HQ 225317 - Internal Advice; 19 U.S.C. 1520(c)(1); Godchaux-Henderson Sugar Co., Inc. v. U.S.; "clerical error"; "mistake of fact"; "inadvertence"; 19 U.S.C. 1484; "importer of record"; Customs Directive 3530-02; National Customs Brokers and Forwarders Association of America v. U.S. - United States International Trade Commision Rulings

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HQ 225317

October 25, 1994

ENT-1-01-CO:R:C:E 225317 AJS

CATEGORY: ENTRY

District Director of Customs
U.S. Customs Service
101 E. Main Street
Norfolk, VA 23510

RE: Internal Advice; 19 U.S.C. 1520(c)(1); Godchaux-Henderson Sugar Co., Inc. v. U.S.; "clerical error"; "mistake of fact"; "inadvertence"; 19 U.S.C. 1484; "importer of record"; Customs Directive 3530-02; National Customs Brokers and Forwarders Association of America v. U.S.

Dear Sir:

This is in reply to your request of April 6, 1994, for internal advice pursuant to 19 CFR 177.11(a). Your file reference is CLA-2-ADD:CO:CTB JM.

FACTS:

The entry was filed by Cavalier Shipping Co., as broker for the importer of record, Global Nuclear Services and Supply (GNSS), on February 11, 1994. The entry (Customs Form (CF) 3461) shows that an elected entry date of February 12, 1994, was selected, as permitted by 19 CFR 141.68. The entry also shows that the merchandise was released by Customs on February 12, 1994, the elected entry date.

The file shows that from February 7, 1994 to February 11, 1994, Customs officers fully explained the consequences of an election to be the importer of record with Edlow International and the United States Enrichment Corporation (USEC). When the entry was made the broker had a power of attorney from GNSS but was not authorized to act for the USEC until February 25, 1994.

ISSUE:

Whether election to be an importer of record by a person is a clerical error, mistake of fact or other inadvertence correctable under 19 U.S.C. 1520(c)(1).

LAW AND ANALYSIS:

19 U.S.C. 1520(c)(1) provides that Customs may reliquidate an entry to correct a "clerical error, mistake of fact, or other inadvertence . . . not amounting to an error in the construction of a law, adverse to the importer and manifest from the record or established by documentary evidence, in any entry, liquidation, or other customs transaction, when the error, mistake, or inadvertence is brought to the attention of the Customs Service within one year after the date of liquidation or exaction." This provision "is not remedial for every conceivable form of mistake or inadvertence adverse to an importer but rather the statute offers 'limited relief'." Godchaux-Henderson Sugar Co., Inc. v. United States, 85 Cust. Ct. 68, 74, C.D. 4874, 496 F. Supp. 1326 (1980)(Godchaux).

A "clerical error" has been stated by the courts to be "a mistake made by a clerk or other subordinate, upon whom devolves no duty to exercise judgement, in writing or copying the figures or in exercising his intention." PPG Industries, Inc. v. United States, 7 CIT 118, 124 (1984). The evidence shows that the election to be the importer of record was an informed choice by GNSS after considering available options. It was not the error of a clerk in transposing figures. Therefore, we conclude that no clerical error occurred.

A "mistake of fact" has been described as "a mistake which takes place when some fact which indeed exists is unknown, or a fact which is thought to exists, in reality does not exist." C.J. Tower & Sons of Buffalo, Inc. v. United States, 68 Cust. Ct. 17, 22, C.D. 4327, 336 F. Supp. 1395, 1399 (1972), aff'd 61 CCPA 90, C.A.D. 1129, 499 F.2d 1277 (1974). There is no evidence to show that a mistake of fact occurred.

Inadvertence is a somewhat broader term, and has been defined as "an oversight or involuntary accident, or the result of inattention or carelessness, and even as a type of mistake." Id. It is clear from the record of discussions reported that the election by GNSS to be the importer of record was not due to a lack of knowledge as to the consequences of that election. Under 19 CFR 141.67, a person may withdraw any entry papers until the merchandise was authorized for release by Customs. That authorization occurred on February 12, 1994. The election to be the importer of record became binding on GNSS. The evidence simply does not support a finding that any inadvertence occurred.

It is apparent that between February 7, 1994 and February 11, 1994, the USEC changed its position on whether it would serve as the importer of record. The issue is whether Customs has authority to disregard the election of an otherwise qualified person to be the importer of record.

In Godchaux, the Customs Court discussed the applicability of section 1520(c)(1). In that case, the plaintiff imported sugar under an immediate delivery permit but did not file a consumption entry until a later time. At the time of importation, the sugar was eligible for duty-free treatment under the Generalized System of Preferences. However, after importation and before entry, the duty-free status of the sugar was terminated. The plaintiff sought relief pursuant to section 1520(c)(1) for its failure to file the entry before the duty-free status was terminated. In this instance, relief is sought pursuant to section 1520(c)(1) for the failure to use a certain importer of record on the entry documents.

