HQ 230089 - AFR 5301-02-100200; drawback; prior notice of exportation; unused merchandise drawback; waiver of prior notice of exportation; evidence of exportation; 19 U.S.C. 1313(j)(1); 19 CFR 191.35; 19 CFR 191.36 - United States International Trade Commision Rulings

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HQ 230089

May 26, 2004

DRA-4-RR:CR:DR 230089 IOR

CATEGORY: DRAWBACK

Port Director
Customs and Border Protection
2350 N. Sam Houston Parkway East
Suite 1000
Houston, TX 77032-3126

Attn: Deidra Golden

RE: AFR 5301-02-100200; drawback; prior notice of exportation; unused merchandise drawback; waiver of prior notice of exportation; evidence of exportation; 19 U.S.C. 1313(j)(1); 19 CFR 191.35; 19 CFR 191.36

Dear Sir:

The above-referenced protest was forwarded to this office for further review. We have considered the points raised by the protestant and your office. Our decision follows.

FACTS:

The protest is of the denial of drawback for four drawback entries. The drawback entries were filed from January through August 2001, and designated Polybutene 24 imported by the protestant, Synthetic Oils & Lubricants (“SOLTEX”). The drawback was claimed on the basis of unused merchandise under 19 U.S.C. §1313(j)(1). Drawback was denied for the failure to comply with 19 CFR 191.35, notice of intent to export. In addition, an application for the retroactive waiver of prior notice was denied. The drawback entries at issue are MS6-xxxx001-5, MS6-xxxx002-3, C53-xxxx350-3, and MS6-xxxx003-1, and they were liquidated on February 8, 2002.

By letter dated August 10, 2001, the protestant submitted to the U.S. Customs Service (now U.S. Customs and Border Protection) (“CBP”), a request for approval of a waiver of the prior notice of intent to export under Customs Regulations 191.91 (19 CFR 191.91). Included in the information is a list of the imported and exported product designations as follows:

Import Designation Soltex Designation

(Foreign seller’s code)

Polybut 0 Polybutene 6

Polybut 06 Polybutene 8

Polybut 09 Polybutene 10
Polybut 010 Polybutene 12
Polybut 025 Polybutene 16
Polybut 05E Polybutene 18
Polybut 5 Polybutene 20
Polybut 10 Polybutene 24
Polybut 30 Polybutene 32
Polybut 150 Polybutene 122
Polybut 200 Polybutene 128

The protestant states that the differences in the above grades can be defined by a difference in viscosity and molecular weight. With regard to records, the application states that extensive records are kept for all phases of inventory management, and that inbound and outbound storage tank activity is reported weekly. With regard to accounting, the application states that the FIFO method is used for accounting. A subsequent letter dated November 21, 2001, which is referenced as an amendment to “Application under Section 191.93” states that “as of April 1, 2001, Soltex will maintain their inventory recording system on a first-in-first-out (FIFO) basis due to the purchase of domestic product in addition to the purchase of imported product.”

With respect to entries 001-5 and 002-3, the port issued a letter to the protestant dated January 23, 2002, stating that drawback was denied in full for the reason that:

Not in compliance with the time frames for 1313(j)(1), i.e., an export cannot occur prior to importation of the drawback eligible merchandise as per 19 CFR 191.31 and company not approved for retroactive waiver of prior notice per 19 CFR 191.36.

With respect to entries 350-3 and 003-1, the port issued a letter to the protestant dated January 23, 2002, stating that drawback was denied in full for the reason that: Company not approved for retroactive waiver of prior notice per 19 CFR 191.36, these claims are not eligible for drawback refund.

The descriptions of the drawback entries below, illustrate the factual situations for the four entries.

Drawback claim MS6-xxxx003-1 was filed on August 13, 2001. The claim was for drawback under 19 U.S.C. §1313(j)(1). The claim identified 261,460 lbs. of Polybutene 24, imported by entry no. WBA-xxxx032-0, on January 12, 2001. The merchandise was asserted to have been exported in six shipments of Polybutene 24, in a total quantity of 261,460 lbs. to Canada, from January 3, 2001, through March 29, 2001.

