BON-2/PRO-2-02-RR:IT:EC 225826 CC
Port Director
U.S. Customs Service
300 S. Ferry Street
Terminal Island
San Pedro, CA 90731
RE: Application for further review of Protest No. 2704-94- 101170; Notice of Redelivery; HQ 225807
Dear Sir or Madam:
The above-referenced protest was forwarded to this office
for further review. We have considered the facts and issues
raised, and our decision follows.
FACTS:
The merchandise the subject of this protest consists of
sweet rice. The importer submitted required documentation,
including a copy of Customs Form (CF) 3461, to the Food and Drug
Administration (FDA) prior to entry. A notice of sampling from
the FDA, dated November 16, 1993, is stamped on the CF 3461.
This notice stated "the shipment must be held intact," and
indicated that the FDA would be sampling the merchandise. The
subject merchandise was entered and released on November 21,
1993. The protestant, as principal, executed a continuous bond
securing the entry of the shrimp. In a letter dated January 21,
1994, the FDA requested Customs to seek redelivery of the subject
merchandise, since a sample had not been made available to the
FDA. On February 16, 1994, Customs issued a Notice to Redeliver
(CF 4647), citing the importer's failure to make the merchandise
available to the FDA for examination as the reason for the
redelivery request. The protest was filed on April 8, 1994.
Liquidation of the subject entry occurred on October 21, 1994.
ISSUE:
Whether a Notice to Redeliver is valid when merchandise
subject to FDA regulations is not made available to the FDA for
examination after a notice of sampling has been issued?
Whether the subject Notice of Redelivery was timely issued
within the meaning of 19 CFR 113.62(d)?
LAW AND ANALYSIS:
Initially, we note that a demand for redelivery is a
protestable matter pursuant to 19 U.S.C. 1514(a)(4). In
addition, the subject protest was timely filed in accordance with
19 U.S.C. 1514(c)(3)(B).
The protestant states that the Customs bond authorized
Customs to demand redelivery if the released merchandise failed
to comply with the laws or regulations governing admission into
the United States. 19 CFR 113.62(d). Since no notice of refusal
of admission was issued determining the merchandise failed to
comply with the laws governing admission, the protestant argues
that the demand for redelivery is invalid.
Section 12.3 of the Customs Regulations concerning the
release of merchandise under bond states the following:
No food, drug, device, cosmetic, pesticide,
hazardous substance, or dangerous caustic or corrosive
substance, the subject of 12.1 shall be released
except in accordance with the laws and regulations
applicable thereto. Where any such merchandise is to
be released under bond pursuant to regulations
applicable thereto, a bond on Customs Form 301,
containing the bond conditions set forth in 113.62 of
this chapter shall be required.
Section 113.62 of the Customs Regulations (19 CFR 113.62)
contains the basic importation and entry bond conditions.
Paragraph (d) of this provision states the following:
If merchandise is released conditionally from
Customs custody to the principal before all required
evidence is produced, before its quantity and value are
determined, or before its right of admission into the
United States is determined, the principal agrees to
redeliver timely, on demand by Customs, the merchandise
released if it:
(1) Fails to comply with the laws or regulations
governing admission into the United States;
(2) Must be examined, inspected, or appraised as
required by 19 U.S.C. 1499; ...
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).
19 U.S.C. 1499 provides the following at paragraph (a)(1):
Imported merchandise that is required by law or
regulation to be inspected, examined, or appraised
shall not be delivered from customs custody (except
under such bond or other security as may be prescribed
by the Secretary to assure compliance with all
applicable laws, regulations, and instructions which
the Secretary or the Customs Service is authorized to
enforce) until the merchandise has been inspected,
appraised, or examined and is reported by the Customs
Service to have been truly and correctly invoiced and
found to comply with the requirements of the laws of
the United States.
Under 21 U.S.C. 381, a sample may be requested by the FDA
for examination for imported food and other merchandise subject
to FDA authority. In this case the FDA requested a sample of the
subject rice for examination. Therefore, the subject merchandise
was required by law to be examined pursuant to 19 U.S.C. 1499.
