LIQ-4-01/PRO-2-01 RR:IT:EC 226285 CB

Port Director
U.S. Customs Service
c/o Protest and Control Section
6 World Trade Center, Rm. 761
New York, NY 10048-0945

RE: Application for further review of Protest No. 1001-95-102472 under 19 U.S.C. 1514(c)(2); Protestability Under 19 U.S.C. 1514; Deemed Liquidation; 19 U.S.C. 1504; Reimbursement Certification; 19 U.S.C. 1677g; Assessment of Interest; Failure to Make Cash Deposit

Dear Sir:

The above-referenced protest was forwarded to this office for further review. We have considered the evidence provided, and the points raised, by your office and the protestant. Our decision follows.


According to the file, on January 24, 1993, the importer entered certain merchandise (fresh salmon). The protestant acted as surety for the entry. Liquidation was suspended pending completion of an antidumping duty investigation. The suspension was lifted on June 24, 1994, and the entry was liquidated on September 23, 1994. Pursuant to Commerce's instructions, Customs issued liquidation instructions on June 24, 1994.

On January 3, 1995, a Formal Demand on Surety was issued by Customs. On March 17, 1995, protestant filed a protest requesting a stay of "... any further action on this protest until FOIA documents have been received and surety has had an opportunity to supplement this protest." Protestant stated that it was filing a "protective protest" and alleged general grounds on which the protest was based. Additionally, surety protested the liquidation of the entry on the basis that it had deemed liquidated by operation of law. Thereafter, on April 25, 1995 (the supplement is dated April 20 but was not received and filed with Customs until April 25, 1995), protestant filed a "Supplement to Protest 1001-95-102472." In the supplement protestant objected to Customs decision to assess double the antidumping duties on the subject entry based on the importer's failure to provide a reimbursement statement. Furthermore, protestant objected to Customs assessment of interest on the entry.


Should the subject protest be granted?


Initially, we note that the required certification that the protest is not being filed collusively to extend another authorized person's time to protest, as required for a protest by a surety (see 19 U.S.C. 1514(c)(2)), was provided. Pursuant to 19 U.S.C. 1514(c)(2), a surety may file a protest within 90 days from the date of mailing of notice of demand for payment against its bond. The demand for payment was issued on January 3, 1995. Therefore, the surety's protest, and any amendments thereto, must have been filed no later than April 3, 1995. The subject protest was filed on March 17, 1995. Thus, it is noted that the initial protest was timely filed. We also note that liquidation of an entry is protestable pursuant to 19 U.S.C. 1514(a)(5).

Pursuant to 19 U.S.C. 1514(c)(1)(A) through (D) the initial protest is statutorily inadequate. The initial protest, which as previously stated was timely filed, did no more than identify the entry protested, the date of entry, the date of liquidation, and the demand date, make the non-collusion statement required by the statute for a surety protest, and provide a string of potential claims as a protective action. In view of the requirement in 19 U.S.C. 1514 that "[a] protest must set forth distinctly and specifically ... each decision described in [19 U.S.C. 1514(a)] as to which protest is made ... [and] the nature of each objection and the reasons therefor ...", the initial protest does not appear to be sufficient. See, in regard to the foregoing, Mattel, Inc. v. United States, 72 Cust. Ct. 257, 262, C.D. 4547, 377 F. Supp. 955 (1974), in which the court summarized prior court decisions on this issue as follows: "In short, the court, taking a liberal posture, has held that however cryptic, inartistic, or poorly drawn a communication may be, it is sufficient as a protest for purposes of section 514 if it conveys enough information to apprise knowledgeable officials of the importer's intent and the relief sought." It is difficult to see how the initial protest met even this standard.

As to the "supplemental" protest, we note that under 19 U.S.C. 1514, "[n]ew grounds in support of objections raised by a valid protest or amendment thereto may be presented for consideration in connection with the review of such protest ... at any time prior to the disposition of the protest ...." Also under 19 U.S.C. 1514, a protest may be amended only "prior to the expiration of the time in which such protest could have been filed under [19 U.S.C. 1514]." Thus, the "supplemental" protest was not timely as an amendment of the initial protest (i.e., it was filed more than 90 days after the demand on the surety) and, accordingly, it could only be considered if it raises new grounds in support of objections raised by a valid protest or amendment. As stated above, the validity of the initial protest is doubtful. Although there are serious procedural problems with this protest, we are addressing the substantive issues raised in the "supplemental protest."

The controlling statute, in regard to the deemed liquidation issue raised by protestant, is 19 U.S.C. 1504. This provision was amended by section 641 of Public Law 103-182, the North American Free Trade Agreement Implementation Act (107 Stat. 2057, 2204), enacted December 8, 1993. As amended, 19 U.S.C. 1504 provides that an entry, where liquidation has been extended, deem liquidates on its fourth-year anniversary; any entry whose liquidation is suspended and such suspension is subsequently removed but the entry is not liquidated within six months after Customs receives notice of the removal is deemed liquidated at that time.

Section 1504 provides, in pertinent part, that, except as otherwise provided, an entry not liquidated within one year from the date of entry shall be deemed liquidated at the rate of duty, value, quantity, and amount of duties asserted at the time of entry by the importer of record. The exception to this general rule is that Customs can extend or suspend the time for liquidation. When liquidation of any entry is suspended, Customs is required to provide notice of the suspension to the importer of record and to any authorized agent and surety of such importer of record. The subject entry was liquidated more than one year after the date of entry. Presumably, the protestant asserts that it deemed liquidated pursuant to section 1504(a)(1).