By letter dated November 6, 2001, the Drawback Unit requested that SOLTEX submit invoices and proof of export for three of the exportations identified on the drawback claim, and certificates of analysis for the imported and exported merchandise. A “Certificado de Analisis” dated December 10, 2000 for “Polybut 30” included in the file appears to be an analysis of the imported merchandise prior to its exportation. On or about November 27, 2001, the drawback claim was amended to change the identified import to WBA-xxxx660-9, of Polybutene 24 which was imported on November 10, 2000. The quantity of measure and amount of duty claimed was not amended.

The export documentation submitted for the three requested shipments consists of an export invoice, an uncertified copy of a signed bill of lading indicating shipment of Polybutene 24 from Houston to Canada, the Canadian Customs Coding Form (the “B3”), and a NAFTA Certificate of Origin. The Certificates of Origin indicate the merchandise is from Argentina. The bill of lading for one of the exports is not dated, and the bills of lading for two exports include a loading date, but no date of importation into Canada.

The Canadian B3s submitted identify the vendor and the importer consistently with the invoice, and reference the same purchase order number as the invoice and bill of lading. The “direct shipment date” and the “release date” is provided on each B3. The merchandise is described as “Polybutene”. The declaration is not executed, meaning that no broker name is entered, the declaration is not dated, and there is no signature. The pre-printed declaration states “I [insert individual name] of [insert broker name] declare the particulars of this document to be true, accurate and complete.” The declaration has space for a date and a signature. We note that the release date on the B3 is consistent with the asserted dates of export on the document provided by the Canadian purchaser.

The export documents are consistent as to the quantities shipped, and the exports indicated on the chronological summary of exportations. A certificate of analysis was provided for one of the three exports, and refers to the merchandise as “polybutene 24”.

In the case of drawback entry 350-3, for the four asserted exports for which proof of exportation was requested, documentation was submitted for three of the exports, and none could be provided for the fourth one and that export was accordingly removed by the protestant from the drawback claim. With regard to the remaining three asserted exports, the documents consisted of an invoice, dated signed or unsigned bill of lading, and a completed “Canadek Declaration” (“Canadek”). The Canadek is essentially the same document as the NAFTA Certificate of Origin, and shows the merchandise as being of Argentinian origin. Documentation for yet a fifth asserted export was provided and in addition to the invoice, bill of lading and Canadek, a broker’s B3 was included. The B3 was not executed but included a Canadian duty paid stamp dated 8 days after the stated release date.

Drawback claim MS6-xxxx002-3, was filed on January 18, 2001. The claim was for drawback under 19 U.S.C. §1313(j)(1). The claim identified 1,482,440 lbs. of Polybutene 24, imported by five import entries from January 24, 2000 through November 10, 2000. The merchandise was said to have been exported as 27 shipments of Polybutene 24, six shipments of Polybutene 32, and one shipment of Polybutene 6, in a total quantity of 1,482,440 lbs. to Canada, from January 10, 2000, through December 12, 2000.

Subsequently, on or about November 27, 2001, the drawback claim was amended to change the identified import of January 24, 2000, to one of Polybutene 24, made on December 11, 1999. The change was made so that all of the exports would have occurred subsequent to at least one of the importations. .
By letter dated September 11, 2001, the Drawback Unit requested that SOLTEX submit proof of export for three of the exportations identified on the drawback claim. The export documentation submitted for the three requested shipments consists of an export invoice, an uncertified copy of a signed or unsigned bill of lading indicating shipment of the invoiced polybutene to Canada, the B3, and a NAFTA Certificate of Origin. The bills of lading do not contain a date of importation into Canada.

The Canadian B3s submitted identify the vendor and the importer consistently with the invoice, and reference the same purchase order number as the invoice and bill of lading. The B3s include a “direct shipment date” and a “release date”. The merchandise is described as “Polybutene” or “Polybutylene”. The declarations on the B3s are executed to the extent that the brokerage name and date are included, but no individual is named, nor is there an individual signature. In the case of drawback entry 001-5, the B3s submitted are executed to the same extent, except one B3 is stamped with an illegible stamp that refers to Canada. It may be a duty-paid stamp. The pre-printed declaration states “I [insert individual name] of [insert broker name] declare the particulars of this document to be true, accurate and complete.” The declaration has space for a date and a signature.

