Customs Ruling HQ 228654 - Protest AFR 3801-99-100369; NAFTA; 19 U.S.C. 1520(d); 19 CFR 181.22; 19 CFR 181.31; 19 CFR 181.32; 19 CFR 181.33 (d)(3); certificate of origin

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HQ 228654
Aug 29, 2002

Type : NAFTA • HTSUS :
Related: 964035; 964515; 964858; 965079; 228942

LIQ-9-RR:CR:DR 228654 IOR

Port Director
U.S. Customs Service
477 Michigan Ave., Suite 200
Detroit, MI 48226
Attn: Gregory J. Westrick, Import Specialist

Re: Protest AFR 3801-99-100369; NAFTA; 19 U.S.C. 1520(d); 19 CFR 181.22; 19 CFR 181.31; 19 CFR 181.32; 19 CFR 181.33 (d)(3); certificate of origin

Dear Sir:

The above-referenced protest was forwarded to this office for further review. Our decision follows the receipt of additional submissions dated July 11, 2001, December 6, 2001 and January 16, 2002, and a meeting between representatives for the protestant, me, members of my staff, and personnel from the Office of Field Operations, on December 4, 2001.

FACTS:

This protest is against the denial of 356 post-importation duty refund requests filed by Ford Motor Company (“protestant”) under 19 U.S.C. §1520(d), which cover a total of 1853 consumption entries of automobile parts imported from Canada. The consumption entries were made from January 2, 1997 through February 23, 1998. The requests were electronically filed from sometime within one year after the filing of the first consumption entry through January 22, 1999.

We have reviewed the complete documents for representative petitions 3801-98-351726, 3801-98-351253, and 3801-98-351331. The electronic filings can be viewed in Customs Automated Commercial System (ACS) in the PMTL function. As an example of an electronic filing, the electronic filing on May 13, 1998, for petition no. 3801-98-351235 reads as follows:

Reference is made to lines 2-4, 6-8, 10-13 imported from Canada. We respectfully request, based on the statements below, that the entry be (re)liquidated with a total duty refund of [$ ], and a total MPF refund of [$ ], under the provisions of 520(D), TA, 1930 as amended.

To our knowledge, the importer has not provided a copy of the entry summary or equivalent documentation to any other person or party. The importer is not aware of any claim for refund, wavier [sic] or reduction of duties for the goods, within the definition of Article 303 of NAFTA. Further, the importer does not have the knowledge of any person that has filed a protest, petition or request for liquidation relating to the good under any provision of law.

We request that this error be corrected under the provisions of 520(D)(1), TA, 1930 at the time of (re)liquidation.

Using the PMBL function in ACS, Customs can view the consumption entry number or numbers for which a refund or refunds are claimed.

Subsequent to the electronic filing, a letter dated May 14, 1998, on behalf of the protestant was mailed to the port, referencing the electronic filing no. 3801-98-351253, and consumption entry no. 27xxx86-9, and enclosing “the attached copy of the original CF7501 that was submitted as a paperless entry via ABI; also a copy of the original package if the entry was submitted as documents required.” The letter is date-stamped by Customs in Detroit on May 18, 1998. The letter also has the stamp “Denied May 21, 1999”. The attached document consisted of a “broker’s summary” of the CF 7501, which summary included the original entered value, duty rate and duty paid for each line item, the claimed duty rate and duty amount, and the amount of refund of duty claimed for each line item, and finally the total amount of duty and Merchandise Processing Fee (“MPF”) refund claimed. The broker’s summary is dated May 12, 1998, on the bottom of each page. The date of the consumption entry was June 23, 1997.

There is another letter with the refund request on behalf of the protestant, referencing the electronic filing number 3801-98-351253, dated November 5, 1998, enclosing the country of origin NAFTA certificates (CO). The letter is date stamped November 9, 1998 by Customs. The enclosed NAFTA CO is dated January 12, 1998.

According to the ACS PMGS screen, the request for a duty refund was denied because “the NAFTA certificate of origin was not furnished within one year of the date of importation.” According to the ACS PMAS screen, the request for a refund was denied on May 21, 1999, and the denial message was sent electronically to the protestant’s broker.

