H293813

March 10, 2020 HQ H293813 DRA 4; FOR 1 H293813 SMS OT:RR:CTF:ER Port Director U.S. Customs and Border Protection Port of New York/Newark 1100 Raymond Blvd., Suite 402 Newark, NJ 07102 Attn: Sonia Elmalis, Supervisory Drawback Specialist RE: Application for Further Review of Protest No: 4601-2016-101317; Refund Eligibility of Quarterly Harbor Maintenance Tax Payments, under 19 U.S.C. § 1313(j) Dear Port Director: The above-referenced protest has been forwarded to our office for further review. We have considered the points raised by BMW of North America, LLC (“BMW”) regarding the denial of the refund of Harbor Maintenance Taxes (“HMT”) paid on a quarterly basis on merchandise admitted into a foreign trade zone (“FTZ”). Our response follows. FACTS: BMW is in the business of importing and manufacturing motor vehicles in the United States. On March 13, 2015, BMW imported 629 vehicles at the Port of Baltimore and admitted the vehicles into an FTZ in Baltimore. BMW explains that the vehicles were intended for immediate export to Canada; however, due to inclement weather, the vehicles were diverted to the Baltimore FTZ. Because of the unloading of the vehicles at the Port, BMW was assessed and paid HMT. Additionally, according to BMW, HMT was remitted to U.S. Customs and Border Protection (“CBP”) as part of the HMT payment submitted with CBP Form 349, Quarterly Summary Report in the first quarter of 2015. The vehicles were withdrawn from the FTZ and formally entered, under entry number xxx-xxxxxx340-8, into the customs territory of the United States on March 31, 2015, and were subsequently exported to Canada. On March 9, 2016, BMW filed drawback entry xxx-xxx002-3 for the refund of the HMT under 19 U.S.C. § 1313(j)(1), unused merchandise drawback, designating the 629 vehicles. In support of its claim BMW submitted the following documentation: A completed CBP Form 7551 (Drawback Entry) signed by BMW’s Assistant, dated August 7, 2015, which lists both the FTZ admission number xxxxxxxxxxxxx0l06 and the underlying entry number xxx-xxxxxx340-8; A copy of CBP Form 214 (Application for Foreign-Trade Zone Admission and/or Status Designation), dated March 18, 2015, with designated Zone Admission No. xxxxxxxxxxxxx0l06, covering 629 vehicles, imported on the FIGARO CA509 vessel, and lists the HMT owed for the 629 vehicles; A copy of BMW’s “Admission Detail Report” which lists the 629 vehicles by Vehicle Identification Number (“VIN”), this report also includes the bill of lading number (“BOL”), export date, date of removal, and entry number and date. We note that this report includes 98 vehicles under seven other entry numbers and 531 vehicles under entry number xxx-xxxxxx340-8; A copy of the CBP Form 349 (Harbor Maintenance Fee Quarterly Summary Report), which lists the total amount of HMT paid by BMW during the first Quarter of 2015. The report includes every FTZ admission number, vessel name, import and admission date, BOL value, and the HMT amount assessed for each BOL; Acknowledgment e-mail from notification@pay.gov, entitled Pay.gov Payment Confirmation: Harbor Maintenance Fees, for the total amount of HMT paid on April 30, 2015, for the first quarter of the year; and BMW Chorological Summary of Exports, which lists each of the 629 vehicles by VIN under FTZ admission number xxxxxxxxxxxxx0l06, along with their date of exportation, and respective BOL number. BMW also submitted a separate drawback claim requesting a refund of the duties it paid on entry number xxx-xxxxxx340-8, which was liquidated with the appropriate refund of duties on September 30, 2016. On September 30, 2016, drawback entry xxx-xxx002-3 was liquidated with no drawback paid for HMT, by the Port of Newark’s Drawback Office. The Drawback Office asserts that drawback was denied because HMT imposed on merchandise admitted to an FTZ does not appear to have been “paid” upon entry or importation, as required in section 1557(a) of the Miscellaneous Trade and Technical Corrections Act 2004 (“the 2004 Trade Act”); which amended Section 313(j) of the Tariff Act of 1930 (19 USC 1313(j)). According to the Drawback Office, the HMT that is the subject of this AFR was paid on a quarterly basis on merchandise admitted into an FTZ, and thus, there is insufficient information to determine if there is drawback eligibility under 1313(j) based on this submission. The Port contends that the documentation submitted with the protest does not adequately link the payment of HMT to the designated import entries. BMW protested this decision on November 28, 2016. BMW asserts that because the HMT was assessed upon importation, drawback is expressly refundable in accordance with 19 U.S.C. § 1313(j)(1), and the 2004 Trade Act. On February 12, 2019, Regulations and Rulings (“RR”) reached out to the Port of Baltimore and their Trade Zone Operations, Inc. (“TRO”) personnel, and obtained the documentation submitted by BMW with their FTZ admission, which included: A copy of CBP Form 214 (Application for Foreign-Trade Zone Admission and/or Status Designation), dated March 18, 2015, with designated Zone Admission No. xxxxxxxxxxxxx0l06, covering 629 vehicles, imported on the FIGARO CA509 vessel, and lists the HMT owed for the 629 vehicles; Five Sea Waybills for the FIAGARO CA509, which lists the vehicles by description and includes addendums that lists the vehicles by their VIN; and Five Commercial Invoice Summaries, which lists every vehicle by VIN, BOL number, and includes the vessel name, and the value of each vehicle. An Automated Commercial Environment (“ACE”) search of entry number xxx-xxxxxx340-8, resulted in no supporting documentation. Subsequently, RR requested additional information from BMW and TRO and obtained TRO’s operator reports regarding BMW’s entry of their merchandise withdrawn from the FTZ. TRO provided the following entry documentation: CBP Form 7501, Entry Summary, for entry number xxx-xxxxxx340-8, dated March 31, 2015, which contained twenty-one lines of a total of 531 vehicles; TRO prepared Detailed Duty Owed Report by Entry Line for entry number xxx-xxxxxx340-8, which lists a total of 531 vehicles by entry line, model number, vessel name, VIN, and zone admission number xxxxxxxxxxxxx0l06; CBP Form 3461, Entry/Immediate Delivery, dated March 31, 2015; United States Environmental Protection Agency Declaration Form; United States Department of Transportation National Highway Traffic Safety Administration Declaration Form; and BMW’s detailed Report of 531 Vehicles for entry number xxx-xxxxxx340-8, which includes the VIN, model year, description, and value of each vehicle. In addition to the above information submitted in connection to entry number xxx-xxxxxx340-8, TRO provided information for two other entries that were made by BMW containing 28 more vehicles, admitted under zone admission number xxxxxxxxxxxxx0l06. ISSUE: Whether quarterly payments of Harbor Maintenance Tax imposed on goods admitted to a foreign trade zone are refundable under 19 U.S.C. § 1313(j). LAW AND ANALYSIS: We note initially that the refusal to pay a claim for drawback is protestable pursuant to 19 U.S.C. § 1514(a)(6). The instant protest was timely filed, within 180 days from the date of liquidation. See 19 U.S.C. § 1514(c)(3)(A). CBP denied BMW’s drawback claim on September 30, 2016, when it liquidated the subject drawback entry without drawback, and this protest was filed on November 28, 2016, within 180 days of that liquidation. BMW requests further review per 19 C.F.R § 174.24. Under 19 C.F.R. § 174.24, further review shall be accorded a party when the decision against which the protest was filed is alleged to involve questions of law or fact which have not been ruled upon by CBP. See 19 C.F.R. § 174.24(b). Upon review of the application for further review, we find that these facts and issues have not been the subject of a CBP ruling. See 19 C.F.R § 174.24(b) and 19 C.F.R § 174.26(b)(1)(iv). Accordingly, further review is warranted. S

We note initially that the refusal to pay a claim for drawback is protestable pursuant to 19 U.S.C. § 1514(a)(6). The instant protest was timely filed, within 180 days from the date of liquidation. See 19 U.S.C. § 1514(c)(3)(A). CBP denied BMW’s drawback claim on September 30, 2016, when it liquidated the subject drawback entry without drawback, and this protest was filed on November 28, 2016, within 180 days of that liquidation. BMW requests further review per 19 C.F.R § 174.24. Under 19 C.F.R. § 174.24, further review shall be accorded a party when the decision against which the protest was filed is alleged to involve questions of law or fact which have not been ruled upon by CBP. See 19 C.F.R. § 174.24(b). Upon review of the application for further review, we find that these facts and issues have not been the subject of a CBP ruling. See 19 C.F.R § 174.24(b) and 19 C.F.R § 174.26(b)(1)(iv). Accordingly, further review is warranted.Section 313(j)(1) of the Tariff Act of 1930, as amended (19 U.S.C. § 1313(j)(1)), provides for drawback, which is a refund of certain duties, taxes, and fees imposed on imported merchandise after the timely filing of a claim with CBP, providing there is sufficient evidence linking to an article’s exportation or destruction. Drawback is a privilege, not a right, and is subject to compliance with the prescribed rules and regulations. See 19 U.S.C. § 1313(l); Swan & Finch Co. v United States, 23 S Ct 702 (1903). The relevant drawback provision in 19 U.S.C. § 1313(j) states that, for unused merchandise drawback, the refund includes duties, taxes, and fees. Specifically, the statute provides, If imported merchandise, on which was paid any duty, tax, or fee imposed under Federal law upon entry or importation— is, before the close of the 5-year period beginning on the date of importation and before the drawback claim is filed— (i) exported, or(ii) destroyed under customs supervision; andis not used within the United States before such exportat