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HQ 228182





January 8, 2001

DRA-2-02-RR:CR:DR 228182IOR

CATEGORY: DRAWBACK

Port Director
U.S. Customs Service
2350 N. Sam Houston Pkwy East
Houston TX 77032

Attn: Deidra Golden

Drawback Unit

RE: Protest Application for Further Review No. 5301-97-100371; 19 U.S.C. 1313(j)(1); NAFTA; frozen strawberries; deterioration; evidence of exportation; apportionment; 19 CFR 181.45

Dear Sir:

The above-referenced protest was forwarded to this office for further review. Our decision follows.

FACTS:

The protest is of the liquidation of 15 drawback entries. Eight entries were filed on January 31, 1997 and liquidated on July 25, 1997, and seven entries were filed on February 18, 1997 and liquidated on August 15, 1997. The entries were liquidated with no drawback. The drawback claims designated entries of frozen Mexican strawberries, and drawback was claimed under 19 U.S.C. §1313(j)(1) on the basis of exported frozen strawberries to Canada. Drawback was denied on the grounds that the claimant/protestant failed to provide evidence of exportation, and failed to establish that either the inventory of the merchandise follows Schedule X, Appendix to Customs Regulations, Part 181, or the exported merchandise has not deteriorated. It is asserted by the Port that acceptable proof of export was defined to the protestant telephonically, in writing, in a one-on-one outreach program and by seminar attendance, but such proof was never provided.

The Port takes the position that at least a portion of the exported merchandise is deteriorated, based on the shelf life of frozen strawberries. The Port relies upon publications of Dow Chemical Company and Texas Agricultural Extension Service (of Texas A&M University). According to the Dow publication, frozen fruits can be stored in the freezer for up to 6 months. The Texas Agricultural Extension Service Publication, entitled “Safe Home Food Storage”, recommends frozen fruit can be stored in the freezer for up to 12 months. Another publication not relied on by the Port, published by the NDSU Extension Service, of the North Dakota State University, recommends that fruit not be stored longer than 12 to 18 months. All three publications relate to home use. According to these publications, the objective of the storage is to preserve the food quality.

The protestant has submitted certain documents relating to the receipt into and withdrawal from storage of the merchandise. These documents are annotated in red ink to indicate which drawback entry corresponds to the stored and subsequently withdrawn merchandise. It appears that the annotations were made by the protestant or its broker. The protestant has submitted letters from the cold storage warehouse managers stating that the strawberries were not reprocessed and that no changes were made to the product, and that the products were shipped in the original containers and condition in which they were received.

The following describes the documents in support of two representative drawback claims.

Drawback Claim 439-xxxx398-6

CF 7501 The protestant imported a total of 1800 cartons of strawberries, under subheadings MX0811.10.0050 (frozen strawberries containing sugar not more than 25% by weight) and MX0811.10.0070 (frozen strawberries, other), HTSUS. The merchandise was imported from Mexico on April 27, 1995, and the country of origin is identified as Mexico.

Purchase invoice There is an invoice number 147 to the protestant from a Mexican company for 1800 cartons of strawberries. The four different items listed on the invoice consist of different types of strawberries in varying types of containers and at varying prices. The total invoice price is less than the value shown on the CF 7501. The invoice includes 146 units of 30lb. containers of sliced strawberries (it does not specify frozen). The weight on the invoice nearly matches the weights on the CF 7501.

Receiving Records According to a Cold Storage company Loading and Unloading Tally sheet dated April 28, 1995, the 146 30 lb. containers were assigned lot no. 41987 and were given a storage location of A-5. The same tally sheet included 4 other loads of merchandise, all from the same supplier in Mexico, with individual lot numbers and location assignments.

Product Release There is a form, dated February 6, 1997, issued by the protestant to the Cold Storage company requesting that 30 units in warehouse lot # 41987 be shipped via a specified carrier to a Canadian company.

Job Order There is the Cold Storage company job order with a call date of February 6, 1997 and a pick up date of February 11, 1997, identifying the protestant as the customer. The job order identifies 30 units from lot 41987, located at A-5.

