CLA-2 RR:CR:SM 562582 ALH
Area Port Director
U.S. Customs Service
#1 La Puntilla Street, U.S. Customhouse
San Juan, Puerto Rico 00901
RE: Protest No. 4909-02-100007; NAFTA Certificate of Origin; Beetle and Jetta Motor Vehicles; 19 CFR Part 181
Dear Port Director:
This is a decision on the Protest and Application for Further Review filed by Customs Broker Eric A. Guillermety Pérez on behalf of Volkswagon de Mexico S.A. de CV against the port’s decision to deny North American Free Trade Agreement (“NAFTA”) preferential tariff treatment for certain vehicles from Mexico. The Protest was filed on February 20, 2002, with regard to entry No. XXX-XXXXXX6-7 dated October 16, 2001. The decision to deny NAFTA preferential treatment was based on the port’s finding that the broker was not in possession of a valid NAFTA Certificate of Origin at the time of claiming NAFTA eligibility.
FACTS:
On October 15, 2001, seventy-nine units of Beetle and Jetta motor vehicles were imported from Mexico. The exporter was Volkswagon de Mexico S.A. de CV. The units were entered under No. XXX-XXXXXX6-7 on October 16, 2001, with the “MX” prefix, thereby claiming the NAFTA preferential duty rate. On November 20, 2001, U.S. Customs Service (“Customs”) requested the NAFTA Certificate of Origin using Customs Form 28 (CF 28). In response, the broker, Eric A. Guillermety Pérez, sent a letter on November 27, 2001, to the importer, Euroclass Motors, Inc., requesting the certificate within 30 days of the notice. On December 12, 2001, the broker filed the certificate covering the blanket period from 01/01/2002 to 12/31/2002 with a signature date of 01/01/2002. A cover letter dated December 11, 2001, was attached to the certificate. The cover letter stated that the certificate covered NAFTA Motor Vehicle Averaging Election for Fiscal Year 2002.
On December 13, 2001, Customs issued to the broker a Notice of Action (CF-29) of a rate advance based on a failure to provide a valid NAFTA Certificate of Origin. The explanation provided for on CF-29 states, “The Certificate of Origin received by this office is not acceptable for the following reasons: the dates on the blanket certificate do not cover date of entry.” On December 18, 2001, the broker submitted a second Certificate of Origin covering the blanket period from 01/01/2001 to 12/31/2001. The certificate reflects that it was signed on 01/01/2001 by Mr. Fausto Lopez who holds the position of Manager, Free Trade Agreements at Volkswagon de Mexico S.A. de C.V. Subsequently, the entry was liquidated on December 28, 2001, as dutiable at 2.5% based upon the port’s determination that the NAFTA Certificate of Origin was not properly filed. A protest was timely filed by the broker on February 20, 2002.
ISSUE:
Whether the importer had the NAFTA Certificate of Origin in its possession at the time a NAFTA preferential duty rate was claimed on the units subject to this protest, as required by 19 CFR 181.21(a).
LAW AND ANALYSIS:
Part 181, Customs Regulations (19 CFR Part 181), implements the duty preference provisions of NAFTA. Subpart C of 19 CFR Part 181 implements the import requirements under NAFTA. The pertinent sections of the regulations to this case are as follows:
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 the 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.
Section 181.22(b), Customs Regulations (19 CFR 181.22(b)), states, in pertinent part, “an importer who claims preferential tariff treatment …shall provide, at the request of the Port Director, a copy of each Certificate of Origin pertaining to the good….”
Section 181.22(c), Customs Regulations (19 CFR 181.22(c)) states, in pertinent part, “if the port director determines that a Certificate is ...defective... the importer shall be given a period of not less than five working days to submit a corrected Certificate.”
Section 181.23(a), Customs Regulations (19 CFR 181.23(a)), provides that if the importer fails to comply with any requirement under this part, including submission of a Certificate of Origin under §181.22(b) or submission of a corrected Certificate under §181.22(c), the port director may deny preferential tariff treatment to the imported good.
The requirements of 19 CFR Part 181 are further clarified in Customs Directive 3810-014 dated June 28, 1999, (superceding Directive 099 3280-15) which provides guidelines to Customs officers regarding the NAFTA Certificate of Origin. The directive states, in pertinent part, that, “Customs shall give importers a reasonable amount of time to submit a copy of the Certificate, generally 30 days.... If the Certificate contains inadequate information, is unsigned, or is otherwise defective on its face, the Import Specialist will instruct the importer to submit a corrected Certificate.... Certificates that are not signed and dated, or are otherwise defective on their face, are not valid. The Import Specialist shall notify the importer via a CF 29 to submit a corrected copy of the Certificate or the claim for preferential tariff treatment will be denied. The importer must be given at least 5 working days from the date of mailing to submit a corrected Certificate... Failure to provide a valid Certificate of Origin to Customs will result in denial of the NAFTA claim.”
In the present case, the importer made a written declaration that the units qualified for preferential tariff treatment for a good under NAFTA by including on the entry summary the symbol “MX” for a good of Mexico. Customs Regulations (19 CFR 181.21(a)). On November 20, 2001, Customs requested from the broker the supporting NAFTA Certificate of Origin. Customs Regulations (19 CFR 181.22(b)). The broker sent on November 27, 2001, a request to the importer, Euroclass Motors, Inc., for a copy of the certificate. On December 12, 2001, the broker filed a Customs Form 434, NAFTA Certificate of Origin, with the port. Customs Regulations (19 CFR 181.22(b)(1)). The certificate covered a blanket period from 01/01/2002 to12/21/2002 with a signature date of 01/01/2002.
On December 13, 2001, Customs informed the broker that the certificate covered the wrong period of time. As stated by the port, the broker submitted a second blanket Certificate on December 18, 2001, covering the correct time period for the entry under consideration here.
In compliance with 19 CFR 181.22(b)(2), the second certificate was signed by the exporter, Mr. Fausto Lopez who holds the position of Manager, Free Trade Agreements at Volkswagon de Mexico S.A. de CV. The form was completed in English as required by 19 CFR 181.22(b)(3). The certificate covered a blanket period from 01/01/2001 to12/21/2001 with a signature date of 01/01/2001. Customs Regulations (19 CFR 181.22(b)(5)). Based on the totality of the evidence submitted, the facts support the determination that the importer had the certificate in its possession at the time of the NAFTA preference claim on October 16, 2001.
HOLDING:
Based on the information in the record, Customs is satisfied that the importer had in its possession at the time of the NAFTA preference claim a Certificate of Origin meeting all the requirements of 19 CFR 181.22(b). 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,
Myles B. Harmon
Director, Commercial Rulings Division