• Type : • HTSUS :

OT:RR:CTF:VS H185795 KSG

Port Director
1624 East Seventh Avenue, Suite 101
U.S. Customs and Border Protection
Tampa, Florida 33605

Re: Protest No. 1801-11-100019; DR-CAFTA; correction of certification

Dear Port Director:

This is in response to the Application for Further Review of Protest No. 1801-11-100019 submitted by counsel on behalf of Topline Screen Printing & Embroidery (Topline), whether certain mens' t-shirts were eligible for preferential tariff treatment pursuant to the U.S.-Dominican Republic-Central America Free Trade Agreement (DR-CAFTA). At the request of counsel, a conference was held on this matter on June 5, 2012. An additional submission dated November 8, 2012, which included manufacturer's affidavits for the yarn used to make the fabric were incorporated into the record.

FACTS:

This case involves entries of mens' cotton t-shirts classified in subheading 6109.10 of the Harmonized Tariff Schedule of the United States (HTSUS), cut and assembled in Honduras, from fabric produced in Guatemala from yarn produced in the U.S. The goods were entered under the DR-CAFTA on January 29, 2010, claiming that they were wholly obtained or produced entirely in the territory of one of the Parties.

The importer submitted manufacturer's affidavits for yarns from Swift Spinning, Frontier Spinning Mills Inc., and Parkdale, which indicate that the yarn was produced in the U.S. from U.S. originating fibers. Another affidavit from Mayotex indicates that it used U.S.-origin yarn to produce cotton fabric in Guatemala. It is asserted that the fabric was cut and assembled into finished t-shirts in Honduras by Hawkins Apparel Group S.A..

Three separate certifications of origin were submitted by Topline, the importer in this case to cover the same entries, which all contain some variation in the information provided. We will refer to the original certification submitted with the entry as Certification A. Certification A shows Topline as the importer, and Hawkins Apparel Group S.A. as the producer and exporter in Honduras of the imported t-shirts. Further, certification A shows Mayotex in Guatemala as the fabric producer; Parkdale, Swift Spinning Inc. and Frontier Spinning Mills Inc. as the yarn producers; and Hilos A & E Honduras S.A. and Coats North America in Honduras as sewing thread producers. The purchase order numbers are listed as well. Certification A was signed by Brenda E. Vasquez of Hawkins Apparel and dated December 24, 2009. Although the importer refers to this certification as a blanket certification, no blanket period of time was provided.

CBP sent out a request for information (CBP Form 28) dated January 27, 2011, asking for supporting documentation, including the certification of origin; bill of materials; cost data; purchase orders, including, purchase orders for the Coat's sewing thread; commercial invoices, including, the sewing thread invoices, from Coats; proof of payment; sewing thread delivery tickets from Coats; and production and manufacturing documents. In response to the CBP Form 28, the importer submitted various documents, including manufacturer's affidavits and production records. The certification provided in response to the CBP Form 28 did not match the original certification provided to CBP. The importer states that it could not locate the original certificate of origin that had accompanied the shipment (Certification A) and therefore, a second certification of origin (which we will refer to as Certification B) was prepared by Brenda E. Vasquez.

Certification B references the same purchase order number as Certification A but differs from Certification A in that for the sewing thread, it lists Coats North America in Honduras, Unifi Manufacturing Inc. in the U.S. and American & Efird, Inc. in the U.S. as the producer. Brenda E. Vasques wrote the date of December 24, 2009 on Certification B (the same date as Certification A), even though it was prepared at a later date.

The third certification, which we will refer to as Certification C, was provided to the import specialist after questions were raised by CBP regarding Certification B. The import specialist noted that the manufacturer's affidavit of origin for certain yarn (used to make sewing thread) provided by Unifi Manufacturing Inc. to Hilos A & E Honduras, S.A. were produced with fibers of Indian origin. The import specialist asked questions regarding single-ply sewing thread produced with Indian-origin fibers, which Certification B indicated were used to produce the t-shirts. Hawkins states that they further researched the order and determined that in fact, fibers of Indian origin sourced from Hilos were not used to make these t-shirts. Certification C also did not specify a period of time, so it was also not a blanket certification. At this point, Brenda Vasquez was no longer employed by Hawkins but Hawkins printed her name on the certification (we note that there is no signature on Certification C). Certification C was also dated December 24, 2009 even though it was prepared at a later date.

Philip Todd Hawkins of Hawkins Apparel Group, the exporter/producer, submitted an affidavit explaining the reasons why Certifications B and C were created. It is asserted that Certification B was created because Hawkins could not locate a copy of Certification A when the importer requested it in response to the CBP Form 28. It is asserted that Certification C was created because Hawkins did further research and discovered that the sewing thread containing fibers of Indian origin, was not used to make the t-shirts subject to this entry; only sewing thread produced by Coats was used to produce the t-shirts at issue.

