OT:RR:CTF:ER H189455 ASL
Port Director
U.S. Customs and Border Protection
2350 N. Sam Houston Pkwy E
Suite 1000
Houston, TX 77032
Attn: Ms. Linda Finnerty, Import Specialist
Re: Application for Further Review of Protest No: 5309-11-100567 concerning Chlorinated Isocyanurates from the People’s Republic of China under Antidumping Order A-570-898
Dear Port Director,
The purpose of this correspondence is to address the Application for Further Review (“AFR”) of Protest Number: 5309-11-100567, dated August 30, 2011. The protesting party is Cambrian Chemicals, Inc. (“Cambrian”).
FACTS:
Cambrian made the following entries of trichloroisocyanuric acid and/or sodium dichloroisocyanurate, which are both within the scope of the order on Chlorinated Isocyanurates from the People’s Republic of China (“PRC”), subject to the antidumping duty order number A-570-898:
Date of Entry
Entry Number
01/14/2009
xxx-xxxx3416
01/26/2009
xxx-xxxx4075
02/06/2009
xxx-xxxx5635
02/18/2009
xxx-xxxx6740
03/21/2009
xxx-xxxx9165
04/02/2009
xxx-xxxx0541
04/16/2009
xxx-xxxx1903
04/16/2009
xxx-xxxx1895
04/27/2009
xxx-xxxx2513
See Notice of Antidumping Duty Order: Chlorinated Isocyanurates From the People's Republic of China, 70 Fed. Reg. 36561 (June 24, 2005). Cambrian’s shipments of chemicals were manufactured in the PRC by Hebei Jiheng Chemical Co. (“Jiheng”). Cambrian purchased these chemicals from third parties, Hengshui Tongsheng Industrial, Co. Ltd (“Hengshui”) and Yangzhou Chemical Co. Ltd. (“Yangzhou”), both of which are based in the PRC. Cambrian confirmed that Hengshui and Yangzhou were the exporters throughout its protest. Jiheng was not the invoicing party, nor was it listed as the foreign shipper on the commercial invoices, packing lists, or seaway bills. Rather, all of the sales documents were between Cambrian and either Hengshui or Yangzhou. On all of the relevant documents, Jiheng was identified as the manufacturer.
On December 16, 2004, the U.S. Department of Commerce (“Commerce”) issued a final determination finding that chlorinated isocyanurates from the PRC were being sold, or likely to be sold, at less than fair value within the United States. See Notice of Final Determination of Sales at Less Than Fair Value: Chlorinated Isocyanurates From the People's Republic of China, 70 Fed. Reg. 24502 (May 10, 2005). Subsequently, on June 24, 2005, Commerce issued the antidumping duty order for Chlorinated Isocyanurates from the PRC. Commerce instructed Customs and Border Protection (“CBP”) to collect cash deposits for chlorinated isocyanurates manufactured or exported by Jiheng equal to the specific weighted-average antidumping duty margin of 75.78 percent. See Message No. 5180208 (June 29, 2005). The PRC-wide rate was set at 285.63 percent. Id.
On October 20, 2008, Commerce published its amended final results of the antidumping duty administrative review, for the period of review from June 1, 2006, to May 31, 2007. Amended Final Results of Antidumping Duty Administrative Review: Chlorinated Isocyanurates from the People's Republic of China, 73 Fed. Reg. 62249 (Oct. 20, 2008). The cash deposit rates for the exporter Jiheng was 0.90 percent, but the PRC-wide rate was 285.63 percent. On November 17, 2010, Commerce published its final results of the 2008-2009 antidumping review of Chlorinated Isocyanurates from the PRC. Chlorinated Isocyanurates from the People's Republic of China: Final Results of 2008-2009 Antidumping Duty Administrative Review, 75 Fed. Reg. 70212 (Nov. 17, 2010). In these final results Commerce calculated a dumping margin of 2.66 percent for the exporter Jiheng. On December 8, 2010, Commerce sent CBP liquidation instructions for entries exported by the PRC-wide entity during this period, stating that CBP should assess antidumping duties equal to the PRC-wide rate of 285.63 percent of the entered value of all shipments of chlorinated isocyanurates from the PRC exported by the PRC-wide entity. See Message No. 0342306 (Dec. 8, 2010). On January 25, 2011, Commerce notified CBP that the U.S. Court of International Trade (“CIT”) issued a preliminary injunction on entries of chlorinated isocynaurates produced and exported by Jiheng for the period of June 1, 2008 through May 31, 2009.
