CLA-2 RR:CTF:VS H247309 KSG
Port Director
U.S. Customs and Border Protection
157 Tradeport Drive
Atlanta, Georgia 30354
RE: Protest # 1704-12-100322; Eligibility of gold jewelry for preferential tariff treatment under the GSP
Dear Director:
This is in response to an Application for Further Review #1704-12-100322 filed by the broker on behalf of Breuning, Inc., involving imported gold jewelry and its eligibility for preferential tariff treatment under the Generalized System of Preferences (“GSP”).
FACTS:
This case involves 17 entries of gold jewelry entered from March 29, 2011, through October 5, 2011. The jewelry was classified in subheadings 7113.20 and 7113.11.50, of the Harmonized Tariff Schedule of the United States (“HTSUS”). The importer states that the country of origin of the jewelry is Thailand and submitted Certificates of Origin dated from May 2010 through July 2010, and July through September 2011, to support this claim. As an example, for an entry made on July 27, 2010, one Certificate of Origin lists Breuning Company Limited with an address in Thailand as the exporter, and Saint Maurice GmbH, located in Pforzheim, Germany, as the consignee. The Certificate of Origin is dated July 17, 2010, and references several invoice numbers with a date of July 16, 2010. The Certificate of Origin generically lists a variety of jewelry and the number of pieces; however, the invoices from Thailand have not been submitted.
Post Entry Amendments (“PEA”) were filed for the entries in question because at the time of entry the GSP was not in effect. The goods transited through Germany with a final destination in the U.S. The importer submitted invoices from Breuning in Germany to Breuning, Inc. in the U.S., for jewelry, dated July 21 and 23, 2010, and air waybills listing the shipper as Breuning, Pforzheim, Germany, and the consignee as Breuning, Inc. in the U.S.
The importer also submitted a European Union (“EU”) Certificate of Origin executed by Breuning, Pforzheim, Germany, listing the origin of the jewelry as Thailand. In addition, the importer also submitted a EU document dated October 17, 2007, concerning the establishment of a bonded warehouse.
There was no evidence submitted to demonstrate that the 35% value-content requirement was met.
ISSUE:
Whether the imported gold jewelry is eligible for preferential tariff treatment under the GSP.
LAW AND ANALYSIS:
Title V of the Trade Act of 1974, as amended (19 U.S.C.A. 2461-65), authorizes the President to establish a GSP to provide duty-free treatment for eligible articles from beneficiary developing countries (“BDCs”). Articles produced in a BDC may qualify for duty-free treatment under the GSP if the articles are imported directly into the customs territory of the U.S. from the BDC and the cost or value of the materials produced in the BDC plus the direct costs of processing operations performed in the BDC is not less than 35 percent of the appraised value of the article at the time of entry into the U.S. See 19 U.S.C. 2463(a)(2) and (3).
The regulations set forth at 19 CFR 10.175 state that the “imported directly” requirement is met if the goods undergo:
Direct shipment from the BDC to the U.S. without passing through the territory of any other country; or
If the shipment is from a BDC to the U.S. through the territory of any other country, the merchandise in the shipment does not enter into the commerce of any other country while en route to the U.S., and the invoice, bills of lading, and other shipping documents show the U.S. as the final destination; or
If shipped from the BDC to the U.S. through a free trade zone (“FTZ”) in a BDC, the merchandise shall not enter into the commerce of the country maintaining the FTZ, and (1) The eligible articles must not undergo any operations other than: (i) Sorting, grading, or testing, (ii) Packing, unpacking, changes of packing, decanting or repacking into other containers, (iii) Affixing marks, labels, or other like distinguishing signs on articles or their packing, if incidental to operations allowed under this section, or (iv) Operations necessary to ensure the preservation of merchandise in its condition as introduced into the FTZ….
If the shipment is from any BDC to the U.S. through the territory of any other country and the invoices and other documents do not show the U.S. as the final destination, the articles in the shipment upon arrival in the U.S. are imported directly only if they: 1) Remained under the control of the customs authority of the intermediate country; (2) Did not enter into the commerce of the intermediate country except for the purpose of sale other than at retail, and the port director is satisfied that the importation results from the original commercial transaction between the importer and the producer or the latter’s sales agent; and (3) Were not subjected to operations other than loading and unloading, and other activities necessary to preserve the articles in good condition…
General Note 3(c)(i), HTSUS, provides, in part, that special tariff treatment under the GSP is indicated in the “Special” subcolumn in the tariff by the symbols “A”, “A*,” or “A+”. Thailand is designated as a BDC for GSP purposes under General Note 4(a), HTSUS. Subheadings 7113.20, and 7113.11.50, HTSUS, from Thailand were not listed in GN 4(d), HTSUS (2011) as an excluded item and are therefore, eligible for GSP.
The GSP Program expired on December 31, 2010. On October 21, 2011, the President signed H.R. 2832, which extended the GSP Program through July 31, 2013, and provided for retroactive application for eligible entries entered or withdrawn from warehouse on or after January 1, 2011, through November 5, 2011. Pub. L. 112-40; Oct. 21, 2011. The importer was given 180 days after the date of enactment of H.R. 2832 to submit a request for a refund, and was required to provide sufficient information to enable CBP to locate the entry or to reconstruct the entry if it could not be located.
The importer timely submitted a request for retroactive application of the GSP. While there is no requirement that substantiating documentation be submitted with retroactive claims, CBP retains the right to ask for such information with regard to all GSP claims, including claims filed retroactively. CBP requested substantiating documentation in this case. The jewelry passed through the territory of Germany; accordingly, 19 CFR 10.175(a) is not applicable. Further, no invoice was submitted from Breuning in Thailand showing the U.S. as the final destination. In fact, the airway bill shows shipment from Germany to the U.S. Therefore, 19 CFR 10.175(b) is not applicable. While the jewelry was shipped through a bonded warehouse/ FTZ, it was not located in a BDC; therefore, 19 CFR 10.175(c) is not applicable. Lastly, 19 CFR 10.175(d) is not applicable because the importation of the jewelry to the U.S. did not result from the original commercial transaction between Breuning in the U.S. and the Thai producer. Accordingly, the importer has not shown that the “imported directly” requirement was met in this case. The Protest should be denied.
HOLDING:
The Protest in this case should be denied.
In accordance with Section IV and VI of the CBP Protest/petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), 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 Regulations and Rulings of the Office of International Trade 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 & Trade Facilitation Division