Some inventory storage documentation was provided with regard to entry WBA-xxxx564-6, which is an entry identified for drawback in drawback claim 001-5. The documentation included the import invoice and a summary of quantities of merchandise discharged into two storage tanks. According to the CF 7501, the merchandise was imported on May 22, 1999, on the Bow Cardinal. According to the invoice, the merchandise consisted of Polybut 10 (Polybutene 24) and Polybut 30 (Polybutene 32). The total quantity entered was 997,545 kg and the total quantity discharged into tanks 41 and 47 was 997,544 kg. The merchandise was discharged into tanks 41 and 47 on May 23 and 24, 1999. The inventory records provided, did not include May, 1999. One set of records did show an input from the Bow Cardinal on March 10, 1999, which however is over two months prior to the date the identified merchandise was imported.

In addition, with respect to claim 001-5, the documentation provided for one of the selected exports was not consistent with respect to the value of the merchandise, and we cannot determine that the merchandise asserted to have been exported and for which an invoice was provided is the same as that reflected on the B3 submitted. According to the B3, the value of the merchandise said to have been exported is $20,070.72, while the invoice and bill of lading reflect a sales price of $19,068.48. The difference between the U.S. and Canadian dollar does not account for the discrepancy.

With respect to all four drawback claims, no notice of intent to export merchandise (NOI) was filed. According to the drawback office, the application for waiver of NOI was denied by the port due to discrepancies in the claims filed which resulted in numerous amendments, including claims based on exports which were made prior to the importation of the designated merchandise, and a review of the drawback claims on file and the protestant’s overall CBP drawback performance. The drawback office also considered the August 10, 2001 application for waiver of NOI a request under 19 CFR 191.36 to allow drawback despite the protestant’s failure to provide NOI.

With respect to each drawback claim, the protestant has supplied what is asserted to be a complete record of the purchaser’s purchases from the protestant for the years 1998-2001, in the form of an attachment to a letter signed by an employee of the Canadian purchaser. Each letter states that the attachment is an itemized list of polybutene purchased and used by the Canadian purchaser, for the stated dates. Each attachment includes the exports asserted on the drawback claim.

The following is a description of the Canadian entry process, and the significance of the various dates on the B3. The “release date” is the date the goods, which are the subject of the B3, were physically released by Canadian Customs, into the custody of the Canadian importer. At this point the amount of duty owed on the merchandise has not been specifically identified. Subsequent to the “release” of the merchandise, the importer has five business days in which to present a “final accounting” to Canadian Customs. The “final accounting” consists of the submission of a completed B3 to Canadian Customs. The total amount of duties or any other fees asserted as owed on the B3 are then placed on the importer’s or its broker’s K84. The K84 is a statement issued at the end of each month to the importer or broker, which details each B3 transaction number and the amount owed to Canadian Customs. Although the K84 is not issued until after the submission of the B3, the date the B3 is “certified”, that is the declaration is completed, is the date as of which the duties and taxes owing are considered to be paid. In this case, a copy of the “certified” B3 was not provided with respect to some of the exports. Specifically, the B3s submitted for claim 003-1 were not dated, and for claim 350-3, no B3s were submitted for the selected exports, and the one B3 submitted was not certified.

The protestant takes the position that it has complied with all of the statutory, regulatory and administrative requirements for drawback. With regard to the requirement for NOI, the protestant states as follows:

The filing of the notice of intent to export (NOI)intends for the U.S. Customs Service to exam[sic] the exportation; neither the NOI nor the examination having a basis in law as a prerequisite to the allowance for drawback. In short, the regulation requiring the filing of a Notice of Intent to Export, prior to exportation, adds a condition not found in the statute.

ISSUE:

Whether the protestant has satisfied the requirements for drawback under 19 U.S.C. §1313(j)(1).

LAW AND ANALYSIS:

We note initially that the refusal to pay a claim for drawback is a protestable issue pursuant to 19 U.S.C. §1514(a)(6). Drawback for the subject entries was denied on February 8, 2002, when they were liquidated with no drawback. This protest was timely filed on May 9, 2002 which is within the 90-day filing deadline set forth in 19 U.S.C. §1514(c). This protest involves the denial of drawback under 19 U.S.C. §1313(j)(1).

