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HQ 227539

February 23, 1998

LIQ-9-01-RR:CR:DR 227539


Area Port Director of Customs
U.S. Customs Service
Commercial Operations Division
198 West Service Road
Champlain, New York 12919
ATTN: C. Lee Noyes, SIS

RE: Protest 0712-97-100048, MPF refunds, 19 U.S.C. 1520(d), ability to protest denial of claim, post-importation NAFTA claims

Dear Sir:

This is in response to Protest 0712-97-100048, filed by the importer of record as the customhouse broker for Teknor Industrial Computers, Inc., which concerns the denial of a refund of merchandise processing fees (MPF) under 19 U.S.C. 1520(d).


The protestant imported a computer, book and computer disk containing software from Canada under the following subheadings, respectively: 8471.50.40, 4901.99.00 and 8524.91.00, Harmonized Tariff Schedule of the United States (HTSUS). The protestant contends that the merchandise qualified under the North American Free Trade Agreement (NAFTA) rules of origin, but claims that they failed to claim preferential tariff treatment at the time of entry. The entry summary for entry 112-xxx999-4 (one of four entries concerning the same issue) indicates that the country of origin for the merchandise was Canada, and that NAFTA preferential treatment was claimed and granted on the computers. The merchandise was entered on June 5, 1996, and the entries were liquidated on September 20, 1996.

By letter dated September 25, 1996, the protestant filed a claim under 19 U.S.C. 1520(d) requesting a refund of $25.04. There was ($0.06 duty and $25.00 MPF) listed as the total amount paid on the entry summary for entry 112-xxx 999-4; the remaining $0.02 is the duty payable on the one square meter of imported software originating from Canada. Along with this letter, the protestant submitted a Blanket Certificate of Origin, dated August 30, 1996, for the merchandise. The blanket period covered by the certificate was from January 1 through December 31, 1996. The certificate lists several items described as utility disks but does not identify the software disk involved in the entry and does not refer to any book.

On October 21, 1996, written notice of the denial of the section 1520(d) claim was provided to the protestant, pursuant to 19 CFR 181.33(d)(3)(We note that the denial did not include "a statement regarding the right to file a protest against the denial under part 174 . . . "). The claim was denied to the extent that its claim extended to the refund of MPFs. This protest was then timely filed on January 9, 1997, pursuant to 19 CFR 174.12(e)(2), which provides that protests shall be filed within 90 days after the date written notice of denial of a claim filed under section 1520(d).


1. Whether there is sufficient evidence to show that a timely, proper claim for NAFTA preference for the imported book was made?

2. Whether a refund of the merchandise processing fee is authorized if there is insufficient evidence to show that a duty-free book was eligible for NAFTA tariff preference?


As noted above, a protest was filed timely by the importer of record against the Customs denial of the claim of September 25, 1996. The importer of record is both a proper party to make a claim under 19 U.S.C. 1520(d) and a proper party to a protest.

On the entry, no claim for NAFTA tariff preference was made for either the disk containing software or the book. The post-importation claim of September 25, 1996, included a certificate of origin that makes no reference to the book. The claim itself is a form letter which simply declares that goods, as shown on the attached certificate or origin, are eligible for preference under 19 U.S.C. 1520(d). If the claim included the book, that fact is not obvious from the description of the items on the relevant certificate of origin.

The exception to assessment of the merchandise processing fee imposed by 19 U.S.C. 58c(a)(9) is set forth in 19 U.S.C. 58c(b)(10):

(10)(A) The fee charged under subsection
(a)(9) or (10) of this section with respect to goods of Canadian origin (as determined under section 202 of the United States-Canada Free-Trade Agreement Implementation Act of 1988) when the United States-Canada Free-Trade Agreement is in force shall be in accordance with article 403 of that Agreement.

(B) For goods qualifying under the rules of origin set out in section 3332 of this title, the fee under Subsection (a)(9) or (10) of this section -

(I) may not be charged with respect to goods that qualify to be marked as goods of Canada pursuant to Annex 311 of the North American Free Trade Agreement, for such time as Canada is a NAFTA country, as defined in section 3301(4) of this title; and

(ii) may not be increased after December 31, 1993, and may not be charged after June 29, 1999, with respect to goods that qualify to be marked as goods of Mexico pursuant to such Annex 311, for such time as Mexico is a NAFTA country.

Any service for which an exemption from such fee is provided by reason of this paragraph may not be funded with money contained in the Customs User Fee Account.

With respect to the book, the entry papers show no compliance under 19 CFR 181.21 for filing a NAFTA tariff preference claim on importations since the symbol "CA" appears only as a prefix to the tariff subheading for the computers and not as a prefix to the tariff subheading for either the disk containing software or the book. Also, as noted above the post-importation NAFTA claim includes certificate of origin that utility disks does not even link the listed disks with the imported disk. The certificate does not list the book. Consequently, the protestant has failed to provide sufficient evidence showing entitlement to the exemption in 19 U.S.C. 58c(b)(10).

The Customs Service has modified its position on the refund of merchandise processing fees under 19 U.S.C. 1520(d). A copy of the modification notice and HQ 227605 is enclosed for your information.

While a refund of the merchandise processing fee is authorized in an appropriate case, there is an insufficient showing of eligibility here.


1. Because there is insufficient evidence of NAFTA eligibility for all of the imported articles on the entry, the exemption from the merchandise processing fee, this protest is to be denied.

2. A refund of the merchandise processing fee under 19 U.S.C. 1520(d) is authorized in eligible situations, as set forth in the enclosure.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office, with Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act, and other public access channels.


John Durant, Director
Commercial Rulings Division


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