OT:RR:CTF:VS H324840 AP
Center Director, Electronics Center of Excellence and Expertise
U.S. Customs and Border Protection Los
Angeles International Airport 11099
South La Cienega Blvd.
Los Angeles, CA 90045
RE: Application for Further Review of Protest No. 0401-22-102887; Information Systems
Error; Overvaluation
Dear Center Director:
This is in response to an Application for Further Review (“AFR”) of Protest No. 040122-
102887, submitted on behalf of SES Imagotag, Inc. (“protestant”), now VusionGroup,1 asserting
that an information systems error resulted in the overvaluation of the entered goods covered by a
November 10, 2020 entry. On October 12, 2023, we had a meeting with the protestant’s
representative.
FACTS:
The protestant, a U.S. subsidiary of a company in France, filed two entries on October
162 and November 10, 2020, which were both liquidated on September 10, 2021. This
protest/AFR was timely submitted on February 28, 2022. The entries consisted of various
electronic equipment such as indicator panels, modems, and telephone parts. The protestant
claims that the entry value of the two entries was overstated, and customs duties were overpaid
due to information system errors following the French parent’s deployment of a new enterprise
resource planning (“ERP”) system on May 11, 2020.
1
At the time when the AFR/Protest was filed, the protestant’s name was SES Imagotag, Inc. In 2024, SES Imagotag,
Inc. changed its name to Vusion Group. See SES-Imagotag Becomes VusionGroup,
https://www.vusion.com/insights/ses-imagotag-becomes-vusiongroup/, last viewed Aug. 26, 2024.
2
The Electronics Center of Excellence and Expertise (“Electronics CEE”) agreed that the correct entered value for
the October 16, 2020 entry was $82,788.08 and liquidated it as protested. Since the protest was granted in part, only
the November 10, 2020 entry is at issue in this AFR.
The parent company explained that over a period of several months until March 2, 2021,
doubled prices appeared on the commercial invoices and an incorrect 10 percent internal markup
was applied. The parent company also stated there was a rounding error, which was fixed on
May 26, 2021. The protestant submitted the original and corrected entry summaries, invoices,
bill of lading, and proof of payment.
The original entered value for the November 10, 2020 entry was $545,087.78. The value
on line 1 (material 3428) of the original CBP Form 7501 was $102,138 and the value on line 2
(material 3541) was $442,950. The original September 15, 2020 invoices from the parent
company to the protestant stated that the terms of delivery were “FOB.”
The revised entered value for the same entry is $250,823.73. The value on line 1
(material 3428) of the revised CBP Form 7501 is $75,723 and the value on line 2 (material 3541)
is $175,101. The protestant submitted two sets of revised invoices – revised commercial
invoices 1000000631 and 1000000632, and revised invoice 9010009950. Revised commercial
invoices 1000000631 (material 3541) and 1000000632 (material 3428) from the parent company
in France to the protestant list terms of delivery “DAP” and a total value of $250,823.73.
Revised invoice 9010009950 from the parent company to the protestant (materials 3428, 3397
and 3541) included terms of delivery “FOB” and a total value of $326,546.84. The wire transfer
statement from the bank shows that the protestant paid $326,546.84 (invoice 9010009950) to the
parent company in France on March 26, 2021.
The foreign manufacturer of the merchandise covered by the November 10, 2020 entry
was in China. According to the bill of lading, the port of loading was Chongqing, China and the
port of discharge and place of delivery was New York.
Our office requested additional information/documentation from protestant, through its
representative, on June 2, 2022; August 9, 2022; March 8, 2023; October 12, 2023; November
20, 2023; February 15, 2024; and February 26, 2024, and protestant did not submit it. On
February 26, 2024, upon the protestant’s request, our office even granted an extension until
March 15, 2024 to accommodate change in personnel within the company and enable the
protestant to “adequately respond.”
ISSUE:
Whether the protestant has demonstrated that the merchandise was overvalued due to an
information systems error and is entitled to a refund of duties due to the error.
LAW AND ANALYSIS:
We note that the matter protested is protestable under 19 U.S.C. § 1514(a)(1) as a
decision on the value of merchandise. The protest was timely filed 180 days of liquidation for
the entry. See Miscellaneous Trade and Technical Corrections Act of 2004, Pub. L. 108-429, §
2103(2)(B)(ii)-(iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)). Further Review of
this protest is properly accorded to protestant pursuant to 19 C.F.R. § 174.24(b) because the
issues protested involve questions of law or fact, which have not been ruled upon.
2
Before the passage of the Miscellaneous Trade and Technical Corrections Act of 2004, an
importer could not remedy a clerical error, mistake of fact, or other inadvertence by filing a
protest under 19 U.S.C. § 1514. Instead, an importer was required to request a refund under 19
U.S.C. § 1520(c), which authorized the reliquidation of an entry to correct a clerical error,
mistake of fact, or other inadvertence. The implementing regulations authorized reliquidation if
the clerical error, mistake of fact, other inadvertence “(1) [did] not amount to an error in the
construction of a law; (2) [was] adverse to the importer; and (3) [was] manifest from the record
or established by documentary evidence.” See 19 C.F.R. § 173.4(a).
The Miscellaneous Trade and Technical Corrections Act of 2004 repealed 19 U.S.C. §
1520(c) and amended 19 U.S.C. § 1514(a) to include “any clerical error, mistake of fact, or
other inadvertence” that occurs in an “entry, liquidation, or reliquidation” as protestable events.
See Pub. L. 108-429, Title II, § 2015, Dec. 3, 2004, 118 Stat. 2598.
The protestant has not supported its error claims with respect to the November 10, 2020
entry. The numbers do not add up after the claimed errors are corrected. Also, the two sets of
revised invoices contain different Incoterms and total values. The protestant paid its parent
company more than four months after the goods were entered into the United States and the
invoices do not contain terms and conditions of payment. No purchase orders have been
submitted. The protestant has not provided relevant documentation addressing the first sale in
the multi-tier transaction such as invoices from the manufacturer in China, purchase orders to the
manufacturer, and proof of payment to the manufacturer. Such evidence would have allowed a
comparison of the first and second sale prices to determine if the goods were overvalued. The
protestant did not take advantage of the opportunities to provide additional information in
response to our requests on June 2 and August 9, 2022; March 8, October 12 and November 20,
2023; and February 15 and 26, 2024. Accordingly, we disagree that the revised invoices should
replace the invoices originally submitted for the merchandise covered by the November 10, 2020
entry.
HOLDING:
The protest with respect to the November 10, 2020 entry should be denied. You are
instructed to notify the protestant of this decision, through the protestant’s representative, no later
than 60 days from the date of this decision. Any reliquidation of the entry or entries in
accordance with the decision must be accomplished prior to this notification. 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 CBP website at
https://www.cbp.gov and other methods of public distribution.
Sincerely,
For Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division
3