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HQ 961423

APRIL 10, 1998

CLA-2 RR:CR:GC 961423 JAS


TARIFF NO.: 8704.31.00/9903.87.00

Port Director of Customs
1000 2nd. Ave., Suite 2100
Seattle, WA 98104-1049

RE: Protests 3004-92-100066, 3004-92-100131; Heading 8703, Motor Vehicle Principally Designed for the Transport of Persons; Heading 8704, Motor Vehicles for the Transport of Goods; GEO Tracker, Sport Utility Vehicle; Protest Denied for Failure to Prove Claim, 19 CFR 174.13(a)(6); Extension of Liquidation of Entries Under United States-Canada Free Trade Agreement (CFTA), Election to Average, 19 CFR 10.310

Dear Port Director:

This is our decision on protests 3004-92-100066 and 3004-92-100131, both filed against your classification under the Harmonized Tariff Schedule of the United States (HTSUS), of GEO Tracker motor vehicles. The vehicles were entered between November 22, 1991, and February 28, 1992. Entries the subject of protest 3004-92-100066 were liquidated between February 28 and May 22, 1992, and the protest timely filed on May 28, 1992. Entries the subject of protest 3004-92-100131 were liquidated/ reliquidated between June 26 and July 10, 1992, and the protest timely filed on September 10, 1992.


The merchandise subject to these protests is a motor vehicle designated the GEO Tracker. The protestant states they are Jeep-like passenger vehicles, but the record contains no literature, brochures or further descriptions. The vehicles were entered under the provision for motor vehicles principally designed for the transport of persons, with spark-ignition internal combustion reciprocating piston engines, in subheading 8703.22.00 or subheading 8703.23.00, HTSUS, depending on cylinder capacity. A claim for preferential tariff treatment as originating goods under the U.S.-Canada Free-Trade Agreement (CFTA) was made at the
time of entry, and an election to average, over its 12-month financial year, its calculation of the value-content requirement for the purpose of establishing originating-good status for the vehicles was made under section 202(e)(2) of the CFTA and section 10.310, Customs Regulations (19 CFR 10.310).

Customs officers in Blaine noted that the classification of sport utility-type vehicles either in heading 8703 or in heading 8704, involves consideration of both structural and auxiliary design features. Because the importer provided no information on the type of GEO Tracker being imported, and to protect the revenue, they liquidated the entries under subheading 8704.31.00, HTSUS, as motor-vehicles for the transport of goods. Goods so classifiable in 1991 and 1992 were dutiable under heading 9903.87.00, HTSUS, at the rate of 25 percent ad valorem. However, vehicles which qualify as originating goods under the CFTA are eligible for preferential tariff treatment.

Protestant makes no factual or legal arguments in support of the heading 8703 classification. Protestant does, however, assert that the liquidation of the subject entries constitutes an unauthorized denial of its claim for preferential tariff treatment under the CFTA because the liquidations contravened the election to average procedures outlined in section 10.310 of the Customs Regulations.

The provisions under consideration are as follows:

8703 [o]ther motor vehicles principally designed for the transport of persons...dutiable at MFN rate applicable at time of importation, but duty-free as an originating good under the CFTA

8704 Motor vehicles for the transport of goods...dutiable under heading 9903.87.00 at the rate of 25 percent ad valorem, but duty- free as an originating good under the CFTA


Whether the vehicles were properly classified under appropriate provisions of heading 8704/9903 as motor vehicles for the transport of goods; whether the claim for preferential tariff treatment under the CFTA was improperly denied.


Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6.

As to the classification issue, protests against decisions of the appropriate Customs officers must be in conformity with applicable statutory and regulatory requirements. Under 19 U.S.C. 1514(c)(1), a protest of a decision under subsection (a) of section 1514 must set forth distinctly and specifically each decision as to which protest is made. See United States v. E. H. Bailey & Co., 32 CCPA 89, C.A.D. 291 (1945), United States v. Parksmith Corp., 514 F. 2d 1052, 62 CCPA 76 (1975), and related cases. In addition, the Customs Regulations require that a protest set forth the nature of, and justification for the objection distinctly and specifically with respect to each decision. 19 CFR 174.13(a)(6).

The scope of review in a protest filed under 19 U.S.C. 1514 is limited to the administrative record. Customs will consider all relevant allegations that are supported by competent evidence. In acting on a protest, however, Customs lacks the legal authority to assume facts and arguments that are not presented and, therefore, not in the official record.

In this case, the protestant properly contested the decision to liquidate the entries in question under subheading 8704.31.00/9903.87.00, HTSUS. However, protestant has submitted no evidence in support of the claim that the vehicles are classifiable under subheading 8703.23.00, HTSUS, nor is there other evidence of record from which we can independently determine the validity of the claim.

As to the denial of the claim for preferential tariff treatment under the CFTA, the file reflects that at the time of entry the Canadian manufacturer made an election to average under 19 CFR 10.310, Customs Regulations. The liquidation of entries in which a CFTA claim is made based on the vehicle averaging method should be extended, in accordance with instructions from the Director, Office of Trade Operations, in a telex 01189, dated February 2, 1989. However, the entries under protest were prematurely liquidated, which necessitated the filing of this protest.

The record shows that the Canadian manufacturer filed the annual report required by 19 CFR 10.311(c), in connection with the election to average. Based on Audit Report No. 331-91-APO-001, which the North Central Region Regulatory Audit Division, Detroit Branch, issued on October 19, 1993, the Director, Office of Trade Operations, issued memorandum MAN-1-CO:TO:NVC RD, dated June 23, 1994, advising all Customs field offices that the motor vehicles covered by the referenced election to average met the rule of origin criteria for purposes of the duty preference under the CFTA, and instructing that all affected entries be liquidated accordingly.


Based on protestant's failure to comply with the requirements of 19 CFR 174.13(a), the protest should be DENIED as to classification. Based on protestant's compliance with applicable rule of origin criteria, the protest should be ALLOWED as to the claim for preferential tariff treatment under the CFTA.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you should mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries 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 to the public via the Diskette Subscription Service, the Freedom of Information Act and other public access channels.


John Durant, Director
Commercial Rulings Division

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