CLA-2 RR:CR:SM 562134 TJM
TARIFF NO: 2520.10.0000
Area Port Director
US Customs Service
2nd & Chestnut Street
Philadelphia PA 19106
RE: AFR; Protests 1101-01-100060 and 1101-01-100057; NAFTA Certificate of Origin; power of attorney; wholly owned subsidiary; parent company; authority; signor; agency; crude rough stone gypsum; 19 CFR § 181.22(b)(2).
Dear Area Port Director:
The above referenced protests were forwarded to this office for further review. We have considered the evidence provided, and the points raised by your office and the protestant. Our decision follows.
FACTS:
Protest number 1101-01-100060 covers 12 entries made by Georgia-Pacific Gypsum Corp. of Atlanta, GA, between January 18, 2000, and September 16, 2000. The importer claimed NAFTA preferential treatment (CA 2520.10.0000). On October 4, 2000, your office issued a Notice of Action (CF 29) to the importer stating that the:
Blanket Certificate of Origin to support the NAFTA claim on the following entries has been determined to be invalid because the signatory is not the exporter of record. . . .This constitutes a C/O denial.
These entries were liquidated on November 3, 2000, with a rate advance. The importer timely filed a protest on January 22, 2001.
Protest number 1101-01-100057 covers an entry made by the same importer on July 13, 2000. The importer claimed NAFTA preferential treatment (CA 2520.10.0000). On September 28, 2000, your office issued a Notice of Action (CF 29) to the importer stating that:
The Certificate of Origin received by this office is not acceptable for the following reasons: A Certificate of Origin must be signed by the exporter or by someone with power of attorney granted by the exporter. After various telephone conversations with GP Gypsum in Atlanta, it was determined that the signatory was not the exporter and did not have power of attorney. As a result, the Certificate is invalid and the NAFTA claim is denied. C/O Denial.
The entry was liquidated on October 13, 2000, with a rate advance. The importer filed a timely protest on January 12, 2001.
The blanket NAFTA Certificate of Origin covers the period from January 1, 2000, to December 31, 2000. The Certificate of Origin was signed by Dave Horton and dated October 15, 1999. The “Company” is listed as Georgia-Pacific Canada, Inc. The signor’s “Title” is listed as Controller. The Georgia-Pacific Canada, Inc., is listed as the producer and the exporter.
Your office contends that the Certificate of Origin submitted by the importer is invalid because it was not signed by the exporter or a person with a power of attorney. Rather, it was signed by Dave Horton, who is the Controller of the importing company of record, Georgia-Pacific Gypsum, Inc. The importing company and the Canadian exporting company (Georgia-Pacific Canada, Inc.) are both wholly owned subsidiaries of Georgia-Pacific Corporation of Atlanta, Georgia. Your office notes that the affidavit provided by the Canadian exporting company to prove that the signor had authority to sign the Certificate of Origin is moot because the affidavit was signed after the date of the NAFTA claim.
The protestant, on the other hand, contends that the signor of the Certificate of Origin had authority from the exporter to sign the Certificate. Accompanying the protest, the protestant submitted an affidavit signed on November 29, 2000, (which is after the date of the NAFTA claim) by David Fleiner, President, Georgia-Pacific Canada, Inc. The affidavit states, in pertinent part, that:
The undersigned, David R. Fleiner, as President of Georgia-Pacific Canada Inc., pursuant to the authority granted to me by the Board of Directors and the Bylaws of said company, hereby affirms the authority of David Horton, Controller of G-P [Georgia-Pacific] Gypsum Corporation to act on behalf of Georgia-Pacific Canada, Inc., specifically:
To execute and deliver Certificates of Origin by and on behalf of Georgia-Pacific Canada, Inc.; and
To execute any document, statements or notices related to the export from Canada or the import to the United States of any good produced by Georgia-Pacific Canada, Inc.
In his capacity as Controller of G-P Gypsum, David Horton has knowledge of and information concerning the daily operations of Georgia-Pacific Canada operations, including manufacture, sales and shipment. He has responsibility to gather and report financial and other operating information regarding Georgia-Pacific Canada as a wholly owned subsidiary of Georgia-Pacific Corporation, which is operated in conjunction with G-P Gypsum Corporation.
I further affirm that Georgia-Pacific Canada Inc. and G-P Gypsum Corporation are wholly owned subsidiaries of Georgia-Pacific Corporation.
This office discussed the case with counsel on February 15, 2002, and clarified the language of the affidavit. On February 20, 2002, this office received a revised affidavit that is identical to the above affidavit by David R. Fleiner, except for the language that “[I] hereby affirm that during the years of 1999 and 2000 David Horton, Controller of G-P Gypsum Corporation was authorized to act on behalf of Georgia Pacific Canada, Inc. . . .”
ISSUE:
Whether the denial of the NAFTA claim as described above is consistent with Customs laws and regulations.
