CSMS Message: 92-000364

TO : ALL ABI BROKERS.

FROM : WILLIAM WAGNER

SUBJECT : CFT-520-514 PROCESSING

DATE : 08/25/92

2237071
AUGUST 24, 1992

CFT-1-CO:T:T:T WW

TO : ALL ASSISTANT REGIONAL COMMISSIONERS (OPERATIONS),
AREA, DISTRICT AND PORT DIRECTORS

FROM : ASSISTANT COMMISSIONER (CO)

SUBJECT : U.S.-CANADA FREE TRADE AGREEMENT (CFTA)- CLAIMS
AND PROCESSING CLAIMS FOR REFUNDS UNDER 19 USC 1514
AND 19 USC 1520(C)(1)

REFERENCE: UNITED STATES-CANADA FREE TRADE AGREEMENT DATED
JANUARY 2, 1988; UNITED STATES-CANADA FREE TRADE AGREEMENT
IMPLEMENTATION ACT OF 1988, PUBLIC LAW 100-499 DATED SEPTEMBER
28, 1988.

PASS TO : ALL NATIONAL IMPORT SPECIALISTS, IMPORT SPECIALISTS,
ENTRY OFFICERS, CUSTOM INSPECTORS, OTHER INTERESTED
CUSTOMS PERSONNEL, IMPORTERS AND BROKERS.

AT THE CFTA CONFERENCE HELD IN BUFFALO, NEW YORK, ON AUGUST 13-
15, 1991, A RECOMMENDATION WAS MADE THAT HEADQUARTERS PROVIDE
FIELD OFFICES WITH EXAMPLES FOR PROCESSING POST-LIQUIDATION
CLAIMS FOR CFTA. THEREFORE THE FOLLOWING INSTRUCTIONS ARE
INTENDED TO ASSIST IN: (1) REDUCING THE NUMBER OF CLAIMS; (2)
IMPROVING THE QUALITY OF THE CLAIMS; (3) ESTABLISHING UNIFORMITY
IN TREATMENT OF CLAIMS; AND (4) EXPEDITING THE PROCESSING OF THE
CLAIMS.

WHEN CONSIDERING CFTA CLAIMS PLEASE BE GUIDED BY THE FOLLOWING:

A CLAIM FOR DUTY-FREE TREATMENT UNDER THE CFTA FILED AFTER AN
ENTRY IS LIQUIDATED CAN BE GRANTED AND THE ENTRY RELIQUIDATED
ONLY IF THE CLAIMANT FILES A VALID PROTEST UNDER 19 U.S.C. 1514
OR A VALID RELIQUIDATION REQUEST UNDER 19 U.S.C. 1520(C)(1).
THERE CAN BE NO VALID PROTEST OR RELIQUIDATION REQUEST WITHOUT A
VALID CF 353, EXPORTERS CERTIFICATE OF ORIGIN (ECO), INCLUDED
WITH THE PROTEST OR RELIQUIDATION REQUEST.

A BLANKET ECO IS INVALID IF THE TERM SPECIFIED ON THE ECO DOES
NOT COVER THE TIME PERIOD IN WHICH THE ENTRY WAS MADE. IF THE
ECO IS VALID OTHERWISE, IT REMAINS VALID EVEN IF SIGNED AND DATED
AFTER THE PERIOD OF COVERAGE BUT BEFORE THE CLAIM IS MADE AND
BEFORE THE PROTEST OR RELIQUIDATION REQUEST, IS FILED.

AN ENTRY LIQUIDATED DUTIABLE MAY BE RELIQUIDATED FREE OF DUTY BY
MEANS OF A TIMELY PROTEST THAT ASSERTS CFTA ELIGIBILITY AND WHICH
IS SUPPORTED BY A VALID ECO.

AN ENTRY LIQUIDATED DUTIABLE FOR WHICH THE 90-DAY PROTEST PERIOD
HAS EXPIRED MAY BE RELIQUIDATED FREE OF DUTY ONLY BY MEANS OF A
TIMELY RELIQUIDATION REQUEST (WITHIN ONE YEAR AFTER LIQUIDATION)
UNDER 19 U.S.C. 1520(C)(1). THE CLAIMANT MUST SHOW THAT THE
LIQUIDATION WAS: (1) ERRONEOUS; (2) THAT THE ERROR WAS MANIFEST
IN THE ENTRY OR ESTABLISHED BY DOCUMENTARY EVIDENCE; AND (3) THAT
THE ERROR WAS A MISTAKE OF FACT OR CLERICAL ERROR RATHER THAN A
MISINTERPRETATION OF A LAW.