On March 4, 2011, CBP liquidated the entries in accordance with Message No. 0342306 and assessed an antidumping duty equal to the PRC-wide rate of 285.63 percent. On August 30, 2011, Cambrian filed a protest with the port protesting the liquidation of its entries at the PRC-wide rate, arguing the liquidation of the entries was not executed in accordance with Commerce’s instructions. Cambrian asserts that CBP failed to properly follow Commerce’s liquidation instruction and seeks reliquidation of these entries under the final results rate of 2.66 percent because the entries were manufactured by Jiheng. The port argues that the entries were properly liquidated because while the chemicals were produced by Jiheng, they were not exported by Jiheng, but by either Hengshui or Yangzhou, as the invoicing party and foreign shipper, and thus properly received the PRC-wide rate.
ISSUES:
Whether CBP properly followed Commerce’s liquidation instructions.
LAW AND ANALYSIS:
We note initially that the instant protest was timely filed, within 180 days from the date of liquidation. 19 U.S.C. § 1514(c)(3)(A). CBP liquidated Cambrian’s entries on March 4, 2011, and this protest was filed on August 30, 2011, within 180 days. Further, the protestant requests further review per 19 C.F.R. § 174.24. CBP’s regulations provide for further review of a protest when, inter alia, the decision against which the protest was filed:
(b) Is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts
19 C.F.R. § 174.24(b). Upon review of the application for further review, we find that there are legal arguments that have not been the subject of a Headquarters ruling or court decision. See 19 C.F.R. § 174.24(b), (c) and 19 C.F.R. § 174.26(b)(1)(iv). Accordingly, further review is warranted.
Generally, assessed antidumping duties properly applied by CBP are not protestable, because "Customs has a merely ministerial role in liquidating antidumping duties." Mitsubishi Electronics America, Inc. v. United States, 44 F.3d 973, 977 (Fed. Cir. 1994). Per 19 U.S.C. § 1673, Commerce calculates and determines the antidumping duty rate. Commerce then directs CBP to collect the estimated duties. See 19 U.S.C. § 1673e(a)(1). CBP is required to collect the antidumping duties imposed by the Department of Commerce per 19 U.S.C. § 1673(g). In Mitsubishi Electronics America, Inc. v. United States, 44 F.3d 973 (Fed Cir. 1994) the court stated:
Customs merely follows Commerce's instructions in assessing and collecting duties. Customs does not determine the “rate and amount” of antidumping duties under 19 U.S.C. § 1514(a)(2). Customs only applies antidumping rates determined by Commerce. Further, Customs has a merely ministerial role in liquidating antidumping duties under 19 U.S.C. § 1514(a)(5).
(Id. at 977). Therefore, Commerce is required to determine the rate of antidumping duty to be assessed. CBP’s ministerial role is to follow the liquidation instructions and to compute the duty by applying the antidumping duty rate set by Commerce to the appraised value as determined by CBP. However, inasmuch as Cambrian protests the liquidation, i.e., disputes the application by CBP of Commerce's liquidation instructions, this matter is protestable. See Xerox Corp. v. United States, 289 F.3d 792 (Fed. Cir. 2002).
Based on the relevant documentation, the exporter of these chemicals was either Hengshui or Yangzhou, depending on the entry. The protestant, Cambrian, purchased the chlorinated isocyanurates from either Hengshui or Yangzhou, which is evident from the commercial invoices. Jiheng appeared on the commercial invoices only as the manufacturer of the merchandise. The fact that Jiheng has a separate exporter rate is irrelevant here because Commerce’s liquidation instructions apply to the exporter not the manufacturer/producer. Based on the documentation and as confirmed by Cambrian throughout the protest, the exporters of the chlorinated isocyanurates were Hengshui and Yangzhou, not Jiheng. Because neither Hengshui nor Yangzhou had a separate rate, CBP properly applied the PRC-wide rate of 285.63 percent. See Message No. 0342306 (Dec. 8, 2010).
Cambrian argues that the liquidation of its entries at the PRC-wide rate of 285.63 percent was contrary to Commerce’s instructions. Instead, Cambrian seeks reliquidation of the entries at the final results rate for Jiheng, which was 2.66 percent. See Chlorinated Isocyanurates from the People's Republic of China: Final Results of 2008-2009 Antidumping Duty Administrative Review, 75 Fed. Reg. 70212 (Nov. 17, 2010). However, Commerce’s instructions only directed that the 2.66 percent rate be applied to entries that were both produced and exported by Jiheng. Message No. 2093303 (April 2, 2012). Because Hengshui and Yangzhou were the exporters and shippers for these entries, and not Jiheng, the PRC-wide rate was applicable as neither Hengshui nor Yangzhou had a separate rate.
