Application for Further Review of Protest 5201-11-100286; DR-CAFTA claim

HQ H192142 February 6, 2014 OT:RR:CTF:VS H192142 CMR CATEGORY: Classification U.S. Customs and Border Protection Assistant Port Director 6601 NW 25th Street Room 273 Miami, FL 33122-3215 RE: Application for Further Review of Protest 5201-11-100286; DR-CAFTA claim Dear Ms. Amato: This is in response to Application for Further Review of Protest 5201-11-100286, filed by McGuireWoods, LLP, on behalf of their client, Sports Licensed Division, against your denial of preferential tariff treatment under the Dominican Republic – Central America – United States Free Trade Agreement (DR-CAFTA). The protestant sought further review by this office of the protest and by letter dated September 28, 2011, this office set aside your denial of further review. FACTS: The protest at issue involves two entries of men’s knit jerseys. The garments were cut and sewn in Guatemala. The port issued a Notice of Action, dated November 30, 2010, requesting information regarding the two entries which are the subject of the protest. By Notice of Action, dated January 12, 2011, the port notified the importer of the port’s negative determination regarding the importer’s DR-CAFTA claim and informed the importer of the deficiencies in the importer’s documentation submitted in response to the earlier notice. The port liquidated the entries without benefit of DR-CAFTA preferential tariff treatment on January 28, 2011 and the protest was timely filed on July 22, 2011. In denying the protest, the port identified deficiencies in the documentation submitted to support the DR-CAFTA claim: Foreign commercial invoices reflect that 100% polyester men’s knitted jerseys were imported. The fabric affidavit from [the fabric producer] should only relate to 100% polyester fabric. The address of the manufacturing plant does not agree with the address reflected on the DR-CAFTA certification. This affidavit also lists the names and addresses of four yarn producers. The DR-CAFTA certification reflects that [X] was the producer of the yarn. Copies of invoices referenced on the [yarn producer’s] affidavit were not submitted. The National Textile and Garment Quota Administration [Y] affidavit is unacceptable. This document states that, “…products…will be transformed by or will be sold to [Z] …” This statement is ambiguous. This document also makes reference to, “raw sewing thread”; “yarn/thread”; and to “fibers”. ISSUE: Whether the garments which are subject to the protest are entitled to DR-CAFTA preferential tariff treatment based on the documentation presented to CBP. LAW AND ANALYSIS: The DR-CAFTA is implemented in the HTSUS in General Note (GN) 29. However, at issue in this case is not the question of whether the merchandise met the terms of the GN 29 per se, but whether the information submitted was sufficient to substantiate the claim that the merchandise met the terms of GN 29 and that certain materials used in the manufacture of the merchandise originated within the territory of one or more of the DR-CAFTA parties. The CBP Regulations applicable to the DR-CAFTA are contained in 19 CFR § 10.581 to § 10.625. Section 10.616 specifically addresses “Verification and justification of claim for preferential tariff treatment.” With regard to verification of a claim by a port, the regulation references different methods how verification may be conducted, including written requests for information. In the case of both entries at issue, that is what the port did; it issued CBP forms requesting specific information. The DR-CAFTA claims were denied because the port felt the documentation submitted in response was deficient to support the claims. When the importer filed the protest against the port’s liquidation of the entries without benefit of the DR-CAFTA claims, the importer submitted additional information to support the claims for preferential tariff treatment. The port reviewed the submitted documentation and concluded the documentation provided was still insufficient to support the claim for the reasons set forth in the FACTS section above. Importers are required to maintain records and documents which support their preference claims for a minimum of five years after the date of importation of the good in accordance with 19 CFR § 10.587. If an importer fails to comply with any requirements under Subpart J of Part 10 of the CBP Regulations, the port director may deny preferential treatment to the imported goods for which preference is claimed. Further in reviewing documents submitted to support a claim for preferential tariff treatment for purposes of DR-CAFTA, we consider the memorandum regarding “Amendments to the U.S. – Dominican Republic – Central America Free Trade Agreement Implementation Instructions,” dated April 26, 2006, which was issued by the Executive Director, Trade Enforcement and Facilitation, Office of Field Operations; Textile Book Transmittal (TBT)-07-019, “Documents Used to Verify Free Trade Agreement and Legislated Trade Program Claims for Textiles and Wearing Apparel,” which was issued by the Executive Director, Trade Policy and Programs, Office of International Trade on October 10, 2007; and TBT-11-004, “Additional Documents Used to Verify Free Trade Agreement and Legislated Program Claims for Textiles and Wearing Apparel,” which was issued by the Executive Director, Trade Policy and Programs, Office of International Trade on March 31, 2011. This office has reviewed the documents submitted with the protest and based upon our review find that the port’s objections to certain documents were in error. We have no problem with the manufacturer’s affidavit identifying more than one fabric which was produced and used in the production of garments by the same manufacturer provided that the specific fabric at issue is clearly pointed out on the document which was the case here. Nor do we take issue with having more than one yarn supplier identified, provided it is clear which yarn supplier or suppliers provided the yarns used in the production of the fabric at issue in the imported garment. In addition, although the port believed the address for the fabric producer differed from the DR-CAFTA certification and the fabric producer’s affidavit, we found the address to be the same on both documents. The port objected to the failure of the protestant to submit copies of the invoices referenced on the yarn producer’s affidavits. Counsel submitted two of the three invoices referenced on the yarn producer’s affidavits in the file. For the third invoice, counsel presented the a copy of the related invoice under which the goods were shipped and which was referenced on the affidavit. We are satisfied with these documents. As to the National Textile and Garment Quota Administration [Y] affidavit referred to by the port, counsel is correct that CBP Headquarters referenced as an example of documents which CBP will accept include Certificates of Origin “prepared by the Government of Guatemala’s National Commission of Quota Administration for Textiles and Wearing Apparel (Comision Nacional de Administracion de Cuotas y Prendas de Vestir de Guatemala).” See TBT-11-004. The documents referenced by the port are in fact Certificates of Origin from this body. While we understand the port believed the documents to be ambiguous, we do not find them to be so. HOLDING: The protest should be allowed. We note that the decision herein is based upon the specific facts of this case and the documents submitted to and reviewed by this office. In accordance with the Protest/Petition Processing Handbook (CIS HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this 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 and Trade Facilitation Division