HQ 561748 - Protest and Application for Review No. 3801-00-100301; NAFTA Certificate of Origin; Section 520(d) Claim - United States International Trade Commision Rulings

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HQ 561748

September 5, 2002

MAR-2-05 RR:IA 561748 RFC

CATEGORY: NAFTA

Port Director of Customs
U.S. Customs Service
477 Michigan Avenue
Detroit, MI 48226

RE: Protest and Application for Review No. 3801-00-100301; NAFTA Certificate of Origin; Section 520(d) Claim

Dear Sir or Madam:

This is in reference to a Protest and Application for Further Review (number 3801-00-100301) filed by Windsor Machine Products, Inc., contesting the denial of a North American Free Trade Agreement (NAFTA) claim for preferential tariff treatment under General Note 12 of the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The merchandise this is the subject of this protest consists of various automobile parts imported from Canada. The merchandise was imported on the following dates: October 14, 15, 19, & 22 1998; November 9, 13, 18, 25 & 30, 1998; and December 4 & 15, 1998.

The merchandise was entered on the following dates: October 27, 28, & 30, 1998; November 5, 23 & 30, 1998; and December 3, 10, 15, 18 & 30, 1998.

The merchandise was liquidated on the following dates: August 27, 1999; September 3 & 24, 1999; October 1, 8 & 15, 1999; and November 12, 1999.

On October 13, 1999, a NAFTA claim was made for preferential tariff treatment (post-importation duty refund claim) under HTSUS General Note 12 that covered all the above-mentioned merchandise. On January 12, 2000, the port denied the claim on the basis that the claim did not satisfy the requirements for such a claim insofar as no written declaration attesting to the fact that the merchandise qualified as originating at the time of importation was submitted by the importer, as required by 19 U.S.C. § 1520 (d)(1) and 19 CFR § 181.32 (b)(1).

On April 11, 2000, a protest was filed against the denial of the NAFTA claim for preferential tariff treatment. The protest was filed within ninety days from the dates of liquidation.

In support of its protest, the protestant submits the following arguments:

The regulations do not spell out the form of the declaration, leaving that to the discretion of the importer. Likewise, the regulations do not spell out the "other documentation relating to the importation of the goods as the Customs Service may require." Thus the exact form and requirements to the petition are left open, except that a NAFTA Certificate of Origin is required.

This means that any written statement claiming that the goods qualified under the NAFTA rules of origin at the time of importation is acceptable. The letter that accompanied the 520 (d) petition contains the following statement;

"These entries were entered without the privilege of NAFTA. Attached, for your review, are copies of the NAFTA Certificates that apply to these entries and a spreadsheet listing the information specific to each entry."

It is the position of the importer that the phrase "...copies of the NAFTA Certificates that apply to these entries..." is a declaration that the good qualified under those rules at the time of importation. Clearly, if the NAFTA Certificates of Origin apply to these entries, the goods on those entries qualified at the time of importation and entry. The regulations do not require that the phrase "the good qualified under the rules at the time of importation" be used, but only that the goods be claimed to originate at the time of importation. The presentation of the NAFTA Certificates of Origin with a letter, stating that they apply to the entries, makes that claim.

It is also the position of the importer that the certification on the Certificate of Origin which states that "...the goods on that certificate originated in the territory of one or more of the parties, and comply with the origin requirements specified for those goods in the North American Free Trade Agreement...," fulfills that requirement when the blanket period in box 2 of the certificate encompasses the date of importation, even when the date in box 11a is after that date range. In other words, to sign and date, in 1999, a declaration with a blanket period of 101098 to 123198 is a declaration that the goods referred to on the certificate qualified for preferential treatment in 1998.

It has also been suggested that the following language, contained in a document identified as a "NAFTA 520(D) Questionnaire" that was completed by the exporter (Windsor Machine Products Inc), satisfies the requirements of 19 U.S.C. § 1520 (d)(1) and 19 CFR § 181.32 (b)(1):

Pursuant to section 181.32(b)(1), we state that the goods entered on the attached mentioned entry summary (ies) qualified as originating, under the NAFTA rules of origin, at the time of export. Certification provided as per attached signed CF434 (NAFTA certificate).

The record reflects that this questionnaire accompanied the October 13, 1999, NAFTA claim for preferential tariff treatment.

