3230-044 Quota and Duty Refund Requests: TPLs/TRQs

Published CBP guidance; operative status and applicability must be assessed from the retained publisher edition.

CUSTOMS DIRECTIVE
ORIGINATING OFFICE: FO:TP:I:Q CUSTOMS DIRECTIVE NO. 3230-044
DATE: AUGUST 5, 1999
SUPERSEDES:
REVIEW DATE: AUGUST 2001
SUBJECT: QUOTA AND DUTY REFUND REQUESTS: TPLs/TRQs
1 PURPOSE. To provide guidance to Customs officers whose responsibilities
include reviewing duty refund requests for NAFTA preferential tariff treatment involving
Tariff Preference Levels and Tariff Rate Quotas (TPLs/TRQs) pursuant to provisi ons of
the North American Free Trade Agreement (NAFTA).
2 POLICY. The references and procedures outlined in this directive will be
followed to ensure that refunds are properly administered and quota charges are
properly applied for merchandise subject to TPLs and TRQs under the NAFTA.
3 AUTHORITIES/REFERENCES. 19 CR 12.132(b), 19 CFR Part 132, 19 CFR
Part 173, 19 CFR Part 174, 19 CFR Part 181, 19 CFR Part 191, Harmonized Tariff
Schedule of the United States, (Section XI, Additional U.S. Notes 3, 4, and 5; Section
XXII, Subchapter VI, U.S. Notes 1, 21, and 22), Appendix 6.B. to Annex 300-B of the
North American Free Trade Agreement, dated December 1993, CIS HB 3200-08, dated
March 1998, NAFTA Fact Sheet #17, dated January 1, 1994, Quota Book Transmittal
98-12, dated September 8, 1998, Textile Book Transmittal 99-001, dated December 29,
1998.
4 DEFINITIONS. The following definitions are provided for process facilitation.
4.1 Tariff Preference Level (TPL). A TPL applies to Canadian and Mexican textiles
pursuant to the North American Free Trade Agreement (NAFTA) and described in
Section XI, Additional U.S. Notes 3, 4, and 5 of the Harmonized Tariff Schedule of the
United States. A TPL provides for a Customs duty at a preferential (NAFTA) r ate to
textile imports that do not qualify for NAFTA, up to a specified quantity.
4.2 Tariff-rate quota. A tariff-rate quota permits a specified quantity of merchandise
to be entered or withdrawn for consumption at a reduced rate during a specified period.
For purposes of this directive, orange juice from Mexico is the only commodity under
consideration for tariff-rate quota eligibility.
4.3 Certificate of Eligibility. A valid Certificate of Eligibility issued by the governments
of Canada or Mexico in conjunction with a claim for NAFTA preferential tariff treatment
is required for non-originating textile and apparel goods subject to the tariff preference
level provisi ons of Appendix 6.B. to Annex 300-B of the NAFTA and additional U.S.
Notes 3 through 6 to Section XI, Harmonized Tariff Schedule of the United States.

4.4 Quota Rate Export Certificates (“Cupos”). “Cupos” are issued by the Mexican
government to Mexican producers for a fee and prepared in connection with a claim for
NAFTA preferential tariff treatment. The annual quota quantity is monitored and
controlled by the Mexican government through the “Cupo” process. At this time,
“Cupos” are issued only for i mports of orange juice from Mexico.
5 RESPONSIBILITIES.
5.1 It is the responsibility of all Port Directors to carry out the provisions of this
directive and to disseminate its contents to Customs field officers who review and
process duty refund requests for quota-class merchandise subject to NAFTA TPLs or
TRQs.
5.2 It is the responsibility of all Directors, Field Operations to see that the provisions
of this directive are carried out uniformly and effectively throughout their r espective
Customs Management Centers.
6 PROCEDURES.
6.1 A filer may claim tariff preferential treatment within prescribed time limits, and
therefore request remittance of duties paid at the over-quota rate for TPLs/TRQs using
the processes described below. Customs must be mindful that such requests are not
always valid or appropriate. And as such, Customs officers must be cognizant of quota
status, liquidation status, and the timeliness of claims before honoring requests for duty
refunds through 514 protests, 520(c)(1)s, 520(a)(4)s, 520(d)s, and Supplemental
Information Letters (SILs). To protect the revenue of the United States and to avoid the
replication of any duty refunds, Customs officers must carefully review all claims for
evidence of prior r efunds.
6.1.1 Pursuant to 19 CFR 191.3(c), payment of drawback duties is allowed for
definitive products paid at an over-quota rate of duty. Therefore, merchandise subject
to an over-quota rate of duty established under a TPL/TRQ may have been remitted
through drawback prior to the Customs officer’s review of a prevailing refund claim. To
avoid duplicating duty refunds that pertain to claims for preferential tariff treatment,
Customs officers may verify the existence of a drawback refund using the DKJL
function code.
6.1.2 A Certificate of Eligibility or a “Cupo” is submitted at the time tariff preferential
treatment involving a TPL or TRQ is claimed, respectively. If a filer does not furnish a
certificate or “Cupo” with his initial entry summary submission, he may file the certificate
or “Cupo” at a later date using an appropriate mechanism described below. The time of
presentation for merchandise eligible for a TPL or TRQ that was entered into
consumption without the initial submission of the certificate will be the time the
certificate is submitted to Customs.

