BON-1-04 RR:IT:EC 226893 SAJ
Barbara J. Brockman
Fines, Penalties and
Forfeitures Officer
Room 198
511 N.W. Broadway
Portland, OR 97209
RE: Untimely Request for Extension on a Temporary Importation
Bond (TIB) under 19 C.F.R. 10.37; 19 C.F.R. 10.39(d)(1); TIB
Entry No. F55-00036903; BMW of North America, Inc.
Dear Ms. Brockman:
This office has received the above-referenced request for a
TIB extension as provided for under Customs Regulations. The
extension is requested by Donnie B. Turbeville on behalf of BMW
of North America, Inc. (importer). We have considered the
request and have made the following decision.
FACTS:
The importer faxed a letter dated January 27, 1995 to Ronald
Vertrees of Customs Clearing Service (broker). The letter is
addressed to Customs Denver and states that the imported BMW
passenger car would be "used in the United States for endurance
and emission tests for approximately two years". Emphasis added.
The subject car was entered on January 31, 1995.
On February 13, 1995, an entry summary Customs Form (CF)
7501 was filed, whereby the subject car was entered under
subheadings 9813.00.30/Free and 8703.23.00/2.5% of the Harmonized
Tariff Schedule of the United States (HTSUS). The TIB bond
period expired on January 31, 1996. Accordingly, liquidated
damages were assessed at twice the duty due by the issuance of CF
5955A on March 14, 1996. See 19 C.F.R. 10.39(d)(1).
Your office received a letter dated March 25, 1996 from the
importer, untimely requesting an extension, in response to
receiving the CF 5955A. In that letter, the importer stated
that the broker was expected to file for an extension with
Customs at the appropriate time. As a result, the importer
"assumed that the entry had been made."
As evidence of the importer's reliance of their broker,
importer provided two letters indicating that the broker was
aware of the importer's need to: 1) conduct testing on the
subject car for approximately two years, and 2) request an
extension of the one year initial term of the TIB.
ISSUE:
Whether an exportation under the bond is warranted under the
facts presented.
LAW AND ANALYSIS:
The basic requirements for a TIB are provided for in U.S.
Note 1(a) of Subchapter XIII, Chapter 98, HTSUS. Articles
described in this subchapter, "when not imported for sale or for
sale on approval, may be admitted into the United States without
the payment of duty, under bond for their exportation within 1
year from the date of importation." The U.S. Note provides that
the one year period for exportation may be extended for one or
more further periods which, when added to the initial year, do
not exceed a total of three years. The Customs Regulations
pertaining to temporary importations under bond are found in 19
C.F.R. 10.31-10.40.
Section 10.37 of the Customs Regulations provides that
extensions of the time for exportation of merchandise under a TIB
may be granted by the appropriate port director upon written
application on CF 3173. Section 10.37 also maintains that
untimely requests for an extension of time for exportation are to
be referred to Customs Headquarters.
Generally, extensions based upon untimely requests are only
granted under extraordinary circumstances. Untimely requests for
TIB extension will be granted only in the following
circumstances: (1) the articles covered by the entry remain in
this country; (2) there is no evidence indicating the use of the
articles for purposes contrary to the terms of the bond; (3) the
applicant is not a chronic violator; (4) there is no evidence of
lack of due diligence in complying with the law and regulations;
and (5) there is a reasonable explanation as to why the
application was not timely filed. See, e.g. Headquarters ruling
(HQ) 219756 (June 2, 1987) and HQ 218315 (February 28, 1986).
There is no dispute that the importer filed the request for
the extension in response to the notice for liquidated damages
(CF 5955A). The importer indicates, as an extenuating
circumstance for the lateness of the TIB extension request, that
the broker "did not live up to the expectations of a
professional."
In previous cases, we have held that a misunderstanding
between the importer and its broker does not relieve the bond
holder of the responsibility to comply with the terms of the
bond. HQ 225452/225683 (January 20, 1995). In HQ 223400
(September 24, 1991), we found that the failure of a broker to
notify the importer of the requirement to timely export the
merchandise and/or request an extension is not evidence
demonstrating that the failure to file the application on time
was due to extraordinary circumstances. See HQ 224894 (December
8, 1993); HQ 223399 (December 11, 1991); and HQ 221898 (April 1,
1990).
The importer was fully aware of the bond requirements,
claimed the duty-free benefits of the TIB, and agreed to comply
with them. Regardless of importer's intent, no compelling reason
has been put forth to explain the failure to export or destroy
the merchandise within one year or timely file a request for an
extension of the bond. Consequently, we find a lack of due
diligence to comply with the bond terms.
As previously indicated, approvals of untimely requests are
granted only sparingly for extraordinary reasons, such as death
or serious illness of the employee responsible for making the
request for extension. See HQ 219659 (July 8, 1987). The
situation in this case does not appear to be one in which
circumstances were so extraordinary that relief may be granted.
Rather, the circumstances are more in the nature of a lack of due
diligence.
HOLDING:
Based on the foregoing, the extension of the TIB is not
warranted. Accordingly, you should proceed with the claim for
liquidated damages. Please note that this ruling addresses only
the issue of untimely request for extension and not the
applicability of liquidated damages or any petition for relief
from those damages, or compliance with procedures under 19 C.F.R.
Part 172, concerning liquidated damages.
Sincerely,
William G. Rosoff
Chief
Entry and Carrier Rulings Branch