RR:IT:VA 548367er
Interim Port Director
Los Angeles – Long Beach Seaport
U. S. Customs and Border Protection
301 E. Ocean Blvd.
Suite 1400
Long Beach, CA 90802
RE: Application for Further Review of Protest No. 2704-03-101293; Price Based Safeguards.
Dear Sir:
This is in response to the above-referenced application for further review of protest dated July 10, 2003, which was submitted to your office on June 2, 2003, by counsel on behalf of ConAgra-AMH (“ConAgra”).
FACTS:
An additional duty of $0.21 per kilogram was assessed on frozen boneless beef from Australia under HTSUS 9404.02.34, which covers beef valued at $1.50 per kilo or more but less than $1.70 per kilo. You state that the value applied to determine this classification was an FOB value of $1.65 per kilo. Counsel claims that Article 5 of the Agreement on Agriculture, Uruguay Round Agreements Act, requires CIF values to be used in applying “price-based” safeguard duties in Heading 9904. In this instance, the CIF price amounts to approximately $1.80 per kilo, which, according to counsel, results in classification in 9904.02.35, a provision that calls for no additional duty. Counsel additionally provided a copy of a letter dated October 31, 2000, from the Director, Trade Programs, stating that the CIF value is needed for classification purposes, and the FOB value is necessary as the dutiable value.
ISSUE:
Whether Customs should use FOB or CIF prices in the administration of price-based Special Safeguard (“SSG”) duties for the subject merchandise?
LAW AND ANALYSIS:
Initially, we note that the protest was timely filed pursuant to 19 U.S.C. 1514(c).
The United States imposes additional SSG duties on certain agricultural goods pursuant to Article 5 of the Uruguay Round’s Agreement on Agriculture. These duties are imposed if the price at which a product enters falls below a specified trigger price, or if the volume of such imports exceeds a specified trigger level. For the United States the schedule of agricultural goods and the SSGs for those goods are set out in subchapter IV of Chapter 99, HTSUS.
Appraised value for imports into the United States is normally reported and calculated on an FOB basis, with freight reported separately. The procedures for assessment of price-based SSGs as set out in Article 5 are based on CIF prices, both for the initial determination of trigger prices and for the price of each shipment.
As pointed out by counsel, the correct means of reporting SSG duties was the subject of an inquiry in November 1999 from counsel to the Director of Trade Programs at Customs. In October 2000, the Director of Trade Programs issued a letter to counsel in which it was determined that the CIF price should be used for purposes of administering SSGs. Counsel included a copy of that letter with its memorandum in support of its protest.
Based on the foregoing, we find that for the subject merchandise the CIF price should be used for administering SSGs. Accordingly, in applying the CIF price, the value per kilogram is greater than $1.70 and therefore the classification to be used is 9904.02.35.
HOLDING:
For the subject merchandise, Customs should use CIF prices in the administration of price-based Special Safeguard (“SSG”) duties. You are directed to grant this protest.
In accordance with section 3A(ll)(b), Customs Directive 099 3550-065, dated August 4, 1993, this decision should be mailed by your office to Protestant no later than sixty days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to the 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 to the public via the Diskette Subscription Service, the Freedom of Information Act and other public access channels.
Sincerely,
Virginia L. Brown
Chief, Value Branch