CBP Rules Inadmissible Food Ineligible for Duty Refund If Importer Can Recondition
Food that was denied entry but can be reconditioned to meet FDA requirements isn't prohibited merchandise, so it isn't eligible for a refund if it's exported or destroyed, CBP said in a recent ruling.
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Though a provision of the customs regulations allows refunds of duties and taxes on goods that have left CBP custody if they were entered in good faith but later found to be prohibited, if an importer is given the option of bringing the food into conformity, then the food is considered restricted merchandise, and is ineligible for the refund provision, CBP said.
The ruling, H282725, dated Aug. 23 and released Dec. 5, came to CBP headquarters on a request for internal advice -- filed over eight years ago in 2016 -- from CBP staff at JFK Airport.
An importer of frozen shrimp had filed a post-entry amendment in 2015, asking for a refund of antidumping duties on the frozen shrimp it exported or destroyed under CBP supervision after being refused admission by the FDA due to the presence of nitrofurans, a type of antibiotic. Importantly, the goods had already been released before the importer received a notice of redelivery. And that notice of redelivery gave the importer the option of bringing the shrimp "into conformity."
In its ruling, CBP said that goods are eligible for refunds if they haven't left continuous CBP custody. And that means actual physical custody -- goods that receive a "CBP release" message in ACE but remain in CBP's physical custody are still eligible for the refund.
But once goods leave CBP's continuous custody, they are no longer eligible for refunds, with the exceptions of duty drawback, bonded articles and merchandise entered in good faith but later found to be prohibited. According to one of those previous rulings, prohibited merchandise is merchandise that can't be lawfully imported under any circumstances. On the other hand, goods that may be altered to come into conformance with U.S. requirements, then lawfully entered, are restricted merchandise, and don't qualify for a refund under the exception for prohibited merchandise.
And despite CBP JFK's concerns that those previous rulings and the relevant customs laws may conflict with Customs Directive 5610-006A, which covers entry deletion and entry or entry summary cancellation, the directive itself references the CBP regulations on refunds for goods released from CBP custody, CBP headquarters said.
"Thus, while the language of C.D. No. 5610-006A appears to be contradictory to 19 U.S.C. § 1558 because its language is not fulsome, the supporting regulatory citations given within the offending sentence clarifies that it is addressing prohibited merchandise that is released from CBP’s custody," the agency said.