OT:RR:CTF:VS H287868 YAG
Mr. Armando Taboada, Jr.
Center Director, Machinery Center of Excellence and Expertise
109 Shiloh Dr., Ste. 300
Laredo, TX 78045
RE: Internal Advice; NAFTA Certificate of Origin
Dear Center Director:
This is in response to your email, dated June 22, 2017, forwarding to our office a request for internal advice, filed by Husch Blackwell, LLC, on behalf of their client, Westinghouse Air Brake Corporation (“Wabtec”). At issue is the validity of a NAFTA Certificate of Origin provided by Wabtec to U.S. Customs and Border Protection (“CBP”) with respect to the importation of certain molded plastic parts under Entry No. [***].
Counsel for Wabtec has asked that certain information submitted in connection with this internal advice request be treated as confidential. This request for confidentiality is approved. The information contained within brackets and all attachments to this internal advice request, forwarded to our office, will not be released to the public and will be withheld from published versions of this decision.
Wabtec, headquartered in Wilmerding, PA, is a leading supplier of products and services for freight rail, passenger transit, and select industrial markets worldwide. The company manufactures a broad range of products such as locomotives, freight cars, passenger transit vehicles, and power generation equipment, for both original equipment and aftermarket applications.
On December 3, 2014, Wabtec imported into the United States 4,000 molded plastic parts valued at $2,865.00. These parts were shipped to Wabtec by Mako Plastics Ltd. (“Mako”), an unrelated vendor in Canada. The entry package for Entry No. [***] included the Entry Summary (Form 7501), Mako’s commercial invoice, the NAFTA Certificate of Origin (prepared by Mako), and UPS Waybill. The subject entry was reviewed in the course of a Focused Assessment Audit of Wabtec by CBP. CBP concluded that for NAFTA purposes, Wabtec represented an unacceptable risk, primarily due to the missing information on the NAFTA Certificate of Origin. Specially, CBP determined as follows: (1) the NAFTA Certificate of Origin did not have a blanket time period in Field 2; (2) the part numbers for the plastic parts were not listed on the Certificate, and the Certificate lacked the information about the importer; and, (3) the NAFTA Certificate of Origin was not dated; therefore, it was not in the possession of Wabtec Corporation at the time the NAFTA claim was made. Wabtec disagreed with CBP’s findings, and this internal advice request followed.
In its internal advice request, counsel states that the exporter/producer, Mako, prepared the NAFTA Certificate of Origin for a single shipment. Therefore, since the Certificate of Origin did not cover multiple shipments of identical goods, the blanket period on the Certificate was properly left blank. Further, counsel states that the format of the Certificate conforms exactly to the format authorized by CBP regulations. The Certificate was prepared and signed by the exporter/producer, Mako, and it accurately described the imported plastic parts under subheading 3926.90 of the Harmonized Tariff Schedule of the United States (“HTSUS”). It also identified the NAFTA preference criterion for the imported plastic parts (Criterion B), Canada as the country of origin, the title of the person signing the Certificate, and the producer of the goods. Counsel points out that the NAFTA Certificate of Origin is not required to identify a part number for the imported goods. Finally, in its submission, counsel argues that the NAFTA Certificate of Origin was in Wabtec’s possession at the time the NAFTA claim was made. Counsel states that the NAFTA Certificate of Origin identified the unique UPS tracking number for the shipment, which ties the Certificate directly to the commercial invoice and to the UPS Waybill. Therefore, even though the NAFTA Certificate of Origin was not dated at the time it was presented to CBP, counsel argues that the date of the Certificate can be easily verified through the UPS tracking number, placed on the certificate, as well as on the UPS Waybill and the commercial invoice, all presented to CBP as part of the entry package.
Is the NAFTA Certificate of Origin submitted for Entry No. [***] valid for the merchandise at issue in that entry?
LAW AND ANALYSIS:
Under NAFTA, goods produced in Canada, Mexico, or the United States are eligible for preferential tariff treatment upon importation into one of the three countries if they satisfy certain rules. These rules are laid out in the various articles of the North American Free Trade Agreement, and the corresponding regulations are set out in Part 181 of the Customs Regulations (19 C.F.R. Part 181). The following three (3) questions are presented in this case to determine the validity of the Certificate submitted to CBP: (1) whether the blanket time period in Field 2 was required to be completed; (2) whether Mako was required to indicate the part numbers for the imported plastic parts on the Certificate and provide the importer’s information; and, (3) whether the undated NAFTA Certificate of Origin was in the possession of Wabtec Corporation at the time the NAFTA claim was made.
Whether the blanket time period in Field 2 was required to be completed
Pursuant to Subpart C of Part 181 and NAFTA Article 501, an importer who claims NAFTA preference must make a declaration of that claim, and the declaration must be based on a complete and properly executed original Certificate of Origin, or copy thereof which covers the goods being imported. See 19 C.F.R. §181.21(a). The Certificate of Origin shall be on CBP Form 434 (or a form issued by the customs authority for Canada or Mexico or other approved format), signed by the exporter or authorized agent having knowledge of the relevant facts. See 19 C.F.R. §181.22(b). An importer may use single Certificates for single importations. The single Certificate should be related to the shipment by indicating the invoice number or other unique reference. Blanket Certificates may be used for repetitive shipments of goods, and the goods must be imported on or between the specified “From” and “To” dates. This period may not exceed 12 months. See 19 C.F.R. §181.22(b)(5)(i)-(ii).
