HQ 225569 - Request for Internal Advice; Export Documentation; Drawback claim - United States International Trade Commision Rulings

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HQ 225569

January 11, 1995

DRA-2-02-CO:R:C:E 225569 CB

CATEGORY: DRAWBACK

U.S. Customs Service
Regional Program Manager Drawback Unit
Northeast Region
10 Causeway Street, Ste. 810
Boston, MA 02222-1056

RE: Request for Internal Advice; Export Documentation; Drawback claim

Dear Sir:

This is in reply to your memorandum dated July 8, 1994 (your fie DRA-1-0:CO:L DJG), requesting internal advice regarding proof of exportation for drawback purposes.

FACTS:

The customhouse broker for the Bausch & Lomb Company has submitted a package of export documentation on which they would like your opinion. You state that the importer intends to use the totality of this documentation to establish the fact and date of exportation for drawback purposes.

The sample documentation consists of the following:

1. a bill from the Canadian Customs broker; 2. a copy of the Canadian Customs entry;
3. a copy of the Canadian Customs invoice; and 4. a copy of the commercial invoice.

The broker claims that the documents tie together so that the commercial invoice number is referenced on the Canadian Customs invoice ("CCI"). The shipping date on the commercial invoice and CCI correspond with the date of direct shipment listed on the Canadian entry. The number of packages and total values match on the CCI and entry. And, finally, the Canadian Customs transaction number on the entry is the same on the Broker's billing invoice.

During a telephone conversation between the broker and this office, the broker clarified that Bausch & Lomb would be applying for both manufacturing drawback and same condition drawback on exports to Canada.

ISSUE:

Whether the proposed documentation package satisfies the regulatory requirements for proof of exportation.

LAW AND ANALYSIS:

The Customs Regulations pertaining to drawback, promulgated under the authority of section 1313(1), are generally found in 19 CFR Part 191. However, the drawback regulations pertaining to drawback under the North American Free Trade Agreement (NAFTA) are found in 19 CFR Part 181. The regulations pertaining to meeting the evidentiary requirements for NAFTA exportations are specifically found in 19 CFR ?181.47. The importer has specified that the request for internal advice applies to exports to Canada. Therefore, the proposed documentation package has to be analyzed under both the non-NAFTA drawback and NAFTA drawback regulations. The NAFTA provisions on drawback will apply to goods exported to Canada on or after January 1, 1996.

The Customs regulations pertaining to meeting the evidentiary requirements for exportation are specifically found in 19 CFR procedures whereby the exportation of articles covered by a drawback claim may be established:

1. Certified Notice of Exportation (191.52(c)(1)); 2. Uncertified Notice of Exportation (191.52(c)(2)); or 3. Exporter's Summary (191.53).

In the request for internal advice, the broker does not specify which of the three options Bausch & Lomb will be using. It is assumed for purposes of this ruling, that the claimant will be using the uncertified notice of exportation procedure. When the uncertified notice of exportation procedure is used to support a drawback claim, it must be supported by "documentary evidence of exportation, such as the bill of lading, air waybill, freight waybill, Canadian Customs manifest, cargo manifest, or certified copies thereof, issued by the exporting carrier." Supporting documentary evidence is required to establish fully the time and fact of exportation and the identity of the exporter

The Customs Service has published a number of rulings on the evidence necessary to establish exportation for drawback purposes (see Treasury Decision (T.D.) 78-283 and Customs Service Decisions (C.S.D.'s) 79-72, 79-254, 79-399, 8259, 85-23, and 89-21). As stated in C.S.D. 79-253, the list set forth in the regulation is not exclusive and a variety of documents may be used to support uncertified notices of exportation. The ruling held that other documents certified by a disinterested third party having knowledge of the exportation are acceptable. The instant documentary package includes the Canadian Customs entry which shows the date of the physical entry of the merchandise into Canada (this date is shown in the upper right hand comer after the words "CADEX REL"). Also, the "direct shipment date" shown on the documents is the date the merchandise leaves the factory. On the basis of the cited rulings and the governing section of the Customs Regulations, the proposed documentation package is satisfactory documentary evidence of exportation for drawback purposes up until December 31, 1995.

The requirements for proof of exportation for NAFTA are found regulations will apply to the above-described fact situation as of January 1, 1996. For purposes of same condition drawback on NAFTA exportations, the regulation provides that supporting documentary evidence shall establish fully the time and fact of exportation, the identity of the exporter, and the identity and location of the ultimate consignee of the exported goods. 19 CFR air waybill, freight waybill, export ocean bill of lading, Canadian customs manifest, cargo manifest, or certified copies thereof, issued by the exporting carrier and signed in ink, as exemplars of satisfactory documentary evidence. Id. The requirements for proof of exportation under NAFTA for same condition drawback do not differ from the requirements for the uncertified notice of exportation procedure for non-NAFTA drawback.

Therefore, on the basis of the governing regulation and the conclusion reached with respect to non-NAFTA drawback proof of exportation, the proposed documentation package is satisfactory supporting documentary evidence of exportation for same condition NAFTA-eligible drawback purposes.

Regarding manufacturing NAFTA-eligible drawback claims, NAFTA provides that the amount of customs duties that will be refunded, reduced or waived will be the lesser of the total amount of customs duties paid or owed on the goods or materials when imported into a NAFTA country and the total amount of customs duties paid or owed on the finished good in the NAFTA country to which it is exported. Therefore, the proof of exportation requirements for manufacturing drawback are different. Under the regulations, proof of exportation to Canada is the Canadian entry document ("Canadian Customs Invoice or B-3), "presented with either the K-84 Statement or the Detailed Coding System." See 19 CFR ?181.47(b)(2)(I)(D) which incorporates 181.47 by reference. The regulation goes on to provide that a Canadian customs document that is not accompanied by a valid receipt [for duties paid] is not adequate proof of exportation and payment of duty in Canada. 19 CFR ?181.47(c)(1). Finally, the final customs duty determination of Canada, or a copy thereof, respecting the relevant entry must also be provided. See 19 CFR ?181.47(c)(3). A review of the document package submitted on behalf of Bausch & Lomb discloses that this package would not meet the requirements for proof of exportation for manufacturing drawback under NAFTA because there is no evidence of duties paid.

HOLDING:

The sample documentation package submitted by Bausch & Lomb is sufficient evidence to establish proof of exportation for drawback purposes, as required under 19 CFR 8191.52, as applicable, until December 31, 1995. The package also meets the requirements for proof of exportation, as set forth in 19 CFR exported to a NAFTA country. However, the documentation package fails to meet the regulatory requirements for proof of exportation for manufacturing drawback under NAFTA because there is no evidence of payment of duties.

This decision should be mailed by your office to the internal advice requester no later than 60 days from the date of this letter. On that date 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 to the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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