Order Pick Sheet There is the Cold Storage company’s Order Pick Sheet, dated February 11, 1997, issued for the protestant and indicating delivery to a Canadian company, which includes 30 units from lot # 41987, located at A-5.

Drawback Entry form The drawback entry designates 1800 cartons of frozen strawberries and claims drawback on the exportation of 30 cartons of frozen strawberries. The drawback entry is dated and signed February 7, 1997, and states that the merchandise is to be exported on or about February 13, 1997. There is a Customs signature dated February 10, 1997 indicating that Customs has decided not to examine the merchandise and that it may be exported. The drawback entry is dated February 18, 1997, in ACS, and is date stamped as received by the Drawback Unit in Houston the same date.

Export invoice There is an invoice, number 5282, dated February 13, 1997 from the protestant to a Canadian company, for the sale of a total of 675 units of frozen strawberries. 675 units are of whole Mexican strawberries, and another 675 units are for sliced Mexican strawberries. The total weight of the merchandise is 18370.8 kg. The invoice indicates that the merchandise was shipped on February 10, 1997.

Canadian B-3 There is a broker issued “new combined B3-invoice”, which document has been confirmed to be an approved Canada Customs B3 form. The B3 reflects18,370.8 kg., the same weight of merchandise as the export invoice, however the value for duty is $3,108.68 less than the price reflected on the invoice, and the value for tax is $1697.48 less than the price reflected on the invoice. There is a 14-digit transaction number on the form. The form indicates two typed dates. Because the form is nearly illegible it is not apparent what the dates represent. The dates are February 19, 1997 and February 10, 1997. The protestant is identified as the vendor. The importer number is the same as that assigned to the protestant in another document listed below. The document specifies a duty amount, and includes the broker fee.

Canadian Cargo Control Document There is an undated “Canadian Cargo Control” document with a bar coded “cargo control number” for 1350 units of frozen sliced strawberries with sugar, showing the consignee as the Canadian company and the shipper as the protestant. The weight is 18370.8 kg.

Unknown document There is a document that appears to have been issued by the broker. The form contains an importer number, transaction number and cargo control number. The importer number and the transaction number is the same as on the B3 invoice. The cargo control number is the same as on the cargo control document. The form identifies the protestant as both the vendor and the importer. There is a typed date of February 13, 1997, an illegible stamped date of February 1997 which was changed by hand to be the 20th, and a handwritten date of what appears to be February, 13, 1997.

Canada Customs Invoice There is a Canada Customs Invoice on a broker issued form, completed by hand. The document indicates the date of direct shipment to Canada is February 10, 1997. The document identifies the merchandise as 1350 units of frozen Mexican strawberries (675 units are of whole Mexican strawberries, and another 675 units are for sliced Mexican strawberries). The weight is the same as reflected on the export invoice and the B3 invoice. The value is the same as reflected on the export invoice.

Business number- Import/Export Account Registration/Conversion An undated form shows a business number assigned to the protestant for an “importer account”.

Export Payment Record A document dated March 17, 1997 that appears to have been issued by the Canadian company purchasing the merchandise, references invoice number 5282, and indicates the amount invoiced was deposited.

March 24, 1997 Customs letter There is a letter from Customs to the broker for the protestant, dated March 24, 1997, referencing seven of the subject drawback claims, including 439-xxxx398-6, requesting acceptable proof of export, or proof that the company is approved for export summary procedure accompanied by a chronological summary of exports, the correct IRS number, and a correct drawback type on coding sheet. The information is requested within 30 days.

The foregoing storage withdrawal and export documentation also relates to drawback entries 439-xxxx394-5, 439-xxxx395-2, 439-xxxx396-0, and 439-xxxx397-8.

Drawback Claim 439-xxxx854-1

CF 7501 The protestant imported a total of 1252 cartons of strawberries, under subheadings MX0811.10.0050 (frozen strawberries containing sugar not more than 25% by weight) and MX0811.10.0070 (frozen strawberries, other), HTSUS. The merchandise was imported from Mexico on June 7, 1996, and the country of origin is identified as Mexico.

