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HQ 225021


February 22, 1994

ENT-6-01/CON-2-07-CO:R:C:E 225021 PH

CATEGORY: LIQUIDATION

U.S. Customs Service
9901 Pacific Highway
Blaine, Washington 98230
(ATTN: Protest Reviewer)

RE: Application for Further Review of Protest No. 3004-93-100125; Exporter's Certificate of Origin; CF 353; CD 099 3280-012; 19 CFR 10.307; 19 U.S.C. 1514

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:

According to the file, on March 29, 1993, the protestant, a Customs broker, entered the merchandise under consideration, a Caterpillar Motor Grader. The merchandise was entered as dutiable, under subheading 8429.20.00.00, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), with duty in the amount of $750. There is an invoice prepared by the protestant in the file according to which the merchandise was consigned from and to Montana Tractor Inc., of Kalispell, Montana. According to a hand- written notation on the invoice, the exporter was Ritchie Bros. of Surrey, British Columbia. There is an "Auction Invoice", dated March 10, 1993, in the file, according to which the merchandise was sold at auction by Ritchie Bros. to Montana Tractor Inc.

In the file there is a May 26, 1993, communication from the protestant to Customs stating that the protested entry was filed without free trade and "as per the attached free trade certificate, free trade does apply." The communication also stated "in light of this matter we respectfully request a refund in the amount of $795.60 [the amount over the duty of $750 represents the applicable merchandise processing fee] upon liquidation for duty overpaid." A Customs Form (CF) 353, Exporter's Certificate of Origin was enclosed. The CF 353 was completed to show Montana Tractor in field 1 (Goods consigned from (exporter's identification)); January 1, 1993 as the effective date and December 31, 1993 as the expiration date in field 2 (if blanket certification); and "various" in field 3 (consignee). The CF 353 was not dated and was signed by a person identified as the owner of Montana Tractor.

On July 23, 1993, the entry was liquidated as entered (i.e., dutiable with duty in the amount of $750). On August 30, 1993, the protestant filed the protest under consideration. The basis of the protest was stated to be "... we have a certificate of origin showing this shipment to qualify for free trade." With the protest the protestant provided an undated letter (according to a stamped indication on the letter, it was received by the protestant on June 25, 1993) signed by the official of Montana Tractor who was identified on the CF 353 as the owner. In this letter it was stated that Montana Tractor purchased the grader from the British Columbia auction company, that the grader was built in Canada, and that the company had never had to pay duty on Canadian goods since implementation of the United States-Canada Free-Trade Agreement (CFTA). Also submitted with the protest was a new CF 353, completed to show Ritchie Brothers in field 1 and Montana Tractor in field 3. Field 2 was left blank. The CF 353 was dated June 23, 1993, and was signed by the person identified as the owner of Montana Tractor. The protestant cited "Administrative Message 92- 0364" as supporting its position.

ISSUE:

May the protest in this case be granted?

LAW AND ANALYSIS:

Initially, we note that the protest was timely filed (i.e., within 90 days of the notice of liquidation; see 19 U.S.C. 1514(c)(2)(A)) and that the decision protested is protestable (see 19 U.S.C. 1514(a)(5)).

The CFTA entered into force on January 1, 1989 (see Article 2105 of the CFTA and Presidential Proclamation 5923 of December 14, 1988 (53 Federal Register 50638, 50640, December 16, 1988)). The provisions of the CFTA were adopted by the United States with the enactment of the United States-Canada Free-Trade Agreement Implementation Act of 1988 (CFTA Act; 100 Stat. 418, Public law 100-449).

According to Article 406 of the CFTA, "[t]he parties' respective Customs Administrations shall cooperate as specified in Annex 406 [of the CFTA]." Annex 406, A. 1., provides that each Party may require that an importer who represents that goods imported from the territory of the other Party meet the rules of origin make a written declaration to that effect and base such declaration on the exporter's written certification to the same effect; that such an importer provide the Customs Administration of the Party with proof of the exporter's written certification of the origin of the goods; and that these requirements may be made mandatory.

Section 205(a) of the CFTA Act provides that any person who certifies in writing that goods exported to Canada meet the rules of origin under the CFTA Act shall provide, upon request by any customs official, a copy of that certification. According to the legislative history for the CFTA Act, this provision implements the provisions of Annex 406 allowing each party to require an importer of goods from the other party to submit a declaration of origin based upon a written certification from the exporter (Senate Report 100-509, 100th Cong., 2d Sess. (1988), printed at 1988 U.S.C.C.A.N. 2395, 2412).