The Customs Court held in Godchaux that plaintiff's failure to file a duty-free entry by the deadline prescribed by law was not within the scope of section 1520(c)(1). Godchaux at 74. The court stated that by the express terms of section 1520(c)(1) plaintiff was required to establish a "clerical error, mistake of fact, or other inadvertence . . . in an entry, liquidation, or other customs transaction . . ." (emphasis in original). Id. The court further stated plaintiff's mistake or inadvertence was not in an entry, but rather in failing to make an entry prior to a certain date. Id. The court added that had plaintiff, through mistake of fact or inadvertence, filed a dutiable entry prior to the termination date for duty-free status and the entry was liquidated accordingly, the entry could be reliquidated duty free pursuant to section 1520(c)(1). Id at 75.

In this case, the claimed mistake or inadvertence was not in the entry but rather in failing to name a certain importer of record because the local broker lacked a power of attorney for that importer. As stated previously, there was no mistake in the entry which was filed. GNSS was a permissible importer of record. See NCBFA infra. Accordingly, we find the rationale of Godchaux instructive for determining that the election of an otherwise eligible person to be the importer of record is not subject to reliquidation under section 1520(c)(1).

19 U.S.C. 1484(a)(1) states that one of the parties qualifying as the "importer of record" under paragraph (2)(C) of this section shall make entry as described in paragraph (a)(1)(A) of this section. Section 1484(a)(2)(C) states that when entry of merchandise is made, the required documentation shall be filed either by the owner or purchaser of the merchandise or, when appropriately designated by the owner, purchaser, or consignee of the merchandise, a person holding a valid license under section 1641 of this title (i.e., a customs broker). The terms "owner" or "purchaser" are described as "any party with a financial interest in a transaction, including, but not limited to, the actual owner of the goods, the actual purchaser of the goods, a buying or
selling agent . . ." Customs Directive 3530-02 (November 6, 1984). GNSS declared that it met the statutory criteria by electing to serve as the importer of record and Customs accepted this declaration, as authorized by 19 U.S.C. 1484(a)(2)(B).

The Court of International Trade (CIT) interpreted section 1484 in National Customs Brokers and Forwarders Association of America v. United States, 14 CIT 108, 731 F.Supp 1076 (1990) (NCBFA). NCBFA involved an action to compel the Secretary of the Treasury and the Commissioner of Customs to promulgate regulations establishing a certain hierarchy among those permitted to enter merchandise transported by international courier services in consolidated shipments. In NCBFA, the plaintiff contended that a broker chosen by a courier service may not make entry of individual shipments in a consolidated shipment if another broker has been chosen by the owner or purchaser of the individual shipment. This case is similar in that Customs is being asked to determine from which otherwise eligible person it should accept entry.

In regards to section 1484(a)(2)(C), the court in NCBFA stated that the term "a person" "appropriately designated" can be read only to signify one who is designated in a suitable or proper manner. NCBFA at 111. The court also stated that such person must hold a valid customs brokers license. Id. The court concluded that "[i]f this person, therefore, has been designated in a proper or suitable manner by either the owner, purchaser, or consignee, and if this person is a properly licensed customs broker, such person may make entry of the items in the shipment." Id. As stated previously, GNSS elected to be the importer of record.

In NCBFA, the court stated that if a specific broker is named or designated under section 1484 and a broker other than the one specifically named or designated enters the merchandise and damage results to the owner or broker originally designated, the parties should look to their contracts for remedies. NCBFA at 114. The court also stated that leaving to the parties to protect themselves through contract or through their choice of carrier appears more appropriate than compelling Customs to prohibit the entry of consolidated shipments in the manner requested. Id. We are likewise of the view that leaving to the parties to protect themselves through contract or other means more appropriate than compelling Customs to determine from which eligible person to accept an entry. The court added that under the terms of the statute Customs remains free to deal with any licensed broker chosen by an owner, purchaser or consignee. Id. In this case, Customs was simply following a similar course of action in accepting GNSS's election to be the importer of record. Therefore,
we find the above analysis from NCBFA supportive for determining that no error occurred in the subject entry which may be corrected pursuant to section 1520(c(1).

HOLDING:

The subject entry may not be reliquidated pursuant to 19 U.S.C. 1520(c)(1).

The Office of Regulations and Rulings will take steps to make this decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels 60 days from the date of this decision.

Sincerely,

John Durant, Director
Commercial Rulings Division

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