Receiving Records According to a Cold Storage company Loading and Unloading Tally sheet dated June 7, 1996, 482 30 lb. containers of frozen strawberries were assigned lot no. 76178 and were given a storage location of B-75. The same tally sheet included 2 other loads of merchandise, all from the same supplier in Mexico, with individual lot numbers and location assignments, for a total of 1252 containers of merchandise.

Product Release There is a form, dated January 15, 1997, issued by the protestant to the Cold Storage company requesting that 239 units in warehouse lot # 76178 be shipped via a specified carrier to a Canadian company.

Job Order There is the Cold Storage company job order with a call date of January 16, 1997 and a pick up date of January 22, 1997, identifying the protestant as the customer. The job order identifies 239 units from lot 76178, located at B-75.

Order Pick Sheet There is the Cold Storage company’s Order Pick Sheet, dated January 22, 1997, issued for the protestant and indicating delivery to a Canadian company, which includes 239 units from lot 76178, located at B-75.

Drawback Entry form The drawback entry designates 1252 cartons of frozen strawberries and claims drawback on the exportation of 239 cartons of frozen strawberries. The drawback entry is dated and signed January 21, 1997, and states that the merchandise is to be exported on or about January 25, 1997. There is a Customs signature dated January 23, 1997 indicating that Customs has decided not to examine the merchandise and that it may be exported. The drawback entry is dated January 31, 1997, in ACS, and is date stamped as received by the Drawback Unit in Houston the same date.

CF 7512 There is a CF 7512, identified as a T.E., dated January 20, 1997, that describes a total of 1320 units of frozen strawberries. The units are broken down according to consumption entry numbers and dates of entry. The merchandise includes in the description 239 pails, and identifies them in relation to the same consumption entry number which is designated in the drawback claim. The CF 7512 describes shipment of the merchandise from Hidalgo, Texas to Detroit, Michigan with a final destination of Ontario, Canada. The document is not completed by Customs to show lading and clearance for Canada.

Export invoice There is an invoice, number 5268, dated January 31, 1997 from the protestant to a Canadian company, for the sale of a total of 1320 units, of 30 lbs., of whole Mexican frozen strawberries. The total weight of the merchandise is 17,962.56 kg. The strawberries are described as being Grade B or better from 1996 pack. The invoice indicates that the merchandise was shipped on January 22, 1997.

Canadian B-3 and broker invoice There is a broker issued document titled “Invoice” issued by a broker, which has been confirmed to be an authorized Canada Customs B3 form. Nowhere does the document reflect the same weight of the merchandise as on the export invoice, or the invoice amount. (The weight and value is however discussed with the larger shipment described below on the Canada Customs Invoice). There is a 14-digit transaction number. The form indicates two typed dates. Because the form is nearly illegible it is not apparent what the dates represent. The dates are January 24, 1997 and January 29, 1997. The document specifies a duty amount, and includes the broker fee.

Canada Customs Invoice There is a Canada Customs Invoice on a broker issued form, completed by hand. The box for the date of direct shipment to Canada is blank. The document identifies the merchandise as 1350 units of frozen Mexican strawberries. The weight is greater than that reflected on the export invoice. The value is greater than that reflected on the export invoice. (The difference in weight and value is consistent with the difference between 1320 30 lb. units and 1350 30 lb. units).

Canadian B-3 There is a computer generated document identifying the protestant and the Canadian company, and showing the same transaction number, duty amount, weight and value as the Canada Customs Invoice, and the broker invoice B3. This document is a B-3 without the broker fee.

Export Payment Record There is a copy of the Canadian Company’s check, made out to the protestant, in an amount consistent with the price of 1320 units of strawberries, and referencing the export invoice number 5268.

The foregoing storage withdrawal and export documentation also relates to drawback entries 439-xxxx853-3, 439-xxxx852-5, 439-xxxx850-9, and 439-xxxx849-1.

There is an additional pair of documents consisting of a B-3 broker invoice and a printed Canada Customs Invoice with a bar coded 14-digit transaction number matching the one on the B-3. However, the documents do not appear to relate to any of the drawback claims which are the subject of this protest.