1. VALIDITY OF THE EXPORTER'S CERTIFICATE OF ORIGIN (ECO)

PRIOR TO GRANTING A POST-ENTRY CLAIM FOR RELIEF, THE ECO MUST BE
REVIEWED FOR SUFFICIENCY AND RELEVANCY. THE ECO MUST PERTAIN TO
THE TRANSACTION UNDER CONSIDERATION. AT THIS POINT, SEVERAL
DATES BECOME CRITICAL: THE DATE OF ENTRY, THE SIGNATURE DATE, AND
ON A BLANKET ECO, THE EFFECTIVE DATE AND THE EXPIRATION DATE.

A.) THE DATE IN THE SIGNATURE FIELD MUST PRECEDE THE CLAIM
DATE.

EXAMPLE:

ENTRY WAS MADE AT MFN RATES ON AUGUST 17, 1989, AND
LIQUIDATED AS ENTERED JANUARY 5, 1990. A PROTEST AND
CLAIM WAS FILED ON JANUARY 25, 1990, USING AN ECO DATED
DECEMBER 29, 1989.

RESULTS:

ECO IS VALID, PROTEST MAY BE GRANTED, AND ENTRY
RELIQUIDATED.

B.) THE TERM ON A BLANKET CERTIFICATE MUST COVER THE ENTRY
TRANSACTION.

EXAMPLE:
ENTRY WAS MADE ON APRIL 15, 1989, AT MFN RATES AND
LIQUIDATED ON DECEMBER 17, 1989. THE IMPORTER
REQUESTED RELIEF ON JANUARY 22, 1990, BY FILING A
PROTEST AND CLAIM FOR CFTA PREFERENCE AND
SUBMITTED A BLANKET ECO THAT HAD AN EFFECTIVE DATE
OF JUNE 1, 1989, AND EXPIRATION DATE OF NOVEMBER
30, 1989.

RESULTS:

THE CLAIM WOULD BE DENIED FOR LACK OF A VALID ECO
BECAUSE THE BLANKET ECO DID NOT COVER THE TIME PERIOD
FOR THE SHIPMENT UNDER CONSIDERATION. IF THE BLANKET
ECO DATES HAD COVERED THE PERIOD FROM FEBRUARY 22,
1989, TO JULY 21, 1989, THE CLAIM COULD HAVE BEEN
APPROVED SINCE THE DATE OF THE SHIPMENT WOULD HAVE
BEEN WITHIN THE TERM OF THE BLANKET ECO.

C.) THE SIGNATURE DATE ON A BLANKET ECO MAY BE SUBSEQUENT
TO THE EFFECTIVE DATE RANGE GIVEN IN FIELD 2.

EXAMPLE:
ENTRY IS FILED ON MARCH 15, 1990, AT MFN
RATES AND LIQUIDATED ON JUNE 15, 1990. ON JULY 17,
1990, A PROTEST AND CLAIM FOR REFUND IS SUBMITTED AND
IS ACCOMPANIED BY A BLANKET ECO WITH A RANGE OF
EFFECTIVE DATES FROM NOVEMBER 15, 1989, TO MAY 14,
1990, AND A SIGNATURE DATE OF JULY 7, 1990.

RESULTS:

THE SIGNATURE DATE DOES NOT RENDER THE ECO INVALID AND
THE CLAIM WOULD BE JUDGED ON ITS MERITS.

2. IF CFTA RATES WERE CLAIMED ON THE ORIGINAL ENTRY, THE ECO
DATE MUST PRECEDE THE ENTRY DATE. IF NOT, THE CLAIM SHOULD BE
DENIED AND THE ISSUANCE OF PENALTIES CONSIDERED.

EXAMPLE:

THE BROKER IS DIRECTED BY THE IMPORTER TO
ENTER THE GOODS AS ELIGIBLE UNDER THE CFTA, BUT HAS
NOT RECEIVED THE ECO WHEN THE GOODS ARE IMPORTED.
THE BROKER ENTERS THE GOODS AS CFTA ELIGIBLE. WHEN
CUSTOMS REQUESTS THE ECO AT A LATER DATE THE BROKER
PRODUCES A DOCUMENT WHICH IS DATED SUBSEQUENT TO
THE ENTRY DATE.