6.2 Post Importation Claims Processed in the Same Quota Period. The Automated
Commerci al System (ACS) i s currently programmed to charge quota in accordance with
the time of presentation that is input through the quota module using the QSUP function
code. For this reason, Customs personnel must ensure priority handling of TPL/TRQ
claims for tariff preferential treatment when received to avoid charging quota to a
subsequent quota period.
6.2.1 Quota-class entries must be expeditiously processed through the ACS Quota
Module using the function code QSUP and receive the “ACCEPTED” status message
for all applicable quota lines before any refunds are allowed. Presentation of a
certificate or “Cupo” does not guarantee the low rate of duty. The quota must be open.
Be mindful that a TPL or TRQ could fill while a protest, SIL, or other administrative
action is waiting for review leading to the risk of overfilling the quota.
6.2.2 Protests (514). A filer may submit a claim, under a protest, requesting NAFTA
preferential tariff treatment for articles subject to TPLs and tariff-rate quota class
merchandise, i.e., orange juice from Mexico. Filers will adhere to the normal protest
procedures outlined in 19 CFR 174.12. All claims must contain either a Certificate of
Eligibility for articles subject to TPLs or a valid “Cupo” for imports of orange juice.
6.2.3 Refund Requests 520(c)(1)/520(a)(4). If a filer applies for a refund using a
520(c)(1) or 520(a)(4) r equest, Customs personnel should render a decisi on that
adheres strictly to the regulatory provisi ons of 19 CFR 173.4 and 173.4a, respectively.
Both mechanisms are limited in scope to their use and appropriateness.
6.2.4 Refund Requests 520(d). The textile and apparel goods cited in this directive,
because they are non-originating, do not qualify for consideration under a 520(d) claim.
Orange juice from Mexico, however, is originating. Therefore, filers are permitted to file
a claim, under a 520(d), requesting NAFTA preferential tariff treatment for orange juice
from Mexico pursuant to the provisi ons of 19 CFR 181.21, Subpart C. A valid “Cupo” is
required.
6.2.5 Supplemental Information Letter (SIL). A filer may submit a claim, under a SIL,
requesting NAFTA preferential tariff treatment for articles subject to TPLs or tariff-rate
quota-class merchandise, i.e., orange juice from Mexico. All claims must contain either
a Certificate of Eligibility for articles subject to TPLs or a valid “Cupo” for imports of
orange juice from Mexico.
6.3 Post Importation Claims Processed in a Different Quota Period. Filers have the
option to claim tariff preferential treatment at the time of entry summary or to claim tariff
preferential treatment at a later time that may occur in a quota period that differs from
the quota period in which the merchandise was released. Claims filed at a later time
must be filed within the prescribed time limits governing each refund option cited in
6.2.2 through 6.2.5. However, because current ACS programming does not allow for
quota charges outside of the prevailing quota period, the quota can only be charged for
the period that correlates with the time of presentation. The following procedure will be

followed until such time ACS programming can accommodate quota charges for
different quota periods and/or a definitive administr ative ruling is issued on this subject.
6.3.1 If a Certificate of Eligibility and/or “Cupo” is submitted for TPLs/TRQs subject to
quota limits during a quota period that is different from the current quota period,
Customs field officers should conduct a thorough review of the transaction in question,
inclusive of any documentation that assists in the decisi on as to whether or not the
claim is valid. Customs field officers can contact Headquarters Quota via ACS E-Mail
attribute HQ Quota for additional assistance at the time a valid refund request is filed as
well. A determination on all such requests dealing with prior quota periods should be
made on a case-by-case basis.
7 MEASUREMENT. Customs field offices will have successfully execu ted the
requirements of this directive when the following is accomplished:
7.1 All refund requests that pertain to TPL and TRQ eligibility under the NAFTA are
evaluated for timeliness and if timely, the requests are appropriately acted upon in
deference to quota status.
7.2 All quota-class merchandise is reviewed, evaluated, and validated before
refunds are issued.
Assistant Commissioner
Office of Field Operations