OT:RR:CTF:VS H317381 CMR
Apparel, Footwear and Textile Center of Excellence
CBP San Francisco Field Office
555 Battery St, Room 433
San Francisco, CA 94111
Attn: IS Christopher Jeresko
RE: Application for Further Review of Protest 2408-20-100195; NAFTA Certificate of Origin; Polypropylene Bags
Dear CEE Director:
This is in response to the Application for Further Review (AFR) of Protest 2408-20-100195, timely filed, involving the acceptability of a North American Free Trade Agreement (NAFTA) Certificate of Origin presented by the importer, the Bag Corporation. This protest was timely filed by the importer’s custom’s broker on behalf of the importer.
We note that the AFR was properly approved as the protestant, the importer, alleges that denial of the protest is inconsistent with Headquarters Ruling Letter (HQ) H287868, dated November 29, 2017, and HQ 561820, dated June 19, 2002.
FACTS:
At issue is one entry of polypropylene bags of a kind used for the packaging of goods. The protest submission states that the bags are made of man-made textile materials and are classified under subheading 6305.32.00, Harmonized Tariff Schedule of the United States. The bags were produced in Mexico and entered by the importer, the Bag Corporation, located in Richardson, Texas, with a claim for NAFTA preferential tariff treatment.
The protest states that on May 11, 2020, a Customs and Border Protection (CBP) Form 28 was issued, notifying the importer that this entry was the subject of an origin verification and requesting the entry package and supporting documentation, including a certification. On June 18, 2020, a CBP Form 29 was issued notifying the importer that the submitted documentation was deficient. No certification had been submitted and there was no statement regarding assists. The importer was provided an additional 20 days to submit the certification.
On July 6, 2020, the importer’s broker submitted a statement from the importer concerning assists and a Certificate of Origin for the shipment at issue. On July 9, 2020, a CBP Form 29 was issued denying NAFTA preferential tariff treatment. The CBP Form 29 indicates that NAFTA treatment was being denied because “the NAFTA certificate evidences that it was not in the importer’s possession at the time the NAFTA claim was made.” The shipment at issue was entered on March 23, 2020. The submitted NAFTA Certificate of Origin was dated July 2, 2020.
The importer submits that due to the COVID-19 pandemic, neither the importer nor the manufacturer had access to the original Certificate of Origin as both had their employees working from home. The Mexican manufacturer had an employee issue another Certificate of Origin for the shipment and the employee dated the certificate the day it was signed, July 2, 2020, rather than back date it.
The importer submits that, per the CBP Regulations, specifically, 19 CFR § 181.22(c), the importer should have been given five (5) business days from the date the Certificate of Origin was rejected to submit a corrected certificate, or in this case, the original one. In conjunction with the protest, the original NAFTA Certificate of Origin dated January 1, 2020, signed by the exporter, was submitted, along with a letter from the importer stating that this certificate was in its possession at the time the NAFTA claim was made. The letter, on Bag Corporation letterhead paper, was signed by the importer’s plant manager.
On March 17, 2021, CBP received a letter, dated March 16, 2021, from the importer, through their broker, wherein the importer states that the Certificate of Origin was signed in Juarez City, Mexico, and is physically kept there. CBP received an additional email from the importer’s broker stating that the importer and manufacturer are related parties and confirming that the Certificate of Origin was signed and kept on file at the manufacturer’s factory.
ISSUE:
Whether the NAFTA Certificate of Origin submitted with the protest should be accepted to verify the NAFTA claim for the entry of polypropylene bags at issue.
LAW AND ANALYSIS:
Under NAFTA, goods produced in Canada, Mexico, or the United States are eligible for preferential tariff treatment upon importation into one of the three countries if they satisfy certain rules. These rules are laid out in the various articles of the NAFTA, and the corresponding regulations are set out in Part 181 of the Customs Regulations (19 C.F.R. Part 181).
