OT:RR:CTF:ER
H218115 PTM
PRO 2-04, LIQ 4-01
Port Director
Savannah Port of Entry
U.S. Customs and Border Protection
1 E. Bay St.
Savannah, GA 31401
RE: Application for Further Review of Protest 1703-11-100163
Dear Port Director,
This is in response to the above-referenced protest and application for further review (“AFR”) forwarded to our office on May 17, 2012. The protesting party is American Home Assurance Co. (“AHAC”), surety for importer of record, American East Coast Processing Enterprises Corporation. Our response follows.
FACTS:
On August 22, 2001, American Coast Processing Enterprises Corporation. filed antidumping duty entry 315-XXXXX593 for frozen cooked crawfish tailmeat from the People’s Republic of China (“PRC”) with U.S. Customs and Border Protection (“CBP”). The associated commercial invoice was issued by China Kingdom Import & Export Co. Ltd. (“China Kingdom”). A Sanitary Certificate shows that the merchandise was produced by Chaohu Daxin Foodstuffs Co., Ltd. (“Chaohu Daxin”). The CBP Form 7501 shows the importation of crawfish tail meat and assessed antidumping duties (“ADD”) at the rate of 201.63% ad valorem under antidumping duty case A570-848. In connection with the entry, AHAC issued a single transaction bond covering the subject entry.
On September 29, 2000, China Kingdom requested a new shipper review of its shipments from the U.S. Department of Commerce (“Commerce”). See Freshwater Crawfish Tail Meat From the People’s Republic of China: Initiation of New Shipper Antidumping Administrative Review, 65 Fed. Reg. 66,525 (Nov. 6, 2000) (“Initiation of New Shipper Review”). In that notice, Commerce stated:
Concurrent with the publication of this initiation notice, we will instruct the U.S. Customs Service to allow, at the option of the importer, the posting of a bond or security in lieu of a cash deposit for each entry of the merchandise exported by the companies listed above, until the completion of the review.
Initiation of New Shipper Review, 66 Fed. Reg. at 66,525. On January 3, 2001, Commerce issued Message No. 1003204 to CBP concerning a new shipper review for freshwater crawfish tail meat from China for four shippers, in which it stated “[f]or shipments of freshwater crawfish tail meat entered…for consumption in the United States on or after 11/06/2000, a bond or other security deposit is permitted, at the importer’s option, for the following new manufacturers and/or exporters: Firm: China Kingdom Import Case Number: A-570-848-023 Deposit Rate: 201.63%.” The bond at issue was posted in lieu of a cash deposit for the subject entry, which entered on August 22, 2001, before the bonding period had terminated.
Commerce completed its new shipper review on September 27, 2001, assigning China Kingdom an ADD rate of 77.30 percent ad valorem. See Freshwater Crawfish Tail Meat From the People’s Republic of China: Amended Final Results of Antidumping Duty New Shipper Reviews, 66 Fed. Reg. 49,343 (Sept. 27, 2001) (“Amended Final Results of New Shipper Reviews”). In that notice, Commerce stated:
Furthermore, the following deposit requirements will be effective upon publication of this notice of amended final results of antidumping new shipper reviews for all shipments of freshwater crawfish tail meat from the PRC entered, or withdrawn from warehouse, for consumption on or after the date of publication, as provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rates for the reviewed companies will be the rates shown above. . . . These deposit requirements shall remain in effect until publication of the final results of the next administrative review.
On September 28, 2001, China Kingdom requested a review of its shipments, which Commerce initiated on October 23, 2001, and covered the entry at issue in this protest. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 66 Fed. Reg. 54,195 (Oct. 26, 2001) (“Initiation of Administrative Review Notice”). On April 21, 2003, Commerce published the final results of the administrative review in the Federal Register and found an ADD rate of 223.01 percent for China Kingdom. See Freshwater Crawfish Tail Meat from the People’s Republic of China; Notice of Final Results of Antidumping Duty Administrative Review, 68 Fed. Reg. 19,504 (Apr. 21, 2003). On May, 2, 2003, Commerce issued liquidation instructions for the period of September 1, 2000 through August 31, 2001, which included the subject entry. See Commerce Liquidation Message No. 3122210. On May 20, 2003, China Kingdom appealed Commerce’s final results of the administrative review by filing suit with the U.S. Court of International Trade (“CIT”). See China Kingdom Import & Export Co. Ltd. v. United States CIT Court No. 03-00302 (May 20, 2003). On July 2, 2003, The United States Court of International Trade issued an order to enjoin the liquidation of certain entries during the pendency of litigation before the CIT. On July 3, 2003, Commerce instructed CBP to enjoin liquidation of entries of freshwater crawfish tail meat manufactured or exported by China Kingdom for the period of September 1, 2000 to August 31, 2001 as a result of the CIT’s injunction. See Commerce Injunction Message No. 3184201 (July 3, 2003).