For some refund requests, for example no. 3801-98-351726, the reason for the denial in full or partial denial of the request for refund, was that the part numbers for which refunds were requested were not covered by the CO supplied. According to the Port, where the denial was due to the lack of a match between the CO and the imported merchandise for which a preference is claimed, it is assumed that the CO was submitted within one year of the importation of the merchandise. The petitions which are the subject of this protest were denied from April 6, 1999 through July 13, 1999.

By letter dated July 16, 1996 (Exhibit A to the protest), to the Customs Port Director in Detroit, the protestant proposed to Customs that for future claims filed under 19 U.S.C. §1520(d):

- Ford will continue to enter as dutiable any NAFTA goods when a valid CO is unavailable at the time of entry summary. - Customs may liquidate the entry summary as dutiable. - When the CO is received from the supplier, Ford will advise Customs by letter from its broker of all of the entry summary numbers, entry summary dates, and liquidation dates requesting re-liquidation under section 520(D). COs would not be presented to Customs. -On a random basis, Customs would provide Ford with a list of COs they wanted Ford to provide for review. -Alternatively, Customs could conduct a post audit review at Ford to verify the COs are on file. -A future alternative would be to provide Customs with copies of CD ROMs containing all NAFTA COs as well as periodic updates to these files.

(Emphasis added). There is a letter from the protestant dated January 15, 1997 (Exhibit B to the protest), to the Customs Port Director in Detroit, which references two liquidated entries. According to the protest, this letter represents an initial electronic filing of a 1520(d) claim, and encloses computer diskettes containing data files that represent a petition for NAFTA preference. In the letter the protestant states:

In accordance with the sample verification procedures developed by your office in consultation with U.S. Customs Headquarters, Ford will await notification of which consumption entries will be subject to verification before providing copies of NAFTA Certificates of Origin and entry documentation, as required.

The letter also contains the declaration that the goods qualified as originating goods at the time of importation. According to the Port and ACS records, both referenced entries were the subject of NAFTA 1520(d) petition 3801-97-304505. However, the petition was not “electronic” in the manner that the petitions which are the subject of this protest were electronic, and is not a subject of the instant protest. No such letters were with the representative petitions reviewed.

There is a letter dated March 30, 1998, from the protestant to Customs in Detroit. The letter proposes the submission of a disk for claims for a one month period, upon the receipt of which Customs would request a random sampling of paperless entry summary packages and COs.

The Port Director of Detroit sent two letters (Exhibits C and D to the protest), both dated April 10, 1998, to the protestant’s broker. Exhibit C is a response to the protestant’s March 30, 1998 letter. In Exhibit C, the following statements were

made:

After careful review, we have determined that your proposal is not fully acceptable. The Port of Detroit will accept your claims on a monthly basis, via disk, with minor changes to the format of presentation…. However, you must supply the paper documentation required by the regulations.

Section 181.32(b)(2) of the Code of Federal Regulations is explicit in its requirement that Certificates of Origin be submitted with claims. Also, Customs Directive 099 3550-070, dated April 15, 1994 [superseded by Customs Directive 3550-070A, dated June 28, 1999] provides procedures for the filing of Post-Importation NAFTA claims.

Exhibit D was written regarding “some confusion on submission of documentation to support 520(d) claims filed electronically.” In Exhibit D, the following statements were made:

The Port of Detroit has not issued any instruction or instituted any procedure that is contrary to Section 181.32(b) of the Code of Federal Regulations. All 520(d) claims must be supported by the submission of the Certificate of Origin (CO). It is not a document that can be requested at random.

I am aware of the fact that your company has filed in excess of 600 electronic 520(d) claims without the submission of the CO. As this is not in line with regulations, but acknowledging the existing confusion, we are requesting that the CO for claims already filed be submitted within 60 days of the date of this letter. All claims filed subsequent to this letter must contain the required supporting documentation.