Inventory records such as those described above were provided for all fifteen drawback entries, except for five of the drawback claims for which no receiving records were provided. Regarding three of those five claims the protestant has provided a letter to Customs from the Cold Storage company, which states that the receiving records are not available “due to a computer loss that stored the information”.

This decision is based upon the review of three complete claims, and the inventory records provided for all of the claims. Each of the three reviewed drawback claims designates one entry. Two of the three reviewed claims are based on the same claimed exportation. Based on the inventory and warehouse withdrawal records, it appears that all of the fifteen claims are based on five claimed exportations.

ISSUE:

1) Whether under 19 U.S.C. 1313(j)(1), strawberries imported from Mexico and exported to Canada are subject to NAFTA drawback.

2) Whether the protestant is entitled to drawback under 19 U.S.C. 1313(j)(1).

LAW AND ANALYSIS:

Under 19 U.S.C. §1313(j)(1), drawback is authorized if imported merchandise on which was paid any duty, tax, or fee imposed under Federal law because of its importation is, within 3 years of the date of importation, exported or destroyed under Customs supervision and was not used in the United States before such exportation or destruction. Substitution of commercially interchangeable merchandise, subject to certain conditions, is authorized under 19 U.S.C. §1313(j)(2) but, as explained below, such substitution is unavailable in this case.

Under 19 U.S.C. §1313(j)(4):

Effective upon the entry into force of the [NAFTA], the exportation to a NAFTA country ... of merchandise that is fungible with and substituted for imported merchandise, other than merchandise described in paragraphs (1) through (8) of section 3333 of this title, shall not constitute an exportation for purposes of [section 1313(j)(2)].

As the strawberries are goods originating in Mexico and exported to a NAFTA country (19 U.S.C. §3333(a)(5)(a)), they are exempt from the above limitation, however, as agricultural products, they are also exempt from the exemption under
paragraph 12 of section A of Annex 703.2 of the Agreement, which provides as follows:

Restriction on Same-Condition Substitution Duty Drawback

12. Notwithstanding Article 303 (Restriction on Drawback and Duty Deferral Programs), beginning on the date of entry into force of this Agreement, neither Mexico nor the United States may refund the amount of customs duties paid, or waive or reduce the amount of customs duties owed, on any agricultural good imported into its territory that is substituted for an identical or similar good that is subsequently exported to the territory of the other Party.

The Customs Regulations implementing the NAFTA Implementation Act are found in 19 C.F.R. Part 181. Subpart E of Part 181 contains the regulations providing restrictions on drawback and duty-deferral programs. According to section 181.41, "[e]xcept in the case of § 181.42(d), the provisions of this subpart apply to goods which are imported into the United States and then subsequently exported from the United States to Canada on or after January 1, 1996, or to Mexico on or after January 1, 2001" (see also the comment and response on this provision in Treasury Decision (T.D.) 95-68, the Final Rule promulgating Part 181, in which "Customs agree[d] that the subpart covers all exports to Canada or Mexico ..."). Section 181.42(d) implements 19 U.S.C. §1313(j)(4), and provides that "... [t]here shall be no payment of [unused merchandise substitution drawback] under 19 U.S.C. §1313(j)(2) on goods exported to Canada or Mexico on or after January 1, 1994." Section 181.45 provides for goods eligible for full drawback (i.e., not subject to the calculations for NAFTA drawback (see 19 C.F.R. §181.44)), including (under subsection (b)), "[a] good imported into the United States and subsequently exported to Canada or Mexico in the same condition...." Under section 181.45(b)(2), "[c]ommingling of fungible goods [with an exception for certain agricultural goods] in inventory, such as parts, is permissible (see § 191.141(e) of this chapter), provided that the entries for designation for same condition drawback are identified on the basis of an approved inventory method set forth in the appendix to this part." The exception for agricultural goods, 181.45(b)(2)(ii), provides that “[a]gricultural goods imported from Mexico may not be commingled with fungible agricultural goods in the United States for purposes of same condition drawback under this subpart.” Section 181.45(b)(2)(ii) implements paragraph 12 of section A of Annex 703.2 of the Agreement, supra, which is also implemented by statute in 19 USC §3333(a)(2)(B).

