RR:CR:DR 228506 CK
Port Director of Customs
Attn: Protest Branch
112 W. Stutsman
Pembina, North Dakota 58271-4102
RE: Protest and AFR No. 3401-99-10006; NAFTA origin; Certificate of Origin; 19 CFR part 181; HQ 227853; 19 U.S.C. 1514; KT Industries Ltd.
Dear Sir or Madam:
This is in reply to the above-referenced protest forwarded to this office on July 12, 1999. Please find our response below.
This protest, 3401-99-100006, was filed with the Port of Pembina on June 22, 1999. Protest is made against the liquidation of the merchandise of line item 3 of entry number DN2-XXXX894-1, entered January 28, 1999, without the benefit of NAFTA preference. The entry was liquidated on June 11, 1999, with line item 3, described as “tab material of polyethylene terepthalate,” classified as 3920.62.0000, with a rate of duty 4.2% ad valorem.
Line item 3 of the CF 7501 for DN2-XXXX894-1, lists the material as “Plast, Flat, Polyethylene Terep.,” classified as CA3920.62.000, HTSUS, with a free rate of duty. Attached is an invoice from GHY USA, Inc., broker for Protestant. The invoice is dated January 15, 1999, and lists 8 lines of merchandise, with HTSUS classification numbers. Also attached is the corresponding shipper’s invoice, Winnipeg Motor Express, dated January 16, 1999.
A CF 28, Request for Information, dated March 2, 1999 is included in the file. The CF 28 is addressed to KT Industries, lists GHY USA, Inc. as the broker, and requests a CF 434, Certificate of Origin, for entry DN2-XXXX894-0 on line item 3920.62.0000, HTSUS.
A CF 29, Notice of Action, dated May 10, 1999 is also attached. The CF 29 is addressed to KT Industries, lists GHY USA, Inc. as the broker, and states that action has been taken regarding a rate advance. The explanation section states, “On March 2, 1999, a CF 28 Request for Information was issued by this office, requesting a copy of the Certificate of Origin (CF 434) used as the basis for your NAFTA claim on the above-referenced entry. Inasmuch as no response has been received to this Request for Information, pursuant to CD 099-3810-011 dated August 31, 1994, your claim for NAFTA preference on these goods has been denied.”
Included in the file is a letter from GHY USA, Inc. to Area Port Director at Pembina, dated May 14, 1999, stamped, “Received by Customs May, 1999.” (Note: the day of the month received is illegible.) The letter states that it is enclosing proof of submission of the requested NAFTA certificate back on March 3, 1999. It encloses the NAFTA certificate again, and a letter to KT industries. It asks that Customs check to see what happened to the original submission on March 3, 1999. The letter also requests that the CF 29 be cancelled, since no “proposed” CF 29 was ever sent, and that KT Industries has had filed a certificate of origin on file with GHY USA, Inc. since January 5, 1999.
Attached to the letter is a copy of the CF 29 dated May 10, 1999, described above. Also attached is letter from GHY USA, Inc. to KT Industries, dated March 3, 1999. The letter encloses a copy of the CF 28, Request for Information. The letter informs KT Industries that it must respond within 30 days. However, it states that GHY USA, Inc. has pulled a copy of the NAFTA certificate from its files and submitted it to Customs on KT Industries’ behalf today. The letter closes by stating that GHY USA, Inc. should here from Customs within 30 days if more information is needed. Also attached to the letter is a copy of the CF 28 dated March 2, 1999, described above.
Also attached is the Certificate of Origin. The certificate is dated January 1, 1999, and covers the blanket period of January 1, 1999 to December 31, 1999. The top of the certificate of origin contains a dated fax line which states, “Jan 05-99 Tue 10:47 am. K.T, Industries.” The Exporter is KT Industries, Ltd., and the broker is GHY USA, Inc. The certificate is two pages and lists 27 items. The merchandise that is the subject of the protest, Tab material of polyethylene terepthalate is line item 8 on the certificate.
Finally, also attached is a copy of bill issued June 6, 1999 to KT Industries Ltd. The bill is from the Customs Service seeking the amount of money due from the rate advance.
