ENT-5-01
OT:RR:CTF:ER H121420 KBR
Port Director
U.S. Customs and Border Protection
1515 Poydras Street, Suite 1705
New Orleans, LA 70112
Attn: Protest Office
RE: Application for Further Review of Protest No. 200210150001; Automobile Tires; Time of Entry; 19 CFR § 141.68
Dear Port Director:
The above referenced protest was filed on behalf of Unicorn Tire Corporation to challenge the decision by your port that the subject automobile tires were subject to a Presidential Proclamation authorizing increased duties on certain vehicle tires from the People’s Republic of China arriving on or after September 26, 2009. This protest was forwarded to this office for further review. We have considered the facts and issues raised, and our decision follows.
FACTS:
The merchandise that is the subject of this protest consists of automobile tires imported from China. This protest consists of three entries: xxx-xxxx021-1; xxx-xxxx832-2; and xxx-xxxx830-6. The customs broker, V. Alexander & Co., Inc., filed entry summaries on behalf of Unicorn Tire Corporation through the Automated Broker Interface (ABI) on September 24, 2009. The estimated date of arrival that Unicorn Tire Corporation indicated was September 25, 2009. On Customs and Border Protection (CBP) Form 7501, Entry Summary, Unicorn Tire Corporation listed the entry date as September 24, 2009. The CBP Form 3461, Entry Form, was also filed by Unicorn Tire Corporation on September 25, 2009, and lists an arrival date of September 25, 2009, and an entry date of September 25, 2009. The Automated Commercial System (ACS) records for these entries shows that the date of arrival of the vessel transporting the tires, the Rio De Janeiro Express, was October 8, 2009.
On September 11, 2009, President Barack Obama signed Proclamation 8414 authorizing additional duties on certain vehicle tires from the People’s Republic of China. See Proclamation 8414 of September 11, 2009, 74 Fed. Reg. 47861 (September 17, 2009). The effective date of these duties was September 26, 2009. Protestant claims that since it filed its entry summary (CBP Entry Summary Form 7501) and CBP Entry Form 3461 via ABI on September 24, 2009, with an elected entry date of September 25, 2009, the proper date of entry is September 25, 2009. Unicorn Tire Corporation further argues that September 25, 2009, is the proper time of entry because CBP posted a cargo release date in ABI on that date.
The port determined that the automobile tires could not be entered for duty purposes until after the automobile tires actual arrival within the port limits. Therefore the time of entry was the actual arrival date within the port limits of the vessel transporting the automobile tires, on October 8, 2009. Therefore, on March 6, 2010, pursuant to the Presidential proclamation, CBP issued CBP Form 28 Request for Information, and CBP Form 29 Notice of Action, which advanced the assessed rate of duty from 4 percent to 35 percent.
ISSUE:
Whether the time of entry can precede the actual arrival of the merchandise within the port limits.
LAW AND ANALYSIS:
Initially, we note that the protest was timely filed under the statutory and regulatory provisions for protests. See 19 U.S.C. § 1514 and 19 CFR Part 174. The entries were liquidated on March 26, 2010. Unicorn Tire filed this protest on April 27, 2010, which is within 180 days of the date of liquidation.
In general, for CBP to grant an application for further review (“AFR”), a protestant must make a valid request for further review pursuant to 19 CFR § 174.24 through § 174.26. In this case, protestant presents the issue of whether the time of entry may precede the actual arrival of merchandise within the port limits when the importer elects an earlier date and CBP posted an earlier cargo release date in ABI. This is a question not previously ruled upon by CBP, satisfying the criteria of 19 CFR § 174.24(b).
Unicorn Tire Corporation filed its CBP Entry Summary Form 7501 on September 24, 2009. The regulations, in 19 CFR § 141.68(b) state that when an entry summary serves as both the entry documentation and entry summary, the time of entry will be the time the entry summary is filed in proper form with the proper estimated duties attached.
The regulations in 19 CFR § 141.68 state that the time of entry may be established in the following ways:
(a) When entry documentation is filed without entry summary. When the entry documentation is filed in proper form without an entry summary, the ``time of entry'' will be:
(1) The time the appropriate CBP officer authorizes the release of the merchandise or any part of the merchandise covered by the entry documentation, or
(2) The time the entry documentation is filed, if requested by the importer on the entry documentation at the time of filing, and the merchandise already has arrived within the port limits; or
(3) The time the merchandise arrives within the port limits, if the entry documentation is submitted before arrival, and if requested by the importer on the entry documentation at the time of submission.
(b) When entry summary serves as entry and entry summary. When an entry summary serves as both the entry documentation and entry summary, in accordance with § 142.3(b) of this chapter, the time entry will be the time the entry summary is filed in proper form with estimated duties attached except as provided in § 142.13(b).
