HQ H290000
BON 1
OT:RR:CTF:ER
H290000 SMS
U.S. Customs and Border Protection
Port of Atlanta
157 Tradeport Drive
Atlanta, GA 30354
Attn: Barry R. Carter, Paralegal Specialist
Re: TIB Extension Request for TIB Entry Number J50-014XXXX-X Liquidated Damages Case: 20161704200292-01
Dear Port Director:
This is in reply to your correspondence dated, June 24, 2016, concerning a Temporary Importation Bond (“TIB”) Extension Request for TIB Entry Number J50-014XXXX-X. Please note that this ruling addresses only the issue of the untimely request for extension and not the applicability of liquidated damages or any petition for relief from those damages, or compliance with procedures in 19 C.F.R. § 172, which should be handled by the Port. We received your letter on September 7, 2017, our response follows.
FACTS:
On October 20, 2014, MDT Armor Corp (“MDT”) imported ten Land Rovers under TIB Entry Number J50-014XXXX-X. These vehicles were classified under the Harmonized Tariff Schedule of the United States (“HTSUS”) as 9813.00.0540. This TIB expired on October 7, 2015, and MDT failed to export or destroy one of the vehicles prior to such date. On June 7, 2016, MDT provided the Port of Atlanta with evidence that all ten vehicles had been exported. Nine of the ten vehicles were exported prior to the expiration of the TIB, and the final vehicle, bearing VIN number SALLDBLR8FA457669, was exported on November 14, 2015. On April 27, 2016, U.S. Customs and Border Protection (“CBP”) issued CBP Form 5955A, Notice of Penalty or Liquidated Damages Incurred and Demand for Payment, to MDT. On May 6, 2016, the Port of Atlanta’s Fines, Penalties & Forfeitures Officer (“the Port”) received a petition from Panmet Group, Inc., (“Panmet”) an agent acting on behalf of MDT. This petition contained a letter, dated May 3, 2016, requesting an extension for the TIB. There is no record of an Application for Extension of Bond for Temporary Importation, CBP Form 3173, having been received by the Port.
In its May 3, 2016 letter, Panmet contends that it submitted a timely TIB extension request, and that MDT was under the impression that the request had been processed by the Port. However, when the Port requested a copy of this request, Panmet explained that a copy was not made of the original submission. Instead, Panmet submitted email correspondences between MDT and Panmet, dated October 5, 2015, and Panmet and its broker, Atlanta’s Customs Broker, dated October 9, 2015, requesting the status of the new close date after its extension of TIB Entry Number J50-014XXXX-X. Panmet also submitted a copy of a November 2, 2015, e-mail to CBP requesting an update on the new close date after the extension of J50-014XXXX-X. In its May 3, 2016 request, Panmet explained that the vehicles would be exported in 2016, and extra time was needed in order to finish work on the vehicles. Your office received this letter on May 6, 2016. This request was then forwarded to our office on September 7, 2017.
ISSUE:
Whether the grant of an untimely request to extend a TIB is warranted.
LAW AND ANALYSIS:
The TIB provisions are found in U.S. Note 1(a) of Subchapter XIII, Chapter 98, HTSUS. This Note states, “[a]rticles described in the provisions of this subchapter, when not imported for sale or sale on approval, may be admitted into the United States without the payment of duty, under bond for their exportation within 1 year from the date of importation.” The U.S. Note provides that the 1-year period for exportation may be extended for one or more further periods which, when added to the initial year, do not exceed a total of 3 years. The CBP regulations pertaining to TIB’s are found in 19 C.F.R. § 10.31-10.40. CBP regulation 19 C.F.R. § 10.37 provides that extensions of the time for exportation of merchandise imported under a TIB may be granted by the appropriate Center director upon written application on CBP Form 3173. Section 10.37 also provides that any untimely requests for an extension of time for exportation are to be referred to CBP Headquarters for disposition.
