Internal advice; claim number 4601-05-200216; Victorinox Swiss Army Apparel LLC; 19 U.S.C. § 1520(c)(1); mistake of fact, clerical error, or other inadvertence; Andean Trade Promotion and Drug Eradication Act; textile and apparel products; TBT-02-035; Certificate of Origin; 19 C.F.R. § 10.244

HQ 231096 November 23, 2005 LIQ-9-01 RR:CR:DR 231096 EMS U.S. Customs and Border Protection 1100 Raymond Boulevard Newark, New Jersey 07102 ATTN: Jennifer Tagliaferro, Protest and Control Re: Internal advice; claim number 4601-05-200216; Victorinox Swiss Army Apparel LLC; 19 U.S.C. § 1520(c)(1); mistake of fact, clerical error, or other inadvertence; Andean Trade Promotion and Drug Eradication Act; textile and apparel products; TBT-02-035; Certificate of Origin; 19 C.F.R. § 10.244 Dear Ms. Tagliaferro: This is in reply to your correspondence dated August 18, 2005, requesting internal advice with respect to a petition filed by Victorinox Swiss Army Apparel (VSAA) LLC pursuant to 19 U.S.C. § 1520(c)(1) for claim number 4601-05-200216. You provided copies of the petition filed by VSAA on April 20, 2005, as amended, and a supplemental submission filed on August 12, 2005. We have reviewed these documents, and our decision follows below. FACTS: VSAA made four entries between June 24, 2003 and February 11, 2004 that consisted of items generally described as men's cotton shirts and classified under subheadings 6105.10.0010 or 6109.10.0012 of the Harmonized Tariff Schedule of the United States (HTSUS). The Port of Newark/New York (the Port) liquidated the subject entries between May 7, 2004 and December 27, 2004 at the corresponding rates of duty, which had been asserted by VSAA on the entry summaries (CBP Form 7501).1 The entry summaries also showed that the country of origin and exportation was Peru. Other documentation accompanied the entry summaries, including the following: the commercial invoices issued by the foreign vendor, which show that the vendor's office, plant, and store were located in Peru; export visas that appear to have been issued by the Government of Peru; and textile certificates of origin dated March 11, 2003, which comport with the requirements of the Andean Trade Promotion and Drug Eradication Act (ATPDEA), and list the Andean fabric and yarn producers. On April 19, 2005, VSAA filed a request for reliquidation pursuant to 19 U.S.C. § 1520(c)(1), alleging that the entry of the subject merchandise without claiming duty-free treatment was the result of both an inadvertence and a mistake of fact. VSAA contends that the subject merchandise was eligible for duty-free treatment under subheading 9821.11.25, HTSUS, pursuant to the ATPDEA, Pub. L. No.107-210, § 3101-3108, 116 Stat. 933, 1023-40, enacted on August 6, 2002. Accompanying the request for reliquidation were copies of each subject entry and the corresponding ATPDEA Certificates of Origin for the relevant blanket periods during which the subject merchandise was imported. The ATPDEA provides duty-free treatment for certain textile and apparel articles which meet the requirements set forth in § 3103 of the ATPDEA, codified at 19 U.S.C. § 3203(b), wherein paragraph 5(A)(i) provides that inter alia importers claiming such duty-free treatment must have in their possession a valid Certificate of Origin. The CBP regulations specify that, at the time of entry, the importer must "make a written declaration that the article qualifies for that treatment" and that declaration must "be based on a Certificate of Origin that has been completed and properly executed in accordance with § 10.244, that covers the article being imported, and that is in the possession of the importer." 19 C.F.R. § 10.245.2 In this case, VSAA alleges that, at the time of entry, it was unaware that the vendor possessed ATPDEA Certificates of Origin for the subject merchandise. VSAA also claims that, had it been aware of this fact, it would have instructed its broker to enter the subject merchandise duty-free under subheading 9821.11.25, HTSUS. See Proclamation No. 7616, 67 Fed. Reg. 67, 283 (Nov. 5, 2002). In support of its request for reliquidation under this subheading, VSAA cites to a CBP memorandum dated November 8, 2002, TBT-02-035, which directed the field on the implementation of the ATPDEA for textile and apparel products. VSAA relies on the following instruction: Textile and apparel articles entered at the normal duty rates because the importer did not possess a valid Certificate of Origin to make a claim, that have met the above provisions, can avail themselves of all post entry procedures. 3 VSAA contends that it is entitled to reliquidation of the subject entries with duty-free treatment on the basis of 19 U.S.C. § 1520(c)(1) (repealed 2004), a remedy available to importers within one year after the date of liquidation of the merchandise at issue. VSAA alleges that its failure to have the Certificate of Origin in its possession for goods that were otherwise eligible for ATPDEA treatment was an inadvertence that required its garments to be entered, and ultimately liquidated, without the preferential treatment provided under the ATPDEA. In its supplemental submission, VSAA further alleges that the failure to claim duty-free treatment under the ATPDEA was the result of a mistake of fact, specifically, that the importer was unaware that the vendor had prepared an ATPDEA Certificate of Origin and, if the importer had been aware of this fact, it would have instructed its broker to claim duty-free treatment at the time of entry. As a result of the failure to claim duty-free treatment at the time of entry, VSAA contends