LAW AND ANALYSIS:
I. Possession At The Time Of The Claim
Section 181.21(a), Customs Regulations (19 CFR 181.21(a)) states, in pertinent part, that:
[I]n connection with a claim for preferential tariff treatment for a good under NAFTA, the U.S. importer shall make a written declaration that the good qualifies for such treatment. . . .[t]he declaration shall be based on a complete and properly executed original Certificate of Origin, or copy thereof, which is in the possession of the importer and which covers the good being imported. (Emphasis added)
In the instant case, whether the importer possessed a Certificate of Origin at the time of the claim is not at issue. The issue is whether the Certificate was complete and properly executed.
II. Valid Certificate of Origin
19 C.F.R. § 181.21(a) requires that a NAFTA claim shall be based on a complete and properly executed original Certificate of Origin, or copy thereof. Section 181.22(c), Customs Regulations (19 CFR § 181.22(c)), states, in pertinent part, that a Certificate of Origin shall be accepted by the port director as valid, provided that “the Certificate is completed, signed and dated in accordance with the requirements of paragraph (b) of this section.” Section 181.22(b) requires that the Certificate of Origin must pertain to the goods entered, be on CF 434 or another approved form, shall be signed by the exporter or its agent having knowledge of the facts, and shall be in English or the language of the exporting country.
III. Authority to Execute Certificate of Origin
Specifically, section 181.22(b)(2), Customs Regulations (19 C.F.R. § 181.22(b)(2)), states that the Certificate of Origin “[s]hall be signed by the exporter or by the exporter’s authorized agent having knowledge of the relevant facts.”
In the instant case, the record before us shows that the signor of the Certificate is not an officer of the immediate exporting company – Georgia Pacific Canada, Inc. He is instead the Controller of Georgia Pacific Gypsum Corp., the importer of record. However, in this case, the two companies, the exporter and the importer are wholly owned subsidiaries of the parent company – Georgia Pacific Corporation. Also, the protestant contends that exporting company (Georgia Pacific Canada Inc.) and the importing company (Georgia Pacific Gypsum) conduct business together. The issue remains whether the signor of the Certificate qualifies as an “agent” of the Canadian exporter having “knowledge of the facts” as required by 19 C.F.R. § 181.22(b)(2).
Under Customs Regulations, an officer of the exporting corporation who has knowledge of the relevant facts could sign the Certificate of Origin because he or she is acting as the authorized agent of the exporter. As a basic principle of corporate law, “officers of a private corporation do not have a franchise in their offices; they are agents and representatives of the corporation.” 18 C.J.S. Corporations § 468 (1990). Furthermore, employment is prima facie evidence of an agency relationship: “The nature of the business of a corporation determines a general agent’s authority, and prima facie it is coextensive with his employment.” Alternatively, one of the ways an exporting corporation can establish an agency relationship with another person who has knowledge of the relevant facts to complete Customs documents by executing a power of attorney. See 19 C.F.R. § 141.31 et. seq. See also section 648 of the North Amerian Free Trade Agreement (NAFTA) Implementation Act, Pub. L. No. 103-182, 107 Stat. 2057, 2207 (Dec. 8, 1993) (expanding the term “customs business” to include preparation of documents or forms in any format intended to be filed with the Customs Service in furtherance of such activities).
The affidavit submitted by the protestant claims that the signor of the Certificate of Origin in question had the authority and knowledge to execute the Certificate for the exporter. In the instant case, Georgia-Pacific Gypsum Corp. is legally separate and distinct from Georgia-Pacific Canada, Inc. These two companies are also legally distinct and separate from Georgia-Pacific Corporation of Atlanta, Georgia, the parent company. However, the above described fact that the signor of the Certificate was not an employee of the exporting company does not necessarily preclude him from being an agent of the exporter if it can be shown that a valid agency relationship existed at the time the Certificate was executed.
IV. Additional Submissions in a Protest/Further Review
Upon further review in a protest, 19 C.F.R. § 174.28 allows the submission of additional arguments/grounds and alternative claims until the final disposition of the protest. It has been the practice of this office to allow protestant to submit additional evidence in a protest. See for example, HRL 112667, dated May 25, 1993; HRL 224397, dated March 8, 1994; HRL 224118, dated July 26, 1993; HRL 562045, dated December 4, 2001; HRL 561991, dated March 29, 2001. Therefore, the submission and consideration of the revised affidavit in this case is permissible.
V. Analysis
In the instant case, the affidavit by the President of the Georgia-Pacific Canada, Inc., affirms that the signor of the NAFTA Certificate of Origin had the authority from the Canadian exporter to act on behalf of the exporter, to sign the NAFTA Certificate and that the agent had knowledge of the relevant facts to the NAFTA-origin claim. We are unaware of any evidence which would undermine the credibility of the affidavit, which represents that the signor of the NAFTA Certificate of Origin was authorized to act as an agent for the Canadian exporting company.
HOLDING:
Based on the facts provided and for the foregoing reasons, it is our opinion that the signor of the NAFTA Certificate of Origin, as required by Customs Regulations, had the authority from the Canadian exporting company to sign the NAFTA Certificate of Origin and that the signor had knowledge of the relevant facts. Therefore, the protest should be granted in full.
This decision should be mailed by your office to the protestant no later than sixty days from the date of this letter. On that date, the Office of Regulations & Rulings will take steps to 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 means of public distribution.
Sincerely,
John Durant
Director
Commercial Rulings Division