OT:RR:CTF:ER H239257 RDC
Port Director
U.S. Customs & Border Protection
1100 Raymond Blvd.
Suite 402
Newark, N.J. 07102
Att: Protest and Control
Re: Sterling International Mercantile; internal advice on protest 4601-12-102142
Dear Port Director:
This is in response to your request for internal advice with regard to protest 4601-12-102142 filed by Sterling International Mercantile (Sterling) on October 24, 2012. Sterling protests the refusal to refund duties deposited on an entry of disposable lighters that were denied entry.
FACTS:
After the lighters were entered on November 12, 2011, and released, the Consumer Product Safety Commission (CPSC) requested that CBP issue a notice of redelivery. According to this request the lighters were of a type that are subject to the requirements of 16 C.F.R. § 1210.17(b), among which are:
At least 30 days before it first imports or distributes in commerce any model of lighter subject to the standard, every manufacturer and importer must provide a written report to the Division of Regulatory Management, Consumer Product Safety Commission, . . . .
16 C.F.R. § 1210.17(b). The CPSC had no record of the required report. The lighters were redelivered to CBP custody and subsequently exported to Canada. CBP liquidated the entry on September 21, 2012, without refunding any duties. Sterling now protests the liquidation of the entry of lighters without refund of the duties paid, which Sterling argues that it is entitled to per 19 U.S.C. § 1558. On February 21, 2013, you requested guidance from us with respect to whether the fact that the CPSC required the exportation of the lighters would result in the refund of duties to the importer under 19 U.S.C. § 1558.
ISSUE:
May duties be refunded per 19 U.S.C. § 1558 when lighters are denied entry because of CPSC requirements and then the lighters are exported?
LAW AND ANALYSIS:
The protest is timely filed per 19 U.S.C. § 1514, within 180 days of liquidation. The entry was liquidated on September 21, 2012, and the instant protest was filed on October 24, 2012. Moreover, the decision protested, the refusal to refund duty, is protestable per 19 U.S.C. § 1514(a)(5). However, we find that the protestant did not support its request for further review as required by 19 C.F.R. § 174.24 because it did not provide a statement advising the basis of further review or describing the facts and law justifying its request further review. However, the port is requesting guidance as to the resolution of this issue. The port explained that although it intended to deny the protest, since CBP enforced CPSC safety requirements resulting in the exportation of the disposable lighters, it is looking for our final determination. Accordingly, this response constitutes internal advice per 19 C.F.R. § 177.11.
Section 1558 of Title 19, United States Code prohibits the refund of duties after goods are released unless the goods are eligible for drawback (see 19 U.S.C. § 1313), or entered for warehouse and destroyed (see 19 U.S.C. § 1557). In this case, there is no claim for drawback in accordance with the drawback statute and there is no assertion or evidence that the merchandise has been entered for warehouse. Accordingly, the only exception that might apply is the following:
When prohibited articles have been regularly entered in good faith and are subsequently exported or destroyed pursuant to a law of the United States and under such regulations as the Secretary of the Treasury may prescribe; . . . . and
19 U.S.C. § 1558(a)(2) (emphasis added). Under the only applicable exception refund of duty is made only for prohibited goods. "In order to recover under section 1558(a)(2), the protestant must establish by a preponderance of evidence that the merchandise constituted a prohibited article." See HQ 225115 (March 17, 1995) (citing Glazers Wholesale Drug Co, Inc. v. United States, 51 Cust. Ct. 39, 41 (1963)).
In HRL W231396 (February 5, 2007) we held that no refund of duties applied to scooters that were denied admission because they lacked the required Environmental Protection Agency labels. In that case the scooters were restricted goods, not prohibited goods, so 19 U.S.C. § 1558 did not apply. In HRL W231396 we said that:
The distinction between merchandise that is prohibited from that which is restricted is well settled. (See HRL 221669, 9/3/1991). Prohibited merchandise is that which cannot be lawfully imported 'into the United States under any circumstances. Restricted merchandise is that which may be altered to become conforming with U.S. requirements and then may be lawfully entered. (See A.N. Deringer, Inc. v. United States, 84 Cust. Ct. 196, C.D. 4858 (1980); aff'd 593 F.2d 1015 (1979 Cust. Ct. Pat. App.); HRL 225115, 3/171995). In Zungshen's case, the scooters could have been lawfully entered into the U.S. with the proper labels affixed and accompanied by the proper EPA certification. Since the circumstances of the scooters' importation could have been changed to render the scooters admissible, they fall into the category of restricted merchandise and no refund of duty is permitted. (See Columbia Co. v. United States, 9 Cust. Ct. 179 (1942); C.D. 688, which held that "where Chinese wine was not per se inadmissible, but was subject to detention until packed in containers which complied with the internal revenue regulations, it was not prohibited merchandise.")
Accordingly unless a good is prohibited under any circumstances from entering the United States, 19 U.S.C. § 1558(a)(2) does not apply. Since the lighters at issue could have been lawfully entered into the United States if the required report had been filed with the CPSC, the lighters are "restricted merchandise." Since the lighters are restricted goods, CBP is prohibited from refunding any duties deposited for this entry.
HOLDING:
No duties may be refunded per 19 U.S.C. § 1558 when lighters are refused admission by CPSC for failure to file the required report and then exported because the lighters are restricted goods and not prohibited goods.
Sixty days from the date of the decision Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division