No sample was ever delivered to the FDA for examination; the
importer never delivered a sample to the FDA after the notice of
sampling was issued. As stated above, under the bond, redelivery
may be requested when merchandise must be examined pursuant to 19
U.S.C. 1499. Section 141.113 of the Customs Regulations (19 CFR
141.113) providing for the redelivery of merchandise,
specifically provides for the redelivery of merchandise when an
importer does not comply with the request for a sample. 19 CFR
141.113 was issued, in part, under the authority of 19 U.S.C.
1499. Consequently, the bond was breached since the merchandise
was not examined pursuant to 19 U.S.C. 1499 because no sample was
ever made available to the FDA. Thus the redelivery notice was
proper, despite the fact that no notice of refusal was issued
determining the subject merchandise was inadmissible. In support
of this conclusion and a discussion of the issue of the validity
of a redelivery notice when there is no formal notification that
the merchandise is inadmissible, see HQ 226218 of March 19, 1996.
Concerning the issue of timeliness of the redelivery notice,
the protestant makes two major arguments. First, the redelivery
notice was untimely because no valid conditional release period
was created. Second, even if a valid conditional release period
were created, the redelivery notice was not timely issued after
the conditional release period ended.
Our analysis in this protest concerning the timeliness of a
redelivery notice is the same as that contained in HQ 225807 of
December 4, 1995, a similar protest (copy enclosed and
incorporated into this ruling). In HQ 225807 we found that the
failure of the FDA to issue a "may proceed notice" prior to
release of the merchandise was an occurrence establishing a
conditional period. The issuance of a Notice of Refusal of
Admission by the FDA established an end to the conditional
release period of 90 days from the date of the notice unless
otherwise specified. Thus, Customs has no later than 30 days
after the end of this period to issue a Notice of Redelivery. In
HQ 225807, the notice of redelivery was issued within the 90 day
period after the Notice of Refusal of Admission was issued. We
found, therefore, that the Notice of Redelivery was timely issued
within the meaning of 19 CFR 113.62(d).
In this case, we were informed by the import specialist at
the port of entry that a copy of CF 3461 was submitted to the FDA
by the importer. The FDA either signs a "may proceed notice" or
stamps and signs a notice of sampling on the CF 3461. In this
case, the FDA signed a notice of sampling, which was dated
November 16, 1993. Consequently, the FDA failed to issue a "may
proceed notice" prior to release of the subject merchandise on
November 21, 1993. This failure to issue a "may proceed notice"
by the FDA established a conditional period. A Notice of Refusal
was never issued because no sample was ever submitted to the FDA
for examination. The conditional period, therefore, did not end
prior to issuance of the redelivery notice. Since the Notice of
Redelivery was issued before liquidation of the merchandise
became final, the Notice of Redelivery was timely. See United
States v. Utex, 6 Fed. Cir. (T) 166, 857 F.2d 1408 (1988), United
States v. Commodities Export Co., 15 CIT 1, 6, 755 F. Supp. 418
(1991), and HQ 226218 of March 19, 1996.
HOLDING:
Failure of the importer to deliver a sample to the FDA for
examination was a breach of the bond, making the issuance of a
Notice of Redelivery proper. The Notice of Redelivery was timely
issued within the meaning of 19 CFR 113.62(d). Therefore, the
protest is DENIED.
In accordance with Section 3A(11)(b) of Customs Directive
099 3550-065, dated August 4, 1993, Subject: Revised Protest
Directive, this decision should be mailed by your office to the
Protestant no later than 60 days from the date of this letter.
Any reliquidation of the entry in accordance with the decision
must be accomplished prior to mailing of the decision. Sixty
days from the date of the decision the Office of Regulations and
Rulings will take steps to make the decision available to customs
personnel via the Customs Rulings Module in ACS and the public
via the Diskette Subscription Service, Freedom of Information Act
and other public access channels.
Sincerely,
Director, International Trade
Compliance Division
Enclosure