According to the protestant, “Customs made numerous statements, representations, and commitments, none of which were ambiguous, all of which were clearly and properly understood by Ford, and upon the totality of which Ford relied in making and managing the subject §520(d) claims.” Protestant’s July 11, 2001 submission, p. 21. An example of one such understanding of the protestant is in the following statement contained in the initial protest submission:

It appears that Customs’ arbitrary decision to breach the agreement entered into with Ford occurred only after the submission of the supporting documents. Clearly, if it was Customs intent to deny Ford’s claims for the untimely filing of COs, then Customs would not have struck the agreement with Ford, or at a minimum would have instructed Ford of the possibility that if the COs were filed more than one year after the date of importation, there was the possibility that they would be treated as untimely. This conclusion is bolstered by the request made by Import Specialist Tolksdorf for COs for claims that were being audited, but later denied. There is no reason for Customs to examine evidence in support of a claim it believes to be untimely. All these factors show that Customs’ denial of the claims in breach of the agreement that established a schedule for filing the COs in support of those claims was arbitrary and capricious, and should be overturned.

Other than the letters of April 10, 1998, exhibits C and D, there is no evidence of any statements or agreements regarding the submission of COs. According to Customs officers in Detroit, there was never any agreement that the protestant could submit any CO more than one year after the importation of the merchandise covered by the CO.

Exhibit J to the protest is a list prepared by the protestant which shows 79 section 1520(d) petitions that were filed from January 9, 1998 through May 13, 1998, 29 of which were approved and 50 of which were denied, from August 4, 1998 through July 8, 1999. According to the protestant, the COs were filed late for all of the petitions. According to a review of Exhibit J by the Port of Detroit, of the listed petitions, 54 were denied and only 25 approved. According to the Port of Detroit, the 54 petitions listed are only a very minute portion of section 1520(d) petitions actually denied. Of the 25 approvals listed, 18 were made by one import specialist.

The protestant takes the position that 1) Customs breached its agreement to accept COs within an agreed upon time frame after the electronic petitions were filed and never indicated to the protestant the possibility that the claims could be denied if the COs were submitted more than one year after the importation of the merchandise for which a preference was claimed; 2) Customs has authority to waive the CO requirement under 19 CFR 181.22(d); 3) Customs failed to provide a written denial of the protestant’s claims in accordance with the regulations; 4) there is lack of uniformity in Customs processing of the protestant’s section 1520(d) claims; 5) the protestant provided Customs with sufficient information to process the claims without the submission of the COs; 6) the statute and regulations do not require the filing of a paper CO; 7) the statute and regulations do not require the filing of a CO simultaneously with the electronic filing or even within one year of the importation of the merchandise; and 8) Customs failed to provide the protestant with “written” notice of denial of its petition.

With respect to the section 1520(d) claims which were denied because the CO information did not match the line items for which preference was claimed, and the COs apparently were submitted within one year of the date of importation, the protestant does not raise any argument why Customs decisions to deny the refunds on that basis were incorrect. In its initial protest submission, the protestant asserts that “Detroit’s decision to require paper in this instance is not only out of step, it is a direct cause of the difficulty it encountered in matching claims with COs.” The protestant does not deny that the claims did not match the COs. However in its later submissions the issue appears to be forgotten entirely. In its submission dated July 11, 2001, p. 2, the protestant asserted “there has been no question as to the validity or sufficiency of the NAFTA CO’s submitted by Ford,” when in fact the sufficiency was questioned in the form of the denial of claims for lack of a match between the CO and the imported merchandise. Finally, in the protestant’s submission dated January 16, 2002, on p. 2, the protestant states that the “sole” issue to be determined in this protest is “whether th[e] NAFTA CO’s had to be submitted to Customs within 12 months of the date of entry in order to be perfected and allowable”, and on p. 4, “it is Ford’s understanding that the entire 520(d) claims were denied, because the NAFTA CO’s were not submitted at the same time as the claims and in fact were submitted quite some time after the claims were filed." This is contrary to the position of the protestant taken in the initial submission filed with the protest, which states on p. 3:

The only areas of dispute is procedural: the timing and the format in which the COs were presented to U.S. Customs, and whether Customs could match the COs to individual 520(d) petitions.

We have reviewed representative petition no. 3801-98-351726, and verified that various part numbers for imported merchandise for which preference is claimed, were not included on the CO submitted. Therefore, the protest should be denied as to those section 1520(d) claims which were denied on the grounds that the part numbers of the imported merchandise did not match the information on the CO submitted, on the grounds that the information did not match, and no further argument or evidence has been provided by the protestant.

ISSUE:

Whether the protest can be granted to allow the petitions filed under 19 U.S.C. §1520(d).

