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HQ 114765

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November 23, 1999

QUO-2-01-RR:IT:EC 114765 CC

CATEGORY: ENTRY

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

RE: Application for further review of Protest No. 2304-98-100091; TPL; 19 CFR § 12.132(b); Certificates of Eligibility

Dear Sir:

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 is women’s drawstring trousers and shorts of cotton and polyester. The protest consists of 6 entries. Four of the entries were made on March 5, 1998, one entry was made on March 9, 1998, and one entry was made on March 25, 1998. The merchandise was classified under subheadings 9802.00.8065/6104.62.20 of the Harmonized Tariff Schedule of the United States (HTSUS). In addition, under subheading 9999.00.60, HTSUS, the merchandise was eligible for a Tariff Preference Level (TPL) under the North American Free Trade Agreement (NAFTA) with the submission of a valid certificate of eligibility.

At the time of entry, valid certificates of eligibility were not submitted. Supplemental Information Letters (SIL’s) with certificates of eligibility were submitted on April 19, 1998. You found that the certificates were not valid for the subject entries and did not allow the TPL claim. Four of the entries were liquidated on May 22, 1998, and the other two entries were liquidated on January 15, 1999. The protest was filed on July 9, 1998. Valid certificates of eligibility were submitted with the protest.

ISSUE:

Whether the subject entries are eligible for preferential tariff treatment under TPL’s.

LAW AND ANALYSIS:

For the four entries liquidated on May 22, 1998, the protest was timely filed. For the other two entries, liquidated on January 15, 1999, the protest was filed prematurely, that is, prior to there being a protestable event since the merchandise had not been liquidated when the protest was filed. Subsequent to liquidation, the protestant filed another protest for the two entries liquidated on January 15, 1999. Consequently, this protest is to the liquidation of the four entries on May 22, 1998.

Many goods entered from Mexico and Canada which are considered “originating” goods from those countries are granted preferential tariff treatment under NAFTA. In addition specified textile and apparel goods imported into the U.S. from Canada or Mexico which are not “originating” goods may nevertheless be granted preferential tariff treatment like originating goods up to specific annual quantitative TPL’s. Once a TPL applicable to a NAFTA country’s exports to another NAFTA country has been reached, any further exports of goods of that TPL category to the same NAFTA country during that year may not be accorded NAFTA preferential tariff treatment, but rather will be subject to duty at the most-favored nation rate. See T.D. 95-98, the final rule implementing the submission of certificates of eligibility in 19 CFR § 12.132(b). Consequently, a TPL is a type of tariff-rate quota.

Concerning making a claim for preferential duty treatment as a TPL, 19 CFR § 12.132(b) provides the following:

In connection with a claim for NAFTA preferential tariff treatment involving non-originating textile and apparel goods subject to the tariff preference level provisions of appendix 6.B. to annex 300-B of the NAFTA and Additional U.S. Notes 3 through 6 to Section XI, Harmonized Tariff Schedule of the United States, the importer shall submit to Customs a Certificate of Eligibility covering the goods. The Certificate of Eligibility shall be properly completed and signed by an authorized official of the Canadian or Mexican government and shall be presented to Customs at the time the claim for preferential tariff treatment is filed under § 181.21 of this chapter.

Concerning the filing of a certificate of eligibility and a claim for preferential tariff treatment as a TPL after the entry is filed, T.D. 95-58 states, in a discussion of public comments on this issue, the following:

While a failure to supply the required Certificate of Eligibility will preclude the filing of a claim for preferential tariff treatment and will result in liquidation of the entry at the non-preferential duty rate, Customs believes that importers in most cases will have adequate opportunity, following the date of entry, to submit the Certificate and make the claim when the Certificate is not available at the time of entry. Customs notes in this regard that the importer may supply the necessary documentation and make the claim either at any time prior to final liquidation or in connection with the filing of a protest within 90 days following final liquidation.

We first note that the applicable laws and regulations do not specifically provide for TPL’s in the quota regulations, part 132. Therefore, there are certain issues that are not specifically provided for by the regulations, e.g., what is the time of presentation for a TPL. Consequently, when this is the case, we will look to the intent of the regulations concerning tariff rate quotas, and apply those principles to TPL’s.

Since the date of presentation determines the quota priority and status and determines when the quota is charged for tariff rate quotas (See 19 CFR §§ 132.1(d), 132.11a, and 141.68(d).), we must first determine what is the date of presentation for the scenario described. The time of presentation is the time entry summary is delivered in proper form with estimated duties attached (unless ABI procedures are used). For a TPL, the date of presentation may not be when the entry summary is filed since 19 CFR 12.132(b) provides that a certificate of eligibility must be submitted when a claim for treatment as a TPL is made and entry may be made without submitting the certificate of eligibility. Consequently, the date of presentation for merchandise eligible for a TPL which is entered without the submission of the certificate of eligibility should be the time the valid certificate of eligibility is submitted.

For the subject merchandise, valid certificates of eligibility were submitted on July 9, 1998, which would have been the date of presentation and created quota priority and status. At that time the quantitative restraints for the subject TPL had not been filled. Consequently, the subject entries were eligible for preferential tariff treatment under the TPL.

HOLDING:

The subject entries are eligible for preferential tariff treatment under TPL’s. Consequently, the protest should be GRANTED.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.

Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Jerry Laderberg

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See also:

• Tariff No.: 6104.62.20 - Women's or girls' trousers, breeches and shorts, knitted or crocheted, of cotton
• Tariff No.: 9802.00.80 - U.S. articles assembled abroad, which have not lost their physical identity or have not advanced in value or improved in condition abroad
• Tariff No.: 9999.00.60 - Imports of cotton or manmade fiber apparel from Mexico described in additional US note 3(b) to section XI except as provided in (d) and (e)