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HQ 959068

February 17, 1998

RR:IA 959068 ch


Port Director
U.S. Customs Service
Attn: John Streker
P.O. Box 1490
St. Albans, Vermont 05478

RE: Application for further review of Protest No. 0201-94-100476 under 19 U.S.C., section ? 1514(c)(2);

Dear Sir:

This is a decision on application for further review of a protest filed by Tower Group International, Incorporated.


On August 11, 1994, the importer of record, Tower Group International, entered certain telecommunications equipment at the Port of St. Albans (entry no. 112-6343400-0). Tower Group made a written declaration on the Entry Summary (Customs Form 7501) that the equipment was of Canadian origin and qualified for preferential treatment under the North American Free Trade Agreement (NAFTA).

On August 12, 1994, Customs sent a written request (Customs Form 28) to the exporter, CCEB, care of the importer, for the Certificate of Origin. On September 19, 1994, Customs sent a notice of action (Customs Form 29) to the exporter, care of the importer, indicating that entry in question had been rate advanced and the claim for preferential treatment denied.

On December 19, 1994, the importer filed the instant protest. To support the claim for preferential treatment, the importer supplied a Certificate of Origin covering the goods and period in question. The Certificate was signed by a representative of CCEB as exporter. Field 7 of the Certificate, entitled "Preference Criterion," contains the notation B, which indicates that the goods were produced entirely in the territory of one or more of the NAFTA countries and satisfy the relevant rules of origin, set out in General Note 12(t) of the Harmonized Tariff Schedule of the United States (HTSUS).

Thereafter, the port sent written requests to the importer on June 17, 1996 and July 15, 1996. In each instance, the importer was asked to supply a NAFTA Certificate of Origin and to substantiate the claim that the goods qualify for preferential treatment. The importer failed to respond to the requests for information.

On November 13, 1996, the port sent a notice of action to the importer proposing to deny preferential treatment. The notice contained a written determination that the goods in question are not entitled to preferential treatment. The basis for the determination was that no documentation had been submitted which substantiated the claim contained in the NAFTA Certificate of Origin that the goods are originating goods under the NAFTA.

On February 6, 1997, the importer's claim for preferential treatment was denied because no further information was submitted.


Whether the claim for preferential treatment should be denied under the facts presented?


In order to make a claim for preferential treatment under the NAFTA, an importer must make a written declaration that the good in question qualifies for such treatment. The written declaration is made on the entry summary or equivalent documentation. The declaration must be based on a properly executed Certificate of Origin which is in the possession of the importer and which covers the good being imported. (19 C.F.R. ? 181.21(a)).

Customs Regulation ? 181.22(b) (19 C.F.R. ? 181.22(b)) states in pertinent part that:

An importer who claims preferential tariff treatment on a good under ? 181.21 of this part shall provide, at the request of the port director, a copy of each Certificate of Origin pertaining to the good which is in the possession of the importer.

(Emphasis supplied).

Pursuant to Customs Regulation ? 181.23(a), the port director may deny preferential treatment if the importer fails to comply with the request for the Certificate of Origin.

The foregoing Regulations indicate that Customs must request the Certificate of Origin from the importer and that Customs may deny preferential treatment if the importer fails to produce the document. In this instance, the port requested a copy of the Certificate from the exporter, care of the importer. If the importer simply passed the correspondence to the exporter without reading its contents, the importer would not have known that Customs was making a request for the Certificate. The port had no basis for denying preferential treatment on September 19, 1994 because it had not requested a Certificate of Origin from the importer.

When Customs denied preferential treatment on September 19, 1994, it made an affirmative decision concerning the amount of duties of chargeable. (19 U.S.C.
Certificate of Origin covering the goods in question. Under the circumstances of this transaction, the port was obligated to accept the Certificate as valid unless an origin verification was initiated. (19 C.F.R. ? 181.22(c)).

The methods for conducting a NAFTA origin verification are set forth in Customs Regulation ? 181.72. Pursuant to ? 181.72(a)(3)(i), Customs may conduct an origin verification by means of a verification letter as follows:

A verification letter which requests information from a Canadian or Mexican exporter or producer, including a Canadian or Mexican producer of a material, and which identifies the good or material that is the subject of the verification. The verification letter may be on Customs Form 28 or other appropriate format...

(Emphasis supplied).

Thus, an origin verification by way of a verification letter is initiated when the correspondence is directed to the exporter or producer.

It is noted that Customs may request information concerning the origin of the good from the importer pursuant to ? 181.72(c):

Nothing in paragraph (a) of this section shall preclude Customs from directing inquiries or requests to a U.S. importer for documents or other information regarding the imported good. If such an inquiry or request involves requesting the importer to obtain and provide written information from the exporter or producer of the good or from the producer of a material that is used in the production of the good, such information shall be requested by the importer and provided to the importer by the exporter or producer only on a voluntary basis, and a failure or refusal on the part of the importer to obtain and provide such information shall not be considered a failure of the exporter or producer to provide the information and shall not constitute a ground for denying preferential treatment on the good.

(Emphasis supplied).

Under the Regulation, Customs may request information from the importer. However, the failure of the importer to provide information that can only be supplied by the exporter or producer is not a ground for denying preferential treatment.

Customs in this case directed verification letters to the importer requesting information necessary to substantiate the Certificate of Origin. A NAFTA verification was not initiated because the letters were not directed to the exporter or producer of the good. Although Customs was not precluded from requesting the information from the importer, the failure of the importer to supply the information was not grounds for denying preferential treatment. The failure of Customs to initiate an origin verification means that the Certificate of Origin must be taken at face value.


In view of the foregoing, the protest should be granted in full.

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 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 of 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 Ruling Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.


John A. Durant, Director
Commercial Rulings Division

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