Read the trade court’s decision [PDF 438 KB]
In 2003, a tug boat was repaired in the Dominican Republic before being returned to Puerto Rico.
In September 2003, the tug operator submitted to CBP a record of vessel foreign repair that listed the work performed in the Dominican Republic and later claimed an exemption for foreign vessel repair customs duties, by asserting that the repairs were exempt from the 50% duty rate under provisions of a Caribbean basin initiative.
In 2007, CBP liquidated the entry and denied complete relief because it could not determine what portion of the materials and equipment used in the repair was a product of the Dominican Republic.
The tug operator communicated by email and letter with CBP on several occasion about the exemption denial and asserted that a headquarters ruling obviated the need for a detailed invoice. These letters did not state that they constituted a protest. Then, in January 2008—more than 90 days after liquidation—the tug operator filed a protest with CBP. That formal protest, however, did not mention the prior communications. In February 2008, a second protest was filed.
CBP denied both protests as untimely—i.e., not being filed within 90 days of the decision—and also determined that the emails and letters did not constitute protests.
The trade court today agreed with CBP’s position and found that because critical information was missing from the tug operator’s email and letter communications, these could not be considered to be a valid protest.
For more information, contact a professional with KPMG’s Trade & Customs practice:
John L. McLoughlin
Todd R. Smith
Luis A. Abad
Or your local KPMG Trade & Customs professional.