However, regardless of which of these time of entries apply to this case, 19 CFR § 141.68(e) requires that the merchandise must first arrive within the port limits. Specifically, it explains that:
e) When merchandise has not arrived. Merchandise will not be authorized for release, nor will an entry or an entry summary which serves as both the entry and entry summary be considered filed or presented, until the merchandise has arrived within the port limits with the intent to unlade.
In this case, the actual date of arrival of the carrier was October 8, 2009. Thus, pursuant to 19 CFR § 141.68(e), the time of entry could not be earlier than October 8, 2009. Therefore, consistent with the regulations, CBP determined that the time of entry was October 8, 2009.
Unicorn Tire Corporation argues that pursuant to 19 CFR § 141.68(a)(1), when entry documentation is filed without an entry summary, the correct time of entry is the time the CBP officer authorizes release of the merchandise covered by the entry documentation. Unicorn Tire Corporation stated on its CBP Entry Summary Form 7501 that the entry date was September 24, 2009, the day it filed the form. Unicorn Tire Corporation states that each entry was transmitted through ABI with a “Presentation” date of September 25, 2009. Unicorn Tire Corporation further argues that the presentation date is used in conjunction with the election code to determine the date of entry for the shipment. Unicorn Tire Corporation states that CBP accepted the entry summaries on September 24, 2009, and posted a provisional cargo release date on September 25, 2009, with an estimated date of arrival as September 25, 2009. Thus, Unicorn Tire Corporation asserts that the time of entry is September 25, 2009.
An election of the date of entry by the importer may be made in either ABI or on the CBP Form 3461 entry form. However, a filer’s elected date of entry is not binding on CBP. In HQ 229964 (August 20, 2003), although involving a situation where the articles arrived prior to the paperwork being filed, CBP held that it was not bound by the entry date of the filer’s election code, stating “the entry date for the two protested entries would [not be that requested by the protestant] ‘even if an election had been made’….” Thus, although Unicorn Tire Corporation may have placed a date of September 24, 2009, in the elected entry date of the CBP Entry Form 3461 and the entry date on the CBP Entry Summary Form 7501, CBP is not bound by that entry date. The cargo release date in ABI is simply an estimate and is dependent on whether the cargo has actually arrived. The cargo cannot be released before it physically arrives at the port. In HQ 116429 (June 29, 2005), to determine the time of entry, CBP accepted the need for the merchandise to actually arrive, stating that the “release of merchandise by a CBP officer cannot take place, of course, before the merchandise has arrived at the port.”
In prior rulings CBP has explained that the time of entry for establishing the proper rate of duty for an importation cannot occur until the merchandise actually arrives within the port limits. In HQ 225111 (October 4, 1994), a shipment of silicon metal from China was entered on January 23, 1991, for immediate transportation from Los Angeles, CA. The shipment arrived in Minneapolis, MN, on February 2, 1991. The importer filed a CBP Entry Form 3461 on February 6, 1991. The goods were ordered examined and subsequently were authorized for release on March 18, 1991. An antidumping order on silicon metal took effect on February 5, 1991. The importer argued that the date the shipment first arrived within the U.S. Customs territory, on January 23, 1991, should be the entry date. Legacy Customs ruled that the date at which the duty rates apply is the date the transportation entry was accepted at the port of entry for consumption at Minneapolis on March 18, 1991. HQ 225111 stated that the “court held that because duties did not accrue until arrival in the port of entry there could be no entry for consumption until after arrival.” (Citing Mussman & Schafer, Inc. v. U.S., 27 Cust. Ct. 180 (1951), aff’d. 40 CCPA 108 (1953).
The situation in Mussman, is the reverse of the situation involving Unicorn Tire Corporation: the importer wants the delay and would benefit from the time of entry not being valid until the arrival of the merchandise within the port limits. In Mussman, the importer filed entry paperwork for immediate transportation to the Port of Cincinnati, Ohio, prior to the shipment’s arrival at that port. Mussman, 27 Cust. Ct. at 180. After the paperwork was filed but before the shipment arrived at port, the President issued a proclamation lowering the tariff rate. The importer wanted the benefit of the lower tariff rate. The court agreed stating that “the general rule that the dutiable status of imported merchandise is to be determined at the time it enters into the commerce of the country.” Id. Further, the court explained that entrance of the goods “takes place when control over the goods passes to the importer and nothing remains to be done by the customs officials or employees except to honor the delivery permit and release the goods.” Id. Thus consistent with this prior ruling and court case, the time of entry could not precede the arrival of the goods at the port.
Therefore, in the instant case, because the actual arrival date of the vessel carrying the automobile tires was October 8, 2009, the merchandise could not be considered entered until after that date. Since the Presidential proclamation and increased duty rate went into effect September 26, 2009, prior to the date of arrival of the vessel and therefore, the time of entry for this merchandise, the automobile tires are subject to the increased duty rate.
HOLDING:
The time of entry for the subject entries of automobile tires is October 8, 2009, the date of arrival of the merchandise within the port limits.
You are instructed to DENY the protest. 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 CBP 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, 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 and Trade Facilitation Division