CSMS Message: 11-000277

October 31, 2011

MEMORANDUM FOR: Directors, Field Operations

FROM: Executive Director, Trade Policy and Programs
Office of International Trade

SUBJECT: GUIDANCE: Revision of Post-Importation Preference Program Claims under 19 USC 1520(d) with a Classification Change Memorandum of June 23, 2011, Instructions for the Trade Community

NOTE: “This procedure is currently applicable to the following agreements: the North American Free Trade Agreement (NAFTA), the Chile Free Trade Agreement (CFTA), the Oman Free Trade Agreement (OFTA), the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA), and the Peru Trade Promotion Agreement (PTPA).”

This memorandum revises the aforementioned memorandum of June 23, 2011, and seeks to clarify the administration of a 19 USC 1520(d), post-importation preference claim that includes a classification change or, under certain limited situations, a value change. The 19 USC 1520(d), post-importation preference claim, allows for a preference claim to be made within one year of the date of importation if a claim was not made at entry summary. It is the only mechanism to make a post-importation preference claim on certain Free Trade Agreements . This statutory provision only allows changes to the entry summary that bear directly on the preference claim. This includes a tariff classification or valuation change on a line in which a preference claim is being made, if that valuation change enables the good to meet the terms of the preference program. The limited scope of 19 USC 1520(d) is made clear in internal advice 227127, December 10, 1996, page 2, paragraph 3, excerpted here:

“We find that Customs may reliquidate an entry to refund duties pursuant to 19 USC 1520(d) only for claims which bear directly on the issue of preferential treatment for the goods in question.”

It further elaborates on page 4, paragraph 3, below:

“Accordingly, a post-importation duty refund claim may be granted where the claim involves classification, valuation or other issues that bear directly on the issue of whether the good would have qualified as an originating good. For example, classification must impact on whether the merchandise satisfies a specific rule of origin, while valuation must relate to the regional value content calculation.”

Only classification or valuation changes that result in a line meeting a preference program rule of origin are permitted under 19 USC 1520(d). Such claims should be processed without requiring a Post Entry Amendment (PEA), a Post Summary Correction (PSC) or a 19 USC 1514, Protest.

With respect to the Automated Commercial Environment (ACE), the PSC functionality was deployed on June 4, 2011. For ACE entry summaries, filers should also add language to the PSC Filing Explanation Field that confirms the filing of the 19 USC 1520(d) claim.

Denials should be voided for any post-importation claims which were denied per the June 23, 2011 memorandum that otherwise would have been allowed under this revised guidance.

Copies of this memorandum should be made available to importers, brokers and other interested parties.

Questions regarding post-importation claims should be directed to Katrina Chang, Chief, Trade Agreements Branch or Seth Mazze, Trade Agreements Branch at FTA@dhs.gov. Entry summary and processing questions should be directed to Laurie Dempsey, Chief, Entry Summary and Drawback Branch at (202) 863-6509.

Signed by John P. Leonard for:

Brenda B. Smith

Cc: Director, Trade Operations Division, Office of Field Operations