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HQ 559296




CLA-2 RR:TC:SM 559296 BLS

CATEGORY: CLASSIFICATION

Port Director
U.S. Customs Service
P.O. Box 3130
Laredo, TX 78044-3130

RE: Application for Further Review of Protest No. 2304-95-100001; NAFTA preferential treatment; Certificate of Origin; 19 CFR 181.21(a); 181.22(b);

Dear Sir:

This is in reference to the memorandum dated June 22, 1995, from Import Specialist Jeffrey Saum (Duty Assessment Branch II, Harlingen, TX), forwarding the above-captioned protest, timely filed on behalf of Rol Manufacturing Company ("Protestant").

FACTS:

Protestant filed eight (8) entries during the period June through July 1994 covering automobile parts, claiming duty-free treatment as U.S. goods returned under subheading 9801.00.10, Harmonized Tariff Schedule of the United States (HTSUS), for certain parts, and classification under subheading 8708.92.50, HTSUS, ("Muffler/Exhaust Pipe: For other vehicles"), for other parts claimed to be of Canadian origin. Rol claimed preferential duty treatment under the North American Free Trade Agreement (NAFTA), for the goods claimed to be of Canadian origin.

The sequence of events, as reported by the concerned import specialist, is as follows:

1) On August 12, 1994, the import specialist sends a Request for Information (CF 28) requesting a certificate of origin (CF 434) in connection with C.E. 480-1895114 dated July 12, 1994.

2) In response, Rol submits a blanket certificate of origin covering all of 1994 reflecting a signature date of August 23, 1994. Since the document was executed
by Rol's parent company in Canada, Rol Manufacturing Ltd., and not by the exporter listed on the the entry (Desarrollo Transnacional, S.A.), the import specialist requests a certificate of origin executed by Desarrollo.

3) A second blanket certificate of origin covering calendar year 1994, is submitted by Rol, executed by Desarrollo, reflecting a signature date of September 7, 1994.

4) By Notice of Action dated September 12, 1994, the Customs officer denies the NAFTA claim for duty preference in connection with CE 480-1895114, for failure to have a certificate of origin on file on the date of entry (July 12, 1994).

5) On September 15, 1994, the import specialist requests a certificate of origin covering all open Rol entries with NAFTA claims. Neto Roser, Rol's U.S. broker, states orally that no other certificate of origin exists.

6) On October 7, 1994, CE 480-1895114 is liquidated with a rate advance in regard to the NAFTA claims.

7) By Notice of Action dated October 19, 1994, the import specialist denies NAFTA claims on the other seven open Rol entries filed between May 12, 1994 and August 10, 1994, for failure to submit the requested certificates of origin.

8) On November 14, 1994, the seven entries are liquidated with a rate advance. in regard to the NAFTA claims.

9) By Protest and Application for Further Review dated January 4, 1994, Rol submits (through its broker) a blanket certificate of origin dated January 1, 1994, covering calendar year 1994, which encompasses all of the parts imported by Rol under cover of the eight subject entries.

In its submission furnished with the protest, protestant contends that the parts entered as Canadian origin qualify for NAFTA preferential treatment and that the failure to furnish certificates of origin upon entry was the result of confusion in connection with the new NAFTA requirements. Protestant claims that completed "certificates" of origin for all eight entries were in place when the entries were made, but were not submitted due to a lack of understanding of the new requirements, and that its Canadian branch mistakenly submitted a certificate of origin in connection with C.E. 480-18951144 reflecting the date of preparation, September 7, 1994, rather than the actual certificate of origin predating the entry.

In an additional submission dated January 10, 1996, Rol claims that upon receipt of the CF 28, it believed that Customs required a new certificate of origin, to support re-importation of the products after packaging in Mexico. Accordingly, a new certificate was executed and its date reflected the date of preparation. Rol claims that in fact copies of the certificate were on file at the time the claim for NAFTA preference was made, at the time of entry.

Protestant also claims that with the exception of the U.S. goods returned, all of the imported goods were misclassified upon entry, as mufflers or exhaust pipes, and that the articles should have been classified as gasket sets under subheading 8484.90, HTSUS (Gaskets... of metal, sets, Other), or if packaged individually, based on their component material, i.e., HTSUS subheading 4016.93 (Other articles of vulcanized rubber other than hard rubber, Other, Gaskets); HTSUS subheading 5911.90 (Textile products and articles, for technical uses, Other); HTSUS subheading 8484.90 (Gaskets... of metal, Other); HTSUS subheading 4823.90 (Other articles of paper,... cut to size or shape, Other); and HTSUS subheading 3926.90 (Other articles of plastic, Other).

