HQ 966932 - Protest number 2304-02-100242; 19 USC § 1514; Washington International Insurance Co. v. United States, 16 C.I.T. 599 (Ct. Intl. Trade 1992); also Koike Aronson, Inc. v. United States, 165 F.3d 906 (Fed. Cir 1999); invalid protest; 19 C.F.R. § 174.13. - United States International Trade Commision Rulings

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HQ 966932

March 10, 2004

RR:CR:DR 966932RDC

CATEGORY: PROTEST

Port Director
Customs and Border Protection
9901 S. Cage, Suite B
Pharr, TX 78577
Att: Alan McKnight

RE: Protest number 2304-02-100242; 19 USC § 1514; Washington International Insurance Co. v. United States, 16 C.I.T. 599 (Ct. Intl. Trade 1992); also Koike Aronson, Inc. v. United States, 165 F.3d 906 (Fed. Cir 1999); invalid protest; 19 C.F.R. § 174.13.

Dear Sir or Madam:

Protest number 2304-02-100242 was forwarded to this office for further review on December 27, 2003. We have considered the evidence provided and the points raised by your office and the protestant. Our decision follows.

FACTS:

According to the attachment to the CF 19, protest, the Protestant, Avalon Risk Management, Inc., (“Avalon”), is the General Agent for Aegis Security Insurance, which is the surety for David Moreno, the importer. Nine entries are listed on the Protestant’s “schedule of entries” as protested. The Port has supplied a CF 3461ALT, (entry / immediate delivery), CF 7501, (entry summary), and the invoice for the nine entries. All the entry summaries show David Moreno as the importer of record. Also supplied for entry number 577-0 is a copy of the “notice of penalty or liquidated damages incurred and demand for payment,” dated July 1, 2002 ,and addressed to David Moreno. This notice advised the importer that demand was being made for liquidated damages because the importer failed to re-deliver the merchandise to Customs’ custody after admission was refused by the Food and Drug Administration. Formal demand for payment of delinquent amounts due was mailed to Avalon as the surety for David Moreno, the importer, on May 15, 2002.

According to the Protest / Petition Recommended Action Sheet” prepared by the Port, powdered milk, cereal mix and light cream entered with the protested entries were incorrectly classified as entered. These entries were “rate advanced” after the correct classification was determined and the corresponding duty rate was applied. In addition three of the entries had omitted imported goods from the entry summaries. These goods were added to the entries and the appropriate duty applied, which, according to the port, also resulted in these entries being “rate advanced.” The instant protest was received by CBP on July 30, 2002, reviewed by the port on February 21, 2003, denied and forwarded to this office for further review.

ISSUE:

Whether the instant Protest is valid to prevent the finality of protestable CBP decisions per § 1514 with regard to the protested entries.

LAW AND ANALYSIS:

We note that the instant Protest was timely filed per 19 U.S.C. § 1514(c), which states in pertinent part,

A protest by a surety which has an unsatisfied legal claim under its bond may be filed within 90 days from the date of mailing of notice of demand for payment against its bond. If another party has not filed a timely protest, the surety's protest shall certify that it is not being filed collusively to extend another authorized person's time to protest as specified in this subsection.

19 U.S.C. § 1514(c)(3)(B). Formal demand for payment of delinquent amounts due was mailed to Avalon as the on May 15, 2002. The surety for the importer may file a protest “with respect to merchandise which is the subject of a decision specified” per § 1514(c)(2). This Protest was filed on July 30, 2002. The Protestant also includes the non-collusion statement required by the statute for a surety protest.

The Protestant request that CBP “stay any further action on this protest until surety has received documents requested via FOIA and surety has had the opportunity to review said documents and supplement this protest.” Further, the Protests states, “surety hereby files a protective protest against Customs’ decision to: reclassify and /or reappraise the subject entry; deny drawback; assess antidumping / countervailing duties, marking duties, vessel repair duties, or any other special duties, charges or exaction, including but not limited to interest. Surety also protests the untimely liquidation or reliquidation an d/or unlawful suspension or extension of liquidation as notification was inadequately issued. Surety further protests any clerical error or mistake of fact made on the subject entry.”