RESULTS:

CFTA BENEFITS ARE DISALLOWED, THE IMPORTER IS
POTENTIALLY LIABLE FOR PENALTIES UNDER 19 USC 1592.
THE BROKER IS POTENTIALLY LIABLE FOR PENALTIES UNDER 19
USC 1592.

3. CLAIMS MADE WITHIN 90 DAYS AFTER LIQUIDATION

19 USC 1514: WITHIN THIS TIME PERIOD, ANY PROPER
CHANGE IN CLASSIFICATION CAN BE ACCOMPLISHED UNDER THIS
PROVISION BY FILING A CF 19 AND A VALID ECO.

NOTE: THE COURTS HAVE HELD THAT A PETITION FOR RELIEF UNDER 19
USC 1520(C)(1) FILED WITHIN THE 90-DAY PERIOD FOLLOWING
LIQUIDATION MAY BE TREATED AS A PROTEST UNDER 19 USC 1514, IF
OTHERWISE QUALIFYING THEREUNDER (SEE CD 4547). WHETHER IT MAY BE
CORRECTED UNDER SECTION 1520(C)(1) WOULD DEPEND UPON THE BONA
FIDES OF THE PETITION.

IT IS NORMALLY IMPORTANT TO KEEP THE DISTINCTION CLEAR BETWEEN A
514 CLAIM THAT IS BASED ON A CHANGE IN CLASSIFICATION FROM ONE
HTS NUMBER TO ANOTHER (CONSTRUCTION OF THE LAW) AND ONE THAT IS
BASED SOLELY ON THE SUBSEQUENT RECEIPT OF AN ECO (CLERICAL ERROR
OR MISTAKE OF FACT) BEFORE DENYING A 520 PETITION FILED WITHIN 90
DAYS FROM LIQUIDATION, THE CUSTOMS OFFICE SHOULD CONSIDER WHETHER
THE PETITION IS A VALID PROTEST UNDER SECTION 1514. NOTE
HOWEVER, IT IS A CRITICAL DIFFERENCE WHEN MORE THAN 90 DAYS HAVE
PASSED AFTER LIQUIDATION.

4. BETWEEN 90 DAYS AND 1 YEAR AFTER LIQUIDATION

ADMINISTRATIVE RELIEF CAN ONLY BE CLAIMED UNDER 19 USC 1520(C)(1)
BY SUBMISSION OF A PETITION IN THE FORM OF A LETTER TO CUSTOMS.
THE IMPORTER HAS A GREATER TIME FRAME TO FILE BUT IS RESTRICTED
IN THE SCOPE ON WHICH TO BASE THE CLAIM. CARE MUST BE TAKEN NOT
TO COMBINE THE BROAD RANGE OF CORRECTABLE ACTIONS OF 19 USC 1514
WITH THE MORE LIBERAL TIME LIMITS OF 19 USC 1520(C)(1).
AN ERROR IN THE CONSTRUCTION OF THE LAW IS FATAL. ERRONEOUS
CLASSIFICATION CAN BE CORRECTED UNDER 1520(C)(1) IF IT WAS CAUSED
BY ONE OR A COMBINATION OF THE FACTORS ENUMERATED IN THE
STATUTE, BUT NOT IF THE ERROR IN CLASSIFICATION WAS THE RESULT OF
IGNORANCE OF THE LAW.

THE PETITIONER MUST DEMONSTRATE THAT ONE OR MORE OF THE
REQUIREMENTS OF 1520(C)(1) ARE PRESENT. IT MUST CONTAIN ENOUGH
INFORMATION TO ILLUSTRATE THAT IT IS A VALID 19 USC 1520(C)(1)
CLAIM RATHER THAN AN UNTIMELY FILED PROTEST.

EXAMPLE:

AN ENTRY WAS MADE AT MFN RATES ON JANUARY 20, 1990.
LIQUIDATION OCCURRED ON MAY 2, 1990. THE CANADIAN EXPORTER
COMPLETED AND SIGNED AN ECO (CF 353) ON SEPTEMBER 7, 1990
AND FORWARDED IT TO THE U.S. BROKER WITH A REQUEST FOR A
REFUND. THE BROKER SUBSEQUENTLY FILED FOR A REFUND UNDER 19
USC 1520(C)(1).

