ENT-1-03 CO:R:C:E 223842 C
District Director of Customs
U.S. Customs Service
40 South Gay Street
Baltimore, MD 21202
RE: Protest and application for further review no. 1303-91-
100130; effective date of merchandise processing fee's exemption
for least-developed beneficiary developing countries; General
Note 3(c)(ii)(B), HTSUS; 19 U.S.C. 58c(a)(9)(A); 19 U.S.C.
58c(b)(8)(B)(iii); 19 U.S.C. 58c(b)(8)(E)
Dear Sir:
This responds to the referenced protest and application for
further review. We have reviewed all relevant materials and our
response follows.
FACTS:
PROTESTANT imported merchandise from Sierra Leone on August
30, 1990. It was released on August 31, 1990, and liquidated on
December 28, 1990. At the time of entry summary, a merchandise
processing fee (MPF) was assessed on the imported merchandise.
On October 1, 1990, between the date of entry and the date of
liquidation, an amendment to 19 U.S.C. 58c became effective.
That amendment provided that the MPF of section 58c(a)(9) would
not apply to articles that are products of least-developed
beneficiary developing countries (LDDC's) as set forth in General
Note 3(c)(ii)(B) of the Harmonized Tariff Schedule of the United
States (HTSUS). Sierra Leone is among those countries listed
therein. In this timely filed protest, PROTESTANT asserts that
the liquidation of the entry should not have included the MPF.
You asserted that the merchandise was entered prior to the
effective date of the amendment to 19 U.S.C. 58c and, thus, the
exemption does not apply.
ISSUE:
On the facts of this case, should the entry have been
liquidated without assessment of a merchandise processing fee?
LAW AND ANALYSIS:
Public Law 101-382, dated August 20, 1990, and entitled the
Customs and Trade Act of 1990, amended the law pertaining to the
merchandise processing fee. (P.L. 101-382, 101st Cong. 2d Sess.,
104 Stat. 629.) Section 111(b)(2) of the Act amended 19 U.S.C.
58(b)(8) by providing, in pertinent part, the following under
section 58c(b)(8)(B): "No fee may be charged under subsection
(a)(9) or (10) for the processing of any article that is - (iii)
a product of any country listed in subdivision (c)(ii)(B) or
(c)(v) of general note 3 [of the HTSUS]." As stated above,
Sierra Leone is among those countries listed therein; thus,
products of Sierra Leone, under the amended provision, are not
subject to the MPF.
Under section 115 of the Act, it is provided that the
exemption provided by the above amendment takes effect on October
1, 1990. Your position is that the amendment is effective for
merchandise "entered or released" on or after October 1, 1990.
Thus, since the merchandise in question was entered or released
prior to October 1, 1990, it is not subject to the exemption.
We agree with your interpretation of the statute. Under the
law, the MPF accrues upon entry or release of the merchandise.
Under 19 U.S.C. 58c(a)(9), the fee is applied "for the processing
of merchandise that is formally entered or released during any
fiscal year." (Emphasis added.) Section 58c(b)(8)(E) defines
entry or release of merchandise as follows: "For purposes of
subsection (a)(9) and (10) of this section, merchandise is
entered or released, as the case may be, if the merchandise is -
(i) permitted or released under section 1448(b) of this title,
(ii) entered or released from customs custody under section
1484(a)(1)(A) of this title, or (iii) withdrawn from warehouse
for consumption." (See also 19 C.F.R. 24.23(a)(2).) The
foregoing makes it clear that the intent of the law is to have
the MPF accrue upon entry or release of imported merchandise, a
stage in the entry process coming usually well before
liquidation. Therefore, imported merchandise entered or released
prior to the date the exemption became effective is properly
subject to imposition of the fee. Merchandise entered or
released on or after the date the exemption became effective is
properly exempted from the fee.
On the facts here, the imported merchandise in question was
entered and released prior to October 1, 1990. (The merchandise
was released under a permit for immediate delivery and the time
of entry was the date of entry summary as provided under 19
C.F.R. 141.68(c).) Therefore, it was properly subject to the
MPF. The only way for it to have been freed from the MPF is if
it had been entered on or after October 1, 1990, the date LDDC's
became exempt from the fee. The amendment of the statue by P.L.
101-382 did not have the effect of negating the accrual of the
MPF where such accrual lawfully occurred prior to the effective
date. It applied only to merchandise entered or released on or
after such date.
Based on the foregoing, we conclude that the MPF was
properly assessed on the imported merchandise in question.
HOLDING:
The merchandise processing fee was properly assessed on
merchandise entered (or released) prior to October 1, 1990, the
effective date of the exemption applicable to least-developed
beneficiary developing countries.
You are instructed to deny this protest. Please attach a
copy of this decision to the CF 19 Notice of Action to be sent to
PROTESTANT to fulfill the notice requirement of 19 C.F.R.
174.30(a).
Sincerely,
John Durant, Director
Commercial Rulings Division