The protestant then concludes its arguments by quoting from Headquarters Ruling Letter 227909 (November 2, 1998), which in turned quoted from Mattel, Inc. v. United States, 72 Cust Ct. 257, 262, C.D. 4547, 377 F.Supp. 955 (1974), and contends that the decision in this case relating to the sufficiency of protests should be applied to the instant case.

ISSUE:

How does one satisfy the statutory and regulatory requirement for a post-importation NAFTA claim for preferential tariff treatment (post-importation duty refund claim) that a written declaration stating that the good qualified as an originating good at the time of importation be submitted to the Customs Service, as set forth in 19 U.S.C. § 1520 (d)(1) and 19 CFR § 181.32 (b)(1)?

LAW AND ANALYSIS:

The requirement that one must submit with a claim for NAFTA preferential tariff treatment a written declaration attesting that the good qualified as an originating good at the time of importation has its genesis in the agreement itself:

Article 502: Obligations Regarding Importations

1. Except as otherwise provided in this Chapter, each Party shall require an importer in its territory that claims preferential tariff treatment for a good imported into its territory from the territory of another Party to:

(a) make a written declaration, based on a valid Certificate of Origin, that the good qualifies as an originating good;

(b) have the Certificate in its possession at the time the declaration is made;

(c) provide, on the request of that Party's customs administration, a copy of the Certificate; and

(d) promptly make a corrected declaration and pay any duties owing where the importer has reason to believe that a Certificate on which a declaration was based contains information that is not correct.

2. Each Party shall provide that, where an importer in its territory claims preferential tariff treatment for a good imported into its territory from the territory of another Party:

(a) the Party may deny preferential tariff treatment to the good if the importer fails to comply with any requirement under this Chapter; and

(b) the importer shall not be subject to penalties for the making of an incorrect declaration, if it voluntarily makes a corrected declaration pursuant to paragraph 1(d).

3. Each Party shall provide that, where a good would have qualified as an originating good when it was imported into the territory of that Party but no claim for preferential tariff treatment was made at that time, the importer of the good may, no later than one year after the date on which the good was imported, apply for a refund of any excess duties paid as the result of the good not having been accorded preferential tariff treatment, on presentation of:

(a) a written declaration that the good qualified as an originating good at the time of importation (emphasis added);

(b) a copy of the Certificate of Origin; and

(c) such other documentation relating to the importation of the good as that Party may require.

Article 502, North American Free Trade Agreement, December 17, 1992, Can-Mex-U.S., 32 I.L.M. 289 (1993).

The post-importation requirements for NAFTA preferential tariff treatment claims have been implemented and codified into U.S. statutory law:

(d) Goods qualifying under NAFTA rules of origin. Notwithstanding the fact that a valid protest was not filed, the Customs Service may, in accordance with regulations prescribed by the Secretary, reliquidate an entry to refund any excess duties paid on a good qualifying under the rules of origin set out in section 3332 of this title for which no claim for preferential tariff treatment was made at the time of importation if the importer, within 1 year after the date of importation, files, in accordance with those regulations, a claim that includes-- (1) a written declaration that the good qualified under those rules at the time of importation; (2) copies of all applicable NAFTA Certificates of Origin (as defined in section 1508(b)(1) of this title); and (3) such other documentation relating to the importation of the goods as the Customs Service may require. (Emphasis added.)

Section 206 of Pub. L. 103-182 (December 8, 1993) (19 U.S.C. § 1520 (d)).

The legislative history to the North American Free Trade Agreement Implementation Act serves to confirm the requirement that when making a post-importation claim for NAFTA preferential tariff treatment, one must submit a written declaration attesting to the fact that the goods qualified for the treatment at the time of importation: Present law
Section 520(c) of the Tariff Act of 1930 and implementing regulations provide that a liquidated entry may be reliquidated, even if a protest was not filed within the required 90-day period, due to a clerical error, mistake of fact, or other inadvertence. The mistake must be brought to the attention of the Customs Service within one year after liquidation. Explanation of Provision
Section 206 of H.R. 3450 amends section 520 of the Tariff Act to authorize the Customs Service to reliquidate an entry to refund any excess duties paid and provide NAFTA tariff treatment to the entry. In order to qualify for such reliquidation, the importer must, within one year after the date of importation, file a NAFTA claim in accordance with the implementing regulations, which includes the following documentation: (1) a written declaration that the good qualified under those rules at the time of importation; (2) copies of all applicable NAFTA certificates of origin; and (3) such other documentation that Customs may require. (Emphasis added.) Reasons for change
Section 206 implements sections of NAFTA Article 502 imposing U.S. obligations regarding preferential tariff treatment and the refund of excess duties paid as a result of incorrect declarations.