The liquidation instruction, which the port followed, stated that:
For all shipments of Chlorinated Isocyanurates from the People’s Republic of China exported by the entity listed below entered, or withdrawn from warehouses, for consumption during the period 06/01/2008 through 05/31/2009, assess an antidumping liability of the percentage of the entered value, as listed below.
Entity: PRC-wide entity
Case Number (A-570-898-000)
Final Rate: 285.63
Message No. 0342306 (Dec. 08, 2010) (emphasis added). The port determined that this message was applicable because while the chlorinated isocyanurates were produced by Jiheng, they were not exported by Jiheng, but by Hengshui and Yangzhou.
Cambrian asserts that “Jiheng knew that [Hengshui] and Yangzhou were re-selling to the United States,” and based on this knowledge of the sales, the merchandise should receive the same rate as Jiheng. We first note that Cambrian provided no evidence to support its argument. Further, whether Jiheng had knowledge its sales to Hengshui or Yangzhou were destined for the United States is a determination for Commerce to make, not CBP. If CBP applied the knowledge test it may be doing so to entries not part of Commerce’s retrospective administrative review. In Wonderful Chem. Indus. v. United States, 259 F.Supp. 1273, 1279 (Ct. Int'l Trade 2003) the court noted that “Commerce has established and applied a ‘knowledge test’ for purposes of determining whether various parties involved in importing and exporting goods are subject to antidumping laws.” The court further explained that a “producer passes the knowledge test if the ‘producer knew or had reason to know at the time of sale that the goods were for export to the United States.’” Id. The court then noted the various contexts in which Commerce applied the knowledge test. Id. In each example, Commerce, not CBP, applied the knowledge test in its determination of the antidumping rate. Had Jiheng reported its sales to Cambrian via Hengshui and Yangzhou to Commerce and if Commerce determined they were Jiheng’s sales because of the knowledge test and conducted a review of those sales, it would have included them in its instructions to CBP. Instead, Commerce’s instructions to CBP did not include any reference to these. Rather, Commerce clarified that if no separate rate for an exporter was given, i.e., Hengshui or Yangzhou, then the PRC-wide rate was applicable. See Message No. 0342306 (Dec. 08, 2010).
Cambrian also argues that Hengshui and Yangzhou were “affiliated” with Jiheng under 19 U.S.C. § 1677(28). Cambrian cites to the CIT’s decisions in Hontex Enterprises, Inc. v. United States, 248 F. Supp. 2d 1323 (Ct. Int’l Trade) (2003) (“Hontex I”) and Hontex Enterprises, Inc. v. United States, 342 F. Supp. 2d 1225 (Ct. Int’l Trade) (2004) (“Hontex II”), where the CIT found that antidumping cases involving non-market economies, like the PRC, that the rate for one exporter, in this case Jiheng, will also apply to exporting companies which are “affiliated” with that exporter. However, in the cases Cambrian cited, the court explicitly stated that Commerce was responsible for determining whether the parties were affiliated in accordance with 19 U.S.C § 1677(33). See Hontex II, 342 F. Supp. 2d at 1232 (“[I]n order for Commerce to find that two or more exporters are affiliated…”); see also China Steel Corp. v. United States, 306 F. Supp. 2d, 1291, 1296 (Ct. Int’l Trade) (2004) (“[i]n rendering an affiliation determination, Commerce’s regulation further requires the agency [Commerce] to consider…”). Thus, if Cambrian seeks a determination of Jiheng’s affiliation with Hengshui and Yangzhou, it needs to receive a decision from Commerce. CBP does not make affiliation determinations and Cambrian has failed to cite to any statute, regulation, or case that states otherwise.
As noted above, Commerce is required to determine the rate of antidumping duties to be assessed. CBP’s ministerial role is to follow the liquidation instructions and to compute the duty by applying the antidumping duty rate set by Commerce. Therefore, in accordance with Commerce’s instructions, Cambrian’s entries of chlorinated isocyanurates, exported by Hengshui and Yangzhou, PRC-wide entities without a separate rate, were properly liquidated at the PRC-wide rate of 285.63 percent.
HOLDING:
Cambrian’s entries were properly liquidated at the rate of 285.63 percent and protest 5309-11-100567 should be DENIED.
No later than 60 days from the date of this letter, the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page 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