LAW AND ANALYSIS:

Initially we note that the refusal to reliquidate an entry under 19 U.S.C. §1520(d) is a protestable issue. This protest is of the refusal to reliquidate entries under 19 U.S.C. §1520(d). The subject section 1520(d) petitions were denied from April 6, 1999 through July 13, 1999, and the protest was filed on August 2, 1999. A protest must be filed within 90 days after the protested decision. 19 U.S.C. §1514(c)(3). With respect to the petitions which were denied on April 6, 1999, the protest was not filed within 90 days.

Under 19 CFR 181.33(d)(3), when an entry for which a section 1520(d) claim has been filed, has been liquidated when the Port Director determines the section 1520(d) claim should be denied, the claim may be denied without a reliquidation of the consumption entry. In this case, it appears that with respect to the claims denied on April 6, 1999, the entries had all been liquidated as of that date, and the 90-day time within which to file a protest began as of the date of denial. Therefore the protest must be denied as untimely with respect to the following petitions: 3801-98-351392, 3801-98-351381, 3801-98-351379, 3801-98-351356, 3801-98-351350, 3801-98-351324, 3801-98-351313, 3801-98-351308, 3801-98-351304, 3801-98-351293, 3801-98-351230, 3801-98-351153, 3801-98-351152, 3801-98-351091 and 3801-98-351040. The protest is timely filed with respect to the remaining petition denials.

Under 19 U.S.C. 1520(d), an importer may make a post-entry NAFTA refund request, subject to one-year time limitation from importation:

(d) Goods qualifying under NAFTA rules of origin Notwithstanding the fact that a valid protest was not filed, the Customs Service may, in accordance with regulations prescribed by the Secretary, reliquidate an entry to refund any excess duties (including any merchandise processing fees) paid on a good qualifying under the rules of origin set out in section 3332 of this title for which no claim for preferential tariff treatment was made at the time of importation if the importer, within 1 year after the date of importation, files, in accordance with those regulations, a claim that includes-

a written declaration that the good qualified under those rules at the time of importation; copies of all applicable NAFTA Certificates of Origin (as defined in section 1508(b)(1) of this title); and such other documentation relating to the importation of the goods as the Customs Service may require.

(Emphasis added). The Customs Regulations, 181.32(b) (19 CFR 181.32(b)) set forth the following requirements:

(b) Contents of claim. A post-importation claim for a refund shall be filed by presentation of the following: (1) A written declaration stating that the good qualified as an originating good at the time of importation and setting forth the number and date of the entry covering the good;

(2) Subject to § 181.22(d) of this part, a copy of each Certificate of Origin (see § 181.11 of this part) pertaining to the good;

(3) A written statement indicating whether or not the importer of the good provided a copy of the entry summary or equivalent documentation to any other person. If such documentation was so provided, the statement shall identify each recipient by name, Customs identification number and address and shall specify the date on which the documentation was provided;

(4) A written statement indicating whether or not the importer of the good is aware of any claim for refund, waiver or reduction of duties relating to the good within the meaning of Article 303 of the NAFTA (see subpart E of this part). If the importer is aware of any such claim, the statement shall identify each claim by number and date and shall identify the person who made the claim by name, Customs identification number and address; and

(5) A written statement indicating whether or not any person has filed a protest or a petition or request for reliquidation relating to the good under any provision of law, and if any such protest or petition or request for reliquidation has been filed, the statement shall identify the protest, petition or request by number and date.

As to the time of filing, 19 CFR 181.31, provides that the importer may “file a claim for a refund of any excess duties at any time within one year after the date of importation of the good in accordance with the procedures set forth in §181.32 of this part.” Emphasis added.

According to the statute and regulations cited above, a post-entry claim under 19 U.S.C. 1520 (d) is to contain a written declaration that the good qualified under the NAFTA rules of origin at the time of importation, and copies of all applicable NAFTA COs, in addition to the statements set forth in 19 CFR 181.32(b) 3, 4 and 5, and the claim is to be filed within one year after the date of importation of the merchandise.

In this case, at least a portion of the electronic filings, did not contain a written declaration that the goods qualified under the NAFTA rules of origin at the time of importation, and such declaration was also not included in the letters with which the broker’s summaries were submitted. The COs also were not submitted to Customs at the time of the electronic filing or the submission of the broker’s summaries, or at anytime within one year after the date of importation of the merchandise.

