Application for Further Review and Protest Nos. 5201-11-100305 and 5201-11-100307

HQ H197897 February 21, 2012 OT:RR:CTF:VS H197897 CMR CATEGORY: Classification Port Director U.S. Customs and Border Protection 6601 NW 25th Street Room 272 Miami, FL 33122 RE: Application for Further Review and Protest Nos. 5201-11-100305 and 5201-11-100307 Dear Mr. Suliveras: On November 14, 2011, this office set aside the denials of further review issued by your port for Protest Nos. 5201-11-100305 and 5201-11-100307 and voided the denials of the protests. The protests were filed by Sandler, Travis & Rosenberg, P.A., on behalf of their client, CSA Trading, SA. We set aside the denials of further review because we found that arguments regarding inconsistent decisions with respect to the same or substantially similar merchandise were made and had merit. Therefore, the applications for further review met the requirements of 19 CFR 174.24(a) and 174.25. We have reviewed the protests and the port’s comments. Our decision on both protests is set forth below. FACTS: Each protest involves one entry of apparel entered by CSA Trading. The entries were liquidated on February 18, 2011, without benefit of preferential tariff treatment under the Dominican Republic – Central America – United States Free Trade Agreement Implementation Act (DR-CAFTA). Protests were timely filed against the liquidations on August 12, 2011. The protestant submitted documentation supporting eligibility for duty-free treatment under the DR-CAFTA which was thoroughly reviewed by the port. The port denied the protests and requests for further review and, as already noted, this office set aside the denials of further review and voided the denials of the protests. The port set forth its reasons for denying preferential tariff treatment when it issued denials of the protests. The port identifies deficiencies it believed were present in the submitted documentation and which it believed resulted in a failure to substantiate the claim for preferential treatment. We will address the deficiencies in documentation cited by the port. ISSUE: Are the documents cited by the port deficient and, if so, do they warrant denial of the DR-CAFTA claim with regard to the entries at issue? 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 Customs and Border Protection (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 Form 28s 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 protests 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 that the responses to questions and the documentation provided were insufficient to support the claims. 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 a 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. With regard to the reasons given for denying the protests and the specific documents cited by the port as deficient, the port stated the following: Protest 5201-11-100305 Affidavit from [a yarn producer] is unacceptable. It does not state the “yarn was produced in the United States.” Further, the signature of [X] differs on the affidavits dated October 28, 2009, and November 11, 2009. The signature on the subject affidavit is illegible. Affidavits from [a thread producer] make reference to both yarn and sewing thread; this is unacceptable. Protest 5201-11-100307 Affidavits from [two thread producers] make reference to both yarn and sewing thread; this is unacceptable. As for the differences in the signatures on the referenced affidavits, the port approved Protest 5201-11-100263 which contains the affidavit signed November 11, 2009. That affidavit was not signed by the Vice President of Sales designated as authorized to do so by his company. Instead, his name was signed by an associate at the company who indicated by placing her initials at the end of the name that she was signing for him. The affidavit rejected by the port was signed by the Vice President of Sales. As to its legibility, we recognize that individual’s signatures may not reflect each letter of their name and may be unique to the individual. We find no reason to reject this affidavit. As to the use of the terms yarn and sewing thread in the referenced affidavits submitted by thread producers, we have examined the affidavits and have no concerns with the use of both terms on these documents. Sewing thread is a yarn and, depending on the stage of the production process, at times may be more properly referred to as a yarn. A yarn with a Z twist may be further processed by finishing (dressing) and being put up on supports so as to meet the definition of sewing thread set forth in Note 5, Section XI of the Harmonized Tariff Schedule of the United States. Of more concern to this office, and not noted by the port, is the language in the affidavits for the sewing thread wherein the producer certifies that the good “was manufactured and knitted and finished and dyed.” Clearly, sewing thread is not knitted. We will assume the problem in the affidavits’ language is due to translation issues in this case, but hope that the importer will endeavor to present more accurate statements in affidavits in the future. HOLDING: Protests 5201-11-100305 and 5201-11-100307 should be allowed. 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