CBP Clarifies Post-Importation Claims under Trade Preference Programs

Last Friday, U.S. Customs and Border Protection (CBP) issued guidance regarding proper procedures for submitting claims for preferential tariff treatment under NAFTA, a host of other U.S. Free Trade Agreements, and other preference programs.  It is important that U.S. importers (as well as Canadian and other non-resident importers to the U.S.) know which procedures are available under these different programs in order to preserve their rights to make preferential claims and the timing of when those claims can be made.

In issuing its guidance, CBP noted that importers have historically used a variety of post-importation methods to submit an initial claim for preferential duty treatment, including Post-Entry Amendments (PEAs), Post Summary Corrections (PSCs), Protests filed under 19 U.S.C. § 1514 and post-importation claims submitted pursuant to 19 U.S.C. § 1520(d).

Citing to a pair of court decisions from the Court of Appeals for the Federal Circuit, CBP explained how not all trade preference programs are identical in allowing post-importation preference claims. The court has held that a Protest may not be used to make a preference claims because liquidation of an entry without a claim is not a “protestable decision”.  CBP also cited to Headquarters Ruling Letter (H193959, dated July 30, 2012) that also discussed the limitations on using Protests as a viable procedure to assert a duty preference claim.

CBP’s guidance noted, however, that the law implementing certain preference programs expressly provides for post-importation claims pursuant to 19 U.S.C. § 1520(d).  This allows for a post-importation claim to be made up to one (1) year after the entry date.  This method of submitting a post-import duty preference claim is limited to: NAFTA, CAFTA-DR, Chile FTA, Colombia FTA, Korea FTA, Oman FTA, Panama FTA, Peru FTA.  The guidance goes on to state that for these preference programs, post-importation preference claims can only be submitted under 19 U.S.C. § 1520(d).  PEAs and PSCs are not a valid procedure to submit an initial post-importation preference claim under these Free Trade Agreements.

Where a preference program does not have a post-importation provision under 19 U.S.C. § 1520(d), CBP will continue to accept PEAs and PSCs for initial post-importation preferential duty claims on unliquidated entries.  These procedures will apply to numerous preference programs, including: African Growth and Opportunity Act (AGOA), Australia FTA, Bahrain FTA, Civil Aircraft Agreement, Generalized System of Preferences (GSP), Insular Possessions, Israel FTA, Jordan FTA, Morocco FTA, Pharmaceutical Products Agreement, Singapore FTA, and others.

In reviewing which post-importation procedures can be used to submit an initial preferential duty claim under the different programs, CBP importantly noted in its guidance that the court decisions held “failure to claim preference timely does not give rise to a right to protest[,]” meaning Protests filed under 19 U.S.C. § 1514 as an initial claim for preferential duty treatment will be “rejected as non-protestable” by CBP.  Therefore, importers will need to submit preference claims prior to liquidation.

For assistance with understanding and complying with U.S. Customs laws and  regulations, due diligence support in merger and acquisitions and other strategic alliances, as well as representation before CBP on Protests, in investigations, civil penalties, prior disclosures and other matters, please contact Jon P. Yormick, Attorney and Counsellor at Law, jon@yormicklaw.com or by calling +1.866.967.6425 (Toll free in Canada & U.S.) or +1.216.928.3474.

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About yormicklaw

Experienced international business & trade attorney

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