It is Customs position that both the failure to make a written declaration that the goods qualified under the NAFTA rules of origin at the time of importation and the failure to submit a CO pertaining to the good or goods for which preference is claimed, are fatal to a claim under 19 U.S.C. §1520(d). In this case, with respect to some petitions, the declarations were never made, and for all of the petitions at issue, the COs were submitted more than one year after the date of importation of the merchandise for which the preference is claimed. In accordance with the statute and regulations, not only do the declaration and CO have to be submitted, but they must be submitted within one year of the date of importation. Therefore, due to the protestant’s failure to either make the written declarations or to timely submit the COs, the post-importation refund requests were correctly denied and accordingly, the protest should be denied.

In support of its protest, the protestant raises numerous arguments to support the position that the section 1520(d) claims were valid and timely filed. We will address each of those arguments.

Customs breached its agreement to accept COs within an agreed upon time frame after the electronic petitions were filed and never indicated to the protestant the possibility that the claims could be denied if the COs were submitted more than one year after the importation of the

merchandise for which a preference was claimed

Although the protestant has stated that “Customs made numerous statements, representations, and commitments, none of which were ambiguous, all of which were clearly and properly understood by Ford, and upon the totality of which Ford relied in making and managing the subject §520(d) claims,” other than making vague statements about agreed upon schedules, Customs failure to respond to the protestant’s proposals, other than the requirements set forth in the the two April 10, 1998 letters from the Port Director, no specific agreements or understandings involving Customs have been identified or specified.

Neither April 10, 1998 letter stated that a NAFTA CO may be filed for any 1520(d) petition more than one year after the date of importation, and that the claim will be granted. Exhibit D to the protest states it will accept COs for claims that have already been filed as of April 10, 1998, but nowhere does it say that claims for which the one year time limit had already passed or would pass before the COs are submitted would be considered complete.

There is no indication that the Port Director intended such a result. At the time Exhibit D was written, on April 10, 1998, at least on petition had been filed for which the protestant still could have submitted COs within one year of the importation of the subject merchandise. For example, petition no. 3801-98-350743 was electronically filed on April 8, 1998, and covered five entries made on April 15 and April 16, 1997. It is possible that the protestant could still have provided the COs for those entries. According to Import Specialist Tolksdorf, whose actions the protestant claims to have relied upon, there was never any agreement that the protestant could submit any CO more than one year after the importation of the merchandise covered by the CO.

The protestant, by its assertions of what Customs actions “clearly” meant, is implying that in the face of hundreds of refund petitions Customs should make determinations as to the completeness of the petitions and timeliness, before requesting any additional information. If Customs had failed to request a CO for a petition for which one could still have been timely filed, the protestant would undoubtedly be taking the position that Customs mislead the importer into believing the submission of a CO would be futile. Customs request for documentation is not an implied agreement or determination of anything, instead it is simply a request for documentation. The protestant has not provided evidence of any agreements that were breached by Customs.

Customs has authority to waive the CO requirement under 19 CFR 181.22(d)

Under 19 CFR 181.22(d)(1), unless otherwise specified by the Port Director, an

importer is not required to have a CO in his or her possession for the following:

(i) An importation of a good for which the port director has in writing waived the requirement for a Certificate of Origin because the port director is otherwise satisfied that the good qualifies for preferential tariff treatment under the NAFTA; (ii) A non-commercial importation of a good; or (iii) A commercial importation of a good whose value does not exceed US$2,500, provided that, unless waived by the port director, the producer, exporter, importer or authorized agent includes on, or attaches to, the invoice or other document accompanying the shipment [a signed statement that the merchandise qualifies for preferential treatment under the NAFTA].

The foregoing provision is not applicable to the foregoing provision, because it is limited to waiver of the possession requirement upon importation, and does not address the filing requirement of 19 U.S.C. §1520(d) and 19 CFR 181.32(a)(2). Furthermore, the criteria set forth in 19 CFR 181.22(d)(1) (i) through (iii) have not been met.

There is lack of uniformity in Customs processing of the protestant’s section 1520(d) claims

We agree that there is lack of uniformity in Customs processing of petitions under 19 U.S.C. §1520(d). We do not agree that there is any doubt that the statute and regulations require that the CO be filed within one year of the date of importation of the merchandise. The fact that 25 petitions out of at least 435, were incorrectly allowed, does not establish a reason for granting this protest. Eighteen of the 25 allowed petitions were allowed by one import specialist in error over a period of less than one year.