that the liquidation of the subject merchandise involved a mistake of fact by CBP, which would have been unaware that the goods were eligible for duty-free treatment when it liquidated the subject merchandise at the rates of duty asserted by VSAA on the entry summaries. To further bolster its position, VSAA urges the Port to grant its request for reliquidation because another CBP port, located at the John F. Kennedy International Airport in New York (the JFK Port), allegedly granted an identical request for reliquidation on August 5, 2005. The request for reliquidation submitted to the JFK Port is substantially similar to that which was submitted in the instant case, although it covered different entries. The JFK Port consulted a Commodity Specialist Team to confirm that the merchandise covered by those entries was indeed eligible for duty-free entry under the ATPDEA, but it does not set forth a rationale in its letter granting reliquidation per 19 U.S.C. § 1520(c)(1). ISSUE: Whether the alleged fact that the importer was unaware of the existence of the ATPDEA Certificate of Origin at the time of entry constitutes a clerical error, mistake of fact, or other inadvertence that resulted in CBP's liquidation of the subject merchandise without duty-free treatment? LAW AND ANALYSIS: Section 520(c) of the Tariff Act of 1930, as codified at 19 U.S.C. § 1520(c), is an exception to the finality of the liquidation of an entry under 19 U.S.C. § 1514. 4 Per 19 U.S.C. § 1520(c)(1): the Customs Service may, in accordance with regulations prescribed by the Secretary, reliquidate an entry or reconciliation to correct-- (1) a clerical error, mistake of fact, or other inadvertence, whether or not resulting from or contained in electronic transmission, not amounting to an error in the construction of a law, adverse to the importer and manifest from the record or established by documentary evidence, in any entry, liquidation, or other customs transaction, when the error, mistake, or inadvertence is brought to the attention of the Customs Service within one year after the date of liquidation or exaction . . . . Therefore, CBP may reliquidate the protested entries to correct a clerical error, mistake of fact, or other inadvertence if three requirements are satisfied: (1) the error is adverse to the importer's interests; (2) the error is manifest from the record or established by documentary evidence; and (3) the error is brought to CBP's attention within one year of the date of liquidation. Initially, we note that VSAA timely filed its request for reliquidation on April 20, 2005, which was within one year of May 7, 2004, the earliest date of liquidation among the subject entries. The liquidation of the subject merchandise at the rates of duitability asserted on the entry summaries is clearly adverse to VSAA's interests given that it is seeking reliquidation of the subject merchandise as duty-free under the ATPDEA. In this case, the only requirement of 19 U.S.C. § 1520(c)(1) which is at issue is whether the liquidation of the subject entries without duty-free treatment under the ATPDEA is a mistake of fact, clerical error, or other inadvertence that is either manifest from the record or established by the documentary evidence. At the time of entry, VSAA did not claim duty-free treatment for the subject entries under the ATPDEA, nor is it manifest from the record that its failure to do so was a clerical error, mistake of fact, or other inadvertence. Manifest from the record means "apparent to Customs from a facial examination of the entry and the entry papers alone." ITT Corp. v. United States, 24 F.3d 1384, 1387 (Fed. Cir. 1994). Based on the Port's records, the ATPDEA Certificates of Origin accompanied entry summaries, but VSAA did not make the necessary written declarations, as required by 19 C.F.R. § 10.245. Under the ATPDEA, the importer must make a written declaration that the article being imported qualifies for preferential treatment and, per 19 C.F.R. § 10.245, "the inclusion on the entry summary...of the subheading within Chapter 98 of the HTSUS under which the article is classified will constitute the written declaration." The entry summaries did not include the appropriate HTSUS subheadings and, thus, there was no claim for duty-free treatment. Despite the fact that the ATPDEA Certificates of Origin were among the entry papers, VSAA failed to comply with 19 C.F.R. 10.245, and an examination of the entry papers does not suggest that the liquidation of the subject merchandise without duty-free treatment is remediable under 19 U.S.C. § 1520(c)(1). Further, copies of the ATPDEA Certificates of Origin are the only documentary evidence submitted by the VSAA to support its position that the failure to claim duty-free treatment at the time of entry was a mistake of fact or other inadvertence. Simply providing documents that support the duty-free treatment of merchandise is insufficient, especially given the Port's position that those same documents were submitted at the time of entry. Providing these documents demonstrates that VSAA had available to it, at some point, the ATPDEA Certificates of Origin necessary for making the required written declarations to claim duty-free treatment, but it is not dispositive of the fact that VSAA's failure to claim duty-free treatment was the result of a clerical error, mistake of fact, or other inadvertence. We note that an importer's unawareness of a fact that would make imported merchandise eligible for duty-free status at the time of entry may be remediable under 19 U.S.C. § 1520(c)(1), United States v. C.J. Tower & Sons of Buffalo, 499 F.2d 1277 (C.C.P.A. 1974), but the importer must demonstrate its unawareness of that fact. In Executone Info. Sys. v. United States, the Federal Circuit Court of Appeals analyzed this substantiation requirement in a case where the importer failed to timely file documentation in support of its claim for duty-free treatment, finding that while the proper documentation need not have existed at the time of entry, the importer must prove...that the proper documentation did or would have existed at the time of entry and would have been filed, but for some mistake of fact or inadvertence at the time of entry. 