Protest #4601-09-150391; petroleum; MPF

HQ H120922 July 17, 2012 OT:RR:CTF:VS H120922 KSG Port Director U.S. Customs & Border Protection Protest & Control 1100 Raymond Blvd Suite 402 Newark, NJ 07102 Re: Protest #4601-09-150391; petroleum; MPF Dear Director: This is in response to an Application for Further Review filed by counsel on behalf of Glencore Ltd., in response to Protest #4601-09-150391 involving imported petroleum products. FACTS: This case involves imported petroleum products classified in subheading 2710.19 of the Harmonized Tariff Schedule of the United States (“HTSUS”) entered on February 12, 2009. The country of origin claimed on the CBP Form 7501 is Aruba and the value claimed is $3,562,815. Counsel states that the imported goods are a product of a Caribbean Basin Economic Recovery Act (“CBERA”) beneficiary country and/or a Generalized System of Preferences (“GSP”) least developed beneficiary country. The goods were entered without claiming preference under either program. While Aruba is listed as a CBERA beneficiary country in General Note (“GN”) 7, HTSUS, it is not listed in GN 4(b)(i) as a least-developed beneficiary country under the GSP. The importer is seeking an exemption from the Merchandise Processing Fee (“MPF”). The importer submitted an unsigned commercial invoice dated February 10, 2009, from Valero Refining Company in Aruba for petroleum valued at $3,562,812.89; a marketing invoice dated February 4, 2009, listing a vessel name (Ludovica) for diesel valued at $4,071,070.98; a Valero Movement summary for goods laden on the vessel Ludovica; a 5-page document that refers to the Ludovica; a bill of lading for the Ludovica dated January 31, 2009, showing petroleum laden in Venezuela; and an Origin Certificate indicating that the origin of the petroleum laden in Venezuela was from oil fields in Venezuela, and refined in Venezuela. The import specialist issued a Request for Information (CBP Form 28) dated October 21, 2009, asking the importer to submit a certificate of origin for the entries in question. ISSUE: Whether the importer submitted sufficient documentation to support the claim for an exemption from MPF for the imported petroleum products. LAW AND ANALYSIS: Title V of the Trade Act of 1974, as amended (19 U.S.C.A. 2461-65), authorizes the President to establish the GSP to provide duty-free treatment for eligible articles from beneficiary developing countries (“BDCs”). Articles produced in a BDC may qualify for duty-free treatment under the GSP if the good are imported directly into the customs territory of the U.S. from the BDC and the sum or value of materials produced in the BDC plus the direct costs of the processing operations performed in the BDC is equivalent to at least 35 percent of the appraised value of the article at the time of entry into the U.S. See 19 U.S.C. 2463(a)(2) and (3). Similarly, under the Caribbean Basin Economic Recovery Act (“CBERA”), 19 U.S.C. 2701-2706, eligible articles the growth, product or manufacture of designated beneficiary countries (“BDC”) may receive duty-free treatment if such articles are imported directly to the U.S. from a BDC and if the sum of 1) the cost or value of material produced in the BDC, plus the 2) the direct costs of processing operations performed in the BDC is not less than 35% of the appraised value of the article at the time it is entered into the U.S. The cost or value of materials produced in the U.S. may be applied toward the 35% value-content requirement in an amount not to exceed 15% of the imported article’s appraised value. Aruba is not designated as a BDC or a least-developed beneficiary country for purposes of the GSP. See GN 4(a), HTSUS (2009). Therefore, there is no claim under the GSP and the goods would not be eligible for an MPF exemption under the GSP. However, Aruba is designated as a BDC for the purposes of the CBERA. CBP held in H156916, dated October 27, 2011, that goods which meet the “product of” requirement for eligible least developed beneficiary countries under the GSP are exempt from the MPF regardless if they are eligible for preference under the GSP. CBP held in HRL 224852, dated April 6, 1994, that products of CBERA countries were exempt from the MPF if they met the “product of” requirement for an eligible country. There is no requirement that the good be eligible for preference under the CBERA. Since Aruba is an eligible country under the CBERA, the “product of” requirement would be met if the good was substantially transformed in Aruba into a new article with a new name, character and use. The petroleum would be eligible for the MPF exemption even if it was not eligible for CBERA preference. Because the certificate of origin in this case indicates that the crude oil came from Venezuela and was refined in Venezuela, the imported petroleum has not been demonstrated to be a product of Aruba. Therefore, the goods are not eligible for an exemption from the MPF. The protest is hereby denied. HOLDING: The protest in this case is denied. CBP properly denied the MPF exemption to the imported petroleum. 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