Section 1625(c) (19 U.S.C. 1625(c)(2) (1994)) provides that a proposed interpretive ruling or decision which would have the effect of modifying the “treatment” previously accorded by Customs to substantially identical transaction shall be published in the Customs Bulletin for public comment and be effective 60 days after the date of publication of the final ruling or decision. The first court to discuss a “treatment” in terms of 19 U.S.C. 1625(c)(2) was the Court of International Trade in cross-motions for summary judgement in Precision Specialty Metals, Inc. v. United States, 116 F. Supp. 2d 1350 (2000). The Court stated: It appears that a "treatment" may be found where a "position" might not -- that the definition of "treatment" does not require publication or liquidation among many ports over many years. The term "treatment" looks to the actions of Customs, rather than its "position" or policy. It is also distinct from the terms "ruling" and "decision," which are governed by § 1625(c)(2). n25 This construction would recognize that importers may order their actions based not only on Customs' formal policy, "position," "ruling" or "decision," but on its prior actions. This construction furthers the stated legislative intent underlying § 1625(c). n25 The fact that § 1625(c)(2) provides for relief even when the proposed ruling or decision would not modify any prior ruling forecloses any argument that there is no modification sufficient to trigger § 1625 because Customs' position was already contained in, and did not vary from, prior rulings such as C.S.D. 80-137. The bases for relief set forth in § 1625(c)(1) and (2) exist independent of each other.

The Court in Precision Specialty Metal, Inc. v. United States, 182 F. Supp. 2d 1314 (2001) (Precision II) found a “treatment” where Precision filed 116 drawback entries under T.D. 81-74 between December 11, 1991 and May 13, 1996, and Customs liquidated 69 of these entries with full benefit of drawback. The Court stated Customs was required to publish for notice and comment its intent to revoke the “treatment.”

Regulations have recently been published by Customs with respect to what constitutes a “treatment,” see, T.D. 02-49, 67 F.R.53483 (August 16, 2002), however, the regulations are not effective until September 16, 2002. Customs opinion prior to the publication of the regulations was that the answer as to what constitutes a “treatment” is dependent upon the facts and circumstances involved and that treatment is personal to each importer. The granting of “treatment” to one importer does not carry over to anther importer of the same merchandise where different facts or circumstances are involved. Each claim must be looked at separately and a determination made under the specific facts and circumstances as to whether or not to grant a claim of “treatment.”

In HQ 964035 dated September 25, 2000, Customs found that a “treatment,” subject to a notice and comment revocation, was established where an importer’s merchandise was entered more than 50 times erroneously for at least eleven years and was examined at least six times by Customs. In HQ 964515 dated August 16, 2001, Customs granted a claim for “treatment” where an importer entered over 300 line items of merchandise since 1992 under its claimed classification. After February 19, 1993 Customs consistently liquidated the merchandise as entered. The merchandise was also examined on five occasions in 1995 and 1996, without changing the classification.

In contrast, Customs in HQ 964858 dated July 18, 2001, found that a “treatment” was not established where an importer states he “consistently” entered his merchandise under a certain classification and his merchandise was subject to intensive examination by Customs. In that case, Customs stated that the importer failed to supply any evidence of its “treatment” claim. Customs stated that two entries mentioned by the importer were examined by Customs as part of an inspector audit on paperless entries, and not to verify classification. Customs stated that the importer’s entries were on bypass, and there are no records indicating that the entries were ever examined for purposes of verifying classification. In HQ 965079 dated July 25, 2001 Customs denied a request for “treatment” under 1625(c)(2) where the importer supplied a list of entries between 1998 and 2000 consisting of 26 liquidated and 17 unliquidated entries.

In the instant case, the protestant has identified 25 petitions which were incorrectly allowed over a period of approximately eleven months. Nearly all of the approvals were made by one import specialist. Based on the Court’s holdings in its Precision decisions, and Customs’ previous rulings on the issue, the protestant has not established that a “treatment” exists. Twenty-five petitions, liquidated within an eleven month period beginning after many of the subject duty refund requests had already been filed, is not comparable to the cases discussed above, where Customs found a “treatment.”

