OT:RR:CTF:VS H310482 EE
Port Director
U.S. Customs and Border Protection
6601 NW 25th Street
Miami, FL 33122
RE: Application for Further Review of Protest No. 5201-19-100434; Eligibility of Certain Golf Cart Deep Cycle Batteries under the United States – Peru Trade Promotion Agreement
Dear Port Director:
This is in response to an Application for Further Review (“AFR”) of Protest No. 5201-19-100434, timely filed on November 25, 2019, concerning the eligibility of certain batteries for duty-free treatment under the United States – Peru Trade Promotion Agreement (“PTPA”).
FACTS:
The merchandise subject to the protest at issue, certain golf cart deep cycle batteries, were entered on July 12, 2018 by the importer, Mia Consulting and Trading Inc. (hereinafter, the “protestant”), duty-free under subheading 8507.20.80, Harmonized Tariff Schedule of the United States (“HTSUS”), as entitled to preferential tariff treatment under the PTPA. On March 7, 2019, the Port issued a Request for Information (CBP Form 28) to the protestant requesting supporting documentation to substantiate the claim for preferential treatment under the PTPA, including an affidavit from the producer of the goods and the supplier of the components, a production process diagram, and any documents supporting the originating status of the imported batteries.
On April 23, 2019, the Port issued a proposed Notice of Action (CBP Form 29) inquiring about the percentage of originating and non-originating materials used in the production of the imported batteries. The port also stated that the certificate of origin originally provided contained an incorrect preference criterion (4.1 B4) and that the certificate was not signed by the authorized representative. The port indicated that if this information was not provided after 20 days, preferential treatment under PTPA would be denied. On May 15, 2019, the Port issued a CBP Form 29 notifying the protestant of the negative determination regarding the PTPA claim and of the proposed rate advance. The port also indicated that duties and merchandise processing fees should be paid on all future imports of the same type of merchandise. Subsequently, CBP liquidated the entries on July 5, 2019, denying PTPA treatment. The protestant timely filed a protest on November 25, 2019, claiming that the imported merchandise qualifies for duty-free treatment under the PTPA.
The protestant states that all but two materials used to produce the batteries originate in either the United States or Peru. The two non-originating materials are metallic antimony classified under subheading 8110.10, HTSUS, and ulexite, which is classified under subheading 2528.00, HTSUS. The protestant provided the following documents in support of the claim that the batteries at issue are entitled to duty-free treatment under the PTPA:
-Description of the production process of the imported golf cart deep cycle batteries.
-List of originating and non-originating materials, the corresponding classification and the name of the supplier of each material.
-Invoice number FE01-986, dated June 27, 2018, from Fabrica Nacional de Acumuladores Etna S.A. to the protestant for a total of 2,108 batteries in the amount of $140,895.
-A packing list which corresponds to invoice number FE01-986 and lists a total of 2,108 batteries weighing 58,230 kilograms.
-A bill of lading, dated July 3, 2018, listing the shipper as Fabrica Nacional de Acumuladores Etna S.A. and the consignee as the protestant. The gross weight listed is 58,230 grams. The port of loading is Callao, Peru and the place of delivery is Miami, FL.
-A certificate of origin, dated May 28, 2018, signed by an employee of Fabrica Nacional de Acumuladores Etna S.A. stating that the country of origin of lead – acid batteries (golf car deep cycle batteries new) is Peru. The certificate of origin covers the blanket period January 1, 2018 to December 31, 2018.
-Purchase order number 85138, dated April 17, 2017, issued by Fabrica Nacional de Acumuladores Etna S.A. to 5N Plus UK Limited for metallic antimony.
-Invoice number 90055190, dated May 3, 2017, from 5N Plus Lubeck GmbH to Fabrica Nacional de Acumuladores Etna S.A. for antimony weighing 25,921 kilograms in the amount of $255,321.85. The invoice lists purchase order number 85138.
-A packing list issued by 5N Plus Lubeck GmbH which corresponds to invoice number 90055190 and lists a total of 25,921 net kilograms of antimony.
-A bill of lading, dated May 3, 2017, listing the shipper as Adoorwin Industrial Limited and the “notify parties” as Fabrica Nacional de Acumuladores Etna S.A. The net weight listed is 25,921 kilograms. The port of loading is Huangpu, China, and the port of discharge is Callao, Peru.
-A shipping receipt for the antimony, dated June 30, 2017, listing the destination as Fabrica Nacional de Acumuladores Etna S.A. The shipping receipt lists the container number and the seal number listed on the bill of lading.
