HQ 115557 - Protest 0901-01-100179; Notice of Redelivery; 19 C.F.R. §113.62; 19 C.F.R. §141.113; 21 U.S.C. §381;FDA Refusal of Admission - United States International Trade Commision Rulings

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HQ 115557

April 8, 2002

ENT-RR:IT:EC 115557 LLO

CATEGORY: ENTRY

Protest Review Officer
Arthur J. Lipp
111 West Huron Street
Buffalo, New York 14202

RE: Protest 0901-01-100179; Notice of Redelivery; 19 C.F.R. §113.62; 19 C.F.R. §141.113; 21 U.S.C. §381;FDA Refusal of Admission

Dear Sir:

We received your memorandum dated November 31, 2001 requesting that we review a protest regarding the redelivery of pearl powder skin treatment product. Our ruling on the matter is set forth below.

FACTS:

On October 22, 2000, The Shopping Channel, imported pearl powder skin treatment into the port of Buffalo, New York. On November 1, 2000 the skin treatment was released by Customs into the possession of the Shopping Channel. The Food and Drug Administration (FDA) issued a Notice of FDA Action on November 6, 2000 indicating that a hold had been designated for the skin treatment pending FDA review. On December 7, 2000 the FDA issued a second Notice of FDA Action indicating that a hold had been designated for the skin treatment, and that the product had been detained the day before, on December 6, 2000. The FDA’s second notice informed the protestant that the labeling on the product failed to comply with the cosmetic labeling requirements of 21 C.F.R. §602(a), and requested a clear copy of the labeling. On December 20, 2000, the FDA issued a third notice indicating that a hold had been designated for the skin treatment, and that the product was being detained, and again requesting a clear copy of the labeling for a second time. On January 11, 2001 the FDA issued a joint Refusal of Admission/Customs Notice of Redelivery for the pearl powder skin treatment. On May 18, 2001 the Protestant filed a CF6445 Customs Protest and Summons Information Report, protesting Customs demand for redelivery of the product.

ISSUE:

Whether the subject Notice of Redelivery was timely issued within the meaning of 19 C.F.R. § 113.62.

LAW AND ANALYSIS:

Title 21 U.S.C. §381provides in pertinent part that ”[t]he Secretary of the Treasury shall cause the destruction of any such article refused admission unless such article is exported, under regulations prescribed by the Secretary of the Treasury, within 90 days of the date of notice of such refusal or within such additional time as may be permitted pursuant to such regulations. “

Additionally, title 19 C.F.R. §113.62 contains the basic importation and entry bond conditions. Paragraph (d) of this provision provides as follows:

If merchandise is released from Customs custody to the principal before its right of admission into the U.S. is determined, the principal agrees to redeliver timely on demand by Customs, the merchandise if it: (1) Fails to comply with the laws or regulations governing admission into the United States.

Paragraph (e) of this provision also provides that if merchandise is released to the principal before its right of admission is determined, the principal, after notification, agrees to do any other thing(s) to the merchandise in order to comply with the laws and regulations governing its admission into the U.S. within the time period set forth in the notification. 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.

The Protestant in this matter presents several arguments as to why the Customs Notice to Redeliver was invalid and unenforceable as to redelivery of its skin treatment.

The majority of Protestant’s arguments are based upon similarities drawn between the situation at hand, and U.S. v. So’s USA, Slip Op. 99-90 (1999). (hereafter So’s). The first argument presented by the Protestant is that the subject FDA notices are no more specific as to a conditional release period than the FDA notice provided the importer in So’s, which was found to be insufficient by the court. With regard to this issue, the facts of So’s and the situation at hand are distinguishable. The Protestant states that “[t]he (So’s) court found that the notification “Hold at CES for FDA Examination” on the CF3461 Entry/Immediate Delivery form, was insufficient notice of a conditional release period. However, it should be noted that the facts in So’s indicate that there were six identified CF 3461 forms all of which were marked with a varying combination of stamps, and because the Customs file was missing, it was unclear to the court which CF3461 the Government had sent to the importer. Additionally, the facts in So’s indicate that the CF 3461 that the Government claimed the importer had been sent was stamped with two contradictory messages, one stating “Hold at CES” and the second stamp stated ”FDA MAY PROCEED: No FDA Sample is Desired from this Entry.”

