OT:RR:CTF:ER W231582 RDC
Assistant Port Director, Trade
U.S. Customs and Border Protection
234 W. Service Road
Champlain, NY 12919
Dear Mr. Barnes:
This is in response to a request for further review concerning Protest Number 0712-06-100163 (the Protest) submitted by NJR Energy Services (hereinafter NJR or the protestant). Our decision follows.
FACTS:
By letter dated July 5, 2005, CBP advised NJR that it had received no entries for importations of Canadian natural gas made by NJR for the previous 5 years. Subsequently, NJR submitted entry summaries for these importations. CBP Form 7501 is provided for one such entry as an example of a typical entry: number xxx-xxxx987-5, dated August 31, 2005, and covering imports of gas in August 2004. This entry was liquidated on August 18, 2006.
No claim for preferential treatment under the North American Free Trade Agreement (NAFTA) is reflected on the entry summary. On June 8, 2006, CBP sent NJR a notice of proposed action with regard to 16 monthly entries, including the one described above. This notice advised that CBP intended to assess MPF on the value of the daily importations of gas rather than on the value of the total gas entered in a month and reflected on the entry summary.
NJR responded to the notice by letter dated July 14, 2006, which argued that because the gas is Canadian origin and NJR “has a NAFTA Certificate of Origin on file,” no MPF should be assessed per the NAFTA. No evidence that NJR submitted a copy of its NAFTA certificate of origin was provided, either with this letter or subsequent protest. NJR also argues that “[n]owhere does the regulation, 19 C.F.R. Part 24.23 . . . ” state that MPF will be assessed on a daily basis when entries are submitted once a month.” NJR further states that since MPF is meant to compensate CBP for the processing of the entry, assessing MPF against daily importations when the entry is filed monthly is “an impermissible fee.” The entries were liquidated on August 18, 2006, with MPF assessed on the daily imports of gas covered by the entries.
NJR filed the instant protest on September 11, 2006, against CBP’s assessment of MPF on the value of the daily importations of gas covered by the monthly entries. The instant protest involves 17 entries. We note that 3 of the protested entries do not appear on the notice of action, rate advance, and that one of the entries on the notice of action is not included in the protest. In its protest, NJR advances the same arguments as in its July 14, 2006, letter and makes two additional arguments. First, it asserts that applying the MPF on a daily basis when importation documents are submitted monthly amounts to an impermissible tax on imports rather than a processing fee per United States v. Shoe, 523 U.S. 360 (1998). Second, that applying the MPF on a daily basis during a time when energy costs are very high is counter to U.S. national energy policy “energy resource” concerns.
The port characterizes the issue presented by this protest and application for further review as “the denial of a post-importation claim made under the [NAFTA] based on the Importer[’]s failure to furnish a certificate of Origin . . . .” The port also responds to NJR’s assertions that the CBP regulations do not require MPF be assessed on daily importation values by stating that assessing MPF on a daily basis when monthly entries are made is required by 19 C.F.R. § 24.23(d). The port notes that the importer could have avoided paying the MPF if it had filed entries on the gas as required and claimed NAFTA origin on those entries.
ISSUES:
1. Whether NJR’s July 14, 2006, letter constitutes a valid post-importation claim for NAFTA preference per 19 U.S.C. § 1520(d).
2. Whether the assessment of the MPF against the daily imports of natural gas when the entry summary is filed monthly is contrary to 19 C.F.R. § 24.23(d).
LAW AND ANALYSIS:
The instant protest was timely filed on September 11, 2006, i.e., within 180 days of liquidation on August 18, 2006, of the entries at issue per 19 U.S.C. § 1514(c)(3)(A). It also qualifies for further review per 19 C.F.R. § 174.24(b). NJR alleges the protest “. . . to involve questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts . . . .” NJR’s alleges that since it has “a NAFTA Certificate of Origin on file it is not required to pay a [m]erchandise [p]rocessing [f]ee.” Since CBP has not addressed the issue of a NAFTA Certificate of Origin being “on file” as relieving an importer of liability for MPF, the instant protest qualifies for further review.
NJR argues that because the subject gas is Canadian origin and NJR “has a NAFTA Certificate of Origin on file,” no MPF should be assessed per the NAFTA. Section 58c(a)(9)(A) of Title 19 (2004) required an ad valorem fee of 0.21 percent on merchandise that was formally entered to be paid at the time of entry summary, the so-called MPF. However, to the extent goods are entitled to preferential duty treatment under the NAFTA, such goods are exempt from MPF per 19 U.S.C. § 58c(b)(10)(B) (2004), which states that “for goods qualifying under the [NAFTA] rules of origin . . . , the fee under subsection (a)(9) or (10) [MPF] may not be charged with respect to goods that qualify to be marked as goods of Canada pursuant to Annex 311 of the North American Free Trade Agreement . . . .” A claim for preferential treatment under the NAFTA, in this case the waiving of the MPF, must be made either on the entry summary or within one year from date of importation per 19 U.S.C. § 1520(d).
