HQ 225825 - Application for further review of Protest No. 2704-94- 100047; Notice of Redelivery; Timeliness; HQ 225807; Exportation under Customs supervision - United States International Trade Commision Rulings

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HQ 225825

March 19, 1996

BON-2/PRO-2-02-RR:IT:EC 225825 CC

CATEGORY: BONDS PROTEST

Port Director
U.S. Customs Service
300 S. Ferry Street
Terminal Island
San Pedro, CA 90731

RE: Application for further review of Protest No. 2704-94- 100047; Notice of Redelivery; Timeliness; HQ 225807; Exportation under Customs supervision

Dear Sir or Madam:

The above-referenced protest was forwarded to this office for further review. We have considered the facts and issues raised, and our decision follows.

FACTS:

The merchandise the subject of this protest consists of frozen shrimp. Stamped on a copy of the Customs Form (CF) 3461, is a statement by the broker for the importer, dated March 26, 1993, that the proper FDA documentation had been or would be submitted to the FDA. The subject shrimp was entered and released on March 28, 1993. The protestant, as principal, executed a continuous bond securing the entry of the shrimp. A notice of sampling from the Food and Drug Administration (FDA), dated March 29, 1993, is stamped on the CF 3461. This notice states "the shipment must be held intact," and indicated that the FDA would be sampling the merchandise. A sample was collected by the FDA on March 31, 1993. The FDA issued a Notice of Refusal of Admission for five lots of the merchandise on July 30, 1993. This notice was issued because the shrimp appeared to contain salmonella, and decomposition, filth or both. The protestant was advised in the notice that the subject shrimp must be exported under the supervision of Customs within ninety days of the date of the notice. On October 8, 1993, Customs issued a Notice to Redeliver (CF 4647), citing FDA's refusal of admission as the reason for the redelivery request. The protest was filed on January 4, 1994.

ISSUE:

Whether the subject Notice of Redelivery was timely issued within the meaning of 19 CFR 113.62(d)?

Whether the inadmissible merchandise was exported under Customs supervision?

LAW AND ANALYSIS:

Initially, we note that a demand for redelivery is a protestable matter pursuant to 19 U.S.C. 1514(a)(4). In addition, the subject protest was timely filed in accordance with 19 U.S.C. 1514(c)(3)(B).

Section 113.62 of the Customs Regulations (19 CFR 113.62) contains the basic importation and entry bond conditions. Paragraph (d) of this provision states the following:

If merchandise is released conditionally from Customs custody to the principal ... before its right of admission into the United States is determined, the principal agrees to redeliver timely, on demand by Customs, the merchandise released if it:

(1) Fails to comply with the laws or regulations governing admission into the United States; ...

It is understood that any demand for redelivery will be made no later than 30 days after the date that the merchandise was released or 30 days after the end of the conditional release period (whichever is later).

Concerning the issue of timeliness of the redelivery notice, the protestant makes two major arguments. First, the redelivery notice was untimely because no valid conditional release period was created. Second, even if a valid conditional release period were created, the redelivery notice was not timely issued after the conditional release period ended.

Our analysis in this protest concerning the timeliness of a redelivery notice is the same as that contained in HQ 225807 of December 4, 1995, a similar protest (copy enclosed and incorporated into this ruling). In HQ 225807 we found that the failure of the FDA to issue a "may proceed notice" prior to release of the merchandise was an occurrence establishing a conditional period. The issuance of a Notice of Refusal of Admission by the FDA established an end to the conditional release period of 90 days from the date of the notice unless otherwise specified. Thus, Customs has no later than 30 days after the end of this period to issue a Notice of Redelivery. In HQ 225807, the notice of redelivery was issued within the 90 day period after the Notice of Refusal of Admission was issued. We found, therefore, that the Notice of Redelivery was timely issued within the meaning of 19 CFR 113.62(d).

In this case, we were informed by the import specialist at the port of entry that a copy of CF 3461 was sent to the FDA by the importer. The FDA either signs a "may proceed notice" or stamps and signs a notice of sampling on the CF 3461. In this case the FDA signed a notice of sampling, which was dated March 29, 1993. Consequently, the FDA failed to issue a "may proceed notice" prior to release of the subject merchandise on March 28, 1993. This failure to issue a "may proceed notice" by the FDA established a conditional period. The issuance of the Notice of Refusal on July 30, 1993 established an end to the conditional release period 90 days from that date. The Notice of Redelivery was issued on October 8, 1993, approximately 70 days after the Notice of Refusal was issued, and well within the 90 day period. Consequently, the Notice of Redelivery was timely issued within the meaning of 19 CFR 113.62(d).

The protestant's final argument is that the goods identified in the FDA's Notice of Refusal were exported in September 1993, prior to the issuance of the Notice to Redeliver. The protestant claims, therefore, that redelivery to U.S. Customs custody was both unnecessary and impossible. In support of this claim, the protestant has submitted a Shipper's Export Declaration and a Bill of Lading.

The Notice of Refusal states that the refused merchandise must be exported or destroyed under Customs' supervision (emphasis added) within 90 days from the date of the notice or within such additional time as the district director of Customs specifies. The mere fact of exportation from the United States, however, does not establish that such exportation occurred under Customs' supervision as that term is used in the applicable regulations. United States v. Continental Seafoods, Inc., 11 CIT 768, 672 F. Supp. 1481, 1487 (1987). Concerning the exportation of such merchandise, section 12.4 of the Customs Regulations (19 CFR 12.4) states the following:

The exportation of merchandise, the subject of ?12.1 [which includes foods governed by 21 U.S.C. 381], refused admission into the United States in accordance with regulations applicable thereto shall be under Customs supervision in accordance with the regulations set forth in ??18.25 and 18.26 of this chapter.

Therefore, 19 CFR 12.4 provides how inadmissable goods are to be exported: in accordance with 19 CFR 18.25 and 18.26. See, United States v. Toshoku America, Inc., 879 F.2d 815 (Fed. Cir. 1989). 19 CFR 18.25 (direct exportation) and 19 CFR 18.26 (indirect exportation) require that certain documentation be filed with Customs, e.g., copies of CF 7512 and other documentation depending on the type of exportation. In this case, there is no evidence that the required copies of CF 7512, as well as the other required documentation of sections 18.25 or 18.26, were filed with Customs. In addition, the assistant district director for commercial operations for the district where this protest was filed stated concerning this case that neither the Shipper's Export Declaration nor the Bill of Lading submitted by the protestant was certified by Customs; there was also no indication that Customs was ever permitted the opportunity to verify that the merchandise alleged to have been exported was, in reality, the merchandise that was subject to FDA refusal. Finally, the protestant has made no arguments in the protest that the merchandise was exported under Customs supervision. Consequently, we find that the inadmissible merchandise was not exported under Customs supervision in accordance with the applicable regulations, and, therefore, the notice of redelivery was necessary.

HOLDING:

The Notice of Redelivery was timely issued within the meaning of 19 CFR 113.62(d). The subject goods were not exported under Customs supervision. Therefore, 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 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, Freedom of Information Act and other public access channels.

Sincerely,

Director, International Trade

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