96 F.3d 1383, 1389 (Fed. Cir. 1996). The court concluded that even when an intention to claim duty free treatment is manifest from the records, the importer must nonetheless substantiate its claim. Id.5 Even presuming that the submission of the ATPDEA Certificates of Origin at the time of entry manifests an intention on the part of the importer to claim duty-free treatment, VSAA has not substantiated any error remediable under 19 U.S.C. § 1520(c)(1). The entry papers do not support VSAA's claim that it did not possess the requisite ATPDEA Certificates of Origin to make the claims for duty-free treatment. Indeed, the Port's records, which show that the ATPDEA Certificates of Origin were submitted at the time of entry, compel additional scrutiny of the explanation that VSAA offers as to why it failed to claim duty-free treatment. If VSAA was truly unaware of the existence of the ATPDEA Certificates of Origin, then we are left to wonder how these documents came to be submitted to CBP when the merchandise was entered. There are no affidavits or documentary evidence explaining why VSAA claimed it was unaware of existence of the ATPDEA Certificates of Origin that appear to have been filed at the time of entry and, in the absence thereof, reliquidation would not be available under 19 U.S.C. § 1520(c)(1). See Bar Bea Truck Leasing Co. Inc. v. United States, 5 Ct. Int'l Trade 124, 126 (1983). Under these circumstances, the JFK Port's decision to grant a substantially similar request for reliquidation is not persuasive. The JFK Port's letter informing VSAA of its decision does not set forth any rationale, nor does VSAA provide any compelling reason as to why CBP would rely on that decision in the instant case.6 Furthermore, the JFK Port did not appear to have addressed any factual inconsistency regarding the VSAA's awareness of the existence of the ATPDEA Certificates of Origin for the subject entries. HOLDING: The importer has not provided documentary evidence to support its allegation that it failed to claim duty-free treatment under the ATPDEA at the time of entry because of a mistake of fact, clerical error, or other inadvertence. If the importer submits sufficient documentary evidence to support this allegation, then the subject entries are eligible for reliquidation pursuant to 19 U.S.C. § 1520(c)(1), presuming that the subject entries satisfy all other requirements for duty-free treatment under the ATPDEA. 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.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, William G. Rosoff, Chief Entry Process and Duty Refunds Branch 1 Two subject entries were classified under subheading 6109.10.0012, HTSUS, and subject to a dutiable rate of 17 percent ad valorem, and the other subject entry was classified under subheading 6501.10.0010, HTSUS, and subject to a dutiable rate of 19.8 percent ad valorem. 2 CBP had already published interim regulations on March 25, 2003, setting forth the same requirement and the proper form of the ATPDEA Certificate of Origin. 68 Fed. Reg. 14,478, 14,489-91. 3 The "above provisions" refer to the entry requirements for claiming duty-free treatment under the ATPDEA and the relevant importer responsibilities, as outlined in the memorandum, consistent with the statutory requirements established under § 3103 of the ATPDEA. 4 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 clerical errors, mistakes of fact, and other inadvertence as bases of protest. See Pub. L. No. 108-429, § 2105, 118 Stat. 2434 (2004). Here, 19 U.S.C. § 1520(c) is controlling because the provision was in force for all merchandise entered before December 18, 2004, and the subject merchandise was entered no later than February 11, 2004. See Pub. L. No. 108-429, § 2108, 118 Stat. 2434 (2004). 5 We note the Port's citation to CBP's position, in HQ 224385 dated May 24, 1993, that "the submission of incorrect or incomplete documentation and the failure to submit, or late submission, of 'correct' documentation are not correctable errors under 19 U.S.C. 1520(c)(1)" (citations omitted). CBP's reasoning in that case was controlled by prior decisions of the Court of International Trade that have since been distinguished by the Federal Circuit Court of Appeals, Executone, 96 F.3d at 1387-88, and do not merit the categorical exclusion of cases involving the untimely submission of documentation in support of a claim for duty-free treatment from reliquidation under 19 U.S.C. § 1520(c)(1). 6 A single decision of the nature set forth in the JFK Port's letter does not constitute either an interpretive ruling, per 19 C.F.R. § 177.12(b), or treatment, per 19 C.F.R. § 177.12(c). Additionally, in Degussa Canada Ltd. v. United States, 87 F. 3d 1301 (Fed. Cir. 1996), the court found that there was no mistake of fact, per 19 U.S.C. § 1520(c)(1), when one port director decided a protest while unaware that another port director had approved an application for further review of a protest on the same issue. 2