OT:RR:CTF:VS H327078 RMC
Center Director Center of Excellence and Expertise for Machinery U.S. Customs and Border Protection 109 Shiloh Dr., Suite 300 Laredo, TX 78045
Attn: Paola Aguilera
RE: Application for Further Review of Protest No. 2304-21-102358; USMCA; Denial of § 1520(d) Claim
Dear Center Director,
This is in response to the Application for Further Review (“AFR”) of protest No. 2304-21-102358, timely filed by counsel on behalf of Cardington Yutaka Technologies (“CYT”). CYT contests the decision of U.S. Customs and Border Protection (“CBP”) to deny its post-importation claims for preferential tariff treatment under the United States-Mexico-Canada Agreement (“USMCA”).
FACTS:
CYT is an automotive parts supplier that specializes in producing torque converters, catalytic converters, and exhaust systems for motor vehicles. At issue in this AFR are torque converters that CYT purchased and imported from an affiliated manufacturing facility in Mexico operating under the name Yukuta de Mexico, S.A. de C.V.
According to counsel, CYT conducted an “intensive internal review” to validate preference eligibility after the USMCA entered into force on July 1, 2020. As a result, it initially opted to enter the subject torque converters without a claim for preferential tariff treatment. However, once CYT verified that the torque converters met all requirements for preferential tariff treatment under the USMCA, it filed claims under 19 U.S.C. § 1520(d) seeking refunds of the duties and merchandise processing fees that it deposited at the time of entry.
Following its receipt of CYT’s § 1520(d) claims, the Center of Excellence and Expertise for Machinery (“Center”) began processing the post-importation preference claims. The import specialist then requested copies of the invoices for the merchandise, which CYT did not include as part of its entry documentation, believing that the invoices would help link the information in the USMCA certifications of origin to specific entry lines. CYT refused to provide the invoices, arguing that it is not required to provide them under our regulations in 19 C.F.R. § 182.32. As the import specialist was unable to process the post-importation claims based on the information provided, the § 1520(d) claims were denied. This AFR for denial of the § 1520(d) claims followed.
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-Chile Free Trade Agreement Implementation Act, section 4033 of this title, section 202 of the United States-Oman Free Trade Agreement Implementation Act, section 203 of the United States-Peru Trade Promotion Agreement Implementation Act , section 202 of the United States–Korea Free Trade Agreement Implementation Act, section 203 of the United States–Colombia Trade Promotion Agreement Implementation Act, section 203 of the United States–Panama Trade Promotion Agreement Implementation Act, or section 4531 of this title, 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—
a written declaration that the good qualified under the applicable rules at the time of importation;
copies of all applicable certificates or certifications of origin; and
(3) such other documentation and information relating to the importation of the goods as the Customs Service may require.
Relevant here, section 4531 of Title 19 contains the rules of origin for the USMCA. CBP’s regulations on post-importation USMCA claims further provide that:
A post-importation claim for a refund must be filed by presentation of the following:
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;
A copy of a written or electronic certification of origin prepared in accordance with § 182.12 demonstrating that the good qualifies for preferential tariff treatment;
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
A written statement indicating whether or not any person has filed a protest, petition, or request for reliquidation; and if any such protest, petition, or request for reliquidation has been filed, the statement must identify the filing by number and date.
See 19 C.F.R. § 182.32(b).
Here, counsel argues that the denial of CYT’s post-importation USMCA claims was unlawful because the Center lacked authority to request invoices. In short, counsel asserts that the Center is not authorized to ask for any documents other than those specifically listed in 19 C.F.R. § 182.32(b). Additionally, counsel claims that the Center’s denial of the § 1520(d) claims was a deprivation of CYT’s constitutional right to due process because CBP never gave notice that documents beyond the USMCA certification could be required for a post-importation preference claim.
We disagree with counsel’s interpretation of the statute and regulations. CBP’s regulations at 19 C.F.R. § 182.32(b) provide a list of documents that must be presented with each post-importation USMCA claim. However, the authorizing statute provides that CBP “may require” “such other documentation and information relating to the importation” in order to reliquidate the entry and refund any excess duties and merchandise processing fees. See 19 U.S.C. 1520(d)(3) (emphasis added). To read CBP’s regulations to preclude it from requiring documents other than those specifically listed in 19 C.F.R. § 182.32(b) would impermissibly restrict CBP’s authority under the statute and preclude it from requesting documents that it may need to process valid post-importation preference claims. Moreover, we note that the documents that CYT refused to provide—the invoices—must ordinarily be provided to CBP during the entry process. See 19 C.F.R. § 142.3. Since CBP should already possess the invoice when processing a § 1520(d) claim, it is not necessary to separately list the invoice among the required documents in 19 C.F.R. § 182.32(b). For that reason, we also reject CYT’s constitutional argument that CBP failed to provide notice that the invoices could be required as part of the § 1520(d) process.
HOLDING:
The protest should be DENIED. The Center was authorized to request invoices as part of the § 1520(d) process and properly denied the claims when it was unable to link the claims to specific entry lines based on the information that the importer provided.
You are instructed to notify the importer, through the importer’s counsel, of this decision no later than 60 days from the date of this decision. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to this notification. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel and the public on the Customs Rulings Online Search System (CROSS) at https://rulings.cbp.gov/, or other methods of public distribution.
Sincerely,
For Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division