In this case, the NAFTA Certificate of Origin in question is on the form issued by the Canada Border Service Agency; therefore, it complies with the CBP’s requirements and contains the required data elements. Wabtec Corporation claims that it submitted to CBP a NAFTA Certificate of Origin prepared for a single shipment and executed by the exporter/producer of the imported merchandise. We note that even though the applicable invoice number was not stated on the Certificate of Origin, the unique tracking number generated by UPS was present on the NAFTA Certificate of Origin, Entry Summary, the invoice, and the UPS Waybill, tying all of the documents together. Therefore, we find that the submitted NAFTA Certificate of Origin was related to the single shipment in question and was actually intended to be a single Certificate. Accordingly, Field 2 on the Certificate of Origin, which relates to multiple importations, was not required to be completed by Mako.
Whether Mako was required to indicate the part numbers for the imported plastic parts on the Certificate (and provide the importer’s information)
Pursuant to 19 C.F.R. §181.21(a), the Certificate of Origin “must cover the good being
imported.” The Form 434 (NAFTA Certificate of Origin) instructions covering the “Description of Goods” field state as follows:
Provide a full description of each good. The description should be sufficient to relate it to the invoice description and to the Harmonized System (“HS”) description of the good. If the Certificate covers a single shipment of a good, include the invoice number as shown on the commercial invoice. If not known, indicate another unique reference number, such as the shipping order number.
Furthermore, the instructions for the completion of Field 4 of the Form 434 state as follows:
State the full legal name, address (including country), email and legal tax identification number, as defined in Field #1, of the importer. If the importer is not known, state “UNKNOWN;” if multiple importers, state “VARIOUS.”
We note that the person certifying the preferential tariff treatment under the NAFTA is obligated to provide a full description of each good. This description should be sufficient to relate it to the invoice description and the HS description.
The submitted Certificate of Origin identifies the imported goods as plastic parts and references their classification subheading, 3926.90, HTSUS. Subheading 3926.90, HTSUS, pertains to “other articles of plastics …: Other.” This subheading is referenced on the Entry Summary, Form 7501, but does not appear on the commercial invoice, issued by Mako. The commercial invoice also does not refer to plastic parts, and instead references “2,000 filters – insert body, (item #0305208)” and “2,000 filters – reman. emerg. portion, (item #0305209).” Moreover, there is no information about the importer stated on the Certificate provided to CBP, though we note that the importer information needs only be provided, if known. Nonetheless, once again the UPS tracking number present on the NAFTA Certificate of Origin, Entry Summary, the invoice, and the UPS Waybill provides the link that relates the goods on the Certificate of Origin to the goods on the commercial invoice, as well as the link between the Certificate and the Entry Summary, specifically identifying the importer of the plastic parts in question. Accordingly, Wabtec provided the sufficient link between the imported goods, the importer, and the Certificate of Origin and was not required to indicate the part numbers for the imported plastic parts or provide contact information of the importer on its NAFTA Certificate of Origin.
Whether the undated NAFTA Certificate of Origin was in the possession of Wabtec Corporation at the time the NAFTA claim was made
Pursuant to 19 C.F.R. §181.22(b), an importer claiming preferential treatment shall provide, at the request of the Center Director, a copy of each Certificate of Origin pertaining to the goods in question. Thus, an importer is required to submit a Certificate of Origin which was in its possession at the time of importation to CBP upon request, in order to receive preferential tariff treatment. The requirements of 19 C.F.R. Part 181 are further clarified in Customs Directive 3810-014A, dated July 2008, which provides guidelines to CBP officers regarding the NAFTA Certificate of Origin. The directive states, in pertinent part, that:
5.1.3 In situations where the Certificate was not signed, not dated, or was dated after the date of the claim, the importer must provide proof that a signed and correctly dated Certificate was in the importer’s possession on the date the claim was made. Failure to provide Import Specialists with such proof will result in the denial of the claim.
Furthermore, 19 C.F.R. §181.22(c) states “if the Center Director determines that a Certificate is … defective or has not been completed in accordance with paragraph (b) of this section, the importer shall be given a period of not less than five (5) working days to submit a corrected Certificate.” See also H239669, dated April 23, 2013. Additionally, pursuant to 19 C.F.R. §181.22(c), the Center Director must accept the corrected Certificate as valid, unless he or she determines that the imported good does not qualify as originating for reasons provided elsewhere in Part 181 of the Regulations.
In this case, the submitted NAFTA Certificate of Origin was not dated; therefore, it made the Certificate “defective or … not completed in accordance with paragraph (b) of 19 C.F.R. §181.22.” 19 C.F.R. §181.22(c). Wabtec was never given the opportunity to correct this deficiency. Further, Wabtec did not provide the corrected Certificate in the course of this internal advice. Nonetheless, counsel for Wabtec argues that since the original (defected) NAFTA Certificate of Origin was prepared for a single shipment, the date of the Certificate can be easily verified through the UPS tracking number placed on the Certificate, the Entry Summary, the UPS Waybill, and the commercial invoice. Thus, there are numerous indicia of authenticity surrounding this Certificate, indicating that the lack of a date was “at most a technical discrepancy.” We agree; however, since the presented NAFTA Certificate of Origin is still defective, Wabtec should be given a period of not less than five (5) working days to submit a corrected Certificate.
Based upon the information provided, the NAFTA Certificate of Origin submitted for Entry No. [***] is defective, since it was not dated. However, Wabtec should be given a period of not less than five (5) working days to submit a corrected Certificate. Upon the submission of the corrected Certificate, the NAFTA claim may be allowed, provided the goods qualify for NAFTA preferential tariff treatment.
This decision should be mailed by your office to the party requesting Internal Advice no later than 60 days from the date of this letter. On that date, Regulations and Rulings, Office of Trade, will make the decision available to CBP personnel and the public at www.cbp.gov, by means of the Freedom of Information Act and other methods of public distribution.
Monika R. Brenner, Chief
Valuation & Special Programs Branch