It is clear from the above provisions that substitution drawback under 19 U.S.C. §1313(j)(2) no longer exists for shipments to Canada of Mexican origin agricultural products imported into the United States. That is, the only statutory provision providing for such substitution before enactment of the NAFTA Implementation Act was 19 U.S.C. §1313(j)(2). Since 19 U.S.C. §1313(j)(4), enacted by section 203(c) of that Act, now provides, basically, that shipments of fungible merchandise substituted for imported merchandise shall not constitute an exportation for purposes of section 1313(j)(2), there is now no provision permitting substitution for section 1313(j) drawback on shipments to Canada. See House Report (Ways & Means Committee) No. 103-161(I), pp. 39- 40, 103d Cong., 1st Sess. (1993) (reprinted at 1993 U.S.C.C.A.N. 2552, 2589-2590), in which it is stated:

Subsection (c) [of section 203 of the NAFTA Implementation Act] eliminates, effective upon entry into force of the Agreement, "same condition substitution drawback" by amending [19 U.S.C. §1313(j)(2)], thereby eliminating the right to a refund on the duties paid on a dutiable good upon shipment to Canada or Mexico of a substitute good, except for goods described in paragraphs one through eight of section 203(a) [of the NAFTA Implementation Act].

It is just as clear from the foregoing provisions that, with the specific exceptions provided in 19 U.S.C. §3333(a)(1) through (8) (see above), when fungible goods are commingled in inventory, the only way that entries for designation for same condition drawback on shipments to Canada or Mexico may be identified is with the use of an inventory method approved in the appendix to 19 C.F.R. Part 181, effective January 1, 1996, for exports to Canada and January 1, 2001 for exports to Mexico. Finally, the provision permitting commingling in inventory is specifically not applicable to agricultural goods imported from Mexico. This is explicitly provided by the regulations implementing the applicable statutory provisions (see 19 C.F.R. §181.45(b)(2), quoted above).

Thus, as the subject merchandise consists of strawberries, an agricultural product, they are not eligible for same condition substitution drawback and may not be commingled in the U.S. if they are to be designated for drawback. Therefore, in order to obtain drawback, the protestant must establish that the exact same strawberries imported from Mexico were exported to Canada.

For purposes of drawback to NAFTA countries the regulations distinguish between same condition merchandise under 19 U.S.C. §1313(j)(1), and unused merchandise under 19 U.S.C. §1313(j)(1). For exportations to Canada, made on or after January 1, 1996 (and Mexico on or after January 1, 2001), section 203 of the NAFTA Implementation Act provides for the treatment of goods subject to NAFTA drawback. Under 19 U.S.C. §3333(a) (Section 203(a) of the NAFTA), goods subject to NAFTA drawback, mean any good other than, among other things:

(5) A good that qualifies under the rules of origin set out in section 3332 of this title that is—

(A) exported to a NAFTA country.

Section 3332(a)(1) of title 19, provides that an originating good includes a good originating in the territory of a NAFTA country and the good is wholly obtained or produced entirely in the territory of one or more of the NAFTA countries.

Therefore, an originating good exported to a NAFTA country is not a good subject to the NAFTA drawback limitation. The NAFTA drawback limitation provides that drawback may be granted only on the lesser of the total duties paid or owed on the importation into the U.S. or the total amount paid on the exported good on its subsequent importation into Canada or Mexico.

The Customs Regulations, 19 CFR 181.45(a), issued under the authority of the NAFTA Implementation Act specifically provide for the availability of full drawback on the exportation of originating merchandise to a NAFTA country:

(a) Goods originating in Canada or Mexico. A Canadian or Mexican originating good that is dutiable and is imported into the United States is eligible for drawback without regard to the limitation on drawback set forth in §181.44 of this part if that originating good is: (1) Subsequently exported to Canada or Mexico.

We find that the merchandise was originating for the purpose of this protest on the basis that the claim for preference on the CF 7501 indicates that the merchandise was originating, and according to ACS the entry was liquidated based on the preferential rate.

