ENT-1/QUO 1 RR:IT:EC 115155 RSD
Port Director
Port of New York
C/O Chief, Residual Liquidation and Protest Branch
6 World Trade Center
Room 761
New York, New York 10048-0945
RE: Application for Further Review of Protest No. 1001-00-102772 concerning a demand for redelivery of imported textile articles for a false declaration of the country of origin
Dear Sir:
This is in response to your memorandum dated August 25, 2000, forwarding the above referenced application for Further Review of Protest No. 1001-00-102772 filed on behalf of Warren Corporation by Wilmer Cutler, & Pickering. The protest concerns a demand for redelivery of textile articles for the reason that the importer did not accurately represent the country of origin of the imported merchandise to Customs.
FACTS:
The record indicates that the protest concerns four shipments of dehaired cashmere entered at John F. Kennedy Airport on October 16, 1999, December 20, 1999, January 7, 2000, and February 15, 2000. The imported merchandise was classified under subheading 5102.10.9000, Harmonized Tariff Schedule of the United States (HTSUS). For some of the entries, the entry documents submitted on behalf of the Protestant showed that the country of origin of the cashmere was Mongolia and China. In another case, the entry documents showed that the country of origin of the merchandise was Australia or Italy. The record further indicates that Customs was alerted that on several shipments, Warren was not accurately representing the country of origin of the imported merchandise because the country of origin of the cashmere was actually Iran. Upon learning that the country of origin of the merchandise indicated on the entry documents might not be accurate, on March 27, 2000, Customs issued four notices to redeliver for the entries that are the subject of this protest. The notices to redeliver requested that the importer provide copies of the purchase orders, packing lists, proof of country of origin with supplier/shippers names and addresses, and proof of payment for the relevant shipments of cashmere. The Notices demanded redelivery of the merchandise pursuant to 19 CFR 141.113 unless documents establishing origin were provided within 30 days from the date of the notice.
In reply to the redelivery notices, Warren’s counsel submitted a letter dated May 2, 2000. In the letter counsel explains that Warren asked its supplier, Cashco, to investigate the origin of the imported cashmere. According to counsel, Cashco determined that it had erroneously shipped cashmere of Iranian origin, not the Chinese cashmere that Warren had ordered.
On May 10, 2000, Customs at JFK responded to counsel by sending a letter pointing out that requests for information (CF-28) were being issued in order that Warren could establish the origin of “dehair origin of grey cashmere” supplied by Cashco U.K. Ltd. and Schneider London Ltd. The letter also indicated that a certificate of origin issued for a previous shipment and signed by G. Forchino Biella Transport falsely stated that China was the country of origin for imported cashmere. Accordingly, the letter from Customs further stated that due to Cashco’s admission that the cashmere originated from Iran, any certification from G. Forchino Biella Transport RL was not credible and not acceptable to Customs. Consequently, Warren Corp. had to obtain and submit all requested and/or relevant documentation in order to substantiate the country of origin for each shipment of “dehaired” grey cashmere on the entries in question.
The requests for Information (Customs Form number 28) dated May 9, 2000, stated that, based on the admission by Cashco UK, Ltd. that the shipment of dehaired grey cashmere under entry #496-2961371, is of Iranian origin, after falsely stating C/O as China, additional documented proof of origin from Cashco is now required for this shipment. 1) Submit Purchase Order with name of initial supplier; 2) Invoice from and payment to supplier; 3) Original packing list with supplier’s name and bale #s 30/41; 4) Letter from Cashco UK, Ltd. certifying that the documents provided to support C/O are correct.
On May 25, 2000, Counsel sent a letter to Customs explaining that Cashco was unwilling to provide the information requested by the form 28’s issued to Warren because it felt that disclosure of the prices that Cashco pays for cashmere and the identity of its suppliers in China to Warren would harm Cashco’s competitive position. Counsel indicated that Cashco was prepared to explore alternative methods for providing this information to the American Customs authorities.
ISSUE:
Whether the notices to redeliver were proper.
LAW AND ANALYSIS:
19 CFR 141.113(b) provides the following:
For purposes of determining whether the country of origin of textiles and textile products subject to the provisions of § 12.130 of this chapter has been accurately represented to Customs, the release from Customs custody of any such textile or textile product shall be deemed conditional during the 180-day period following the date of release. If the port director finds during the conditional release period that a textile or textile product is not entitled to admission into the commerce of the United States because the country of origin of the textile or textile product was not accurately represented to Customs, he shall promptly demand its return to Customs custody. Notwithstanding the provisions of paragraph (h) of this section and § 113.62(l)(1) of this chapter, a failure to comply with a demand for return to Customs custody made under this paragraph shall result in the assessment of liquidated damages equal to the value of the merchandise involved.
Section 113.62 of the Customs Regulations (19 C.F.R. §113.62) contains the basic importation and entry bond conditions. Paragraph (d) of this provision provides as follows:
It is understood that any demand for redelivery will be made no later than 30 days after the date that the merchandise was released or 30 days after the end of the conditional release period (whichever is later).