We also note that while the new regulations, T.D. 02-49, 67 F.R.53483, 53497 (August 16, 2002), are not yet effective, they state in pertinent part that to establish a treatment there must be evidence that: (C) Over a 2-year period immediately preceding the claim of treatment, Customs consistently applied that determination on a national basis as reflected in liquidations of entries or reconciliations or other Customs actions with respect to all or substantially all of that person’s Customs transactions involving materially identical facts and issues;

Applying the above definition to the facts presented, the protestant could not establish a “treatment” under the new regulations even if the new regulations were effective immediately.

The protestant provided Customs with sufficient information to process the claims without the submission of the COs.

Although the information submitted, prior to the submission of the CO’s may have been sufficient for Customs to process the refund claims, the submission was not in compliance with the statute and regulations, as described below.

The statute and regulations do not require the filing of a paper CO.

The statute, 19 U.S.C. §1520(d) and 19 CFR 181.32 do not specifically require a “paper” CO, however they do specifically require “copies” of the applicable COs. According to 19 CFR 181.22(b)(1) the CO:

Shall be on Customs Form 434, including privately-printed copies thereof, or on such other form as approved by the Canadian or Mexican customs administration, or, as an alternative to Customs Form 434 or such other approved form, in an approved computerized format or such other medium or format as is approved by [Customs Headquarters].

The CO could be written out on anything, as opposed to a printed copy of a CF 434, provided the format has been approved by Customs. In its letter of July 16, 1996, the protestant was not proposing a different format for the CO, but was proposing that the COs would not be submitted to Customs, unless and until requested by Customs. The issue here is not whether the form of the CO was acceptable but rather whether any CO was required to be filed. The protestant in fact did not timely submit the COs in any form, therefore the form of the CO is not in issue.

The statute and regulations do not require the filing of a CO simultaneously with the electronic filing or even within one year of the importation of the merchandise.

We agree that the CO is not required to be filed simultaneously with the electronic filing. It is presumed that the CO will be filed within a reasonable period of time after the electronic notice of the claim, but not more than one year after the importation of the merchandise. The exact timing of the filing of the CO is not at issue here, because no COs were filed before the one-year period expired.

In the July 11, 2001 submission, p. 2, the protestant states its position that “only the claim for NAFTA preference, as set forth at 19 U.S.C. §1520(d)(1), must be made within the 1-year deadline.” In the January 16, 2002 submission, p. 3, the protestant states:

Indeed, Ford’s position is that only the §520(d)(1) claim must be filed within the 12 month period. The other documents and information set forth in §520(d)(2) and (3) can be submitted to Customs at any point prior to Customs’ determination of the claim.

The protestant’s position is in clear contradiction with the language of the statute. The claim filed within the one year period is required to include all three of the elements set forth in section 1520(d)(1) – (3). There is nothing in the language of the statute to indicate that only the element in (d)(1) must be filed within one year and the elements in (d)(2) and (d)(3) can be filed later. At least a portion of the protestant’s petitions would also have to be denied based on this argument. Neither the electronic filings nor any subsequent submission contained the declaration required in section 1520(d)(1), that the goods for which refunds were being requested qualified under the NAFTA rules of origin at the time of importation.

It is Customs position that the failure to make the statements required under 19 CFR 181.32(b)(3), (4) and (5), is fatal to a section 1520(d) post-importation duty refund claim. See HQ 228942, dated July 17, 2001. In this case, the statements required by 19 CFR 181.32(b)(4) and (5) were made in accordance with the regulations. The statement required by 19 CFR 181.32(b)(3) is also not in accordance with the regulations. The regulations require the statement to indicate “whether or not the importer of the good provided a copy of the entry summary or equivalent documentation to any other person.” The protestant’s broker’s statement that “to our knowledge the importer has not provided a copy of the entry summary…”, is insufficient. It is the broker’s responsibility to be able to make the requisite statement with certainty, on behalf of the protestant. As written, the statement leaves open the possibility that the importer did in fact provide a copy of the entry summary or equivalent documentation to another person or party. This failure to convey the requisite information in the statement is fatal to a claim under 19 U.S.C. §1520(d).