RESULTS:

IF THE DELAY WAS ATTRIBUTABLE TO THE BELIEF THAT THE GOODS
WERE NOT EXPORTED, THEN A MISTAKE OF FACT CAUSED THE
ERROR AND RELIEF COULD BE GRANTED.

IF THE DELAY WAS CAUSED BY A BELIEF THAT UNDER THE
CFTA A CLAIM FOR BENEFITS COULD BE MADE ANY TIME UP
TO A YEAR AFTER EXPORTATION, THEN RELIEF WOULD BE
DENIED. MISINTERPRETATION OF REGULATORY REQUIREMENTS
AMOUNTS TO A MISTAKE IN THE CONSTRUCTION OF LAW.

EXAMPLE:

FOUR ENTRIES WERE MADE BETWEEN JANUARY 1, 1989 AND JULY
2, 1989. ENTRY #1 WAS MADE JANUARY 3, 1989, ENTRY #2 WAS
MADE FEBRUARY 4, 1989, ENTRY #3 WAS MADE MARCH 1, 1989
AND ENTRY #4 WAS MADE JULY 2, 1989. PROTESTANT CLAIMED AND
ENTERED THE MERCHANDISE AT THE MFN RATES. ENTRY #1 WAS
LIQUIDATED ON FEBRUARY 17, 1989. ENTRIES #2,#3, AND #4 WERE
LIQUIDATED ON SEPTEMBER 8, 1989. TWO BLANKET CERTIFICATES
OF ORIGIN (ECO) WERE SUBMITTED BY PROTESTANT TOGETHER WITH A
1520(C)(1) PETITION ON DECEMBER 15, 1989. ONE ECO HAS A
RANGE OF EFFECTIVE DATES FROM JANUARY 1, 1989 TO JUNE 30,
1989. THE OTHER BLANKET ECO HAS A RANGE OF EFFECTIVE DATES
FROM JULY 1, 1989 TO DECEMBER 31, 1989. THE SIGNATURE
DATE FOR BOTH CERTIFICATES IS JUNE 9, 1989.

RESULTS:

PROTESTANT ALLEGED THAT IT WAS UNAWARE THAT THE
MERCHANDISE MAY HAVE BEEN ENTITLED TO PREFERENTIAL DUTY
TREATMENT UNDER THE CFTA UNTIL AFTER LIQUIDATION. THREE OF
THE SUBJECT ENTRIES WERE LIQUIDATED SUBSEQUENT TO THE
ISSUANCE OF THE CERTIFICATE. PROTESTANT COULD HAVE
FILED A 1514 PROTEST AND PRESENTED THE CERTIFICATES WITHIN
90 DAYS OF LIQUIDATION BUT DID NOT. PROTESTANT FAILED TO
PROVIDE EVIDENCE INDICATING WHY IT WAS UNABLE TO FILE A
TIMELY PROTEST WITH REGARD TO THE THREE ENTRIES LIQUIDATED
ON SEPTEMBER 8, 1989.

THEREFORE, RELIEF COULD NOT BE GRANTED UNDER 1520(C)(1).

REGARDING THE ENTRY LIQUIDATED ON FEBRUARY 17, 1989, THE
CANADIAN EXPORTER COMPLETED AND SIGNED THE ECO ON JUNE 9,
1989, MORE THAN 90 DAYS AFTER LIQUIDATION. THEREFORE, THE
PROTESTANT DID NOT HAVE THE OPTION OF FILING A 1514 PROTEST.
SINCE THE RECORD INDICATES THAT A CERTIFICATE WAS NOT
PREPARED UNTIL AFTER THE EXPIRATION OF THE PROTEST PERIOD.
CONSEQUENTLY, THE ONE ENTRY LIQUIDATED ON FEBRUARY 17, 1989,
MAY FALL WITHIN THE SCOPE OF 1520(C)(1).

5. MORE THAN ONE (1) YEAR AFTER LIQUIDATION

NO ADMINISTRATIVE RELIEF IS GRANTED.

SAMUEL H. BANKS