With respect to the NAFTA Certificate of Origin, § 181.21(a) of the CBP Regulations (19 C.F.R. § 181.21(a)) states, in pertinent part, that:
In connection with a claim for preferential tariff treatment, or for the exemption from the merchandise processing fee, for a good under the NAFTA, the U.S. importer must make a formal declaration that the good qualifies for such treatment . . . the declaration must 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.
Additionally, section 181.22(a) provides:
(a) Maintenance of records. Each importer claiming preferential tariff treatment for a good imported into the United States shall maintain in the United States, for five years after the date of entry of the good, all documentation relating to the importation of the good. Such documentation shall include a copy of the Certificate of Origin and any other relevant records as specified in §163.1(a) of this chapter.
Further, pursuant to § 181.22(b) an importer who claims preferential tariff treatment under the NAFTA shall provide, at the request of the Port Director, a copy of each Certificate of Origin pertaining to the good.
The date on the Certificate of Origin that was submitted was several months after the date of the entry at issue. An explanation has been provided to explain why this occurred and the importer claims that it did, in fact, possess the original Certificate of Origin, dated January 1, 2020, prior to the date of entry of the merchandise at issue. That original certificate was presented to CBP as part of the protest submission. In addition, the importer submitted a letter claiming to have had the original Certificate of Origin in its possession, but that it was not able to provide it to CBP because it was at the office and all employees were working from home due to the COVID-19 pandemic.
However, the importer’s submissions to CBP draw into question whether the certificate of origin was, indeed, in the possession of the importer or in the possession of the factory. The importer’s letter, dated March 16, 2021, indicates that the Certificate of Origin was signed in Juarez City and is physically kept there. This fact was confirmed via email by the importer’s broker who stated that the importer and manufacturer are related parties and “the certificate was signed and kept on file at the factory.”
An importer who makes a claim and declaration for NAFTA preferential tariff treatment upon importation must have a properly executed and valid certificate of origin in its possession at the time the claim and declaration are made. If an importer does not have a properly executed and valid certificate of origin in its possession at the time its claim and declaration are made for NAFTA preferential tariff treatment, the port director may deny preferential tariff treatment to the imported goods covered by the claim and declaration. Although the importer and manufacturer are related parties, this does not negate the requirement in the regulations that the importer have in its possession a valid certificate of origin. In this case, the importer did not have the certificate of origin in its possession. It was in the possession of the factory. The importer failed to follow the requirements of §§ 181.21 and 181.22 of the CBP Regulations. Based on the information provided, we agree with the port’s assessment that the importer did not have a valid NAFTA Certificate of Origin in its possession at the time the goods at issue entered and the NAFTA claim was made. See Headquarters Ruling Letter (HQ) 561955, September 17, 2002; and, HQ 562030, dated May 10, 2002.
The protestant claims that they should have been given 5 working days to submit the correct certificate. The CBP Regulation upon which the importer relies in this case, 19 CFR § 181.22(c), provides, in relevant part:
If the Center director determines that a Certificate is illegible or defective or has not been completed in accordance with paragraph (b) of this section, the importer shall be given a period of not less than five working days to submit a corrected Certificate. Acceptance of a Certificate will result in the granting of preferential tariff treatment to the imported good unless, in connection with an origin verification initiated under subpart G of this part or based on a pattern of conduct within the meaning of §181.76(c) of this part, the Center director determines that the imported good does not qualify as an originating good or should not be accorded such treatment for any other reason as specifically provided for elsewhere in this part.
The Certificate of Origin that was submitted to CBP in response to the CBP Form 29 was not illegible or defective, such as by lacking a signature or with no date, nor was it apparent, in any way, that it had not been completed in accordance with 19 CFR § 181.22(b). Therefore, we disagree with the importer regarding the applicability of 19 CFR § 181.22(c).
HOLDING:
The protest should be denied. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (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 or entries in accordance with the decision must be accomplished prior to mailing 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,
For Craig T. Clark, Director
Commercial and Trade Facilitation Division