19 U.S.C. § 1514, protest against decisions of [Customs and Border Protection] provides, in part, that
decisions of [CBP], including the legality of all orders and findings entering into the same, as to-- (1) the appraised value of merchandise;
(2) the classification and rate and amount of duties chargeable; (3) all charges or exactions of whatever character within the jurisdiction of the Secretary of the Treasury; (4) the exclusion of merchandise from entry or delivery or a demand for redelivery to customs custody under any provision of the customs laws, except a determination appealable under section 337 of this Act [19 USCS § 1337]; (5) the liquidation or reliquidation of an entry, or reconciliation as to the issues contained therein, or any modification thereof; (6) the refusal to pay a claim for drawback; or (7) the refusal to reliquidate an entry under subsection (c) or (d) of section 520 of this Act [19 USCS § 1520];
shall be final and conclusive upon all persons (including the United States and any officer thereof) unless a protest is filed in accordance with this section, . . . .

Thus, § 1514 makes final CBP decisions as to the appraised value of merchandise, the classification, rate and amount of duties for entered goods, all charges or exactions, the exclusion of merchandise from entry, delivery or a demand for redelivery, liquidation or reliquidation, denial of drawback or denial of a petition under §§1520(c) or (d), unless a protest is filed against that decision in accordance with § 1514(c). However, there is no provision under which CBP has the authority to “stay” or suspend action on a protest pending the receipt of a response to a request under the Freedom of Information Act (“FOIA”). Thus, we do not have the authority to suspend action on this Protest.

The protest statute, 19 U.S.C. § 1514, exclusively provides the right to challenge administratively a CBP decision. Section 1514 does not provide for a “protective protest” and the instant Protest must be addressed under the requirements of § 1514. Section 1514(c), sets out how a protest must be filed:

A protest of a decision made under subsection (a) shall be filed in writing, or transmitted electronically pursuant to an electronic data interchange system, in accordance with regulations prescribed by the Secretary. A protest must set forth distinctly and specifically-- (A) each decision described in subsection (a) as to which protest is made; (B) each category of merchandise affected by each decision set forth under paragraph (1); (C) the nature of each objection and the reasons therefor; and (D) any other matter required by the Secretary by regulation.

(§ 1514(c)(1)). The implementing Customs Regulations provide,

A protest shall contain the following information: . . . (4) The date of liquidation of the entry, or the date of a decision not involving a liquidation or reliquidation; (5) A specific description of the merchandise affected by the decision as to which protest is made; (6) The nature of, and justification for the objection set forth distinctly and specifically with respect to each category, payment, claim, decision, or refusal; . . . .

(19 C.F.R. § 174.13(a)). These requirements have been interpreted by the courts. In Washington International Insurance Co. v. United States, 16 C.I.T. 599 (Ct. Intl. Trade 1992), the CIT held that a protest, which it stated “did not list or describe the alleged proper classification, and failed to discuss why the proffered classification was correct. Neither did it cite reasons why Customs' determination was incorrect” was not a valid challenge to the classification of goods (Id. at 604).

In coming to this decision in Washington International the CIT relied on 19 C.F.R. § 174.13(a)(6):