To the extent the provided entry summary is representative, we agree with the port’s determination that NJR did not make a claim for preferential treatment under the NAFTA on the entry summaries. Per 19 C.F.R. § 181.21(a) (2004):
In connection with a claim for preferential tariff treatment for a good under the NAFTA, the U.S. importer shall make a written declaration that the good qualifies for such treatment. The written declaration may be made by including on the entry summary, or equivalent documentation, the symbol “CA” for a good of Canada, or the symbol “MX” for a good of Mexico, as a prefix to the subheading of the HTSUS under which each qualifying good is classified. . . . .
The representative entry summary contains no written declaration that the gas qualified for preferential tariff treatment because there is no symbol “CA” preceding the classification nor any other written indication that a claim for preference under the NAFTA is made. Accordingly, no proper claim for duty free treatment under the NAFTA was made on the entry summary.
Even if an importer fails to claim NAFTA origin at the time of entry, it may claim NAFTA origin by filing a request under 19 U.S.C. § 1520(d). Specifically, that provision states in pertinent part that:
Notwithstanding the fact that a valid protest was not filed, the Customs Service may . . . 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 North American Free Trade Agreement Implementation Act [19 USCS § 3332], . . . 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 508(b)(1) [19 USCS § 1508(b)(1)]), or other certificates or certifications of origin, as the case may be . . . .
19 U.S.C. § 1520(d). The CBP regulations state the filing procedures for NAFTA preference claim under 19 U.S.C. § 1520(d). They provide in pertinent part:
A post-importation claim for a refund shall be filed by presentation of the following:
(1) A written declaration stating that the good qualified as an originating good at the time of importation and setting forth the number and date of the entry covering the good;
(2) Subject to § 181.22(d) of this part, a copy of each Certificate of Origin (see § 181.11 of this part) pertaining to the good;
(3) A written statement indicating whether or not the importer of the good provided a copy of the entry summary or equivalent documentation to any other person. . . . ;
(4) A written statement indicating whether or not the importer of the good is aware of any claim for refund, waiver or reduction of duties relating to the good within the meaning of Article 303 of the NAFTA (see subpart E of this part). . . ; and
(5) A written statement indicating whether or not any person has filed a protest or a petition or request for reliquidation relating to the good under any provision of law, and if any such protest or petition or request for reliquidation has been filed, the statement shall identify the protest, petition or request by number and date.
19 C.F.R. § 181.32(b) (2004). Because the written declaration was untimely, no certificate of origin was provided as required by 19 U.S.C. § 1520(d) and NJR failed to comply with 19 C.F.R. § 181.32, NJR did not file a timely or complete post-importation request for NAFTA treatment. NJR’s letter of July 14, 2006, states that because the gas is Canadian origin and NJR “has a NAFTA Certificate of Origin on file,” no MPF should be assessed per the NAFTA. Although this statement may be a “written declaration that the good qualified under the applicable rules at the time of importation” per § 1520(d)(1), we need not reach that issue because it is untimely. Section 1520(d) requires that the claim be made within “1 year after the date of importation.” See also Xerox Corp. v. United States, (423 F.3d 1356 Fed. Cir. (2005)) noting that the legislative history behind 19 U.S.C. § 1520(d) is very clear as to the one-year limitation for filing a claim. The gas covered by the representative entry summary was imported during August 2004 but the declaration was made on July 14, 2006, more than one year after the goods were imported. In addition there is no evidence that NJR complied with §§ 181.32(b)(2) through (5) (2004).
In HRL 229426 (August 29, 2002), we stated that “Section 1520(d) (19 U.S.C. 1520(d)), and the implementing regulations, 19 CFR 181.32 provides an exception to the usual entry requirements for an importer in that a claimant may make a post-importation NAFTA claim[]” and that “[s]trict compliance with the certification statements . . . [was] a condition precedent to the granting of a claim.” HRL 229426 further held that a post-importation NAFTA claim under 19 U.S.C. § 1520(d) is untimely one year and five days after the date of importation is untimely and must be denied. Accordingly, even if NJR’s July 14, 2006, letter was considered the declaration required by 19 U.S.C. § 1520(d), it would be untimely because it was filed more than one year after importation of the gas in August 2004.