The concerned import specialist concurs with the corrected classification of the imported parts as set forth in the submitted protest (CF 6445) and also advises that the advance in value only affects the parts claimed to be of Canadian origin. The claims regarding U.S.-origin of various parts have been accepted. However, the import specialist is of the opinion that the blanket certificate of origin dated September 7, 1994, originally submitted in connection with the entries, indicates that protestant had no CF 434 on file at the time the entries were made since the certificate postdates the entries. Therefore, it is the import specialist's opinion that the NAFTA preference claims made in connection with these entries did not meet the documentary requirements under section 181.21(a), Customs Regulations (19 CFR 181.21(a)).

ISSUE:

Whether the automobile parts subject to this protest are entitled to preferential tariff treatment under the NAFTA.

LAW AND ANALYSIS:

Section 181.21(a), Customs Regulations (19 CFR 181.21(a)), provides that in connection with a claim for preferential tariff treatment for a good under the NAFTA, the U.S. importer shall make a written declaration that the good qualifies for such treatment. With certain exceptions not here pertinent, the regulation
further provides that the "...declaration shall be based on a complete and properly executed Certificate of Origin which is in the possession of the importer and which covers the good being imported."

Section 181.22(b), Customs Regulations (19 CFR 181.22(b)), provides in part that an importer who claims preferential tariff treatment on a good under 19 CFR 181.21 shall provide, at the request of the district director, a copy of each Certificate of Origin pertaining to the good which is in the possession of the importer.

In the subject case, the importer declared on each of the eight entries that the imported articles qualified for preferential tariff treatment under the NAFTA. Thus, under 19 CFR 181.21(a), the importer was required to have in its possession at the time of entry the appropriate certificate of origin covering the merchandise. The record shows that in connection with the request concerning CE 480-1895114, a blanket certificate of origin for calendar year 1994 was filed encompassing all of the merchandise covered by the subject entries, but such certificate postdated the entries, and under these facts could not have been in the importer's possession at the time the NAFTA preference claim was made. Thus, the import specialist acted properly in denying the NAFTA claim. After liquidation, the importer submitted an amended blanket certificate of origin dated January 1, 1994 through December 31, 1994, which predated the entries, claiming that this document was in its possession upon entry, and that the previously filed document was erroneously submitted.

After review of this matter, and particularly noting the fact that there may have been some confusion in connection with the new NAFTA requirements, we accept as true protestant's representation that the certificate of origin covering the subject entries was in its possession at the time the claim for duty preference under NAFTA was made. We also find that protestant has otherwise complied with the requirements under 19 CFR 181.21(a). However, in connection with future entries, protestant should now be fully aware of its obligations under 19 CFR 184.21(a), and that any claim for NAFTA preference must be supported by verifiable evidence that a certificate of origin was in the importer's possession at the time the claim was made. We also find, in accordance with the concerned import specialist's determination, that the amended classifications of the various gaskets and gasket sets as set forth by the importer on the protest documents are correct.

HOLDING:

1) Based on the information in the record, we find that a certificate of origin covering all of the subject merchandise was in the possession of the importer at the time the claim for NAFTA preference was made. Therefore, protestant has complied with the requirements of 19 CFR 181.21(a).

2) The classification of the various parts are correctly set forth by the protestant on the protest, as affirmed by the concerned import specialist, as follows: gasket sets - HTSUS subheading 8484.90 (Gaskets...of metal, sets, Other); rubber parts - HTSUS subheading 4016.93 (Other articles of vulcanized rubber other than hard rubber, Other, Gaskets); textile parts - HTSUS subheading 5911.90 (Textile products and articles, for technical uses, Other, Gaskets); metal parts - HTSUS subheading 8484.90 (Gaskets of metal, Other); paper parts - HTSUS subheading 4823.90 (Other paper, cut to size or shape, Other); plastic parts - HTSUS subheading 3926.90 (Other articles of plastic, Other).

Under these circumstances, you are directed to grant the protest in full.

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 Ruling Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,


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