Counsel for protestant contends that the notices to redeliver were issued untimely. Counsel points out that Customs has held that 19 CFR 141.113(b) contains a time limitation of “promptness”, which means that the notice cannot be issued more than 30 days after the date that merchandise is released from Customs custody. Since in this case, the notices to redeliver were issued more than 30 days after the release of the merchandise, they would not be considered issued promptly.
In Treasury Decision (T.D.) 94-95, 59 Fed. Reg. 61798, December 2, 1994, Customs amended the Customs Regulations to establish a conditional release period of 180 days on entries of textiles and textile products for the sole purpose of facilitating a determination as to whether the country of origin of the entered goods has been accurately represented to Customs. This amendment permitted Customs to issue notices of redelivery to importers of textiles and textile products within 30 days after the end of the conditional release if investigation or information reveals that the merchandise was claimed to originate in a country where little or no manufacturing process occurred in order to avoid quota or visa admissibility requirements. The effective date of this amendment was January 3, 1995.
Counsel concedes that 19 CFR 141.113(b) creates a conditional release period of 180 days beyond the date of release from Customs Custody for Customs to demand redelivery of textiles and textile articles, when there is a question regarding the country of origin of the merchandise. However, Counsel argues that 19 CFR 141.113 is limited to textiles that are subject to textile quota and/or visa requirements. In support of this position, Counsel cites T.D. 94-95, with the above quoted language regarding the conditional release period for textile and textile products as merchandise subject to textile visa and quota requirements. Since the subject merchandise of the protest, cashmere fibers, is not subject to textile quota or visa requirements regardless of the country of origin, the 180-day conditional release period permitted in 19 CFR 141.113(b) does not apply to the four entries in question.
We do not agree with counsel’s position that the conditional release period of 180 days is limited only to textiles that are subject to textile quota or visa requirements. Although as mentioned in T.D. 94-95, the 180 day conditional release period will chiefly occur in cases for textiles that are subject to visa and quota requirements, the explicit language of 19 CFR 141.113(b) indicates that the 180 day conditional release period applies for determining if the country of origin of textiles and textile products subject to the provisions of 19 CFR 12.130 was accurately represented to Customs, regardless of whether such items are subject to quota or visa requirements. Thus the question that arises is whether the cashmere fibers involved in this case are subject to the provisions of 19 CFR 12.130. Basically, the Customs policy has been that articles which are classified in Section XI of the HTSUS are subject to the provisions of 19 CFR 12.130. (See T.D. 90-17, which noted that §12.130 established criteria to be used by Customs officers in determining the country of origin of imported textiles and textile products for purposes of multilateral or bilateral textile agreements entered into by the U.S. pursuant to §204, Agricultural Act of 1956 as amended (7 U.S.C. 1854).
In addition, as further support that articles classified in Section XI of the HTSUS are subject to 19 CFR 12.130, we point to a Federal Register Notice of September 5, 1995, 60 FR 46188. Customs responded to comments regarding the position of Customs that the textile and apparel rules of origin contained in § 12.130 of the Customs regulations cover all goods classifiable in XI (Chapters 50 through 63) HTSUS by stating:
In light of the context in which section 334 of the Act was enacted, Customs believes it is more proper to conclude that Congress intended that the regulations implementing section 334 of the Act include the products covered by the Agreement on Textiles and Clothing of the WTO Agreement for the specific and limited purpose of section 334 of the Act, that is, the determination of the country of origin of textile and apparel products would also be covered by any regulations governing entry or withdrawal from warehouse that may be separately issued under the authority of section 204. Therefore, Customs does not believe that the scope of the regulation implementing section 334 of the Act should be controlled by the traditional scope of §12.130 of the Customs Regulations. On the contrary, it seems clear that the product coverage of §12.130 has been effectively expanded by the adoption of the Agreement on Textiles and clothing of the WTO Agreement and the amendment of section 204 effected by section 332 of the Act. Accordingly, Customs believes that the May 23,1995, notice of proposed rulemaking reflects the correct position on this issue.
Since cashmere items classified under subheading 5102.10.9000, Harmonized Tariff Schedule of the United States (HTSUS) are within Section XI of the HTSUS, they would be subject to the provisions of 19 CFR 12.130. Therefore, we find that the 180-day conditional release period specified in 19 CFR 141.113(b) would apply for the entries that are being protested. The record indicates that Customs learned that the country of origin of the merchandise was not accurately represented to Customs. Although Customs requested additional information so that importer could verify the country of origin of the merchandise in the shipments that are the subject of this protest, the Protestant could not furnish the requested additional information. We note that the merchandise was most likely of Iranian origin, which would make it restricted merchandise. Under such circumstances, we conclude that the merchandise was not entitled admission into the United States. Therefore the notices to redeliver were proper.
HOLDING:
The four notices to redeliver were properly issued. The protest should be 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.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Larry L Burton
Chief
Entry Procedures and Carriers Branch