HQ 967607 - Protest and Application for Further Review (AFR), Protest No. 4601-05-100222 - United States International Trade Commision Rulings

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HQ 967607

June 2, 2005

CLA-2 RR:TC:TE 967607 CMR

CATEGORY: CLASSIFICATION

TARIFF NO.:

Port Director
Port of Newark, New York
C/O Jennifer Tagliaferro
Protest and Control
1100 Raymond Boulevard
Suite 402
Newark, New Jersey 07102

RE: Protest and Application for Further Review (AFR), Protest No. 4601-05-100222

Dear Sir:

This is in response to your memorandum of March 15, 2005, forwarding Protest No. 4601-05-100222, with an approved application for review, to this office for our response. The protest is against your Notice to Redeliver certain men’s jackets and pants which were entered on September 14, 2004. The Notice to Redeliver was issued on January 5, 2005. The protest against the notice was timely filed on February 7, 2005.

We note that AFR was properly granted as the protestant argues questions of fact and law which have not been ruled upon by Customs and Border Protection (CBP) or by the courts. See 19 C.F.R. 174.24(b). This protest involves a unique set of facts as set forth below.

FACTS:

The merchandise at issue was entered at the Port of Newark on September 14, 2004. On September 23, 2004, CBP issued a Request for Information and Notice of Detention with respect to the subject merchandise. The protestant submitted supplemental documentation on October 7, 2004. On October 22, 2004, CBP issued a Notice of Action excluding the merchandise. On November 3, 2004, protestant’s counsel, Follick & Bessich, filed a timely protest on the protestant’s behalf against the exclusion of its merchandise. On December 2, 2004, the merchandise was released to the protestant after completion of an examination at a Customs Examination Station. On January 5, 2005, CBP issued the Notice to Redeliver which is the subject of this protest. Under section 9 of the Notice to Redeliver which provides for the statute and/or regulation violated, CBP noted Customs Regulation 19 C.F.R. § 12.130(g) and 19 United States Code (U.S.C.) 1499. The notice provided that the protestant had 30 days to redeliver the merchandise to CBP custody. On February 7, 2005, the subject protest against the Notice to Redeliver was timely filed.

On February 4, 2005, the port denied the protest filed against the exclusion of the merchandise. Protestant’s counsel filed a request to set aside that denial citing to 19 U.S.C. 1515(d) and claiming that the port failed to consider the protestant’s request for further review of the protest. Counsel noted that section VI, block 16 of the protest form was left entirely blank. The request to set aside the denial of AFR was received by the port on February 25, 2005. The port approved the request to set aside the denial of AFR on March 1, 2005. After consulting with the Office of Field Operations at CBP Headquarters, the port denied the request for AFR and denied the protest on March 18, 2005.

The only matter before this office is the Notice of Redelivery. Protestant’s counsel submits that the Notice to Redeliver “was issued contrary to the administrative intent of 19 C.F.R. § 141.113(b), and is otherwise unlawful.” Additionally, counsel disputes CBP’s underlying decision for the redelivery notice, i.e., “that there is insufficient documentation to support country of origin of the merchandise declared at time of entry.”

ISSUE:

Was the Notice to Redeliver issued by the Port of Newark proper?

LAW AND ANALYSIS:

The Notice to Redeliver at issue cites to violations of Customs Regulation 19 C.F.R. § 12.130(g) and 19 U.S.C. 1499 as the basis for the notice.

Customs Regulation 19 C.F.R. § 12.130(g) provides:

Incomplete or insufficient information. If the port director is unable to determine the country of origin of an article from the information set forth in the declaration, the declarant shall submit such additional information as requested. Release of the article from Customs custody will be denied until the determination is made based upon the information provided or the best information available. In this regard if incomplete or insufficient information is provided, the port director may consider the experience and costs of domestic industry in similar manufacturing or processing operations.

19 U.S.C. 1499 applies to examination, testing and detention of merchandise. We note that 19 U.S.C. 1499(c)(5)(B) provides:

For purposes of section 1581 of Title 28, a protest against the decision to exclude the merchandise which has not been allowed or denied in whole or in part before the 30th day after the day on which the protest was filed shall be treated as having been denied on such 30th day.

See also 19 C.F.R. § 151.16(g) and 19 C.F.R. § 174.21(b).

As the Notice to Redeliver was issued more than 30 days after the release of the merchandise from Customs custody, CBP must examine our authority to recall merchandise from Customs custody found in 19 C.F.R. § 141.113(b), which states:

For purposes of determining whether the country of origin of textiles and textiles products subject to the provisions of § 12.130 of this chapter has been accurately represented to Customs, the release from Customs custody of any such textile or textile product shall be deemed conditional during the 180-day period following the date of release. If the port director finds during the conditional release period that a textile or textile product is not entitled to admission into the commerce of the United States because the country of origin of the textile or textile product was not accurately represented to Customs, he shall promptly demand its return to Customs custody. . . .

Counsel for the protestant argues that the Notice to Redeliver was issued contrary to the administrative intent of 19 C.F.R. § 141.113(b). We agree. Section 141.113(b) was intended to allow CBP sufficient time to determine whether the country of origin of textile merchandise has been accurately represented to CBP, and if not, issue a Notice to Redeliver. The regulatory change brought about by § 141.113(b) was an extension of time for CBP to make such determinations. It changed the conditional release period for textiles and textile products from 30 days to 180 days.

In the instant case, the release of the merchandise was not conditional and prior to requests for additional information to ascertain its right of admission. The merchandise was held for 79 days, additional information was requested and received, and the merchandise was excluded. The protestant filed a protest against the exclusion and on December 2, 2004, less than 30 days after the filing of the protest, the protestant received the relief which was sought, i.e., his merchandise was released. Although the release of the merchandise was not accompanied by a written response from CBP regarding the resolution of the protest against the exclusion, the release of the merchandise by CBP, although in error, resolved the protest. The issuance of a denial of the protest against the exclusion on February 4, 2005, and again on March 18, 2005 (after consideration of the application for further review) was moot. CBP had released the merchandise.

Moreover, this office agrees with the protestant’s counsel that § 141.113(b) was not intended to allow CBP to hold merchandise such as in this case and then enjoy the 180 day time frame established under § 141.113(b) as a conditional release during which time to further consider whether to order the redelivery of such merchandise after its release by CBP.

Section 113. 62(d) of the Customs Regulations (19 C.F.R. § 113.62(d)) sets forth the provision for redelivery of merchandise entered under bond. Section 113.62(d) states:

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).

As stated above, the release of the merchandise in this case was not “conditional.” CBP had only 30 days after the release of the merchandise to demand its redelivery. The Notice to Redeliver the merchandise was issued 34 days after the
merchandise was released. Therefore, the Notice to Redeliver was untimely and the protest must be allowed. As such, there is no need to discuss the protestant’s arguments regarding the sufficiency of documentation submitted to support the country of origin of the merchandise declared at the time of entry.

HOLDING:

The Notice to Redeliver which is the subject of this protest was untimely. The protest is to be allowed. 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
Commercial Rulings Division

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