-Peruvian Customs declaration form, dated May 23, 2017, for the antimony.
-Purchase order number 84322, dated March 8, 2017, issued by Fabrica Nacional de Acumuladores Etna S.A. to Quiagral S.A.C. for ulexite.
-Invoice number 0010808, dated May 14, 2018, from Quiagral S.A.C. to Fabrica Nacional de Acumuladores Etna S.A. for 6,000 kilograms of ulexite in the amount of $4,106.40. The invoice lists purchase order number 84322.
-A shipping receipt for the ulexite, dated May 14, 2018, listing the destination as Fabrica Nacional de Acumuladores Etna S.A.
-Commercial documents such as purchase orders, invoices, and packing lists for the originating materials.
ISSUE:
Whether the golf cart deep cycle batteries imported from Peru are eligible for duty-free treatment under the PTPA.
LAW AND ANALYSIS:
The PTPA was signed by the Governments of Peru and the United States on April 12, 2006. The PTPA was approved by the U.S. Congress with the enactment on December 14, 2007, of the PTPA Implementation Act (“the Act”), Pub. L. 110-138, 121 Stat. 1455 (19 U.S.C. 3805). General Note (“GN”) 32 of the HTSUS implements the PTPA. GN 32(b) sets forth the criteria for determining whether a good is an originating good for purposes of the PTPA. GN 32(b) states:
For the purposes of this note, subject to the provisions of subdivisions (c), (d), (m) and (n) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good under the terms of this note if—
the good is a good wholly obtained or produced entirely in the territory of Peru, the United States, or both;
the good was produced entirely in the territory of Peru, the United States, or both, and—
(A) each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (n) of this note; or
(B) the good otherwise satisfies any applicable regional value content or other requirements specified in subdivision (n) of this note; and the good satisfies all other applicable requirements of this note; or
the good was produced entirely in the territory of Peru, the United States, or both, exclusively from materials described in subdivision (b)(i) or (b)(ii) of this note.
In the instant case, the imported batteries do not meet the definition of the expression “good wholly obtained or produced” listed under GN 32(c)(i). Since the batteries are not considered “wholly obtained or produced” as set forth in GN 32(b)(i), HTSUS, we must determine whether the non-originating materials would satisfy the applicable change in tariff classification. The batteries are classified under subheading 8507.20.80, HTSUS. The applicable rule set forth in GN 32(n)/85.14, HTSUS, provides as follows:
A change to subheadings 8507.20 through 8507.80 from any other subheading.
In this case, the non-originating metallic antimony is classified under subheading 8110.10, HTSUS. The non-originating ulexite is classified under subheading 2528.00, HTSUS. Since both non-originating materials are classified in subheadings outside of subheadings 8507.20, HTSUS, through subheadings 8507.80, HTSUS, the tariff shift rule set forth in GN 32(n)/85.14, HTSUS, is met.
In the proposed Notice of Action (CBP Form 29), the Port stated that the certificate of origin originally provided contained an incorrect preference criterion and that the certificate was not signed by the authorized representative. The regulations applicable to the PTPA are contained in 19 C.F.R. § 10.901 to 10.934. 19 C.F.R. § 10.904, which lays out the certification requirements under the PTPA, provides:
(a) General. An importer who makes a claim under § 10.903(b) of this subpart based on a certification by the importer, exporter, or producer that the good is originating must submit, at the request of the Center director, a copy of the certification. The certification:
(1) Need not be in a prescribed format but must be in writing or must be transmitted electronically pursuant to any electronic means authorized by CBP for that purpose;
(2) Must be in the possession of the importer at the time the claim for preferential tariff treatment is made if the certification forms the basis for the claim;
(3) Must include the following information:
(i) The legal name, address, telephone, and email address (if any) of the importer of record of the good, the exporter of the good (if different from the producer), and the producer of the good;
(ii) The legal name, address, telephone, and email address (if any) of the responsible official or authorized agent of the importer, exporter, or producer signing the certification (if different from the information required by paragraph (a)(3)(i) of this section);
(iii) A description of the good for which preferential tariff treatment is claimed, which must be sufficiently detailed to relate it to the invoice and the HS nomenclature;
(iv) The HTSUS tariff classification, to six or more digits, as necessary for the specific change in tariff classification rule for the good set forth in General Note 32(n), HTSUS; and
(v) The applicable rule of origin set forth in General Note 32, HTSUS, under which the good qualifies as an originating good; and
(4) Must include a statement, in substantially the following form:
I certify that:
The information on this document is true and accurate and I assume the responsibility for proving such representations. I understand that I am liable for any false statements or material omissions made on or in connection with this document;
I agree to maintain and present upon request, documentation necessary to support these representations;
The goods comply with all requirements for preferential tariff treatment specified for those goods in the United States-Peru Trade Promotion Agreement; and
This document consists of ____ pages, including all attachments.
