HQ H277115
OT:RR:CTF:VS H277115 AJR
Port Director
U.S. Customs & Border Protection
Port of Pembina
112 W. Stutsman Street
Pembina, ND 58271
RE: Application for Further Review of Protest No. 3401-16-100025; NAFTA; Certificate of Origin Product Description; Polyfoam
Dear Port Director:
This is in reference to the Application for Further Review (“AFR”) of Protest No. 3401-16-100025, timely filed on June 7, 2016, by International Trade Solutions, on behalf of Foampak Inc. (“Foampak”). The AFR concerns the validity of the North American Free Trade Agreement (“NAFTA”) Certificate of Origin submitted for Polyfoam imported by Foampak from Canada.
FACTS:
This case involves 31 entries of Polyfoam imported from Canada into the United States between February 12, 2015, and November 2, 2015. Foampak is the manufacturer, exporter, and importer of record of the subject Polyfoam. Foampak imported the merchandise through the Port of Pembina, North Dakota, claiming preferential tariff treatment under the NAFTA for all 31 entries. The Port of Pembina and Foampak agreed that Polyfoam was classified correctly upon importation into the United States under subheading 3921.19.00, Harmonized Tariff Schedule of the United States (“HTSUS”).
Polyfoam is the trade name for the expanded polyethylene foam, sold by Foampak. This product contains the following materials: low density polyethylene resin from Canada; atmer 122 (a wax processing aid) from the United States; talc powder from the United States; and, color additive from Canada. The polyethylene resin material accounts for a significant majority of this composition.
Foampak manufactures the Polyfoam in Canada by expanding and extruding the polyethylene resin into sheet material. Foampak states that isobutane gas is also used during this manufacturing process as a blowing agent to cure the materials; however, this gas evaporates from the foam once the foam is cured. Foampak sells the Polyfoam as sheets on rolls or sheets packaged in boxes. According to Foampak, Polyfoam is sometimes referred to as strips of foam when sold in small narrow rolls, and foam sheet or sheet foam to differentiate it from other foam products.
On November 4, 2015, U.S. Customs and Border Protection (“CBP”) forwarded a CBP Form 28 (Request for Information) to Foampak, requesting a NAFTA Certificate of Origin with respect to the Polyfoam entry made on November 2, 2015. Foampak responded the next day by providing a NAFTA Certificate of Origin that was signed by a Foampak representative on December 5, 2014, and covered a blanket period from January 1, 2015, to December 31, 2015 (“Certificate A”). Certificate A specifically referred to subheading 3921.19, HTSUS, and described the imported articles as “Plates, Sheets, Film, Foil and Strips of Plastic” within the description of the goods section (Field #5).
On November 6, 2015, CBP forwarded a CBP Form 29 (Notice of Action) to Foampak, proposing to deny NAFTA preference and rate advance the entries at issue because a valid copy of the NAFTA Certificate of Origin was not provided by Foampak in its response to CBP Form 28. This proposed Notice of Action explained that Certificate A was not valid because the description in Field #5 did not match the description of the imported goods on the invoices. The invoices described the imported goods as “Polyfoam” in varying measurements of thickness, width, and length.
In response, counsel for Foampak submitted a letter, dated November 10, 2015, arguing that the submission of Certificate A was valid. Counsel states that the subject products are plastic sheets in varying dimensions. Counsel contends that describing such products classified under subheading 3921.19, HTSUS, as “sheets of plastic” on Certificate A sufficiently relates this NAFTA Certificate of Origin to the corresponding invoices that describe such products of the same classification as “Polyfoam.” While counsel argued that Certificate A was valid as provided, a corrected NAFTA Certificate of Origin (“Certificate B”) was also submitted. Certificate B contained the same information as Certificate A, except that Certificate B was signed by another Foampak representative on November 9, 2015, and changed the relevant description of the goods in Field #5 to “Plates, Sheets, Film, Foil and strip of plastic, other, Polyfoam.”
On November 27, 2015, CBP issued Foampak another CBP Form 29, taking action to deny preferential tariff treatment under the NAFTA. CBP stated that the description in Certificate A was the same as the heading description for both heading 3920, HTSUS, and heading 3921, HTSUS, and, thus, was not sufficient to identify the products that were identified as “Polyfoam” on the invoices. Additionally, CBP stated that Certificate B was not in the importer’s possession at the time the NAFTA preference was claimed. Our decision follows.
ISSUE:
Whether the NAFTA Certificate of Origin submitted for the Polyfoam entries is valid?
LAW & ANALYSIS:
Under the 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. The rules are laid out in the various articles of the NAFTA, and the corresponding regulations are set out in Part 181 of the CBP Regulations (19 C.F.R. Part 181).
Pursuant to Subpart C of Part 181 and NAFTA Article 501, an importer who claims preference under the NAFTA 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).