Hawkins also provided production records. The typed name of the client was whited out on the production records and Topline was handwritten in the space provided. Counsel states that Hawkins manufactured for Margaritaville, another company that purchased t-shirts. The affidavit of Philip Todd Hawkins states that Hawkins personnel whited out the name Margaritaville and wrote in Topline to distinguish between the two companies, who both buy t-shirts from Hawkins. Because the production records submitted were whited out, CBP was reasonable in questioning the veracity of the submitted documents.

On March 31, 2011, CBP issued a Notice of Action (CBP Form 29) proposing a rate advance stating that the documents provided did not demonstrate the goods were eligible as originating goods under the DR-CAFTA and providing the opportunity to make a second submission within 20 days. CBP subsequently issued a rate advance on the entry.

ISSUE:

Whether the supporting documentation is sufficient to support the claim that the imported apparel is originating under the DR-CAFTA.

LAW AND ANALYSIS:

The DR-CAFTA was signed on August 5, 2004, and includes as parties the United States, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and Costa Rica. The provisions of the DR-CAFTA were adopted by the U.S. in the Dominican Republic Central America Free Trade Agreement Implementation Act, Public Law 109-53 (2005). General Note (GN) 29, of the Harmonized Tariff Schedule of the United States (HTSUS) sets forth the rules of origin for the DR-CAFTA. The regulations for the DR-CAFTA are set forth in 19 CFR 10.581 et seq.

Pursuant to GN 29(b), a good is eligible for treatment as an originating good if: (i) the good is wholly obtained or produced entirely in the territory of one or more of the parties to the agreement; (ii) the good was produced entirely in the territory of one or more parties to the agreement, 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 requirement of this note; or (iii) the good was produced entirely in the territory of one or more of the parties to the Agreement exclusively from originating materials. In this case, the importer claims that the good is wholly obtained or produced entirely in the territory of one or more of the Parties. The men's cotton t-shirts, are alleged to be cut and assembled in Honduras of fabric made in Guatemala and U.S.-origin sewing thread. Therefore, the imported t-shirts would be considered wholly produced in the territory of the Parties if these facts are verified.

CBP requested information to confirm that the t-shirts were originating goods pursuant to the DR-CAFTA. We note that GN 29(c)(iv) permits accumulating originating material from the territory of one or more of the Parties to the Agreement in the production of a good in the territory of another party to the Agreement.

As stated in 19 CFR 10.583(b), a claim is made by including on the entry summary or equivalent documentation, the letter P as a prefix to the subheading of the HTSUS number under which each qualifying good is classified. The certification may be prepared by the importer, exporter or producer of the good. See 19 CFR 10.583(a)(1). The claim need not be in a prescribed format, but must be in writing or transmitted electronically. See 19 CFR 10.584(a)(1).

Pursuant to 19 CFR 10.583, the claim for preferential tariff treatment under the DR-CAFTA may be based on a certification that the importer, exporter, or producer has in his possession at the time of making the claim on the entry summary. Corrections to the claim are made pursuant to 19 CFR 10.583(c), which states that if the importer has reason to believe that the claim is based on inaccurate information or is otherwise invalid, the importer must, within 30 days of the discovery of the error, correct the claim and pay any duties owing. The importer must submit a statement either in writing or via authorized electronic data interchange system to the CBP office where the original claim was filed specifying the correction.

In TBT-12-003, dated March 22, 2012, Supplemental Instructions for Document Review When Verifying Trade Preference Program Claims for Textiles and Wearing Apparel, CBP stated that the trade is to exercise reasonable care in the preparation of trade preference claims and provide CBP with documentation as requested even if the CBP Form 28 does not specify the document type. However, CBP also stated that when a correlation of information on various documents presented to support a claim is not immediately apparent, the importer should supplement the documents with information that supports the claim.

In accordance with the above regulations, the importer submitted a certification at the time of entry (Certification A). If the importer realized that they had further or more accurate information, they should have filed a corrected claim within 30 days of discovery at the initial port where the claim was made, and signed by the person completing the corrected claim and dated on the date actually completed.

We are treating Certification A as the certification in this case. Certification A is dated prior to the date of the filing of the entry summary (January 29, 2010). Certification A, although referred to by the importer as a blanket certification, is not a proper blanket certification since it does not provide a period of time to which it applies. Certification A was incorrect in that it listed Hilos as one of the producers of sewing thread for the imported goods when the importer later stated that was not factually correct. Certifications B and C were not properly filed as corrected claims. Neither Certifications B nor C were properly dated or prepared. Certification B was not submitted because the importer realized it needed to provide further or more accurate information. It was submitted in response to a CF-28 issued by CBP and it contained incorrect information regarding the origin of the sewing thread and was improperly dated. Certification C was not signed and the name on it was not the person who prepared it. Using the name of a person who was not available to sign the certification is improper and CBP cannot accept Certification C as a corrected claim. Since none of the certifications or the corrected claims were properly prepared, we find that the protest was properly denied.

HOLDING:

The protest is hereby denied.

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 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