As previously stated, 19 U.S.C. 1504(c) provides that if liquidation is suspended, notice of such suspension shall be provided to the importer of record, etc. A review Customs records shows that one notice of suspension was issued for the subject entry. The extension date was March 27, 1993. Thus, liquidation of the subject entry was properly suspended. As stated above, 19 U.S.C. 1504 provides that once a suspension is lifted, the entry must be liquidated within 6 months of the lifting of the suspension; otherwise, it will be deemed liquidated. In the instant case, the suspension was lifted on June 24, 1994 and this entry was liquidated on September 23, 1994. Liquidation was prior to the six-month anniversary. Thus, the subject entry did not deem liquidate.

In its "supplemental" protest, the surety contends that since a cash deposit was not made by the importer, the subject entry should have liquidated without the imposition of interest. Regarding the assessment of interest, the liquidation instructions for the subject merchandise state the following concerning interest:

The assessment of antidumping duties by the Customs Service is subject to the provisions of section 778 of the Tariff Act, which requires interest overpayments or underpayments of the amounts deposited as estimated antidumping duties. The rate at which such interest is payable is the rte in effect under section 6621 of the Internal Revenue Code for such periods. Interest shall be calculated through the date of liquidation. In Timken Co. v. United States, 37 F.3d 1470 (Fed. Cir. 1994), the court held that "... the requirement to make cash deposits of estimated duties, under the duty order, triggers the interest provision. Without the duty order, the importer has no obligation to make a cash deposit and consequently no obligation to pay interest." Id. at 1477. In the instant case, the antidumping duty order was issued on April 5, 1991. The order required that a cash deposit of estimated antidumping duties be made on all unliquidated entries, or withdrawals from warehouse for consumption, made on or after the date of publication of the order in the Federal Register (April 12, 1991). See 56 Fed. Reg. 14920 (1991). The fact that the importer failed to make a cash deposit, as required, does not relieve it of the obligation to pay interest for underpayments. As stated by the Court of International Trade in American Hi-Fi International, Inc. v. United States, CIT Slip Op. 96-121 (August 2, 1996), "[p]er Timken, once a duty order issues from Commerce interest begins to accrue,.... Whatever action Customs took or is permitted to take under the continuous entry bond originally issued to secure ordinary duties does not alter the interest requirement which arises after the duty order issues. The statute is intended to achieve a balance.... If the importer pays too little, or nothing at all, it must pay interest on the shortfall." (vol. 30, no. 34, page 56, Customs Bulletin and Decisions, August 21, 1996)(citations omitted)

Additionally, protestant alleges that the importer of record went out of business prior to liquidation of the entry. Thus, that there is no possibility that either the importer or surety will be reimbursed by the exporter for the dumping duties. Protestant requests that the entry be reliquidated without the penalty for lack of an antidumping affidavit. The Department of Commerce has advised Customs regarding its interpretation of this issue. According to Commerce, if the importer goes out of business before the deadline for filing the certificate has passed, Customs should not presume that reimbursement has occurred. On the other hand, if the importer goes out of business after the deadline for filing the certificate has passed, Customs should presume that reimbursement occurred. In the instant case, protestant has not presented any evidence to substantiate its claim that the importer went out of business prior to liquidation of the entry. In the absence of such evidence, Customs cannot accept protestant's assertion.

Having said all of the above, this office finds that the subject protest must be denied on the basis that the issues raised in the supplemental protest are not protestable. The subject protest is against the assessment of double the antidumping duties based on the absence of the reimbursement statement and the assessment of interest on the antidumping penalty. In regard to the protestability under 19 U.S.C. 1514 of these matters, subsection (c)(2) of section 1514 provides that protests may be filed with respect to merchandise which is the subject of a decision specified in subsection (a) of section 1514. The decisions specified in this subsection are "[with certain exceptions], decisions of the Customs service, including the legality of all orders and findings entering into the same as to [seven kinds of decisions are listed] ...." Thus, to be protestable under section 1514, a decision must be a decision of the Customs Service.

Generally, we have held that the role of Customs in the antidumping process is "... simply to follow Commerce's instructions in collecting deposits of estimated duties and in assessing antidumping duties, together with interest, at the time of liquidation" (see HQ 225382, July 3, 1995; see also, Mitsubishi Electronic America Inc. v. United States, 44 F.3d 973 (Fed. Cir. 1994)). However, if Customs fails to follow the instructions of the Department of Commerce, that failure may be subject to protest under 19 U.S.C. 1514 (see, e.g., ABC International Traders, Inc. v. United States, CIT Slip Op. 95-97 (May 23, 1995) "... claims [that Customs erroneously liquidated certain entries and failed to follow Commerce's liquidation instructions] may be brought before the court under 28 U.S.C. 1581(a)(1988), after denial of protests by Customs." (vol. 29, no. 24, page 51, 54-55, Customs Bulletin & Decisions, June 14, 1995)). See also, in this regard, American Hi-Fi, supra, ([j]urisdiction for actions challenging Customs' failure to follow Commerce's actual liquidation instructions ... is found under 28 U.S.C. 1581(a)")(vol. 30, no. 34, page 56, 62, Customs Bulletin and Decisions, August 21, 1996).

In the instant case, there is no allegation that Customs failed to follow Commerce's liquidation instructions but rather protestant challenges the instructions themselves. These are not protestable issues under 19 U.S.C. 1514. Thus, consistent with the above authorities and analysis, the subject protest should be denied.


For all of the reasons stated above, i.e., the initial protest is statutorily inadequate, the supplemental protest was untimely, liquidation was properly suspended, and the issues raised are not protestable, the subject protest should be DENIED.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office, with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act, and other public access channels.


International Trade Compliance