Customs promulgated interim regulations to implement the provisions of the CFTA in Treasury Decision (T.D.) 89-3. Section 10.307, Customs Regulations (19 CFR 10.307) provided for the documentation required to claim a CFTA preference. According to section 10.307(c), a claim for preference was required to be based on the Exporter's Certificate of Origin, "properly completed and signed by the person who exports or knowingly causes the goods to be exported from Canada." The Certificate was required "[to] be available at the time the preference is claimed ...."

Final regulations were promulgated in T.D. 92-8, after Customs received and analyzed comments on the interim regulations. In response to comments on 19 CFR 10.307(c), Customs stated that the requirement in that provision that the Exporter's Certificate of Origin "'must be available' (i.e., must be in existence) at the time the preference is claimed is merely a consequence of the requirement in the first sentence that a claim 'shall be based' on the [Certificate] [which in turn] reflects the terms of Annex 406 of the CFTA ...." Customs agreed with the commenters that section 10.307 could be "overly restrictive" in appearing to provide that a claim for CFTA treatment can be made only at the time of the filing of the entry summary. According to T.D. 92-8, this was not intended and "an importer may file a claim for a CFTA preference after filing of the entry summary or its equivalent (1) at any time prior to liquidation ..., (2) within 90 days after liquidation, by filing a protest under 19 U.S.C. 1514, or (3) at any time within one year of the date of liquidation, by submission of a letter to Customs under 19 U.S.C. 1520(c)(1) ...." However, the T.D. added "that a valid Exporter's Certificate of Origin covering the goods in question also must be in existence at the time that such a post- entry/entry summary claim is made."

After promulgation of the final regulations in T.D. 92-8, Customs issued a Customs Directive providing guidelines for the completion of the CF 353 (Customs Directive 099 3280-012, dated May 19, 1992). According to this Customs Directive, field 1 of the CF 353 "refers to the ... person or business that is responsible for the exportation [and] applies to the certifying signature in field 11." The Customs Directive stated that "[t]he date in the signature field must precede the claim date." In this regard, the Customs Directive reiterated "[t]he ECO [i.e., the CF 353] must be in existence at the time the preference is claimed and shall be presented to U.S. Customs upon request." In regard to blanket certifications, the Customs Directive stated "[although] [t]he date of the signature on a blanket ECO may be after the effective date range given in this field, ... the date of the ECO signature must precede the date of the claim."

Administrative Message 92-0364, dated August 25, 1992, provides guidance on the processing of CFTA claims for relief under 19 U.S.C. 1514 and 1520(c)(1). According to the Administrative Message, "[t]here can be no valid protest or reliquidation request without a valid CF 353 ... included with the protest or reliquidation request." The Administrative Message proceeds to state that the validity of the CF 353 must be reviewed for sufficiency and relevancy. In this regard, the Administrative Message states that "[t]he date in the signature field must precede the claim date."

In this case, the claim for preference under the CFTA was made on May 26, 1993. The CF 353 filed with the claim for preference (with a blanket certification period covering the time in which the claim was made) was invalid because the date it was signed was not given (see above requirements, since the CF 353 was not dated, it could not be determined whether the Certification preceded the date of the claim, as required for the Certificate to be valid; see also, statement on the reverse of the CF 353 that "[u]nless the place, date, signature and title of the exporter appear on the space provided, this document will be considered invalid"). The CF 353 filed with the protest (not a blanket certification) was invalid because the date it was signed (June 23, 1993) was after the date that the claim for preference was made (May 26, 1993) (i.e., "a valid Exporter's Certificate of Origin covering the goods in question [was not] in existence at the time that [the] post-entry/entry summary claim [was] made"; see above quotation from T.D. 92-8; see also, Customs Directive 099 3280- 012 and Administrative Message 92-0364, quoted above). Furthermore, according to field 1 of this CF 353, the exporter was Ritchie Brothers, but the CF 353 was signed by the owner of Montana Tractor. The CF 353 is required to be signed by the exporter (see 19 CFR 10.307(c); see also T.D. 92-8, page 43 of the bound edition of the 1992 Customs Bulletin, "The CFTA specifically requires that the certification be made by the 'exporter'"). The protest is DENIED.
HOLDING:

The protest is DENIED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office, with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director

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