HQ 562776 - Protest and Application for Further Review 4601-02-103955; Notice to Redeliver; timely filing requirements; conditional release period; liquidation; antidumping; garlic; China; Philippines - United States International Trade Commision Rulings

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HQ 562776

January 5, 2004

CLA-02 RR:CR:SM 562776 EAC

CATEGORY: CLASSIFICATION

Port Director
Port of Newark
Customs and Border Protection
1210 Corbin Street
Elizabeth, NJ 07201

RE: Protest and Application for Further Review 4601-02-103955; Notice to Redeliver; timely filing requirements; conditional release period; liquidation; antidumping; garlic; China; Philippines

Dear Port Director:

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

FACTS:

The protest and application for further review presently under consideration pertains to fresh garlic imported by Sal’ve (USA) Enterprises (the “protestant”) into the United States port of Newark, New Jersey on June 19, 2002, with the garlic being formally entered into the commerce of the United States on July 2, 2002. The entry documents reflect that the garlic is a product of the Philippines.

In accordance with Antidumping Order #A570-831, for fresh peeled garlic from the People’s Republic of China, Customs and Border Protection (“CBP”) officials at the port of Newark obtained a sample of the garlic from the entry. In order to verify the country of origin of the garlic, the sample was sent to the CBP Laboratory in Savannah, GA for analysis. In Customs Laboratory Report SV20021330, dated August 20, 2002, the lab reported that the trace metal profile of the sample matched the trace metal profile for garlic from China but not the trace metal profile for garlic from the Philippines.

Based upon the laboratory results, CBP determined that the country of origin of the garlic was China. In response, a Customs Form (“CF”) 4647, “Notice to Mark and/or Notice to Redeliver”, was prepared and issued by CBP on August 28, 2002, informing the protestant that redelivery was sought for purposes of “examination, inspection and appraisement” and, furthermore, because the garlic was not properly marked with its country of origin pursuant to the marking statute, 19 U.S.C. §1304. CBP further noted on the CF-4647 that the merchandise had been “on conditional release pending lab results.”

In response, the protestant filed the above-referenced protest on November 22, 2002, asserting that, as a conditional release period was not properly established by CBP, the Notice to Redeliver was not timely because it was executed more than 30 days after release of the garlic from CBP custody. The protestant further states that the CBP lab’s testing methods for garlic are not accurate and reliable, that CBP reliance on such tests to establish the country of origin for garlic leads to improper determinations, and that the garlic at issue is, in fact, a product of the Philippines. As of the date of filing of the protest, the entry had not been liquidated.

ISSUES:

Whether the Notice to Redeliver issued by CBP was timely.

Whether CBP properly relied on the laboratory tests to determine that the country of origin for the fresh garlic was China.

LAW AND ANALYSIS:

Notice to Redeliver

With respect to the Notice to Redeliver, the first issue we must consider is whether the protest, with application for further review, was timely filed by the protestant. Concerning the filing of protests, 19 U.S.C. §1514 fixes a definite time within which a protest may be filed. The requirement that protests be filed within 90 days after, but not before, notice of liquidation or reliquidation or the date of the decision protested has been interpreted by the Courts. See, The Best Foods, Inc. v. United States, 37 Cust. Ct. 1, 9-10, 147 F. Supp. 749, C.D. 1791 (1956) (prematurely filed protest dismissed); United States v. Reliable Chemical Co., 66 CCPA 123, 605 F. 2d 1179, C.A.D. 1232 (1979) (prematurely filed protest, filed after a "courtesy" notice advising of scheduled liquidation, but before the date of the bulletin notice of liquidation, dismissed in appellate decision reversing lower court’s denial of motion to dismiss); and McDonnell Douglas Corp. v. United States, 75 Cust. Ct. 6, 465 F. Supp. 1291, C.D. 4604 (1975).

In consideration of the foregoing, we find that the instant protest was timely filed with respect to CBP’s decision to issue a Notice to Redeliver. We further note that the decision to issue a Notice to Redeliver is protestable under 19 U.S.C. §1514(a)(4).

The Notice to Redeliver at issue in this case was issued by the port in order to bring the imported garlic within compliance of the marking statute, 19 U.S.C. §1304. Section 304 of the Tariff Act of 1930 (19 U.S.C. §1304), provides that, unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. §1304 was that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. “The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” United States v. Friedlander & Co., 27 C.C.P.A. 297 at 302 (1940).

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. §1304. Section 134.51, Customs Regulations (19 CFR 134.51), provides that when articles or containers are found upon examination not to be legally marked with their country of origin, the port director shall notify the importer on CF-4647 to arrange with the port director’s office to properly mark the article or container or to return all released articles to CBP custody for marking, exportation or destruction.

