U.S. Customs Service
Eugene P. Derven
Area Port Director
Attn: Kathleen A. Lisius
9901 Pacific Highway
Blaine, WA 98230
RE: Protest and Application for Further Review No. 3004-98-100015; Video Update Canada, Inc.; 19 U.S.C. 1520(d); Post-importation NAFTA claim; American Bayridge Corp. v. United States
The above-referenced protest was forwarded to our office for further review. We have considered the points raised by your office and the importer. Our decision follows:
Livingston International, Inc., the broker for Video Update Canada, Inc., is protesting the denial of preferential NAFTA duty rates by the U.S. Customs Service on July 23, 1997.
Livingston International, Inc., the broker and importer of record for Video Update Canada, Inc., imports used magnetic video tapes. Two entries are the subject of this protest, entry number 300-xxxx72-6, entered on March 8, 1996 and liquidated on August 16, 1996, and entry number 300-xxxx59-8, entered on April 23, 1996, and liquidated on August 16, 1996. Both entries were liquidated without NAFTA preferential duty rates.
The attached CF 7501 for entry number 300-xxxx72-6 contains two lines of merchandise. The first line is the subject of this protest, that line states: Video Tape Cassette, WD4
The attached CF 7501 for entry number 300-xxxx59-8 contains two lines of merchandise The first line is also the subject of this protest, that line states: Video Tape Cassette, WD4
A CF 29 is also attached to the file. The CF 29 is directed to both Video Update Canada, Inc. and Livingston International. The CF 29 states, “A request for information (CF 28) was issued requesting specific information on your entry 300-xxxx72-6. No response was received. Your broker requested an extension April 20, 1996, again no response was received. Your broker assured us that you were gathering the requested information so another extension was granted on May 6, 1996. Once more no response. In view of the lack of response, a proposed Notice of Action was issued on May 29, 1996, again no response was received. U.S. Customs issued a follow-up request for information affording you another opportunity to provide the information on June 18, 1996 and again no response. We are compelled to issue this CF-29 Notice of Action taken and deny NAFTA treatment for the following entries 300-xxxx72-6, 300-xxxx54-5, and 300-xxxx59-8. Total duties for these three entries are $27,084.43 minus previous payments of $5,078.27 leaves a balance of $22,006.16 outstanding.”
By letter dated January 7, 1997, Livingston International, Inc., submitted a petition for post-importation claim for reduced benefits under the NAFTA, 19 U.S.C. 1520(d), for entries 300-xxxx72-6 and 300-xxxx59-8. Attached is a Certificate of Origin (C.O.) covering pre-recorded video tapes, subheading 8524.53, HTSUS, for the blanket period February 2, 1996 to May 30, 1996. The C.O. is dated February 2, 1996, and it states, “Revised September 20, 1996.”
The 1520(d) claim was denied by Customs due to a lack of satisfactory evidence that there was a valid C.O. (CF-434) on file at the time of the claim on July 24, 1997.
This protest and application for further review was filed on October 20, 1997, protesting the denial of the 1520(d) claim. Livingston argues that the approval of a NAFTA duty claim should not be denied because a NAFTA certificate was not on file at the time of entry summary. It argues further that if this should be the case, all subsequent remedies would become useless, i.e. 1514 and 1520. Moreover, Livingston argues, the merchandise which is the subject of these entries underwent a review by U.S. Customs import specialists and special agents with the owner of the goods, which we believe affirmed NAFTA status.
Should the protest be granted, and the claim for preferential NAFTA treatment under 19 U.S.C. 1520(d) be allowed?
LAW AND ANALYSIS:
We note, that the refusal to reliquidate under 1520(d) is a protestable issue under 19 U.S.C. 1514, as long as the protest is filed within 90 days, of the denial of the reliquidation. Here, Protestant filed this protest on October 20, 1997, which was within 90 days of the denial of the 1520(d) claim, dated July 24, 1997.
19 U.S.C. 1520 (d), which concerns post-importation duty refund claims for goods qualifying under the NAFTA rules of origin, provides as follows:
(d) Notwithstanding the fact that a valid protest was not filed, the Customs Service may, in accordance with regulations prescribed by the Secretary, reliquidate an entry to refund any excess duties paid on a good qualifying under the rules of origin set out in section 202 of the North American Free Trade Agreement Implementation Act for which no claim for preferential tariff treatment was made at the time of importation if the importer, within 1 year after the date of importation, files, in accordance with those regulations, a claim that includes
(1) a written declaration that the good qualified under those rules at the time of importation;
(2) copies of all applicable NAFTA Certificates of Origin (as defined in section 508(b)(1)); and
(3) such other documentation relating to the importation of the goods as the Customs Service may require. (Emphasis added)
The regulation issued under 19 U.S.C. 1520 (d) can be found in 19 CFR, Part 181, Subpart D.
In American Bayridge Corp. v. United States, Slip Op. 98-66 (CIT 1998), the court stated “When a court reviews an agency’s construction of a statute it must, in the first instance, discern whether Congress has directly spoken to the precise question at issue. See Chevron, USA, Inc. v. Natural Resources Defense Council, 467 U.S. 837, 842 (1984). ‘If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.’ F.llide Cecco Di Fillippo Fara San Martino S.P.A,. v. United States, Slip. Op. 97-143 (CIT 1997) (quoting Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837, 842 (1984).”
In this instance, the intent of Congress is clear in 19 U.S.C. 1520(d), the statute clearly states that for 1520(d) to apply there can be no claim for preferential treatment made at the time of entry. Here, Video Update Canada, Inc., through its broker, Livingston International, Inc. made a claim for NAFTA treatment for both entries on the CF 7501s.
According to 19 CFR 181.13, a claim for preferential tariff treatment under the NAFTA may be made by, “The written declaration may be made by including on the entry summary , or equivalent documentation, the symbol “CA” for a good of Canada, or the symbol “MX” for a good of Mexico, as a prefix to the subheading of the HTSUS under which each qualifying good is classified.” On both entries at issue in this protest, “CA” was used to prefix the subheading 8524.52, HTSUS, on the CF 7501s. Therefore, a claim for preferential tariff treatment was made for both entries at the time of importation, and 1520(d) is not available in this situation.
Additionally, the Certificate of Origin submitted with the request for refund of duties under 1520(d), is dated February 2, 1996, but written beneath that line it reads, “Revised September 20, 1996." It is not clear what has been revised, and since an unrevised version was not submitted it is unclear if this Certificate of Origin was even available at the time the entries at issue were imported, even though a claim for NAFTA treatment was made.
The claim for preferential NAFTA treatment under 19 U.S.C. 1520(d) should be denied. 19 U.S.C. 1520(d) requires that no claim for preferential NAFTA treatment be made at the time of entry, and here, Video Update Canada, Inc., through its broker, Livingston International, Inc. made a claim for NAFTA treatment for both entries on the CF 7501s.
The protest should be DENIED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550065, dated August 4, 1993, Subject: Revised Protest Directive, 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 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 Regulations and Rulings
will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.
John Durant, Director
Commercial Rulings Division