Moreover, the post-importation claim for a refund also fails because there is no evidence that NJR submitted a copy of its NAFTA certificate of origin to CBP as required by the statute. 19 U.S.C. § 1520(d); see also, 19 C.F.R. § 181.32(b)(2) (2004). See Ford Motor Co. v United States, No. 11-145, slip op. (Fed. Cir. Nov. 28, 2011) in which the Court of Appeals for the Federal Circuit held that the one-year time period in 19 U.S.C. § 1520(d) applies to filing the certificate of origin and is a fundamental aspect of the statute that may not be circumvented. NJR asserts only that it “has a NAFTA [c]ertificate of [o]rigin on file . . . .” We assume NJR means that the certificate of origin is “on file” with CBP, presumably with the port. However, the port states it has no certificate of origin and there is no evidence that one was ever provided, despite that NJR is required to file the certificate of origin with the port. 19 C.F.R. §§ 181.22(b), 181.32(a) (2004). The CBP regulations require importers to maintain copies of certificates of origin for 5 years. 19 C.F.R. § 181.22(a). Consequently, NJR made no valid claim per § 1520(d). See HRL 227879 (October 30, 1998) (holding that “The 19 U.S.C. § 1520 (d) claim for preferential tariff treatment under the NAFTA is DENIED since the Protestant failed to provide copies of Certificates of Origin for the merchandise that is the subject of the protest, as is required by the statute and the regulations.”)
Further we find no support, and NJR offers none for the proposition that a certificate of origin is “on file” supplants the statutory requirement under § 1520(d) that copies of the certificate be provided. 19 U.S.C. § 1520(d); 19 C.F.R. §181.32(b)(2) (2004). Accordingly, because no NAFTA certificate of origin was provided and NJR’s July 14, 2006, letter does not comply with the regulatory requirements, NJR did not file a valid or timely post-importation claim for NAFTA preference per 19 U.S.C. § 1520(d). See HRL W231595 (May 19, 2008) (holding that “The Port properly denied the request for a post-importation refund of MPF for monthly entries of natural gas, because the request with respect to some of the releases was untimely, and for the rest of the releases, Constellation Energy failed to obtain either a Certificate of Origin or a waiver of the certification requirement.”)
With regard to NJR’s claim that “[n]owhere does the regulation, 19 C.F.R. Part 24.23 . . . state that MPF will be assessed on a daily basis when entries are submitted once a month,” we have ruled that such a claim is without legal basis. See HRL W231489 (May 19, 2008) (holding that “[T]he claim that MPF should be assessed on a monthly, rather than a daily, basis for imports of natural gas made via pipeline, is denied as without legal basis.”) In HRL W231489 an importer of Canadian origin natural gas protested the assessment of MPF on its daily importations because the gas was NAFTA originating and therefore exempt. In the alternative, the importer asserted that MPF should only be assessed on monthly entries, not on daily importations. HRL W231489 determined that “[t]he legislative history of the Customs user fee statute indicates that Congress intended the MPF . . . to be calculated on the basis of each release.” Since the gas was released daily, MPF was assessed on the daily amounts. Id.
NJR raises two additional arguments: that since MPF is meant to compensate CBP for the processing of the entry, assessing MPF against daily importations when the entry is filed monthly is “an impermissible fee;” applying the MPF on a daily basis when importation documents are submitted monthly amounts to a tax on imports rather than a processing fee per United States v. Shoe, (523 U.S. 360 (1998)); and applying the MPF on a daily basis during a time when energy costs are very high is counter to United States national energy policy. Given the legislative history of the statute providing for the MPF requires MPF to be assessed on the value of daily importations of natural gas, NJR’s additional arguments do not provide a basis for relief.
HOLDING:
NJR’s July 14, 2006, letter does not constitute a valid post-importation claim for NAFTA preference per 19 U.S.C. § 1520(d) because it was untimely and no certificate of origin was provided. Further, the assessment of the MPF against the daily imports of gas when the entry summary is filed monthly is required by 19 C.F.R. § 24.23(d). Therefore the protest is DENIED.
This decision will result in the assessment of MPF, and any reliquidation of the entries in accordance with the decision must be accomplished prior to mailing of the decision, in accordance with Section IV of the Customs Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21). You are to mail this decision, together with CBP Form 19, to the protestant no later than 60 days from the date of this letter.
No later than 60 days from the date of this letter, Regulations and Rulings of the Office of International Trade 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 by other means of public distribution.
Sincerely,
Myles Harmon, Director
Commercial and Trade Facilitation Division