If it is determined that goods previously released from CBP custody must be returned for proper country of origin marking, a Notice to Redeliver may be issued. The CBP Regulations governing the issuance of a Notice to Redeliver are found in 19 CFR 141.113 and 113.62. Applicable to this case is paragraph (a) of section 141.113 which states, in pertinent part, that:

If such merchandise is found after release not to be legally marked, the port director may demand its return to Customs custody for the purpose of requiring it to be properly marked or labeled. The demand for marking or labeling shall be made not later than 30 days after the date of entry in the case of merchandise examined in public stores, and places of arrival, such as docks, wharfs, or piers. Demand may be made no later than 30 days after the date of examination in the case of merchandise examined at the importer’s premises or such other appropriate places as determined by the port director.

Section 113.62, Customs Regulations (19 CFR 113.62), contains the basic importation and entry bond conditions. Pertinent to this case is 113.62(d), which establishes when a Notice to Redeliver may be issued by CBP:

(d) Agreement to Redeliver Merchandise. If merchandise is released conditionally from Customs custody to the principal before all required evidence is produced, before its quantity and value are determined, or before its right of admission into the United States is determined, the principal agrees to redeliver timely, on demand by Customs, the merchandise released if it:

Fails to comply with the laws or regulations governing admission into the United States;

Must be examined, inspected, or appraised as required by 19 U.S.C. §1499; or

Must be marked with the country of origin as required by law or regulation.

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).

Therefore, in the absence of a validly-noticed conditional release period, CBP has 30 days from the date of release to issue a Notice to Redeliver. However, "[i]n many Customs cases, a CF 28, Request for Information, or other appropriate form indicates that a conditional release period has begun." See, United States v. So’s USA, 23 C.I.T. 605 (1999), citing Customs Service Decision (C.S.D.) 90-99, 24 Cust.Bull. 574, 577 (1990).

In discussing the establishment of a conditional release period, in C.S.D. 90-99, dated June 28, 1990, CBP stated:

For purposes of 19 CFR 113.62(d), we consider a request for a sample on a Customs Form (CF) 28, Request for Information, or other appropriate form issued by Customs no later than 30 days after the date the merchandise is released, to establish a conditional release period. The beginning of the conditional release period is the date the CF 28 is issued; the end of the conditional release period is the date Customs receives the sample. If it is determined that the sample is not legally marked, a demand for redelivery must be made no later than 30 days after the end of the conditional release period, i.e., 30 days after the receipt of the sample by Customs. [Emphasis original.]

With regard to the content requirements of the CF 28, CBP indicated that the CF 28 should specify that the merchandise covered by the entry is conditionally released until the sample is submitted and that the sample must be submitted within 30 days of the issuance of the notice. If a sample is not provided within the 30-day period, a demand for redelivery may be made pursuant to 19 CFR 141.113(c). See, C.S.D. 90-99.

Additionally, CBP stated that "the issuance of a CF 28 requesting a sample issued over 30 days after the date the merchandise is released will not establish a conditional release period." In such instances, even though the sample provided is not legally marked or a sample is not provided at all, the entry bond will not be available to enforce a demand for redelivery. Nevertheless, if the entry has not yet been liquidated, marking duties shall be assessed. See, C.S.D. 90-99.

It is our understanding that a CF 28 (or other validly recognized notice) was not issued to the protestant in this case and, therefore, a conditional release period was not established for the entry. In the absence of the establishment of a conditional release period, CBP should have prepared and issued any Notice to Redeliver within 30 days from the date of release of the entry from CBP custody. However, the Notice to Redeliver in this case was issued on August 28, 2002, more than 30 days after release of the entry from CBP custody. Accordingly, as the timeliness requirement was not satisfied in this situation, we find that the protest should be granted with respect to this issue.

Country of Origin of the Garlic

The protestant additionally asserts that the testing methods used by CBP to determine the country of origin for garlic are not accurate or reliable and that, as a result, our reliance on such tests to determine that the garlic in this case is of Chinese-origin is improper. Based upon these arguments, the protestant has requested that CBP “reconsider its preliminary determination of origin, cancel the Notice and liquidate the entry based upon the Philippine origin of the product contained therein.”

As stated above, the garlic entry in the instant case had not been liquidated as of the date the present protest was filed. Therefore, with respect to the issues of the accuracy of the CBP lab’s testing methods for garlic as well as our reliance on the results obtained therefrom to determine the country of origin for the garlic for liquidation purposes, we find that the protest was initiated prematurely and was not timely filed as required under 19 U.S.C. §1514(c)(3)(A), as implemented by 19 CFR 174.12(e)(1). Accordingly, the protest with respect to this subject matter is invalid.

HOLDING:

Based upon the facts considered in this case, we find that this protest should be granted in part and is invalid in part.

With respect to the Notice to Redeliver, we find that the issuance of the notice was not timely. Therefore, with regards to this issue, the protest is granted and the notice should be cancelled. However, concerning the issues of the validity of the CBP lab’s testing methods for garlic and our reliance on the results obtained therefrom to determine the country of origin for the garlic for liquidation purposes, we find that the protest was filed prematurely and is therefore invalid.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550065, dated August 4, 1993, this decision and the Customs Form 19 are to be mailed to the protestant no later than sixty 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 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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