Under 19 U.S.C. §1313(j)(1), drawback is authorized if imported merchandise on which was paid any duty, tax, or fee imposed under Federal law because of its importation is, within three years of the date of importation, exported or destroyed under Customs supervision and was not used in the United States before such exportation or destruction. Under 19 U.S.C. §3333(a)(2), as implemented by 19 CFR 181.45(b), an imported good subsequently exported to Canada or Mexico, in the same condition is eligible for drawback under 19 U.S.C. §1313(j)(1), and is not subject to NAFTA drawback, that is, without regard to the limitation on drawback set forth in 19 CFR 181.44. Pursuant to Articles 303 6(b) and 511, Uniform Regulations were promulgated by the Parties. Those regulations, in pertinent part, are set forth in 60 FR 46469 (1995) and are repeated in 19 CFR 181.45(b)(1). The regulations, 19 CFR 181.45(b)(2), allow for the commingling of originating and non-originating fungible goods, and identification on the basis of an approved inventory method set forth in Schedule X of the appendix to Part 181. The “FIFO” method is such an approved method. The accounting records were not reviewed by the drawback office, due to denial of the drawback claims for the reasons stated.

Under section 191.35, Customs Regulations (19 CFR 191.35), a notice of intent to export must be filed and completed prior to exportation. Under 19 CFR 191.35(a) "[t]he claimant, or the exporter, must file at the port of intended examination a Notice of Intent to Export, Destroy or Return Merchandise for Purposes of Drawback on Customs Form 7553 at least 2 working days prior to the date of intended exportation." This regulation applies to exporters who have filed for unused merchandise drawback under 19 U.S.C. §1313(j).

Claimant failed to comply with the NOI requirements set forth in 19 CFR 191.35. An NOI provides CBP with the opportunity to examine the merchandise to determine that it is the merchandise which was imported and that the merchandise was not used in the U.S. The failure to file the proper notice, deprives the Government of the ability to verify the identity of the merchandise being exported, and the condition of the merchandise (i.e. that it has not been used), for purposes of the drawback statute. See e.g. Swan Tricot Mills Corp. v. U.S., 63 Cust. Ct. 530, C.D. 3948 (1969); C.S.D. 86-25, citing U.S. v. Lockheed Petroleum Services, 1 Ct. Appls. Fed. Cir. 63, 709 F.2d 1472 (1983); HQ 224133, dated April 19, 1993; HQ 220099, dated September 1, 1988.

It is well established that drawback laws confer a privilege, not a right. Swan & Finch Company v. United States, 190 U.S. 143, 23 Sup. Ct. 702 (1903). When merchandise is imported and a drawback statute may potentially be applicable, an accruing or inchoate right may be said to arise. However, the right to recover drawback ripens only when all provisions of the statute and applicable regulations prescribed under its authority have been met. Guess? Incorporated v. United States, 944 F.2d 855 (Fed. Cir. 1991); Romar Trading Co., Inc. v. United States, 27 Cust. Ct. 34 (1951); General Motors Corporation v. United States, 32 Cust. Ct. 94 (1954). Drawback claimants must strictly adhere to the requirements set forth in the statutes and the applicable regulations. United States v. W. C. Hardesty Co, Inc., 36 CCPA 47, C.A.D. 396 (1949); Spencer, Kellogg & Sons (Inc.) v. United States, 13 CCPA 612 (1926). The regulations requiring NOI are mandatory, and compliance with the regulations is a condition precedent to the right to recover drawback. See id., and W.R. Grace & Co. v. United States, 15 Cust. Ct. 105, C.D. 953 (1937).

Under the regulations prior to their revision, under 19 CFR 191.141, the appropriate Customs office could waive the requirement of NOI at any time, including retroactive waivers. See C.S.D. 88-14. In the absence of a clear abuse of discretion, Customs Headquarters would not substitute its judgment for that of the appropriate field office. Id. See also, HQ 222609, dated November 7, 1990.

The Customs Regulations pertaining to drawback were revised (the proposed revised regulations were published in the Federal Register (62 FR 3082), on January 21, 1997, and were the subject of considerable comment and consideration, and responses to the comments were published with the final rule document) (63 FR 10970), on March 5, 1998. In section, 191.36, the regulations provide for the failure to file NOI for purposes of drawback. The regulation requires the claimant that failed to file the requisite NOI to apply for eligibility for drawback with the drawback office where the drawback claim will be filed. The application must be written and is required to include certain specific information.

The application must also include a certification that documentation that the requirements of section 1313(j) specifically and drawback generally have been met will be made available for CBP review upon request. In making its decision to approve or deny the application under this section, CBP will consider factors such as the information provided by the claimant in the written application and the information in the written certifications, and the applicant's prior record with CBP. 19 CFR 191.36(b).

