CLA-2 RR:CR:TE 964515 RH
U.S. Customs Service
555 Battery Street
San Francisco, CA 94111
RE: Classification of Offset Printing Posters under subheading 4911.91.2020, HTSUS; Protest Number 2809-01-100298
This is in response to the Application for Further Review of Protest (2809-01-100298) that you forwarded to our office for review. The protest was timely filed by the law firm of George R. Tuttle, P.C., on behalf of Sacred Temple, Inc., against the liquidation of certain offset printing posters under subheading 4911.91.2020 of the Harmonized Tariff Schedule of the United States (HTSUS). The protest covers 1 entry.
On November 6, 2000, the protestant entered a shipment of posters into the United States from England under subheading 4911.91.4020, HTSUS. On January 22, 2001, Customs issued a CF 29 (Notice of Action) advising the protestant that the merchandise would be classified under subheading 4911.91.2020, HTSUS, resulting in a rate advance. Customs liquidated the entry on March 9, 2001.
Counsel’s primary argument is that, while classification of posters under subheading 4911.91.2020, HTSUS, is correct, the 100 percent duties assessed resulted in improper action taken without authority to do so from the International Trade Administration (ITA), and that enforcement violates due process rights of importers to fair notice and that it violates the Administrative Procedures Act (APA) notice and comment procedures.
Counsel for the protestant also submitted a claim of treatment under 19 U.S.C. §1625(c)(2).
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Was Customs enforcement of the USTR sanctions proper?
Is there is a uniform and established practice of classifying offset printing posters under subheading 4911.91.4020, HTSUS?
3. Has the protestant established a treatment under 19 U.S.C. §1625(c)(2)?
LAW AND ANALYSIS:
On August 16, 2000, Customs published a Proposed Notice in the Customs Bulletin, Vol. 34, No. 33, advising interested parties that it is revoking a treatment previously accorded to Clover Editions, as set forth in HQ 964035, of classifying merchandise described as offset printing posters under subheading 4911.91.4020, HTSUS, which provides for, among other things, posters other than lithograph on paper, and that it is revoking any other treatment previously accorded by Customs to substantially identical merchandise or any contrary ruling.
The final Notice and ruling letter were published in the Customs Bulletin on October 18, 2000, Vol. 34, No. 41 & 42, reclassifying the offset printing posters under subheading 4911.91.2020, HTSUS, which provides for, among other things, lithograph on paper or paperboard.
During the time frame set forth in the Customs notice, merchandise classifiable under subheading 9903.08.11, HTSUS (affecting articles in subheading 4911.91.2020, HTSUS (lithographs)), was subject to 100 percent ad valorem duties imposed on a list of products of certain member states of the European Community (EC) as a result of the EC’s failure to implement the recommendations and ruling of the World Trade Organization (WTO) Dispute Settlement Body concerning the EC’s regime for the importation, sale and distribution of bananas.
Counsel argues that the Customs Bulletin notice of August 16, 2000 provided the first notice to importers that 100 percent duties would apply to posters printed by lithography or offset lithography and that by that time it was too late to provide comments on the USTR preliminary list of proposed sanctionable items published in the Federal Register or to participate in public hearings on the preliminary list and final list of products. Thus, the importers were not afforded fair opportunity for notice and comment to the ITA publication as required by due process and the APA.
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Counsel further claims that Customs was able to impose 100 percent duties on importers without providing any notice, and all of the USTR and ITA notices for comments, hearing, and website postings were rendered moot, because importers were never effectively notified of the application of the duties and the ITA was never permitted to review the economic impact on these duties as imposed on the lithographic posters.
We disagree with these claims. Initially, it is well settled in jurisprudence that Federal Register publication is notice to the world of U.S. Government actions and the fact that such notice is not actually received or reviewed by an affected party does not impact the validity of such notice. Accordingly, the action of the USTR was proper and satisfied all notice requirements. Further, it is Customs position that posters printed by lithography or offset lithography as stated in the Customs Bulletin notice have always been classified under subheading 4911.91.2020, HTSUS. Customs has never issued a ruling letter classifying such merchandise in subheading 4911.91.4020, HTSUS. In addition, under section 484 of the Tariff Act of 1930, as amended (19 U.S.C. §1484), the importer of record is responsible for using reasonable care to enter, classify and determine the value of imported merchandise and to provide any other information necessary to enable Customs to properly assess duties, collect accurate statistics, and determine whether other applicable legal requirements, if any, have been met.
As a result of Customs efforts and obligations to enforce the USTR sanctions, Customs discovered that some importers had been incorrectly entering and liquidating such posters. That is what lead to Customs publication of the proposed notice to revoke a treatment under 19 U.S.C. §1625(c)(2) for one importer of classifying merchandise under subheading 4911.91.4020, HTSUS. All importers with similar claims were invited to reply to the notice and assert their own claim of treatment.