As the subject merchandise is not subject to NAFTA drawback under 19 U.S.C. §3333(a) (as implemented by 19 CFR 181.45(a)), eligibility for full drawback is not limited by application of provisions pertaining to merchandise exported not in the same condition (19 CFR 181.44(g)). Therefore, it is not necessary to make a determination whether the merchandise was exported in the same condition in which it was imported.

In this case, the drawback claim is not made on the basis of an approved inventory method, but is made on the basis of specific identification. Based on the records provided showing entry of the strawberries into cold storage and withdrawal from cold storage, we conclude that the strawberries placed into storage are the very same strawberries withdrawn from storage for export to Canada, however for the reasons described below, we cannot find that these strawberries are also the strawberries imported on the designated entries. With regard to the storage, there is no evidence in the records submitted that merchandise is commingled in the storage locations. The evidence we rely on, for example with regard to drawback entry 439-xxxx398-6, is that 1) protestant was invoiced for 146 pails of sliced strawberries by supplier’s invoice no. 147, dated April 26, 1995; 2) 146 30 lb. containers of sliced strawberries, were received into cold storage on April 28, 1995, and identified as lot 41987 and placed into location A-5; 3) on April 28, 1995 the other strawberries on invoice no. 147 were entered into storage, some into the same A-5 location, but with different lot numbers; and 4) 675 containers of sliced strawberries were withdrawn from cold storage on February 11, 1997, including 30 containers identified as lot 41987 from location A-5, and referencing supplier’s invoice no. 147.

Although the dates of importation of the designated strawberries are consistent with the dates of receipt into warehouse, lack of documentation or discrepancies in the documentation preclude an affirmative finding that the designated strawberries were the same as those received into storage. With respect to drawback entry 439-xxxx398-6, we do not find that the documents establish that the strawberries imported on the designated import entry no. 439-xxxx748-0 were the same strawberries as those that were invoiced by supplier’s invoice 147 and placed into cold storage as lot 41987 into location A-5. We cannot match the imported with the invoiced and stored strawberries because 1) the entered value is $3,000 higher than the invoiced value; 2) the entered weight is 8 kg. Less than the weight reflected on the invoice; and 3) the entered strawberries were classified as frozen strawberries but the invoiced and stored strawberries are simply described as sliced strawberries (other strawberries on the invoice and the storage sheet are described as frozen). In any event, due to the discrepancy between the invoiced amount and the entered value, Customs would not be able to determine the amount of drawback due for the 30 containers of strawberries stated to have been exported.

With respect to drawback entry 439-xxxx854-1, we do not have an invoice to compare to the import entry and from which to determine that the value and amount of duty paid for the specific quantity of strawberries upon which drawback is claimed. The warehouse receiving records indicate that the 1252 containers of strawberries consisted of 482 containers of medium individually quick frozen strawberries, 442 containers of frozen sliced strawberries, and 328 containers of small frozen strawberries. The designated entry, 439-xxxx207-5, consists of two line items. Without an invoice, Customs has no way of determining the amount of drawback attributable to the 239 units of strawberries for which drawback is claimed. Based on the quantity alone, it does appear that the strawberries on the CF 7501 are the same as those received in cold storage on June 7, 1996. Without the invoice, Customs cannot link the import to the merchandise received into storage, which is necessary for purposes of specific identification drawback.

With respect to drawback entry 439-xxxx853-3, which is not described in the FACTS section, there also is no invoice to compare to the import entry and from which to determine the duty paid for the strawberries on which drawback is claimed. The designated entry, 439-xxxx443-6, consists of two separate line items, and is for the entry of a total of 1420 units of strawberries. Customs has no way of determining the entered value of the designated 20 units of exported strawberries. Again, without the invoice, Customs cannot make the necessary link between the import and the merchandise received into storage.

