Perfecting drawback claims by removing ineligible imports

HQ H033549 November 15, 2011 OT:RR:CTF:ER H033549 TT Mr. Michael Benefield U.S. Customs and Border Protection 2350 N. Sam Houston Parkway East, Suite 1000 Houston, TX 77032-3126 RE: Perfecting drawback claims by removing ineligible imports Dear Mr. Benefield: This is in response to the application for further review (“AFR”) for Protest number 5301-08-100375, filed by Georgia Gulf Chemicals & Vinyls, LLC (“Georgia Gulf”), on July 2, 2008. We have reviewed the Protest and our decision follows. FACTS: Georgia Gulf filed four drawback claims, entry numbers xxx-xxxxxx00, xxx-xxxxxx68, xxx-xxxxxx67 and xxx-xxxxxx26. All four claims were filed pursuant to 19 U.S.C. § 1313(b). Some of the imports that were associated with these entries exceeded the statutory requirement of being imported no more than five years prior to the date of export. See 19 U.S.C. § 1313(i). For this reason, the Houston Drawback Office denied the drawback claims in their entirety and liquidated them on April 11, 2008. Thereafter, on July 2, 2008, Georgia Gulf filed its protest disputing the liquidation of the drawback entries. Moreover, on January 21, 2010, Georgia Gulf provided additional arguments to its Protest pursuant to 19 C.F.R. § 174.28, arguing that it should be permitted to remove some imports by severing its drawback claims. In its protest, Georgia Gulf acknowledges that some of the imports were imported more than five years prior to the earliest dates of export. However, it argues that Customs and Border Protection (“CBP”) should allow it to remove the ineligible imports from the claims, while maintaining those that are within the permissible five year time frame. ISSUES: 1) Whether removing imports in a drawback claim constitutes perfection? 2) Whether imports may be severed from a drawback claim? LAW AND ANALYSIS: Georgia Gulf argues that removing importations from a drawback claim constitutes perfection and thus, its protest should be granted and the drawback claims should be reliquidated. In the alternative, it argues that, CBP erred in entirely denying the drawback claims as the ineligible imports should have been severed. Since we determine that removing imports from a drawback claim constitutes perfection, we do not reach Georgia Gulf’s second argument. Initially, we note that the Protest was timely filed under the statutory and regulatory requirements for protests. See 19 U.S.C. § 1514; 19 C.F.R § 174.12(e). Georgia Gulf filed its protest on July 2, 2008, which is less than ninety days from the April 11, 2008 date of liquidation, thereby making its protest timely. Next, Georgia Gulf argues that further review is warranted per 19 C.F.R. § 174.24, because the decision against which the protest was filed is inconsistent with a ruling of the Commissioner of CBP or his designee, or with a decision made at any port with respect to the same or substantially similar merchandise. AFR was properly granted as the Protest involves questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts. Our decision follows. Removing certain importations from a drawback claim constitutes perfection. After submitting a drawback claim, one may amend or perfect a claim pursuant to 19 C.F.R. § 191.52. The regulation, 19 C.F.R. § 191.52(c), explains that liquidated drawback entries may not be amended and unliquidated drawback entries must be amended within three years after the date of export or destruction of the article. Conversely, a perfection of a drawback claim “may be filed more than 3 years after the date of exportation or destruction.” 19 C.F.R. § 191.52(b). Therefore, the issue is whether removing imports from a drawback claim is a perfection or an amendment to the claim. The regulation, 19 C.F.R. § 191.52(b) explains perfection and gives a non-exhaustive list of evidence or information that if submitted, would qualify as perfection. However, this list does not specifically include Georgia Gulf’s proposed action of removing imports. In Toyota Motor Sale, U.S.A., Inc. v. U.S., the Court of International Trade (“CIT”) considered the issue of perfection versus amendment with regards to drawback claims and concluded that, changing an inventory method of a drawback claim is perfection. See Slip Op. 2011-113 at n.14 (September 8, 2011). In its analysis, the CIT explained perfection and amendment by stating that: Perfection refers to the submission of additional information in support of an other otherwise completed drawback claim, usually at the request of Customs. Thus, a party’s submission of additional information to Customs is a “perfection” when it supplements a completed drawback claim. An “amendment” is made when information is submitted that is in addition to the information and materials required for a completed drawback claim under 19 C.F.R. § 191.51(a). (emphasis in original). Additionally, in the CIT’s conclusion that changing inventory methods is perfection, it stated, “[Toyota] did not attempt to submit new information relating to different entries or different exported goods.” Id. at 28. Similarly, Georgia Gulf is not “attempt[ing] to submit new information relating to different entries or exported goods.” Id. Neither is it submitting information that would add to its claim. Instead, it is removing imports from a claim that would otherwise be ineligible for drawback. Thus, eliminating imports from a drawback claim is perfection. Further, our decision is consistent with prior CBP rulings that explain that perfection, as opposed to amendments, cannot change the scope of the drawback claim. See HQ H005627 (February 14, 2011) (finding the revised Certificate of Manufacture and Delivery to be an amendment because it changes the scope of the drawback claim). For instance, “adding different consumption entries [that] designat[e] different imported merchandise” is such a change in scope that would constitute an amendment. HQ 222987 (February 14, 1996) (citations omitted). In this case, the scope of the drawback claim is not being increased. Therefore, Georgia Gulf’s request to remove certain imports from its drawback claim constitutes permissible perfection. As such, Georgia Gulf’s protest should be granted and Georgia Gulf may perfect its claims by removing the ineligible imports. Since we find that the Protest should be granted, Georgia Gulf’s second argument is moot and will not be addressed. HOLDING: Under the facts described, and in response to the request for further review, you are directed to GRANT the Protest. The decision will result in the reliquidation of the drawback claims. This must be accomplished prior to mailing of the decision, in accordance with Section IV of the Customs Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21). You are to mail this decision, together with CBP Form 19, to the protestant no later than 60 days from the date of this letter. No later than 60 days from the date of this letter, 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 by other means of public distribution. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division