With respect to the declaration required under section 1520(d)(1), it is insufficient to merely assert that a claim is being filed under section 1520(d). The requirement that the specific declarations be made is necessary for Customs to be able to rely on the specific statements made in support of the claim. Without specific statements, Customs would be left without a means of holding the claimants accountable for false statements made in order to secure certain benefits.

The protestant takes the position that it is impossible to comply with the requirement in 19 U.S.C. §1520(d)(3), within the one-year time period, because the documentation Customs “may require” could not be known to the claimant until after the claim is filed. We do not agree that (d)(3) refers to unknown verification documentation that Customs may determine to be necessary upon review of the claim. Instead (d)(3) allowed Customs to require additional documentation by regulation, and such documentation is specified in 19 CFR 181.32. Thus, the information required is known to the importer at the time the claim is filed.

The statute and regulations require the claim to be filed within one year after the date of importation, and the claim must include the declaration, COs, and statements. If the information required is not included and not provided within the one-year period, the request filed is not a “claim” within the meaning of the statute, and therefore Customs has no authority to grant the refund.

The protestant asserts that the term “file” was written into the regulations, but is not required by the statute (pp. 12-13 of protestant’s 7/11/01 submission). To the contrary, the term “file” is included in the statute. The statute is consistent with Article 502 paragraph 3 of the NAFTA, which allows the importer to apply for a refund “on presentation of” the declaration, CO and other documentation.

The protestant argues that under the rules of statutory construction, Customs interpretation that both the declaration and CO must be submitted within one year after the date of importation, renders the requirement of one or the other meaningless or redundant because the CO is the “quintessential declaration that the goods qualify for NAFTA preference”. We do not agree that any statutory construction is necessary to interpret the statute. With respect to statutory construction, it is a well-established legal principle that the first step in interpreting a statute is to examine its text. United States v. Alvarez-Sanchez, 114 S.Ct. 1599,1603, 128 L.Ed.2d 319 (1994). Where the content of the statute is in “reasonably plain terms, that language must ordinarily be regarded as conclusive.” Negonsott v. Samuels, 507 U.S. 99, 113 S.Ct. 1119, 1122-23, 122 L.Ed.2d 457 (1993) (quoting Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 570, 102 S.Ct. 3245, 3249, 73 L.Ed.2d 973 (1982). “If the intent of Congress is clear, that is the end of the matter, for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.” Chevron USA Inc. v. United States, 467 U.S. 837, 842-43 (1984); see also Timex V.I. Inc. v. United States, 157 F.3d 879, 882 (Fed. Cir. 1998) (“To ascertain whether Congress had an intention on the precise question at issue, we employ the traditional tools of statutory construction. The first and foremost tool to be used is the statute’s text, giving it its plain meaning.” (internal quotes and citation omitted). This is so in the absence of a “clearly expressed legislative intent to the contrary….” Consumer Product Safety Commission v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980). We find the statutory language at issue to be clear and unambiguous.

The protestant takes the position that because under 19 U.S.C. §1520(c) only notice of the mistake of fact is required to be given to Customs in the one-year period subsequent to liquidation requirements, only notice could be required under 19 U.S.C. §1520(d), in the one-year period. The protestant asserts that the two statutory provisions should be read similarly. The protestant makes a similar argument with respect to 19 U.S.C. §1514. We do not agree, because the statutory language is different, with different requirements, and as stated above the language in section 1520(d) is clear and unambiguous.

The protestant also asserts that requiring the CO to be submitted within one year after the date of importation is inconsistent with Customs ACS NAFTA reconciliation program. Under the reconciliation program, a CO is not required to be submitted to Customs for a post-importation duty refund under 19 U.S.C. §1520(d). Any distinction between this 520(d) and the ACS NAFTA 520(d) reconciliation will be addressed in a protest pertaining to reconciliation.

Customs failed to provide the protestant with “written” notice of denial of its petition.

Under 19 CFR 181.33(d), the port director is required to give the importer written notice of the denial of the claim for a refund. In this case, the port director gave notice of denial of the claims via electronic message sent to the broker. Such message indicated the denial and reason therefore in “writing”. The regulations do not preclude such writing being forwarded electronically.

HOLDING:

The petitions for post-importation refunds under 19 U.S.C. §1520(d) were correctly denied.

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, 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 make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon
Acting Director
Commercial Rulings Division