Further, section 191.36(d) provides that a denial of the application under section 191.36 may be appealed within 30 days of the date of denial. A denial of the initial appeal may be appealed to CBP Headquarters. In this case, a specific application under section 191.36 was not filed, as the August 10, 2001 letter did not set forth that it was an application under section 191.36. However, the drawback office treated the August 10, 2001 application for waiver of NOI as an application under section 191.36 as well as 191.91, and denied it. The denial was not appealed. Therefore, the requirements of section 191.36 were not complied with and drawback can be denied for the protestant’s failure to file a NOI.

In support of the position that the regulatory requirement of an NOI and an examination has no basis in the drawback law, the protestant compares section 1313(j) to sections 1313(c) and 1313(a) and (b). The protestant concedes that the regulations in 19 CFR 191.42 which require a return of rejected merchandise to Customs custody and a NOI prior to such intended return, are consistent with the applicable statute, section 1313(c), which expressly requires that rejected merchandise be returned to Customs custody and that the exportation and destruction of such be under Customs supervision. The protestant further notes correctly that sections 1313(a) and (b), the provisions for manufacturing drawback do not require that merchandise be returned to Customs custody, and that a claim for drawback under section 1313(a) or (b) does not require an NOI under the regulations. The protestant concludes that, therefore, because section 1313(j) also does not specifically require that the exported merchandise be returned to Customs custody, the requirement of NOI is “inconsistent” with the statute and “establishes a requirement which Congress did not intend”.

There is however a relevant distinction between sections 1313(a) and (b) and 1313(j). In section 1313(j) the requirement is that the merchandise “is not used within the United States” before such exportation or destruction, whereas under sections 1313(a) and (b), the use of the imported or substituted merchandise in the manufacture of the exported article is required, and for manufacturing there is the regulatory requirement of a manufacturing drawback ruling. For purposes of manufacturing drawback, the use in manufacturing is established by documentation, and the exportation of the manufactured article can be shown by manufacturing records and sales records. With respect to section 1313(j), the statute requires that the good exported be the same good that was imported and that no change in condition occurred between import and export. Also, since the NAFTA same condition provisions apply, slight changes in condition could result in the merchandise being ineligible under 19 CFR 181.45(b). The Customs Regulation, 191.35 (19 CFR 191.35) requires NOI, “to give Customs the opportunity to examine the merchandise”, to determine whether the exported good meets those statutory requirements.

In Central Soya Company, Inc. v. United States, 15 CIT 105, 761 F.Supp. 133, the court noted that upon review of an agency’s regulations, “the court must consider whether the interpretation of the administrative agency ‘is based on a permissible construction of the statute’.” 761 F.Supp. at 137. In Central Soya, the court reviewed Customs regulations requiring that a drawback claimant under a substitution same condition drawback claim also be the exporter of the substituted merchandise, and found that “neither the statutory language nor its legislative history supports Customs requirement”. Id at 140. The court did not require that the customs requirement be explicitly stated in the statute or the legislative history, but just that the requirement be supported by the statute or legislative history. With regard to NOI, the requirement is a reasonable means to carry out the intent of the statute, that is, to verify that the exported merchandise is in fact “unused” and not changed in condition as required by 19 U.S.C. §3333(a)(2)(B), as implemented by 19 CFR 181.45(b)(1).

In support of its position that the NOI requirement is beyond the authority of the statute, the protestant cites United States v. Morris, 3 Ct. Cust. App. 146, T.D. 32386 (1912) and United States v. Comey Brooklyn Co., 16 Ct. Cust. App. 248, T.D. 42843 (1928). In each of those cases, a requirement had been imposed by Customs that was not imposed by the statute. In Morris, the court distingushed between regulative and prohibitive regulations, prohibitive regulations being those that destroyed or rendered inoperative a statutory provision. In Comey Brooklyn, Customs had imposed a time limit in which to claim manufacturing drawback, where no such time limit was provided for in the statute, and the court held:

It is plain that therein no such time limit is prescribed, nor is any power given to the Secretary to fix one. That officer may prescribe regulations for identifying the merchandise on which drawback is claimed, and for ascertaining the quantity used, the amount of duties paid thereon, the facts of manufacture or production of the articles in the United States, and their exportation therefrom. It appears that Congress deliberately omitted to grant the Secretary any further authority in the matter or to itself prescribe a limit of time within which the imported materials might be manufactured in this country and exported with right of drawback.