We also find the protestant’s claim that there is a uniform and established practice of classifying offset printing posters under subheading 4911.91.4020, HTSUS, without merit. Long-continued administrative practice must be shown by positive evidence. It is not established by the rulings of one to two collectors as to a few shipments or as to some related substance of a different quality or as to a period subsequent to the date of importation. United States v. H. Reeve Angel & Co., Inc., 33 CCPA 114, C.A.D. 324 (1946), cert. den. 328 U.S. 835, 66 SCR 980, 90 L. Ed. 1611 (1946). In our review of similar cases, it is clear that Customs has not uniformly liquidated entries containing posters printed by lithography or offset lithography in subheading 4911.91.4020, HTSUS, nor have importers uniformly entered such posters. On July 17, 2001, Customs published
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a Notice of Proposed Rulemaking setting forth proposed amendments to Part 177 of the Customs Regulations. Part 177.22(a)(2), of the proposed regulations set forth criteria for establishing a uniform practice, which will when adopted codify Customs long administrative practice:
The practice must involve 100 percent uniform treatment accorded by Customs through liquidations performed at multiple ports over an extended period of time. For purposes of this paragraph, “treatment accorded by Customs” means an actual review of entries and therefore does not include cases in which liquidation of an entry occurred without the direct, active involvement of Customs (for example, when liquidation took place by operation of law or involved bypass or automatic liquidation or similar procedures).
On July 6, 2001, the Office of the United States Trade Representative (USTR) filed a Notice of termination of action, monitoring, and request for public comments, stating that the EC is taking satisfactory measures to grant the rights of the United States under the WTO Agreement, and proposing to terminate the 100 percent ad valorem duties on the list of EC products, including lithographs, and to monitor the EC’s compliance.
The termination of increased duties is effective with respect to articles entered, or withdrawn from warehouse, for consumption, on or after July 1, 2001, except that the termination of increased duties on subheading 4911.91.2020, HTSUS, is effective with respect to articles entered, or withdrawn from warehouse, for
consumption, on or after March 3, 1999, for which unliquidated entries or entries subject to timely protest are pending before Customs. This action by the USTR effectively voids the sanctions against lithographs ab initio.
We also note that counsel for the protestant filed a claim of treatment in reply to the Customs Bulletin notice of August 15, 2000. Under section 625 of the Tariff Act of 1930, as amended, 19 U.S.C. §1625 (1994), a proposed interpretive ruling or decision which would –
modify (other than to correct a clerical error) or revoke a prior interpretive ruling or decision which has been in effect for at least 60 days ; or
have the effect of modifying the treatment previously accorded by the Customs Service to substantially identical transactions;
must be published in the Customs Bulletin and will become effective 60 days after the date of its publication. Thus, under the notice if the protestant were able to substantiate its claim of treatment under 19 U.S.C. §1625(c)(2), it would be
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entitled to enter and classify its merchandise under subheading 4911.91.4020, HTSUS, during the 60-day delayed effective date, i.e., until December 18, 2000. Merchandise classifiable under that tariff provision is dutiable at the rate of 0.9 percent ad valorem. Thereafter, the merchandise would be classifiable in accordance with Customs notice under subheading 4911.91.2020, HTSUS, which is dutiable at 4¢/kg.
Counsel claims that Customs consistently classified the protestant’s posters under subheading 4911.91.4020, HTSUS. Since 1992, counsel states that the protestant has imported more than 300 line item entries of posters. Imports began on April 24, 1992, at the Port of Los Angeles under subheading 4911.91.4020, HTSUS. After February 19, 1993, counsel claims that the protestant’s posters were consistently liquidated under the same provision, 4911.91.4020, HTSUS, at the Port of San Francisco. Moreover, Customs examined the protestant’s posters on five occasions in 1995 and 1996, without changing classification of the merchandise. Thereafter, the merchandise was on bypass status and was not examined again until August 2000, after imposition of the sanctions.
The information submitted by counsel has been verified by your port and the Port of Los Angeles. Based on the facts submitted, we find that prior to the Customs Bulletin notice, Customs consistently classified the protestant’s merchandise under subheading 4911.91.4020, HTSUS, and that it is entitled to a treatment under 19 U.S.C. §1625(c)(2).
The protest should be GRANTED. The protestant is entitled to enter and classify its merchandise under subheading 4911.91.4020, HTSUS, during the 60-day delayed effective date set forth in the Customs Bulletin notice, i.e., until December 18, 2000. Merchandise classifiable under that tariff provision is dutiable at the rate of 0.9 percent ad valorem.
Thereafter, the merchandise should be classifiable in accordance with Customs notice under subheading 4911.91.2020, HTSUS, which is dutiable at 4¢/kg. In accordance with the USTR notice, the protestant is entitled to obtain a refund of the 100 percent duties paid (less the amount due as a result of classification under subheading 4911.91.2020, HTSUS).
Instructions to the field on procedures concerning the refund of duties for entries subject to timely protest, as well as for unliquidated entries, will be issued shortly.
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In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, 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