The Port of Pembina takes the position that the certificate of origin was requested from the Importer of Record on a CF 28 dated March 2, 1999. That no response was received and pursuant to CF 099-3810-011 dated August 31, 1994, the NAFTA preference claim was denied and the entry was rate advanced on a CF 29 dated May 10, 1999. On May 14, 1999, a letter was received from the broker requesting cancellation of the CF 29, Notice of Action. Attached to the letter was a copy of the letter sent to the Importer of Record and a copy of the Certificate of Origin. The Port further states that if the certificate of origin is not provided within 30 days NAFTA treatment is denied. The Port states, “The Importer of Record has no proof that the certificate of origin was filed with Customs timely nor that the letter from the broker to the Importer of Record was actually written prior to receipt of the CF 29, Notice of Action. The advance should stand . . .”
It is Protestant’s position that it received this rate advance due to a clerical error. Protestant states that on March 2, 1999 a CF 28 was received. Protestant also states on its CF 19, “On March 3, 1999, GHY USA, Inc. pulled [a] copy of the 1999 NAFTA form from our files here in our office, made a copy and forwarded to US Customs. At that time, GHY USA, Inc. had copied KT Industries with a fax note indicating that we had taken care of this request on their behalf. The file was closed and filed as such. On May 10, 1999 GHY USA, Inc. received a CF 29 “Rate Advance” from Ms Gaye [F]ritz.” Protestant states “the matter was discussed over the phone . . . IW (Why not a ‘Proposed Rate Advance [’], allowing for 20 days . . . ).” Protestant also states “the matter was also followed up with a formal written request to cancel the rate advance and filed along with documents to support the claim. On June 16, 1999, a Notice of Liquidation was received with [the] rate advance . . .” Finally, the Protestant states, “We are asking for your help to cancel this as [a] clerical error.”
Should this protest be granted pursuant to 19 U.S.C. 1514?
LAW AND ANALYSIS:
We note initially that the protest is timely filed. Liquidation of the entry occurred on June 16, 1999, and this protest was filed on June 22, 1999, well within the ninety-day protest period of 19 U.S.C. 1514.
Second, among the decisions, orders or findings of the Customs Service that are subject to protest are “the classification and rate and amount of duties chargeable.” See, 19 U.S.C. 1514(a)(2).
Consequently, the issue of clerical error and the protestability of a CF 29 raised by the Protestant need not be addressed.
Section 181.21(a) of the Customs Regulations states in regards to filing a claim for preferential tariff treatment, “the declaration shall be based on a complete and properly executed original Certificate of Origin, or copy thereof, which is in the possession of the importer and which covers the good being imported.” (emphasis added)
Section 181.22(b) of the Customs Regulations states in pertinent part, “An importer who claims preferential tariff treatment on a good under § 181.21 of this part shall provide, at the request of the port director, a copy of each Certificate of Origin pertaining to the good which is in the possession of the importer.”
Based on the language in the above two quoted sections, an importer is required to submit a certificate of origin which was in its possession at the time of importation, to Customs upon request, in order to receive preferential tariff treatment. The failure to supply promptly, with the 30-day period set in the CF 28 a certificate of origin creates a rebuttable presumption that the importer did not have such a certificate of origin in its possession at the time of importation.
However, in this case, the Protestant has supplied evidence to rebut the presumption that it did not have a certificate of origin in its possession at the time of entry. As stated in the FACTS portion of this ruling, the certificate of origin the Protestant submitted contains a fax line with the time and date, “Jan 05-99 Tue 10:47 am. K. T. Industries.” The entry at issue, DN2-XXXX894-1, was entered January 28, 1999. Therefore, Protestant had the certificate of origin in its possession at the time it made its claim for preferential treatment on importation.
In order to claim preferential tariff treatment pursuant to 19 CFR 181.21, an importer must have a valid certificate of origin in its possession at the time of importation. The failure to submit a copy of a certificate of origin in response to a CF 28 creates a rebuttable presumption that the importer did not have the certificate of origin in its possession at the time of importation. Protestant has rebutted that presumption by submitting evidence that it did possess a valid certificate of origin at the time of importation.
The protest should be ALLOWED. In accordance with Section
3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, 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 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 Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.
John Durant, Director
Commercial Rulings Division