In this situation, on the other hand, a Notice of FDA Action was issued that boldly stated “Hold Designated,” and stated with regard to the current status of the product indicated that it was “pending FDA review.” These are clear, non-conflicting indicators to the importer that the product was not yet free to enter the U.S. stream of commerce.

The Protestant goes on to argue that the FDA notice failed to clearly notify it that a conditional release period had begun, what the importer’s obligations were with respect to Customs and what event would end the conditional release.

While in So’s, Customs was arguably responsible for the information contained on its own forms, such as the CF3461, in situations such as this, where the form for another agency is involved, it should be noted that Customs lacks any control over the information contained in another agency’s form.

Additionally, it should be noted that a release by Customs is not necessarily a conclusive authorization that the merchandise can proceed into the stream of commerce. Customs is responsible for delivering any merchandise that is presented for entry into the United States, back to the importer. However, various U.S. Government agencies including the Food and Drug Administration, United States Department of Agriculture, Consumer Product Safety Commission and the Bureau of Alcohol, Tobacco and Firearms can issue a notice to an importer indicating that a product cannot proceed freely into the stream of commerce for any number of reasons. When this occurs, although Customs may have authorized delivery of the product to the importer in the form of a release, notices of problems with an entry from other U.S. Government agencies create an obligation on the part of the importer to comply in the manner requested until a determination as to the admissibility of the entry is made, making any release by Customs conditional and the notice by other U.S. Government agencies a priority that essentially supersedes a Customs release of an entry to the importer.

The Protestant further argues that the FDA notice failed to inform the importer of its obligations with respect to Customs. It was not necessary for the Notice of FDA Action to inform the importer of its obligations with regard to Customs because the importer is informed of its obligations to Customs by Customs, in its bond, as outlined in 19 C.F.R. §113.62.

The Protestant then goes on to argue that it was not informed of what event would end the conditional release. Since the conditional release in this case began with the issuance of the Notice of FDA Action regarding the skin treatment, compliance with the requests made by the FDA, along with some type of notice from FDA indicating that the entry was then free to enter the U.S. stream of commerce could have ended the conditional release. In this case, where the importer may have failed to comply with FDA’s requests regarding the merchandise, the event constituting an end to the conditional release period was the issuance of the FDA Refusal of Admission/Customs Notice of Redelivery. Since the conditional release of the skin treatment ended with the issuance of the FDA Refusal of Admission, the Customs Notice of Redelivery must be issued within 30 days of a conditional release pursuant to 19 C.F.R. §113.62. In this case, the Customs Notice of Redelivery was made jointly with the FDA Refusal of Admission, making the Notice of Redelivery timely and therefore enforceable.

In addition to the arguments noted above, the Protestant argues that Customs failed to issue a valid demand for redelivery because a demand was not made on a CF 4647 or by letter. Under 19 C.F.R. §141.113(f) the form of demand for a demand of return of merchandise to Customs Custody shall be made in one of three ways:
on a CF4647, or; other appropriate form, or; by letter.

In this situation the Customs Notice of Redelivery was issued on a form that clearly noted the entry number, product description for the entry in question, the importer’s name and address, time frames and other limitations for which redelivery, exportation or destruction were to occur and the appropriate address to which all relevant, specifically named items were to be returned. Additionally, the form bears the signature of the Area Port Director for Customs. The form described can easily be characterized as an “other appropriate form,” and is valid under 19 C.F.R. §141.113 for these reasons.

The fourth and final argument presented by the Protestant is that the importer did not breach its entry bond for failure to redeliver in response to a FDA Notice of Refusal. While this argument may or may not be valid, it need not be addressed since a valid demand for redelivery was made by Customs as discussed above.

HOLDING:

Following a thorough review of the facts in this case as well as an analysis of the law and applicable precedents that bear upon those facts, we have determined that the Protest should be denied for the reasons set forth in the Law and Analysis portion of this ruling.

Sincerely,

Larry L. Burton
Chief

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