The Comey Brooklyn court noted that a regulation which sought a means to verify a statutory requirement such as establishing the facts of manufacture or production of the articles in the U.S. would be permissible. Since the claimant here must establish that the exported article was the imported article and that that article was unused and in its imported condition, the regulation here which provides a means to verify those requirements would be consistent with the Comey Brooklyn analysis. The NOI regulation simply provides a means for CBP to verify the unused condition of the exported merchandise.

If NOI has been neither provided nor waived, the drawback requirements have not been met either in form or substance. CBP is of the position that no compliance short of actual compliance can be regarded as sufficient compliance, and substantial compliance is not sufficient where full compliance is required. See HQ 221489, dated February 20, 1990, citing Swan Tricot Mills Corp. v. U.S., 63 Cust. Ct. 530, C.D. 3948 (1969), and Swift and Co. v. U.S., 10 Cust. Ct. 198, C.D. 753 (1943), reh. den. 11 Cust. Ct. 321, abs. 49029 (1943). Therefore, the failure to comply with 19 CFR 191.36 and where CBP has not waived examination is a basis for denial of drawback.

In addition to the failure to comply with the notice requirement, the file indicates other failures that would warrant the denial of drawback. The documentation submitted with the drawback claims does not indicate specific storage and removal information pertaining to the imported merchandise. There is insufficient information to ascertain that the merchandise said to have been exported is the same merchandise as the imported merchandise identified in the drawback claims. In addition, there is no evidence that the merchandise said to have been exported can be identified as the imported merchandise by accounting method. According to the protestant’s November 21, 2001 letter, the protestant began to maintain an inventory recording system on a FIFO basis, only as of April 1, 2001. On April 1, 2001, for all of the drawback claims, all of the imports and exports occurred prior to April 1, 2001, and therefore would not have been covered by the protestant’s FIFO system. Therefore, there is no evidence that the merchandise asserted to have been exported was the same as the identified imported merchandise, as required under 19 U.S.C. §1313(j)(1).

Drawback on the basis of substitution of imported merchandise is not permitted for exports to Canada since January 1, 1994. Substitution of unused commercially interchangeable merchandise, subject to certain conditions, is authorized under 19 U.S.C. §1313(j)(2), but 19 U.S.C. §1313(j)(4) limits that
authorization for exports to Canada and Mexico. Under 19 U.S.C. §1313(j)(4):

Effective upon the entry into force of the [NAFTA], the exportation to a NAFTA country ... of merchandise that is fungible with and substituted for imported merchandise, other than merchandise described in paragraphs (1) through (8) of [19 U.S.C. §3333(a)], shall not constitute an exportation for purposes of [section 1313(j)(2)].

See, 228209, dated April 12, 2002.

With regard to the evidence of exportation, in general, the proof of exportation requires evidence of an intent for the merchandise at issue to unite with the mass of things belonging to that of another country, and evidence that the merchandise left the U.S. See 19 CFR 101.1. The documents submitted support the intent for the subject merchandise to join the commerce of another country. Such intent is shown by the invoices. Evidence that the merchandise left the U.S. could consist of, for example, a bill of lading indicating that the goods are on an outbound vessel or aircraft, or that the goods were entered into a foreign government’s Customs. See HQ 228272, dated November 8, 1999.

The Customs Regulations 191.72 (19 CFR 191.72) require evidence of exportation as follows:

Exportation of articles for drawback purposes shall be established by complying with one of the procedures provided for in this section (in addition to providing prior notice of intent to export if applicable (see §§ 191.35, 191.36, 191.42, and 191.91 of this part)). Supporting documentary evidence shall establish fully the date and fact of exportation and the identity of the exporter. The procedures for establishing exportation outlined by this section include, but are not limited to:

(a) Actual evidence of exportation consisting of documentary evidence, such as an originally signed bill of lading, air waybill, freight waybill, Canadian Customs manifest, and/or cargo manifest, or certified copies thereof, issued by the exporting carrier; (b) Export summary (§ 191.73);
(c) Certified export invoice for mail shipments (§ 191.74); (d) Notice of lading for supplies on certain vessels or aircraft (§ 191.112); or (e) Notice of transfer for articles manufactured or produced in the U.S. which are transferred to a foreign trade zone (§ 191.183).

