OT:RR:CTF:VS H286298 RMC
Port Director
U.S. Customs and Border Protection
Port of Houston
7141 Office City Drive
Houston, TX 77087
Re: Application for Further Review of Protest No. 5309-16-100103; Generalized System of Preferences; Request for Refund of Duties Paid During Lapse Period; Mistake of Fact
Dear Port Director:
This is in response to the Application for Further Review (“AFR”) of Protest No. 5309-16-100116, timely filed by Givens & Johnston, PLLC on behalf of the importer, Industrial Chemicals, Inc. (“Industrial Chemicals”). The AFR concerns whether goods entered during the lapse period of the Generalized System of Preferences (“GSP”) are eligible for a refund of duties paid.
FACTS:
Industrial Chemicals is a chemical distributor in the southeastern United States. According to the information provided, between January and May of 2015 (i.e., during the GSP lapse period), Industrial Chemicals made 20 entries of chemicals at the Port of Houston. Industrial Chemicals claims that, but for the lapse in the GSP, the merchandise would have been eligible for preferential tariff treatment under the GSP.
On June 25, 2015, Industrial Chemicals’ broker emailed two Industrial Chemicals employees to inform them that the U.S. House of Representatives had passed a bill that included GSP renewal. The email stated that “[o]nce the bill is signed and becomes law, Customs will issue specific instructions about securing refunds for entries made during the lapse in GSP.” According to counsel, the Industrial Chemicals employees who received this message assumed that this message, along with the broker’s practice of handling all of Industrial Chemicals’ business with U.S Customs and Border Protection (“CBP”), meant that their broker would be filing GSP refund requests on behalf of Industrial Chemicals.
Three months later, Industrial Chemicals emailed its broker requesting a list of its entries that were dutiable due to the GSP suspension. The email stated that “[w]e are working on refunding our customers for the duty we charged them . . . and [Industrial Chemicals employee] is wondering if we could get a list of the entries that we paid duties on.” An affidavit signed by the customs broker states that the broker interpreted this request to mean that Industrial Chemicals would file GSP refund requests on its own behalf. According to Industrial Chemicals, however, the purpose of this message was not to inform the broker that Industrial Chemicals intended to file GSP refund requests on its own behalf, but rather to determine which customers would be owed duties when the GSP refund requests filed by the broker were granted.
On January 22, 2016, an Industrial Chemicals employee informed the broker that she had not received GSP refunds. The broker responded by asking whether Industrial Chemicals had sent a letter to CBP requesting a refund. The Industrial Chemicals employee then informed the broker that “[w]hen I asked you for the entry numbers I was just looking to verify our information,” and the broker stated that she would contact CBP for a refund.
On February 2, 2016, the broker filed a GSP refund request with CBP on behalf of Industrial Chemicals. Industrial Chemicals acknowledges that, based on guidance published in the Federal Register, these refund requests were required to be filed by December 28, 2015. See Federal Register Vol. 80. No. 144. Because the requests were not filed until over a month after the deadline, CBP denied the refund requests as untimely. However, Industrial Chemicals protests this decision, arguing that its failure to timely file its GSP refund requests was due to a “mistake of fact” or “inadvertence.”
ISSUE:
Whether the entries made during the lapse period of the GSP are eligible for a refund of duties paid.
LAW AND ANALYSIS:
The GSP is a renewable preferential trade program that allows the eligible products of designated beneficiary developing countries to directly enter the United States free of duty. The GSP program expired on July 31, 2013, but has been renewed through December 31, 2017, effective July 29, 2015, with retroactive effect between August 1, 2013 to July 29, 2015, by means of a provision in the Trade Preferences Extension Act of 2015.
In a Federal Register Notice dated July 28, 2015, CBP provided notice that it would accept claims for GSP duty-free treatment for merchandise entered, or withdrawn from warehouse, for consumption and that CBP would process refunds on duties paid on GSP-eligible merchandise that was entered during the period that the GSP program was lapsed. See Federal Register Vol. 80. No. 144. Entries that were filed electronically via the Automated Broker Interface (“ABI”) using Special Program Indicator (“SPI”) Code “A” as a prefix to the tariff number would be automatically processed by CBP. For entries that either were not filed through the ABI or were filed through the ABI without the SPI Code “A” prefix, importers were required to timely submit a duty refund request to CBP. In accordance with Section 202(b)(2) of the Trade Preferences Extension Act of 2015, which required all requests to be filed “not later than 180 days after the date of the enactment of this Act,” the deadline for making such requests was December 28, 2015.
Here, as the entries at issue either were not filed through the ABI or were filed through the ABI without the SPI Code “A” prefix, Industrial Chemicals was required to submit a duty refund request to CBP by December 28, 2015. As noted above, however, Industrial Chemicals did not submit its request until over a month after the deadline on February 2, 2016. The port therefore rejected Industrial Chemicals’ refund request as untimely, and Industrial Chemicals protested.
