OT:RR:CTF:VS H303451 CMR
Alice Buchanan
Apparel, Footwear & Textiles Center
Assistant Center Director
U.S. Customs and Border Protection
555 Battery Street, Room 433
San Francisco, CA 94111
RE: Application for Further Review of Protest 1704-18-100177; Denial of § 1520(d) claim; Origin certification
Dear CEE Director:
This is in response to the Application for Further Review (AFR) for Protest 1704-18-100177, filed by Geodis, on behalf of their client, Chico’s FAS, Inc., (the protestant) against your decision to deny a post-importation claim for preferential tariff treatment under the United States-Korea Free Trade Agreement (“UKFTA”) for certain women’s knit garments.
FACTS:
The protestant’s merchandise at issue was admitted into a Foreign Trade Zone (FTZ) under nine different Customs and Border Protection (CBP) Form 214 Zone Admission numbers involving sixteen different commercial invoices. Subsequently, the merchandise was entered into the customs territory of the United States from the FTZ in seven separate entries. The protestant, through their broker, made a post-importation claim for preferential treatment of certain merchandise entered under the seven entries as eligible for the UKFTA, under 19 U.S.C. § 1520(d). The § 1520(d) claim was received by U.S. Customs and Border Protection (CBP) on April 25, 2017, and was denied in full on January 3, 2018. The Protest was timely filed on April 4, 2018, with the AFR filed on April 27, 2018.
The dates of importation for the merchandise at issue, as reflected on the nine CBP Form 214s, were February 12, 2016 (two admissions); March 18, 2016; April 8, 2016 (two admissions); April 15, 2016; April 22, 2016; April 29, 2016; and, May 1, 2016.
In submitting the § 1520(d) claim, the protestant’s broker provided documentation to support the claim, including documents entitled, “U.S.-Korea Free Trade Certification.” On only some of these certifications, the classification of the merchandise was changed from a subheading of 6110, Harmonized Tariff Schedule of the United States (HTSUS), by drawing a line through the classification typed on the document and writing by hand a subheading of 6106, HTSUS, onto the form. However, the documentation submitted also included commercial invoices, flow charts of the fabric production in the Republic of Korea (hereinafter, Korea); origin declarations for the yarns used in the production of the fabrics used to produce the garments; origin declarations for the fabrics used to produce the garments, including declarations from the fabric finishers (including dyeing and printing); textile declarations of origin and certificates of origin, signed by the exporter; and, copies of the freight forwarder’s cargo receipts. The CEE denied the § 1520(d) claim citing HTS discrepancies on certificates of origin and quantity discrepancies between commercial invoices and the CBP Form 7501.
In response to a request from this office, protestant’s broker submitted additional production records for representative styles. The documents for each style included Chico’s purchase order wherein the factory, and its location, is identified; a bill of materials; a factory profile; a copy of the contract between the factory and the vendor; a certificate of garment delivery; proof of payment to the factory by the vendor; garment worksheets; cutting information, including a cutting summary and daily cutting report; sewing information, including a sewing summary, sewing report, and sewing summary report; finishing report (summary, ironing, inspecting, polybag and inspecting); time card statement and time cards for the same time period; proof of payment of the workers; and a quality assurance report for the merchandise prepared by a third party (agent).
ISSUE:
Whether the § 1520(d) claim was properly denied.
LAW AND ANALYSIS:
Section 520(d), Tariff Act of 1930, as amended (19 U.S.C. § 1520(d)), provides, in relevant part, as follows:
Notwithstanding the fact that a valid protest was not filed, the Customs Service may, in accordance with regulations prescribed by the Secretary, reliquidate an entry to refund any excess duties (including any merchandise processing fees) paid on a good qualifying under the rules of origin set out in . . . section 202 of the United States – Korea Free Trade Agreement Implementation Act, . . . for which no claim for preferential tariff treatment was made at the time of importation if the importer, within 1 year after the date of importation, files, in accordance with those regulations, a claim that includes –
(1) a written declaration that the good qualified under the applicable rules at the time of importation; (2) copies of all applicable NAFTA Certificates of Origin (as defined in section 1508(b)(1) of this title), or other certificates or certifications of origin, as the case may be; and (3) such other documentation and information relating to the importation of the goods as the Customs Service may require.
[Bold added.]