The regulations state that the procedures for establishing exportation include, but are not limited to, the procedures listed in (a) through (e). The regulation also requires that the evidence "establish fully the date and fact of exportation." Therefore, any procedure used to establish exportation, whether or not included in (a) through (e), must "establish fully the date and fact of exportation."

The documents submitted in this case, for claim 003-1, in the form of the B3s do indicate the date the merchandise was released from Canadian Customs into the commerce of Canada, and thereby do indicate a date of exportation. As shown in the facts, no B3s were provided for the selected exports for claim 350-3, although one other export was supported by what may be a B3 stamped by Canadian Customs as “duty paid.” However, the B3s submitted for drawback entry 003-1 are not dated or signed, and do not indicate the date they were certified as paid to Canadian Customs. For claims 001-5 and 002-3, the B3s have dates indicating when they were certified but contain neither a signature nor an individual name. Even the B3s that do indicate the date of certification, do not carry any certification of authenticity in the form of an individual’s name. The documentation showing the date of export from the U.S. must carry some certification of authenticity, either in the form of a signature on an original document or certification of a copy of the executed document. See HQ 226929, dated June 4, 1997.

In this case, the B3s are insufficient to support a claim for drawback. In all of the drawback claims, except for claim 350-3, B3s have been submitted in support of the requested export shipments and the B3s are dated with either a date of release from Canadian Customs, or date of certification of having been paid. In claim 003-1, the release date is provided on the B3s, and in claims 002-3 and 001-5, the B3s have both a release date and a certification date. A release date or certification date not later than three years after the date of importation, is sufficient to establish the date of exportation for purposes of claiming drawback. However, whether the B3 copy is signed, dated or contains an individual’s name or a broker name in the certification, for purposes of accountability, CBP requires either an original B3 or a certified copy thereof, and certified by a U.S. entity. See HQ 229941, dated October 14, 2003. Therefore the B3s for claims 002-3 and 001-5, in which the certifications are dated, require authentication in the form of an original or signed or certified copy, as do the B3s in claim 003-1 where no name or date is included in the certification. In addition, with respect to claim 001-5, with regard to at least one asserted export, as it was described in the Facts section, infra, it is not clear that the merchandise described on the invoice and asserted to have been exported is the same as that reflected on the B3.

The bills of lading are insufficient to establish the fact and date of exportation. The dates, if any, on the bills of lading simply indicate that the merchandise was picked up by a carrier in the U.S.

The certified documents submitted by the Canadian purchasers which list all of the purchases of polybutene from Soltex, are insufficient to establish the date and fact of exportation of the merchandise. Under evidentiary rules, hearsay testimony is not admissible. The Federal Rules of Evidence define hearsay as "a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted." Fed.R.Evid. 801(c). Under Fed. R. Evid. 801(a), a statement includes a written assertion. An exception to the hearsay rule is in 803(6) provides for documentation kept in the ordinary course of business:

A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinions, or diagnoses, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness.

According to each cover letter, each list of purchased polybutene was provided to the protestant by an employee of the Canadian purchaser. The letter does not identify the position of the person providing the document, the date the document was created, or by whom the document was created. None of that information is apparent from the face of the document. It is not apparent that the document was kept in the ordinary course of business. As such, the documents presented to establish that the polybutene was exported to Canada are based on hearsay statements and do not fall within the business records exception because there is no evidence that the documents were prepared in the ordinary course of business or are based on personal knowledge.

With respect to entries 002-3 and 001-5, in addition to there being no evidence that the merchandise asserted to have been exported is the same as that imported, the protestant’s own submitted list of product designations shows that the imported Polybutene 24 is not the same merchandise as the assertedly exported Polybutene 32 or 6. The list of product designations submitted by the protestant indicates that the different designations are different grades of polybutene, therefore they could not be the same merchandise.

HOLDING:

The protestant has not satisfied the requirements for drawback under 19 U.S.C. §1313(j)(1), because no prior notice of intent to export was provided, and the requirement for such notice was not waived, there is no evidence that the merchandise said to have been exported is the same merchandise that was imported, and the evidence of exportation submitted is insufficient for purposes of authentication.

The protest should be denied. In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), 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 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 make the decision available to CBP personnel, and to the public on the CBP

Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director

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