Section 206 of H.R. Doc. No. 103-316, 103rd Cong., 1st Sess. (1993).

The Customs Service's regulations implement the requirement that whenever a post-importation claim for NAFTA preferential tariff treatment is made it must include a written declaration attesting to the fact that the good qualified as an originating good at the time of importation1:

Post-Importation Duty Refund Claims Filing procedures:

(a) Place of filing. A post-importation claim for a refund under Sec. 181.31 of this part shall be filed with the director of the port at which the entry covering the good was filed.

(b) Contents of claim. A post-importation claim for a refund shall be filed by presentation of the following:

(1) A written declaration stating that the good qualified as an originating good at the time of importation and setting forth the number and date of the entry covering the good (emphasis added);

(2) Subject to Sec. 181.22(d) of this part, a copy of each Certificate of Origin (see Sec. 181.11 of this part) pertaining to the good;

(3) A written statement indicating whether or not the importer of the good provided a copy of the entry summary or equivalent documentation to any other person. If such documentation was so provided, the statement shall identify each recipient by name, Customs identification number and address and shall specify the date on which the documentation was provided;

(4) A written statement indicating whether or not the importer of the good is aware of any claim for refund, waiver or reduction of duties relating to the good within the meaning of Article 303 of the NAFTA (see subpart E of this part). If the importer is aware of any such claim, the statement shall identify each claim by number and date and shall identify the person who made the claim by name, Customs identification number and address; and

(5) A written statement indicating whether or not any person has filed a protest or a petition or request for reliquidation relating to the good under any provision of law, and if any such protest or petition or request for reliquidation has been filed, the statement shall identify the protest, petition or request by number and date.

19 CFR § 181.32

In light of the above, it is evident that the submission of a formal written declaration attesting to the fact that the goods in question qualified as originating at the time of importation is a requirement for filing a post-importation NAFTA claim for preferential tariff treatment.

In the instant case, although no such formal declaration was submitted attesting to the fact that the goods in question qualified as originating at the time of importation, another declaration was submitted that could reasonably be held to serve and satisfy the same purpose. Specifically, as indicated above, a document identified as a "NAFTA 520(D) Questionnaire" was completed by the exporter and accompanied the October 13, 1999, NAFTA claim for preferential tariff treatment. The questionnaire stated, in part, as follows:

Pursuant to section 181.32(b)(1), we state that the goods entered on the attached mentioned entry summary (ies) qualified as originating, under the NAFTA rules of origin, at the time of export. Certification provided as per attached signed CF434 (NAFTA certificate).

In view of the fact that the country of exportation (Canada) and the United States are contiguous countries, the date of exportation for each of the goods subject to this protest is the same as the date of importation for each of the goods. Therefore, attesting to the fact that the goods qualified as originating at the time of exportation can reasonably be considered the same as attesting to the fact that the goods qualified as originating at the time of importation. Accordingly, in the instant case, the declaration attesting to the originating status of the goods when exported from Canada can be accepted as satisfying the requirement that a written declaration be submitted attesting to the fact that the goods qualified as originating goods at the time of importation, as required by 19 U.S.C. § 1520 (d)(1) and 19 CFR § 181.32 (b)(1).

HOLDING:

The post-importation claim for NAFTA preferential tariff treatment under 19 U.S.C. § 1520 (d) should be granted because the requirement that a written declaration that the good qualified as an originating good at the time of importation was satisfied, as required by 19 U.S. C. § 1520 (d)(1) and 19 CFR § 181.32 (b)(1). Accordingly, the protest should be granted.

In accordance with section 3 A (11) (b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject Revised Protest Directive, you are to mail this decision, together with Customs Form 19, to the protestant no later than sixty (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 (60) days from the date of this decision, the Office of Regulations and Rulings will make the decision available to U.S. Customs Service personnel, and to the public on the U.S. Custom Service web site (ww.customs.gov), by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Acting Director
Commercial Rulings Division

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