HQ 0223288 - Protest No. 3801-1-101391; Protestability of Requirement for Triennial Report and Fee for Broker Who is Customs Employee; 19 U.S.C. 1514(a)(3) - United States International Trade Commision Rulings

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HQ 223288

September 12, 1991

BRO-3-05/PRO-2-02-CO:R:C:E 223288 PH

CATEGORY: PROTEST

District Director of Customs
Detroit, Michigan 48266

RE: Protest No. 3801-1-101391; Protestability of Requirement for Triennial Report and Fee for Broker Who is Customs Employee; 19 U.S.C. 1514(a)(3)

Dear Sir:

The above-referenced protest was forwarded to this office for further review. We have considered the points raised by your office and the protestant. Our decision follows.

FACTS:

The protestant states that he is an employee of the United States Customs Service. He is also a licensed Customs broker. He contends that he should not be required to make the triennial report and pay the $100 fee to accompany that report required by 19 CFR 111.30(d) and 111.96(d), respectively.

As an alternative, the protestant proposes that, under 19 CFR 111.52, he be allowed to voluntarily offer the suspension of his license for the duration of his employment by the Customs Service. He suggests that while his license is suspended he should not be required to file the triennial report or to pay the $100 fee required to accompany that report. The protestant proposes that his license be so suspended, that the triennial report and fee be so waived, and that his payment of the $100 fee of February 25, 1991, be refunded. The protestant filed this protest, under 19 U.S.C. 1514 on May 24, 1991. The protestant applied for further review of his protest under 19 CFR 174.24.

ISSUE:

Are the requirements that a Customs broker must file a triennial status report under 19 U.S.C. 1641(g)(1) and 19 CFR 111.30(d) and must accompany that report with the fee required in 19 CFR 111.96(d) protestable under 19 U.S.C. 1514?

LAW AND ANALYSIS:

The statutory authority for protests of Customs decisions is found in section 514, Tariff Act of 1930, as amended (19 U.S.C. 1514). Under paragraph (a)(3) of this law, protests may be filed as to, among other things: "all charges or exactions of whatever character within the jurisdiction of the Secretary of the Treasury." This is the only item of those listed in 19 U.S.C. 1514(a) which could possibly cover the matter protested in this case. This phrase has been the subject of a number of judicial decisions. In Puget Sound Freight Lines v. United States, 36 CCPA 70 (C.A.D. 400, 1949), the Court stated:

We are of the opinion that fees, exactions, or charges which bear no relation to the importation of merchandise and the rate of duty resulting from such classification are not, as contended by appellants, "exactions of whatever character (within the jurisdiction of the Secretary of the Treasury)" within the meaning of [19 U.S.C. 1514]." [36 CCPA at 78.]

Recently, the Court of International Trade interpreted this phrase with regard to annual fees for Customs bonded warehouses. In National Bonded Warehouse Association, Inc. v. United States, 676 F. Supp. 1229, 11 CIT 940 (1987), the Court held that the fees were charges or exactions within 19 U.S.C. 1514(a)(3), distinguishing Puget Sound Freight Lines. Then, on rehearing, the Court reversed itself, holding that since "the issue of annual warehouse fees is connected, only tangentially, with the importation of goods and the liquidation of entries", the issue is not within the purview of 19 U.S.C. 1514(a) (National Bonded Warehouse Association, Inc. v. United States, 706 F. Supp. 904, CIT Slip Op. 89-11, 23 Cust. Bull. & Dec. 9, March 1, 1989, page 50, 53).

Clearly, the requirement for a triennial status report under 19 U.S.C. 1641(g)(1) is not within any of the decisions listed as being protestable in 19 U.S.C. 1514(a). The fee required with the triennial status fee, under 19 CFR 111.96(d), is no more connected with the importation of goods and the liquidation of entries than are the annual warehouse fees. Therefore, under the authorities discussed above, particularly the National Bonded Warehouse Association, Inc. v. United States decisions, we conclude that these issues may not be protested under 19 U.S.C. 1514. The protest must be denied.

For your information, even if the issue under consideration were protestable, we would deny the protest on the merits. The statute governing Customs brokers, section 641, Tariff Act of 1930, as amended (19 U.S.C. 1641) requires each person who is licensed with a broker's license to file a triennial report as to "whether such person is actively engaged in business as a customs broker" (emphasis added) and the name under, and address at, which such business is conducted. Since a report is required as to whether the broker is actively engaged in business as a customs broker, the clear meaning is that a report is required even if the broker is not actively so engaged. The fees for brokers are provided for in 19 U.S.C. 1641(h). This is the authority for the $100 associated with the triennial report, provided for in 19 CFR 111.96(d). According to section 111.96(d), the purpose of this fee is to "defray the costs of administering the reporting requirement." Since we have no discretion in requiring the triennial report when a Customs broker is inactive, and since the fee is required for processing the fee, we see no substantive grounds for granting the protest.

Also, for your information, the Office of Trade Operations has taken a position with regard to the issue raised in this protest. It is the position of that Office that the fact that a Customs employee holds a Customs broker's license does not, in itself, constitute a conflict of interest. However, that Office intends to require each new employee of the Customs Service who holds a broker's license to request a voluntary suspension of the license under 19 CFR 111.52. During the time of suspension, the employee will be required to file any reports and pay any fees to keep the license current. Upon termination of the individual's employment by the Customs Service, he or she will be able to reactivate the license without further action.

HOLDING:

The requirements that a Customs broker must file a triennial status report under 19 U.S.C. 1641(g)(1) and 19 CFR 111.30(d) and must accompany that report with the fee required in 19 CFR 111.96(d) are not protestable under 19 U.S.C. 1514.

The protest is DENIED. A copy of this decision should be attached to the Form 19, Notice of Action, to be sent to the protestant.

Sincerely,

John Durant, Director

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