[which] provide[s] that a protest shall contain a description of “the nature of, and justification for the objection set forth distinctly and specifically with respect to each category, payment, claim, decision, or refusal.” Similarly, the Supreme Court explained in the seminal case of Davies v. Arthur, (96 U.S. 148, 151 (1878)), that the protest specificity requirements were structured to: compel [the importer] to disclose the grounds of his objection at the time when he makes his protest. . . . Technical precision is not required; but the objections must be so distinct and specific, as, when fairly construed, to show that the objection taken at the trial was to the time in the mind of the importer, and that it was sufficient to notify the collector of its true nature and character to the end that he might ascertain the precise facts, and have an opportunity to correct the mistake and cure the defect, if it was one which could be obviated. (citation omitted.) (See also Audiovox Corp. v. United States, 8 CIT 233, 598 F. Supp. 387 (1984), aff'd 764 F.2d 848 (Fed. Cir. 1985); American Mail Line, Ltd., v. United States, 34 CCPA 1 (1946)). It is also long settled law that a protest: must point out or suggest the provision of law which it is claimed controls the classification of the subject merchandise . . . If the protest itself gives no indication of the reasons why the collector's action is alleged to be erroneous, and, further, does not set forth the paragraphs which allegedly properly govern the disposition of the merchandise, the document is fatally defective. Mattel, Inc. v. United States, 72 Cust. Ct. 257, 261, 377 F. Supp. 955 (1974) (quoting National Carloading Corp. v. United States, 44 Cust. Ct. 493-494 (1960)) (citations omitted).

(Id. at 602).

Since the Protestant requests that no action be taken on this Protest until it receives the documents it requested, it is obvious that it does not know what CBP decision or decisions it is protesting. The instant Protest does not set forth any decision as to which protest is made. The Protestant states a list of decisions which § 1514 makes protestable, but Avalon never states any decision or decisions “distinctly and specifically” Moreover, the Protestant does not state at all the nature of the objections, nor gives any and reasons therefor. It is also clear that Avalon filed this Protest containing “boilerplate” language, most of which is irrelevant to this Protest: Avalon states that it protests decisions as to “drawback; assess antidumping / countervailing duties, marking duties, vessel repair duties” none of which are assessed against the nine protested entries. Consequently, it is impossible for CBP to take any remedial action, i.e., we have no information as to why Avalon is challenging Customs’ decisions as to the protested entries, nor what Avalon wants changed, nor why the Protestant wants any changes, thus CBP is unable to grant relief.

In Mattel, Inc. v. United States, the Court summarized prior Court decisions on this issue:
the court, taking a liberal posture, has held that however cryptic, inartistic, or poorly drawn a communication may be, it is sufficient as a protest for purposes of section 514 if it conveys enough information to apprise knowledgeable officials of the importer's intent and the relief sought.

(72 Cust. Ct. 257, 262, C.D. 4547, 377 F. Supp. 955 (1974); see also Koike Aronson, Inc. v. United States, 165 F.3d 906 (Fed. Cir. 1999), holding that a Protestant’s failure to state either the nature of its objection and the reasons therefore or to state distinctly and specifically the justification for each objection renders a protest invalid). Since the instant Protest does not “convey enough information to apprise knowledgeable officials of the importer's intent and the relief sought” the Protest if fatally defective. As such, the instant Protest is insufficient to constitute an exception tot he finality of the Customs’ decisions described in § 1514.

Finally, Avalon states, that when it receives the information it requires, “it will complete its review and reserves the right to supplement the claims raised in our protest. Per 19 U.S.C. § 1514 (c)(1)(D):

A protest may be amended, under regulations prescribed by the Secretary, to set forth objections as to a decision or decisions described in subsection (a) which were not the subject of the original protest, in the form and manner prescribed for a protest, any time prior to the expiration of the time in which such protest could have been filed under this section. New grounds in support of objections raised by a valid protest or amendment thereto may be presented for consideration in connection with the review of such protest pursuant to section 515 of this Act [19 USCS § 1515] at any time prior to the disposition of the protest in accordance with that section.

(Emphasis added.) Under § 1514, a protest may be amended only “prior to the expiration of the time in which such protest could have been filed under [section 1514].” Thus, the Protestant may not “supplement the claims raised” in its Protest more than 90 days after the demand on the surety was mailed. The notice of demand on Avalon was mailed May 15, 2002, and thus, the Protestant had until August 15, 2002, to amend its Protest. In addition, since the Protestant did not file a valid Protest or amendment thereto, it also cannot raise new grounds in support of its objections.

HOLDING:

The Protest should be DENIED in full insofar as the instant Protest is invalid to prevent the finality of protestable CBP decisions per § 1514 with regard to the protested entries.

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 Harmon, Director

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