Generally, extensions based upon untimely requests are granted only sparingly for extraordinary reasons, such as the death or serious illness of the employee responsible for making the request for extension (See, HRL 219659, dated July 8, 1987). Generally, extensions are granted when: (1) the articles covered by the entry remain in the country; (2) there is no evidence of use of the articles contrary to the terms of the bond; (3) the applicant is not a chronic violator; (4) there is no evidence of a lack of due diligence in complying with the law and regulations; and (5) there is a reasonable explanation of why the application was not timely filed. See Headquarters Ruling (“HQ”) H121389 (Aug. 29, 2011). H121389 cited to several examples, where by applying the above criteria, CBP has sanctioned untimely requests for extension when the importer provided a reasonable explanation for the untimely request. CBP has held that an extension was warranted when it was shown that the employee who was responsible for the TIB suffered the death of her husband. See H121389 (citing HQ 219659 (July 8, 1987)). An extension was also warranted when the request was received prior to the demand for liquidated damages, and the petitioner explained that the merchandise remained unexpectedly warehoused due to political unrest in the expected country of export. See HQ 223474 (Apr. 3, 1992). Conversely, CBP has not granted relief in situations where the TIB expired due to loss of a file and personnel change. See H121389 (citing HQ 223699 (May 15, 1992)). Nor did CBP grant relief when the responsible employee was too busy with other tasks that they did not keep track of the TIB expiration. See H121389 (citing HQ 222800 (Feb. 4, 1991)).
In HQ H121389, CBP denied a TIB extension request when the circumstances exhibited a lack of due diligence. CBP examined the petitioner’s arguments and found each insufficient to grant its TIB extension request. First, the petitioner explained that a personnel change was the cause of its tardiness. However, as determined in HQ 223699, this was not enough to warrant granting an extension as it was not an extraordinary circumstance, but an occurrence that is to be expected in most businesses. Second, petitioner argued that its staff had no recollection of being advised by the surety company of its bond’s expiration, options, or regulatory obligations. Again, this was not sufficient to demonstrate an extraordinary circumstance, as ensuring compliance with CBP regulations and requirements is the responsibility of the importer, and reliance on a different entity to ensure compliance demonstrated a lack of due diligence. See 19 U.S.C. § 1484(a). Third, the petitioner stated that it relocated its facilities but failed to explain how this event caused it to not file for an extension of its TIB. Lastly, the petitioner explained it first received notice of issues with its TIB through CBP’s Notice of Penalty or Liquidated Damages Incurred & Demand for Payment. However, as there is no requirement for CBP to give notice of a TIB’s expiration, this was not a reasonable ground upon which to grant an extension. Accordingly, CBP found that there was a lack of sufficient evidence to support the grant of the untimely request to extend the TIB.
In this instance, an extension based on an untimely request is not warranted. Applying CBP’s general requirements for granting an untimely TIB extension request to this case, there is no evidence that the use of the vehicles was contrary to the terms of the bond or that MDT is a chronic violator. However, the vehicle covered by the entry did remain in the country and there is evidence of a lack of due diligence exercised by MDT, without a reasonable explanation of why the application was not timely filed. While MDT explains that it was under the impression that a timely extension request was filed, it provided no evidence that a written application on CBP Form 3173 was ever filed, as required under 19 C.F.R. § 10.37. Additionally, as in HQ H121389, MDT’s explanations are not sufficient to demonstrate an extraordinary circumstance existed or that it ensured compliance with CBP regulations and requirements, as is its responsibility. Rather, its reliance on a different entity to ensure compliance demonstrates a lack of due diligence. For instance, MDT e-mailed its agent on October 5, 2015, two days prior to the expiration of the TIB, and Panmet e-mailed the broker on October 9, 2017, two days after its expiration, seeking the new close date of the TIB. Approximately a month after the TIB’s expiration, on November 2, 2015, Panmet e-mailed CBP to determine the status of the TIB close date. However, no other correspondences or documentation were provided. The responses to these e-mails were not provided, and it does not appear that MDT inquired further to confirm that the purported request was actually filed and received. Rather, it was not until MDT received the Notice of Penalty or Liquidated Damages Incurred & Demand for Payment that it provided a letter request for an extension. As such, MDT did not provide any reasonable explanation as to why it has no record of its purported timely filing. Accordingly, there is a lack of sufficient evidence to support a finding of an extraordinary circumstance that prevented the timely filing of a request to extend the TIB.
HOLDING:
Sufficient evidence has not been provided to support the granting of the untimely filed request to extend the TIB in this case. Accordingly, the request to grant an extension of the temporary importation period under 19 C.F.R. § 10.37 is denied. Please inform the importer of our decision.
Please note that 19 C.F.R. § 177.9(b) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a CBP field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.”
Sincerely,
Gail G. Kan, Chief Entry Process & Duty Refunds Branch