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HQ 222097

July 3, 1990

PRO-1-CO:C:R:E 222097


Regional Director
Commercial Operations
Northeast Region
10 Causeway Street
Boston, Massachusetts 02222-1056

RE: Request For Further Review of Protest No. 1303-000295, Dated August 25, 1989; Drawback right to receive payment; Clerical error; Agent has no greater rights than his principal in protest procedures.

Dear Madame:

The following is in reply to your request of December 27, 1989, for further review of the above-referenced protest.


There are two separate sets of facts in this complex matter: the first dealing with the circumstances leading up to the liquidation and payment of the claim for drawback and the second dealing with the claimed clerical error under 19 U.S.C.

Facts Leading Up To The Liquidation And Payment Of The Claim For Drawback:

"A" was the importer of a shipment of steel.

"B", as a Customhouse broker and clothed with the power of attorney for "A", filed as the agent of "A", Customs Form 7539, a Drawback Entry Covering Same Condition Drawback for the steel in question.

A bill of lading submitted with the entry listed "A" as the shipper (exporter).

"A" was listed in item number 30 of the entry as the exporter and claimant identification number for "A" was inserted in item number 34.

"B" was inserted in item number 26 as the "Name of Person Authorized to Collect Drawback (If other than the exporter)."

However, the entry was liquidated on June 17, 1988, and payment was issued to "A", the exporter-claimant who subsequently cashed the check.

Facts Dealing With Claimed Clerical Error Under 19 U.S.C.

"B" (Customhouse broker) in a letter dated and received by Customs on June 16, 1989, requested reliquidation of the drawback entry on the basis of clerical error, mistake of fact and/or inadvertence causing the payment to be made to the wrong party (the exporter-claimant).

Documentation submitted with the letter to support the claim for clerical error indicated, prior to the exportation for drawback, the following;

1. "A" sold the steel in question to "C", a foreign entity.

2. "A" agreed to relinquish all drawback rights to "C" and to execute all necessary documents to enable "C" to exercise drawback rights.

3. "D", legal counsel for "C", authorized "B" (Customhouse broker) to act on behalf of "C" with instructions that the duty refund should be paid to "C" and under no circumstances to "A" and noted that "by statute and regulation the drawback belongs to the exporter and in this case the exporter is ["C"].

Customs denied the request for reliquidation under 19 U.S.C. 1520(c)(1) and "B", the Customhouse broker, filed a protest under 19 U.S.C. 1514(a)(7).


Issue 1. Did the Customs service make a proper drawback payment based on the first set of facts?

Issue 2. Is there a basis to reliquidate for clerical error, mistake of fact, or other inadvertence not amounting to error in the construction of a law based on the two set of facts?

Issue 3. May a Customhouse broker with power of attorney to act as the agent for his principal, the drawback claimant, file a
protest in his own right?


Section 191.73(a) of the Customs Regulations entitled Person Entitled To Receive Drawback states as follows:

(a) Exporter; reservation by manufacturer or producer. The person named on the notice of exportation or in bill of lading...shall be deemed to be the exporter and entitled to drawback unless the manufacturer or producer shall reserve the right to claim drawback. The manufacturer or producer who reserves this right may claim drawback, and he shall receive payment upon satisfactory evidence that the reservation was made with the knowledge and consent of the exporter.
(b) Agent or person designated to receive drawback. Drawback may be paid to the agent of the manufacturer, producer, or exporter, or to the person the manufacturer, producer, exporter, or agent directs in writing to receive drawback payment.

This regulation is applicable for manufacturing drawback under 19 U.S.C. 1313(a) and (b). However, section 191.141(e), concerning same condition drawback, provides, in part, "the provisions relating to direct identification drawback shall apply to claims for drawback under this subpart insofar as applicable to and not inconsistent with the provisions of this subpart". Accordingly, section 191.73 is controlling in determining who has the right to claim same condition drawback and who may be authorized to receive the payment on behalf of the claimant.

Manufacture or production is not a requirement for same condition drawback under 19 U.S.C. 1313(j). Therefore, the only claimant under section 191.73(a) for same condition drawback is the exporter. (See Customs Decision 87-6.) In the first set of facts, "A" was inserted in item number 30 of the drawback entry as the exporter, a bill of lading was submitted with the entry to substantiate that "A" was the exporter of record and the identification number for "A" was inserted in item number 34 of the entry. Under section 191.73(a), "A" was the only party entitled to claim drawback and was the proper claimant.

Under section 191.73(b), the Customs Service may pay the drawback to the authorized agent of the exporter. The agent receives the payment on behalf of his principal, the exporter- claimant. Payment to the authorized agent or directly to his principal is satisfaction of the payment of the claim for drawback. The Customs Service may elect to pay the principal directly to satisfy the claim. Accordingly, we conclude that the payment of the claim directly to the exporter-claimant was a
proper drawback payment under the first set of facts.

The second set of facts reveals that the real exporter was the foreign buyer "C" and that the shipper, "A' was, in fact, merely acting as an agent for the foreign buyer. The question as to who is the proper claimant is a question of law. (See Treasury Decision 10186, which holds, in part, that the owner of the goods who entrusted them to a carrier, under contract for delivery to a foreign port was the exporter, and as such entitled to drawback.) Reliquidation is not applicable under 19 U.S.C. 1520(c)(1) to correct a misinterpretation in the construction of a law or applicable regulations. Moreover, under 19 U.S.C. 1520(c)(1), Customs has authority to correct errors adverse to an importer and the facts fail to show any error adverse to the importer.

Section 174.12(4) and (5) of the Customs Regulations provides that a protest may be filed by "any person filing a claim for drawback", or "any authorized agent" subject to the provisions of section 171.3. A Customhouse broker who files a protest with power of attorney as the agent of the claimant- principal has no greater rights than those of the principal. The claimant-principal is the protestant, not the agent. The protest does not purport to be a protest filed by the Customhouse broker as the agent of the claimant but appears to be an attempt by the agent to file a protest in his own right. Assuming that the Customhouse broker continued to have authority to act as the agent and intended to file the protest as the agent of the claimant-principal, than we have to conclude that the protestant is requesting that the Customs Service pay a drawback claim which the protestant has already received.


Issue 1. Payment of a drawback claim to either the exporter- claimant or to his authorized agent is satisfaction of the claim for drawback. Customs may, elect to pay the exporter-claimant rather than the authorized agent of the exporter-claimant.

Issue 2. The determination as to which party is entitled to file a drawback entry (claim) is a legal question.

Issue 3. A Customhouse broker acting as the agent of the drawback claimant in filing a protest has no greater rights than his principal, the drawback claimant.

You are directed to inform the Customhouse broker who is not the drawback claimant that he has no standing to file a protest in his own behalf. Further, on the assumption that the Customhouse broker filed the protest as the authorized agent of the drawback claimant, you are directed to deny in full the protest of your refusal to reliquidate under 19 U.S.C.

Please provide the parties with a copy of this decision with your denial of the protest.


John Durant

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