, at times may be more properly referred to as a yarn. A yarn with a Z twist may be further processed by finishing (dressing) and being put up on supports so as to meet the definition of sewing thread set forth in Note 5, Section XI of the Harmonized Tariff Schedule of the United States. We do not find the use of these various terms to be confusing. The differences in the HTSUS classification subheadings provided in the affidavits may similarly be explained due to the different stages in production of the yarn destined to be sewing thread. As to the term “trim components,” it is used in the title of the document and the body of the document is clear. While we are uncertain why the producer chose to use the term “trim components,” we see no reason to reject the affidavit based on the use of that term.
HOLDING:
The protest should be allowed.
In accordance with the Protest/Petition Processing Handbook (CIS HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to
mailing of the decision. Sixty days from the date of the decision Regulations and Rulings of the Office of International Trade 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