LIQ-4-01
LIQ-11
OT:RR:CTF:ER H017002 GGK
Mr. Spaulding Wyche
U.S. Customs and Border Protection
4341 International Parkway, Suite 600
Atlanta, GA 30354
RE: Application for further review of protest # 1704-07-100201
Dear Mr. Wyche,
This is in response to the application for further review (AFR) of protest # 1704-07-100201 that you forwarded to this office. We have considered the points raised by the protestant, SNR Bearings USA, Inc., and your office. Our decision follows.
FACTS:
SNR Bearings USA, Inc. (SNR) imported antifriction ball bearings in May and June of 1999. Each entry contained various types of bearings from different countries that were subject to multiple antidumping cases. The French ball bearings, that are the subject of this protest, were subject to antidumping case number A-427-201-013 and were entered at a rate of 8.6%. The entries also included bearings from Germany and the United Kingdom that were subject to antidumping duties; however, the liquidation of these line items is not challenged in this protest. The Department of Commerce (DOC) conducted an antidumping duty administrative review and posted the preliminary results on February 5, 2001. Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, Germany, Italy, Japan, Romania, Singapore, Sweden, and the United Kingdom; Preliminary Results of Antidumping Duty Administrative Reviews, Partial Rescission of Administrative Reviews, and Notice of Intent to Revoke Orders in Part, 66 Fed. Reg. 8,931 (Feb. 5, 2001). The final results were published in the Federal Register on July 12, 2001. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, Germany, Italy, Japan, Sweden, and the United Kingdom; Final Results of Antidumping Duty Administrative Reviews and Revocation of Orders in Part, 66 Fed. Reg. 36,551 (July 12, 2001).
CBP received liquidation instructions for the French ball bearings subject to case number A-427-201-013 on September 5, 2003, (Message No. 3248217) that instructed it to assess an antidumping rate lower than the cash deposit rate of 8.6% However, at the time CBP received these instructions, it still had not received instructions for the U.K. bearings subject to case number A-412-201-010 and all of the entries contained goods subject to A-412-201-010. Since CBP did not have instructions for A-412-201-010, the entries remained suspended until CBP received all instructions for the line items subject to antidumping orders.
CBP finally received liquidation instructions for A-412-201-010 on October 2, 2006, (Message No. 6276206). In those instructions, paragraph five stated that,
[n]otice of the lifting of suspension of liquidation of entries of subject merchandise during the period of 05/01/1999 through 04/30/2000 covered by paragraph 4 occurred with the publication of the final results of review (66 FR 36551, 07/12/2001).
After applying the appropriate DOC liquidation instructions, CBP determined that the entries liquidated by operation of law and CBP posted the liquidation of these entries on March 2, 2007, in the liquidation bulletin. Since the entries liquidated by operation of law, CBP used the deposit rate as the rate of duty.
SNR filed a protest on May 31, 2007, only protesting CBP’s failure to refund the difference in duties between the amount deposited and the amount calculated in the DOC’s final results for the French antifriction ball bearings subject to case number A-427-201-013. SNR did not protest whether or not CBP properly determined that the entries had deemed liquidated. The port asserts that since the entries liquidated by operation of law, the deposit rate is the correct rate to apply.
ISSUE:
Whether CBP should have liquidated the subject entries as “no change” where the entries liquidated by operation of law.
LAW & ANALYSIS:
Timeliness of Protest
Initially, we note that this protest is timely filed within 90 days after the date of the notice of the deemed liquidation. According to the statute in effect at the time, an importer had two periods within which to protest a deemed liquidation. The first protest period began six months after CBP received notice of removal of the suspension of liquidation and is the date on which the entry is automatically deemed liquidated by operation of law. See 19 U.S.C. § 1514(c)(3)(B) (2003). The second protest period began on the date that CBP gives notice of the deemed liquidation or notice of a liquidation reflecting the deemed liquidation. See, e.g., 19 U.S.C. § 1514(c)(3)(A) (2003); Koyo Corporation of U.S.A. v. United States, 497 F.3d 1231, 1241. (Fed. Cir. 2007). The protest indicates that on March 2, 2007, the bulletin notice of liquidation was published and made available to the public, and the protest was filed May 31, 2007, thus falling within the second protest period. We find that the protest satisfies the requirements under 19 C.F.R. § 174.26(b)(iii) because it raises an issue involving the interpretation of a court decision.