The requirements of 19 C.F.R. Part 181 are further clarified in Customs Directive 3810-014A, dated July 26, 2005 (reviewed in July of 2008), which provides guidelines to CBP officers regarding the NAFTA Certificate of Origin. The directive states, in pertinent part, that:
2.7 Certificates are valid provided they are legible, completed, signed, and dated. A Certificate should contain sufficient information so as to allow CBP to establish whether the goods it covers are entitled to preferential tariff treatment. Original Certificates are not required (i.e., photo copies, facsimiles, and Certificates scanned on a computer disc are acceptable).
The instructions for the preparation of CBP Form 434, on the reverse side of the form, state the following regarding Field #2:
Complete field if the Certificate covers multiple shipments of identical goods as described in FIELD # 5 that are imported into a NAFTA country for a specified period of up to one year (the blanket period). “FROM” is the date upon which Certificate becomes applicable to the good covered by the blanket Certificate (it may be prior to the date of signing this Certificate). “TO” is the date upon which the blanket period expires. The importation of a good for which preferential treatment is claimed based on this Certificate must occur between these dates.
The instructions state the following regarding Field #5 (“DESCRIPTION OF GOODS”):
Provide a full description of each good. The description should be sufficient to relate it to the invoice description and to the Harmonized System (H.S.) 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.
In this case, Foampak submitted Certificate A, which was signed by a Foampak representative prior to the importation in accordance with the requirements of 19 C.F.R. Part 181 and relevant guidelines. The port questioned the validity of Certificate A because it found that the merchandise listed on Certificate A did not match the merchandise covered by the corresponding invoices. Particularly, the port did not consider “Plates, Sheets, Film, Foil and Strips of Plastic” as described on Certificate A to sufficiently relate to the products on the invoices, which were described as “Polyfoam.”
We disagree with the assessment by the port, and find that the description on Certificate A sufficiently relates to the invoice description and H.S. description of the good. Here, it was explained that Polyfoam is the trade name for the sheets of expanded polyethylene foam that are sold by Foampak and sometimes referred to as strips of foam, sheet foam, or foam sheet. Both CBP and Foampak agreed that such foam sheets were properly classified under subheading 3291.19.00, HTSUS, indicating that the foam constitutes the description “of other plastics” pertaining to that tariff item. To this extent, the description of “Plates, Sheets, Film, Foil and Strips of Plastic” connotes the sheets and strips of plastic in the form of foam that are imported by Foampak.
In Headquarters Ruling Letter (“HRL”) H243897, dated December 4, 2013, an internal advice was requested to determine the validity of a NAFTA Certificate of Origin. The validity of the Certificate was in question for two reasons. First, it was unclear whether the Certificate was intended as a single shipment or blanket Certificate. Additionally, it was unclear whether the merchandise listed on the Certificate matched the merchandise covered by the corresponding invoices. Even though the description of the goods on the NAFTA Certificate of Origin was provided in a different language than the description on the invoices, and no invoice number or unique reference number was provided to connect the Certificate to the invoices, the description and information on the Certificate sufficiently linked it to the invoices and showed that it was intended as a single shipment as opposed to a blanket shipment. See generally HRL H031402, dated May 5, 2010 (no issue was found with regard to a NAFTA Certificate of Origin that described a fabric classified under subheading 6006.21.90, HTSUS, as “195 ROLLS OF FABRIC 100% COTTON (TUBULAR)” even though various subheadings from different headings in Chapter 60, HTSUS, describe the articles of those subheadings as “fabrics […] of cotton”).
In this case, both Certificate A and the corresponding invoices indicate that the described product is classified under subheading 3921.19, HTSUS. There is only one tariff item within subheading 3921.19, HTSUS, which is tariff item 3291.19.0000, HTSUS. To this extent, it is clear that the product described as “Polyfoam” and classified under subheading 3921.19.0000, HTSUS, on the invoices is meant to relate to the product classified under subheading 3921.19, HTSUS, on Certificate A, despite the different description of “Plates, Sheets, Film, Foil and Strips of Plastic.” Moreover, we note that the NAFTA Certificates of Origin at issue in HRL H243897 and HRL H031402 also had relatively broad descriptions of the imported products, which either did not entirely match the description on the invoices or could be associated with different subheadings. Despite these descriptions, there was sufficient information in these NAFTA Certificates of Origin to connect them to their corresponding invoices. Likewise, the description on Certificate A, together with the associated subheading, provides the necessary connection to the subject good on the invoices, while eliminating products with similar descriptions in other classifications due to the singularity of the particular subheading at issue.
Therefore, we hold that Certificate A is valid because the description is associated with the subheading of the subject product, and this information sufficiently relates to the invoices for the subject product.
HOLDING:
Based on the evidence presented, Foampak provided a valid NAFTA Certificate of Origin for the 31 entries at issue. Accordingly, provided that the port determines that Polyfoam otherwise qualifies for the preferential tariff treatment under the NAFTA, this protest should be granted.
In accordance with Sections 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 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