Before the passage of the Miscellaneous Trade and Technical Corrections Act of 2004, an importer could not remedy a clerical error, mistake of fact, or other inadvertence by filing a protest under 19 U.S.C. § 1514. Instead, an importer was required to request a refund under 19 U.S.C. 1520(c), which authorized the reliquidation of an entry to correct a clerical error, mistake of fact, or other inadvertence. The implementing regulations authorized reliquidation if the clerical error, mistake of fact, other inadvertence “(1) [did] not amount to an error in the construction of a law; (2) [was] adverse to the importer; and (3) [was] manifest from the record or established by documentary evidence.” See 19 C.F.R. § 173.4(a).
The Miscellaneous Trade and Technical Corrections Act of 2004 repealed 19 U.S.C. § 1520(c) and amended 19 U.S.C. § 1514(a) to include “any clerical error, mistake of fact, or other inadvertence” that occurs in an “entry, liquidation, or reliquidation” as protestable events. See Pub. L. 108-429, Title II, § 2015, Dec. 3, 2004, 118 Stat. 2598. Here, Industrial Chemicals states that “the mistake of fact or inadvertence is clear.” According to Industrial Chemicals, it “mistakenly believed that [its broker] would make a claim for retroactive GSP prior to December 28, 2015. Similarly, [the broker] mistakenly believed that Industrial Chemicals would make a claim for retroactive GSP prior to December 28, 2015.” Thus, Industrial Chemicals argues that its failure to file its GSP refund requests before the statutory deadline of December 28, 2015, should be excused.
Industrial Chemicals’ reliance on several court cases and CBP decisions interpreting the scope of “mistake of fact or other inadvertence” under 19 U.S.C. § 1520(c), which was repealed in 2004, is misplaced in the context of a protest under 19 U.S.C. § 1514. Even if the miscommunication between Industrial Chemicals and its broker constitutes a “mistake of fact or other inadvertence,” it must happen “in [an] entry, liquidation, or reliquidation” in order to be remediable under 19 U.S.C. § 1514.
In this case, the miscommunication between Industrial Chemicals and its broker that form the basis of this protest did not occur in the entry or liquidation. Although the entries did not contain a claim for GSP preference, this was not due to a “mistake or inadvertence”: the GSP program was suspended at the time of the entry and, even if it had not been suspended, an importer need not assert a GSP preference claim at entry. More importantly, however, the alleged “mistake of fact or inadvertence” occurred months after the last entry was made and after several of the entries had already liquidated. Thus, no “mistake of fact or inadvertence” occurred in the entry.
Nor did a “mistake of fact or inadvertence” occur in the liquidation. As noted above, several entries had already liquidated before the alleged “mistake of fact or inadvertence” had occurred. For those entries that had not yet liquidated, CBP did not make a “mistake of fact or inadvertence” in liquidating the entries. Rather, CBP liquidated the entries as entered and in accordance with its own guidance implementing a statutorily-mandated 180-day deadline for filing retroactive GSP claims. Thus, no “mistake of fact or other inadvertence” occurred in the liquidation either.
19 U.S.C. 1514, however, also provides a means to protest certain “decisions of the Customs Service,” including:
the appraised value of merchandise;
the classification and rate and amount of duties chargeable;
all charges or exactions of whatever character within the jurisdiction of the Secretary of the Treasury;
the exclusion of merchandise from entry or delivery or a demand for redelivery to customs custody under any provision of the customs laws, except a determination appealable under section 1337 of this title;
the liquidation or reliquidation of an entry, or reconciliation as to the issues contained therein, or any modification thereof, including the liquidation of an entry, pursuant to either section 1500 of this title or section 1504 of this title;
the refusal to pay a claim for drawback; or
the refusal to reliquidate an entry under subsection (d) of section 1520 of this title . . . .
See 19 U.S.C. § 1514(a).
Here, although Industrial Chemicals does not raise this argument, we note that the port’s denial of Industrial Chemicals’ untimely request for a retroactive GSP refund request could be considered a “decision[ ] of the Customs Service” under 19 U.S.C. § 1514(a). However, based on the clear statutory deadline of 180 days contained in the Trade Preferences Extension Act of 2015, and on the Federal Register Notice implementing this statutory mandate, we agree with the port’s decision to deny the request.
Finally, although Industrial Chemicals characterizes its request for relief as a protest to remedy a “mistake of fact or inadvertence” under 19 U.S.C. § 1514, its request is more accurately characterized as a request to equitably toll the deadline for filing GSP refund requests. However, equitable tolling is available only when a party demonstrates “(1) that he has been pursuing his rights diligently, and (2) that some extraordinary circumstance stood in his way” and prevented timely filing. See Holland v. Florida, 560 U.S. 631, 649 (2010). Thus, a “garden variety claim of excusable neglect” does not warrant equitable tolling. Id. at 652 (quoting Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89, 96 (1990). Here, Industrial Chemicals’ own miscommunications with its broker is “garden variety excusable neglect” rather than an “extraordinary circumstance” that justifies the equitable tolling of the GSP refund request deadline.
HOLDING:
The protest should be denied. The entries made during the lapse period of the GSP are not eligible for a refund of duties paid.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (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 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 Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP website 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