CBP Reverses Port Rejection of NAFTA Preference Claim That Used DIS

The Port of Laredo should not have rejected a claim for preferential treatment under NAFTA based on the use of the Document Image System, CBP said in the Sept. 14 ruling HQ H300353. The 1520(d) NAFTA preference claim -- also known as a 520(d) claim -- was filed by BASF Corporation in 2017, but the port rejected the claim because CBP stopped accepting DIS in support of protest submissions filed through ACE. BASF filed an application for further review of protest and noted CBP had not provided information on the requirements specifically for post-import NAFTA claims.

The port's rejection of the claim pointed to a 2016 CSMS message that explained DIS would be unavailable for protests filed through ACE. While, "this message states that all protests must be filed through ACE," it is also explicitly explained in CBP's information on NAFTA claims that "a claim under 1520(d) is not a protest," and that 520(d) claims should "be submitted via email to DIS." Although CBP updated its guide on such NAFTA claims in February to remove mention of 520(d) claims, that update didn't occur until weeks after CBP denied the BASF claim, it said. Also, "nothing in the CBP regulations state that a 520(d) claim must be made through ACE," it said. "Therefore, the fact that the Protestant filed their claim through the DIS is not grounds for denial."

In this case "any change in the procedure to file a 520(d) claim was not effectively communicated" to BASF, the agency said. "Both CBP and the trade community share a mutual responsibility of informed compliance. Under this concept, CBP communicates its requirements to the trade community. In return, the people and businesses subject to those requirements conduct their regulated activities in accordance with U.S. laws and regulations. A key component of informed compliance is the expectation that the importer will exercise reasonable care in his or her importing operations. However, an importer cannot exercise reasonable care and comply with CBP requirements if they are not effectively communicated."