us-cbp-cross-rulings-hq-083050•HQ 083050: Application for Further Review of Protest 1001-7-011000 of August 6, 1987
HQ 083050: Application for Further Review of Protest 1001-7-011000 of August 6, 1987
us-cbp-cross-rulings-hq-083050HQ 083050: Application for Further Review of Protest 1001-7-011000 of August 6, 1987Guidance
Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.
HQ 083050
March 23, 1989
CLA-2 CO:R:C:G 083050 SM
CATEGORY: Classification
TARIFF NO.:
Area Director of Customs
JFK Airport Area
JFK Airport, Bldg. 178
Jamaica, NY 11430
RE: Application for Further Review of Protest 1001-7-011000
of August 6, 1987
Dear Sir:
This protest and application for further review was
filed by Serko, Simon, and Abbey on behalf of Profile Mens-
wear, Ltd. (PMI). It concerns your decision that a shipment
of 1,411 men's suits covered by entry 336-0248090-8 of March
16, 1987, required textile visas for category 443 and cate-
gory 643.
FACTS:
The merchandise covered by the entry was claimed as a
product of Italy with Yugoslavia indicated as the country of
exportation. A Request for Information, Customs Form (CF) 28,
sent on April 10, 1987, asked for details of each operation
performed in Italy and in Yugoslavia. The importer's response
was dated April 27. On May 8, a notice was issued on CF 4647
indicating that the country of assembly and tailoring, Yugo-
slavia, was the country of origin of the suits, and that visas
for categories 443 and 643 were required. The visas were not
presented, and a claim for liquidated damages was issued on
June 25. JFK Area Case 87-4701-24167. This protest was
timely filed on August 6, the ninetieth day after the date of
the notice.
Counsel for the importer protests, first, that the
merchandise was properly marked as to country of origin and,
second, that there was no breach of the entry bond since
Customs failed to make a timely demand under that bond. With
regard to the first point, he claims reliance on a ruling
letter, 726826 of November 20, 1984, that stated, in response
to the importer's inquiry of October 30, that suits assembled
in Yugoslavia from components cut in Italy could be marked to
indicate Italy as the country of origin for marking purposes.
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With regard to the second point, he claims that 19 C.F.R. {
113.62(d) required Customs to issue the notice within 30 days
of the date of release of the merchandise. Since the notice
was sent 53 days after release, he claims that Customs cannot
collect liquidated damages.
ISSUE:
Is Italy or Yugoslavia the country of origin of the
suits? Is Customs precluded from making a claim under the
bond because an untimely demand was made?
LAW AND ANALYSIS:
The textile country of origin regulations, 19 C.F.R. {
12.130 (1988), set out criteria for determining the country of
origin of textile products processed in more than one foreign
country. Section 12.130(e)(1)(v) provides specifically that a
textile article will usually be the product of a country where
it has undergone "[s]ubstantial assembly by sewing and/or
tailoring of all cut pieces of apparel articles which have
been cut in another foreign . . . country . . . into a
completed garment (e.g., the complete assembly and tailoring
of all cut pieces of . . . suits . . . .)"
The information supplied by the importer in response to
the CF 28 of April 10, 1987, as well as his original letter of
October 30, 1984, indicate that in Italy fabric was cut into
pieces for suits. The pieces were then transported to Yugo-
slavia, where they were assembled and tailored into men's
suits. The operations in Yugoslavia thus fall squarely with-
in the description in 19 C.F.R. { 12.130(e)(1)(v), and we
agree with your determination that Yugoslavia is the country
of origin.
Counsel for the importer does not maintain that Italy,
and not Yugoslavia, is the country of origin of the suits
under the regulations. Rather, he claims that Italy was
correctly claimed to be the country of origin because the
marking ruling issued to PMI in November of 1984 has never
been revoked.
We cannot agree. The ruling was issued before the April
4, 1985, effective date of the textile country of origin
regulations, and also before the March 15, 1986, effective
date of category 443 or category 643 restrictions on merchan-
dise from Yugoslavia. The merchandise was entered on March
16, 1987, nearly two years after the effective date of the
regulations. The new regulations went into effect only after
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several notices in the Federal Register and an extensive
comment period. Numerous outstanding rulings would have been
effectively revoked by this major regulatory change, which was
promulgated pursuant to Executive Order 12475 of May 9, 1984.
Thus the suits were properly determined to be products
of Yugoslavia under the regulations. Such merchandise is sub-
ject to quantitative restrictions in accordance with the terms
of the U.S.-Yugoslav bilateral textile agreement negotiated
pursuant to Congressional delegation of authority in section
204 of the Agricultural Act of 1956, as amended, 7 U.S.C. {
1854 (1982). The suits could not be admitted into the United
States unless the proper original visa stamps were presented.
Counsel for the importer further argues that the notice
was not timely and that Customs has therefore failed to meet
the condition precedent of a timely demand under the import-
er's bond. He claims that language in 19 C.F.R. { 113.62
(1988), incorporated by reference into the bond, would have
required Customs to issue the notice within 30 days of the
date of release of the merchandise (since no later "condi-
tional release period" applies in this case).
Section 113.62(d) is the bond principal's agreement to
redeliver merchandise released conditionally before all
required evidence is produced or before quantity, value, or
admissibility is determined if the merchandise:
(1) Fails to comply with the laws or regulations
governing admission into the United States;
(2) Must be examined, inspected, or appraised as
required by 19 U.S.C. 499;
(3) Must be marked with the country of origin as
required by law or regulation.
It concludes with the statement that "demand for redelivery
will be made no later than 30 days after the date that the
merchandise was released or 30 days after the end of the
conditional release period . . . ."
Counsel for the protestant assumes that Customs relies
on section 113.62(d) to secure the importer's performance.
However, section 113.62(e) contains the agreement to rectify
any noncompliance with the law and regulations governing the
admission of the merchandise into the United States. It pro-
vides that "if merchandise is released conditionally to the
principal before its right of admission into the United States
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is determined, the principal, after notification, agrees . . .
to . . . do any other thing to the merchandise in order to
comply with the law and regulations governing its admission .
. . ." The goods were subject to visa requirements by virtue
of the bilateral agreement with Yugoslavia, as a result of
the application of 19 C.F.R. { 12.130, which determined the
country of origin. The notice, CF 4647, informed the pro-
testant that in order for the goods to be admissible, the
protestant had to furnish the required visas.
The protestant does not claim that the demand to present
a proper visa was complied with, or that the demand was made
after liquidation had become final. Rather, the protestant
relies solely on the claim that Customs cannot secure perform-
ance under section 113.62(d) of the bond contract. That reli-
ance is misplaced. The demand made is to furnish proper visas
in accordance with 19 C.F.R. { 12.130, the bilateral agreement
with Yugoslavia, 19 U.S.C.A. { 1484(a)(2)(B) (1980 and Supp.
1988), and 19 U.S.C.A. { 1485(a)(4) (1980 and Supp. 1988).
Performance under those provisions is secured by the agreement
in section 113.62(e) to rectify noncompliance with provisions
of admission. More importantly, the issue for the purpose of
the protest is whether Customs could demand a visa and not
whether that demand could be enforced under a bond condition.
HOLDING:
Since the required visas from Yugoslavia were not pre-
sented, you should deny the protest in full. A copy of this
decision should be sent to the protestant along with your Form
19 Notice of Action.
Sincerely,
John Durant, Director
Commercial Rulings Division
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