There is no language in 19 U.S.C. §1313(j) which permits Customs to apportion drawback when a component of the imported merchandise, rather than the imported merchandise itself, is exported. Where the determination of the amount of duty paid for the exported merchandise can only be approximately determined, by apportionment, Customs is not permitted to pay drawback under 19 U.S.C. §1313(j)(1). See HQ 228317, dated December 5, 2000 and HQ 228199, dated March 26, 1999, in which this issue was thoroughly discussed.

Therefore, even if Customs were to conclude that the imported strawberries were those placed in storage and subsequently withdrawn, the protestant is not entitled to drawback on them because the value of the designated merchandise cannot be determined. If the missing invoices were provided and if it were established that the information on the invoices corresponds to that on the consumption entries, and the above-described discrepancies were satisfactorily explained, and the value of the designated merchandise could be determined with certainty, the protestant may be entitled to drawback.

Finally, we reach the question of exportation. The drawback claimant must provide evidence of exportation as set forth in the Customs Regulations (19 CFR 191.52 and 191.53, were applicable at the time the subject drawback entries were filed). The present applicable regulation is in 19 CFR 191.72. As the strawberries are originating merchandise exported to a NAFTA country, they are not subject to NAFTA drawback or the evidence of exportation requirements set forth in Part 181, subpart E. Section 191.52(c)(2) sets forth the types of documents that are evidence of exportation “such as the bill of lading, air waybill, freight waybill, Canadian Customs manifest, cargo manifest, or certified copies thereof, issued by the exporting carrier.” Section 191.52 states “[s]upporting documentary evidence shall establish fully the time and fact of exportation and the identity of the exporter.” The provision, at the time of filing for right to receive drawback, section 191.73, provided that the person named as exporter on the notice of exportation or on the bill of lading, air waybill, freight waybill, Canadian Customs manifest, or certified copies thereof is deemed the exporter and entitled to drawback.

With respect to the three representative entries, we find that exportation has not been clearly established. For drawback entry 439-xxxx398-6 (the information submitted would also be applicable to drawback entries 439-xxxx394-5, 439-xxxx395-2, 439-xxxx396-0 and 439-xxxx397-8, as the strawberries designated in those entries were part of the same asserted shipment), the B-3 with a transaction number, combined with the evidence of payment referencing the export invoice number would be sufficient evidence of exportation, however the value on the export invoice does not correspond to the value on the B-3. The discrepancy does not appear to be related to currency conversion. With respect to drawback entries 439-xxxx853-3 and 439-xxxx854-1 (the information submitted would also be applicable to drawback entries 439-xxxx852-5, 439-xxxx850-9 and 439-xxxx849-1 as the strawberries designated in those entries were part of the same asserted shipment), the B-3 with a transaction number, combined with the evidence of payment referencing the export invoice number would be sufficient evidence of exportation, however neither the value nor the weight correspond to the export invoice. The B-3 provided is consistent with a shipment of 1350 30 lb. units as opposed to the 1320 units reflected on the export invoice, however we do not have any evidence linking the B-3 to the strawberries withdrawn from storage, invoiced and paid for, as the amounts are not the same. The CF 7512, T.E. is not evidence of exportation as it does not show lading and clearance for Canada. Further,a T.E. would be inappropriate to establish exportation for purposes of drawback, as it is intended to escort foreign-origin non-duty-paid merchandise through the U.S. in order to assure exportation. See, HQ 113986, dated June 17, 1997.

With regard to the evidence of exportation, given a satisfactory explanation regarding the discrepancies, the documentation may be considered sufficient to establish exportation.

On the basis of the foregoing, we conclude that drawback is not authorized for the subject drawback entries, as the value of the designated merchandise and the duty thereon cannot be determined from the documents provided, and the requirements of specific identification have not been clearly met. Further, the documentation does not clearly establish exportation of the designated merchandise.

HOLDING:

1) Strawberries originating in Mexico and exported to Canada are not subject to NAFTA drawback.

2) The protestant is not entitled to drawback under 19 U.S.C. 1313(j)(1), because the duty paid on the designated merchandise cannot be determined, specific identification has not been clearly established, and exportation of the designated merchandise has not been clearly established.

The protest should be DENIED. 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 make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

John Durant
Director, Commercial
Rulings Division

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