Applicable Rate of Duty for Liquidations by Operation of Law
The protestant alleges that CBP failed to refund the difference in duties between what was provided as the cash deposit and what was calculated by the DOC as the assessed rate in the liquidation instructions. In response, you state that because the subject entries were deemed liquidated, the port properly liquidated them at the rate asserted at the time of entry, pursuant to 19 USC §1504(d). However, because SNR properly protested the rate applied to these entries at liquidation, it is entitled to the lower rate assessed in the liquidation instructions.
Per 19 C.F.R. § 159.1, liquidation “means the final computation or ascertainment of the duties . . . accruing on an entry.” This definition of liquidation was affirmed in Swisher International, Inc., v. U.S., 27 F. Supp. 2d. 234 (CIT 1998), rev’d on other grounds, 205 F.3d 1358 (Fed. Cir. 2000), reh’g en banc denied, LEXIS 12707 (Fed. Cir. May 22, 2000). The court found that it “is a liquidation which settles ‘the amount of duties owing.’” Id. at 237. Thus, CBP could not determine the final amount of the duties for the entire entry until Commerce issued instructions for all covered merchandise in the entry. Therefore, liquidation of the protested entries was suspended as long as the liquidation remained suspended for at least one line item of goods on the entry.
While CBP received liquidation instructions for the French ball bearings that are the subject of this protest on September 5, 2003, it could not liquidate the entries because the entries contained line items subject to other antidumping orders for which the suspension of liquidation had not yet lifted. CBP did not receive the instructions lifting the suspension of the remaining bearings for the entries at issue until October 2, 2006. Thus, CBP could not have liquidated those entries until that date and determined that these entries had deemed liquidated. The issue in dispute in this case is whether the proper rate for an entry that deem liquidates is the rate asserted upon entry, or the assessed rate calculated by the DOC when that rate is lower than the cash deposit rate.
For entries subject to antidumping duties, if the preliminary determination of the administering authority is affirmative in an antidumping duty investigation, the administering authority shall:
…order the suspension of liquidation of all entries of merchandise subject to the determination which are entered, or withdrawn from warehouse, for consumption on or after the later of— (A) the date on which notice of the determination is published in the Federal Register, or (B) the date that is 60 days after the date on which notice of the determination to initiate the investigation is published in the Federal Register.
See 19 U.S.C. § 1637b(d)(2). Where liquidation of an entry is suspended due to an antidumping duty investigation, 19 U.S.C. § 1504(d) provides that CBP shall liquidate the entry within six months after receiving notice of the lifting of suspension from the Department of Commerce. Any entry that is not liquidated within six months after receiving notice of the lifting of suspension shall be deemed liquidated at the rate of duty, value, quantity, and amount of duty asserted by the importer of record. See 19 U.S.C. § 1504(d). Thus the rate of duty applied to a deemed liquidation is generally the rate of duty that the importer claims on the entry documents.
However, the Federal Circuit explained in Koyo Corporation of U.S.A. v. United States, that where a party protests a deemed liquidation of entries subject to antidumping duties:
[t]he deposit rate is the correct rate of duty assessed for a deemed liquidation under the procedures of 19 U.S.C. § 1504(d), but if it is adverse to the party being assessed the duties because it is contrary to the final review results then it is unlawful and has no substantive effect.
Koyo, 497 F.3d at 1242-43. Therefore, if the importer protests the duties owed pursuant to a deemed liquidation and the rate of duty asserted at the time of entry is higher than the rate determined by the DOC in the final results of an administrative review, CBP must apply the lower final rate. SNR properly protested the rate applied for the entries that liquidated by operation of law. Thus, the remaining question is whether the assessment rate determined by the DOC is lower.
In this case, the line items at issue were entered at a rate of 8.6%. The liquidation instructions for those items instructed CBP, in Message 3248217, to liquidate at a lower rate. Thus, liquidation at the deposit rate would be “adverse to the party being assessed the duties.” Id. Accordingly, CBP must apply the lower final rate specified in the instructions issued by the Department of Commerce.
HOLDING:
The entries were properly protested, thus CBP should apply the lower final rate assessed in the instructions issued by the Department of Commerce. You are instructed to grant the protest in full. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. No later than 60 days from the date of this letter, the Office of International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP homepage on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division