The pertinent CBP regulations implementing 19 U.S.C. § 1520(d) for purposes of the UKFTA, may be found at 19 C.F.R. §§ 10.1010 through 10.1012. Section 10.1010 provides:
Notwithstanding any other available remedy, where a good would have qualified as an originating good when it was imported into the United States but no claim for preferential tariff treatment was made, the importer of that good may file a claim for a refund of any excess duties at any time within one year after the date of importation of the good in accordance with the procedures set forth in §10.1011 of this subpart. Subject to the provisions of §10.1008 of this subpart, CBP may refund any excess duties by liquidation or reliquidation of the entry covering the good in accordance with §10.1012(c) of this subpart. [Bold added.]
Section 10.1011 sets forth the filing procedures for making a post-importation claim for preferential tariff treatment under the UKFTA. With regard to the contents of a post-importation claim for a refund of duties filed with CBP at a port of entry, or electronically, the regulation requires, at § 10.1011(b), the presentation to CBP of the following:
(1) A written or electronic declaration or statement stating that the good was an originating good at the time of importation and setting forth the number and date of the entry or entries covering the good;
(2) A copy of a written or electronic certification prepared in accordance with §10.1004 of this subpart if a certification forms the basis for the claim, or other information demonstrating that the good qualifies for preferential tariff treatment;
(3) A written statement indicating whether the importer of the good provided a copy of the entry summary or equivalent documentation to any other person. If such documentation was so provided, the statement must identify each recipient by name, CBP identification number, and address and must specify the date on which the documentation was provided; and
(4) A written statement indicating whether or not any person has filed a protest relating to the good under any provision of law; and if any such protest has been filed, the statement must identify the protest by number and date.
[Bold added.]
In Headquarters Ruling Letter (HQ) H275567, dated May 8, 2018, CBP stated that “date of importation” means:
In the case of merchandise imported otherwise than by vessel, the date on which
the merchandise arrives within the Customs territory of the United States. In the case of merchandise imported by vessel, “date of importation” means the date on which the vessel arrives within the limits of a port in the United States with intent then and there to unlade such merchandise.
19 C.F.R. § 101.1. The ruling further stated that:
. . . the FTZ regulations define foreign merchandise as: “imported merchandise which has not been properly released from Customs custody in Customs territory.” 19 C.F.R. § 146.1 (emphasis added). Therefore, prior to its admission into the FTZ, the merchandise has been “imported,” but it simply has not been entered into the Customs territory of the United States.
See also, HQ H282601, dated September 18, 2018.
The § 1520(d) claim at issue was received by CBP on April 25, 2017. The language of 19 U.S.C. § 1520(d) states that an importer must file a claim for a refund of any excess duties at any time within one year after the date of importation of the merchandise. The § 1520(d) claim fails with respect to merchandise imported into the United States prior to April 25, 2016, as it fails to meet the one-year from the date of importation filing requirement. The § 1520(d) claim was timely only with regard to the garments which were imported on April 29, 2016, and May 1, 2016, and subsequently entered into the United States from the FTZ in the entries at issue. Therefore, for garments entered prior to April 25, 2016, the § 1520(d) claim was properly denied.
With regard to the CBP Form 214 filed for garments imported on April 29, 2016, the commercial invoice indicates the garments contained in the FTZ admission were classified within subheadings of 6106.20.2010, HTSUSA. The “Certificate of Origin, Korea-U.S. Free Trade Agreement” document associated with these garments also indicates the garments were classified in subheading 6106.20.2010, HTSUSA. With regard to the CBP Form 214 filed for garments imported on May 1, 2016, the commercial invoice indicates the garments were classified in subheading 6110.30.3059, HTSUSA. The “U.S.-Korea Free Trade Certification” document associated with these garments indicates the garments were classified in subheading 6110.30.3059, HTSUSA.
With regard to the garments for which the § 1520(d) claim was timely filed, i.e., the garments imported on April 29, 2016 and May 1, 2016, and entered into the FTZ, there is no need to address handwritten changes to the classification of the merchandise indicated on the certifications provided with the entries. No handwritten changes appear on the certifications for these garments. Further, a review of the documentation provided by the protestant supports the claim that these garments qualify for preferential tariff treatment under the UKFTA.
HOLDING:
This protest is allowed in part, and denied in part. For garments imported on April 29, 2016 and May 1, 2016, the § 1520(d) claim should be allowed, provided the importer can provide the CEE with the information necessary to substantiate that the garments in the entries were from these importations. The § 1520(d) claim was properly denied for garments imported prior to April 25, 2016.
In accordance with the Protest/Petition Processing Handbook (CIS HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel, and to the public on the Customs Rulings Online Search System (CROSS) at
https://rulings.cbp.gov/ which can be found on the U.S. Customs and Border Protection website at http://www.cbp.gov and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division