(b) Responsible official or agent. The certification provided for in paragraph (a) of this section must be signed and dated by a responsible official of the importer, exporter, or producer, or by the importer’s, exporter’s, or producer’s authorized agent having knowledge of the relevant facts.
(c) Language. The certification provided for in paragraph (a) of this section must be completed in either the English or Spanish language. In the latter case, the Center director may require the importer to submit an English translation of the certification.
(d) Certification by the exporter or producer. A certification may be prepared by the exporter or producer of the good on the basis of:
(1) The exporter’s or producer’s knowledge that the good is originating; or
(2) In the case of an exporter, reasonable reliance on the producer’s certification that the good is originating.
(e) Applicability of certification. The certification provided for in paragraph (a) of this section may be applicable to:
(1) A single shipment of a good into the United States; or
(2) Multiple shipments of identical goods into the United States that occur within a specified blanket period, not exceeding 12 months, set out in the certification.
(f) Validity of certification. A certification that is properly completed, signed, and dated in accordance with the requirements of this section will be accepted as valid for four years following the date on which it was signed.
The protestant submitted a written certificate of origin, dated June 28, 2018, covering the blanket period from January 1, 2018 to December 31, 2018. The certificate of origin includes the name, address, telephone number and email address of the exporter/producer, Fabrica Nacional de Acumuladores Etna S.A. as well as the protestant. It lists the description of the goods as “lead - acid batteries (golf car deep cycle batteries new)” and states that the batteries are classified under subheading 8507.20, HTSUS. The certificate of origin lists the applicable rule of origin as 4.1(b) of the U.S.-Peru TPA and includes a statement in substantially the same form as 19 C.F.R. 10.904(a)(4). The certificate of origin is signed by a representative of Fabrica Nacional de Acumuladores Etna S.A. Based on our review, we do not share the Port’s concerns regarding the certificate of origin.
We do not agree with the Port that the certificate of origin contains an incorrect preference criterion. On November 19, 2013, CBP issued guidance clarifying the preference criterion field in certifications of origin for importations into the United States under a free trade agreement. See CSMS# 13-000564, entitled “Free Trade Agreements Certification of Origin and the Preference Criterion.” In this guidance, CBP stated that “[f]or importations into the United States under a free trade agreement (FTA), when a producer, exporter or importer issues an FTA certification of origin (a.k.a. Implementation Instructions, Attachment A), the “Preference Criterion” field should indicate how the good originates (meets the terms of the agreement) with the greatest specificity possible.” CBP provided three examples of how the “preference criterion” field of the certification of origin should be completed in an importation of lead sheet, classified under subheading 7804.11.00, HTSUS, claiming preferential tariff treatment under the Peru TPA. According to CBP, if the good is produced entirely in Peru and all non-originating materials undergo the required tariff shift (and/or regional value content) specified in the corresponding specific rule of origin, the preference criterion should state: “HTSUS General Note 32(n)78.2 or alternatively, Peru TPA Annex 4.1, Chapter 78, Item 2”. In the instant case, as previously noted, the certificate of origin lists the applicable rule of origin as 4.1(b). Article 4.1(b) of the U.S.-Peru TPA is incorporated in GN 32(b)(ii), HTSUS. Since the protestant claims that the batteries at issue qualify as originating goods because they meet the criteria set forth in GN 32(b)(ii), HTSUS, the “preference criterion” field of the certification of origin was properly completed. We also do not agree with the Port that the certificate of origin was not signed by the authorized representative. We note that the certificate of origin was signed by an employee of Fabrica Nacional de Acumuladores Etna S.A., and thus it was signed by a responsible official of the exporter/producer. Accordingly, we find the certificate of origin was properly completed in accordance with 19 C.F.R. § 10.904. Based on our review, we find that the imported batteries are eligible for preferential tariff treatment under the PTPA.
HOLDING:
In conformity with the foregoing, the protest should be ALLOWED.
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 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, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel, and to the public on the Customs Rulings Online Search System (CROSS) at https://rulings.cbp.gov/ which can be found on the U.S. Customs and Border Protection website at http://www.cbp.gov and other methods of public distribution.
Sincerely,
Craig T. Clark, Director
Commercial and Trade Facilitation Division