The CBP Port of Savannah liquidated the subject entry on July 11, 2003 with 223.01% ADD pursuant to Commerce message 3122210, dated May 2, 2003. On October 6, 2003, the importer filed protest 1703-03-100470 with the CBP Port of Savannah. The importer protested CBP’s liquidation of the subject entry because CBP liquidated the entry while the CIT’s injunction suspending the liquidation of the entry was in effect. CBP concurred and suspended final liquidation of the entry and disposition of protest 1703-03-100470 pending the termination of litigation and final liquidation instructions from Commerce.
After litigation on the administrative review concluded, Commerce published the notice of the amended final results, determining a rate of 90.66 percent for China Kingdom. See Crawfish Tail Meat from the People’s Republic of China: Amended Final Results of the Administrative Review Pursuant to Final Court Decision, 73 Fed. Reg. 74,457 (Dec. 8, 2008). Subsequently, on December 30, 2008, Commerce issued non-public Message No. 8365208, providing a per-kilogram final ADD rate applicable to entries produced by Chaohu Daxin Foodstuff Co., exported by China Kingdom and imported by American Coast Processing Enterprises Corp. and entered under A-570-848-023.
On September 10, 2010, CBP liquidated the subject entry and assessed ADD at the rate applicable to ADD case A-570-848-023 as set forth in message 8365208 (Dec. 30, 2008). CBP issued a bill to AHAC on December 17, 2010. On February 25, 2011, AHAC filed this protest with CBP, challenging the liquidation of the subject entry. AHAC argues that the liquidation of the entry was untimely in that it occurred more than six months after CBP received notice of the lifting of suspension of liquidation for the subject entries. AHAC also protests the rate CBP applied upon liquidation of the subject entry. It further asserts that CBP should not have assessed interest on the entry, as no cash deposit was required at the time of entry. Finally, AHAC protests the doubling of antidumping duties for failure to submit a reimbursement certificate. The port claims that the entry had liquidated in 2003, and therefore, could not be deem liquidated by operation of law. The port states that the per-kilogram ADD rate it assessed was proper as it was consistent with Commerce’s instructions in administrative message 8365208. The port claims it properly assessed interest on the entry because Section 778 of the Tariff Act of 1930 provides that interest provisions are not applicable to cash or bonds posted as estimated ADD before the date of publication of the antidumping duty order, and because the entry was bonded after the date of publication of the ADD order, interest does apply. Finally, the port states that CBP did not double the antidumping duties assessed for failure to provide a reimbursement certificate.
ISSUES:
Whether the entry deemed liquidated by operation of law and at what rate should it be liquidated.
Whether interest is due.
Whether CBP improperly assessed double antidumping duties.
LAW AND ANALYSIS:
We note initially that the instant protest was timely filed, within ninety days from the date of mailing of notice of demand for payment against the surety’s bond. We note that Section 2103 of the Miscellaneous Trade and Technical Corrections Act of 2004 amended 19 U.S.C. § 1514 to permit 180 days in which to file a protest, but that amendment is not applicable to this protest. 19 U.S.C. § 1401 note (2006); Pub. L. No. 108-429, § 2103, 118 Stat. 2434, 2598 (2004). Section 2108 of subtitle B amended Section 1514 effective for goods entered or withdrawn from warehouse for consumption after December 18, 2004. Here, the merchandise was entered on August 22, 2001; therefore, the 90-day protest filing deadline is applicable. See 19 U.S.C. § 1514(c)(3) (2004) and 19 U.S.C. § 1401 note (2006); Pub. L. No. 108-429, § 2108, 118 Stat. 2434, 2598 (2004). Notice of demand for payment against AHAC’s bond was made on December 17, 2010, and this protest was timely filed on February 25, 2011, within 90 days.
Under 19 U.S.C. § 1514(a) "decisions of the Customs Service, including the legality of all orders and findings entering into the same, as to . . . the liquidation or reliquidation of an entry. . . shall be final … unless a protest … is filed in accordance with this section.” Generally, antidumping duty rates correctly 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). However, inasmuch as AHAC 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).
The protestant requests further review of the subject protest. CBP’s regulations provide for further review of a protest when 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). The protestant seeks further review per 19 C.F.R. § 174.24(b), because the “protest involves questions of law or fact that have not been ruled upon by the Commissioner of Customs or his designee or by the Customs Court." Protestant asserts that the entry liquidated by operation of law, that CBP liquidated the entry at the incorrect antidumping rate, and that it filed a proper certificate of non-reimbursement. We agree that further review is warranted for the purpose of addressing the deemed liquidation argument the protestant raised and to determine whether CBP properly applied the correct antidumping rate pursuant to Commerce’s instructions.
AHAC protests CBP’s liquidation of the subject entry on September 10, 2010. It states that the CBP’s liquidation of the entry occurred more than six months after Commerce lifted suspension of liquidation for the subject entry. We note that CBP initially liquidated this entry on July 11, 2003, while an injunction from the Court of International Trade was in place. See Preliminary Injunction to Enjoin the Liquidation of Certain Entries, CIT Court No. 03-00302 (July 1, 2003). However, liquidation of entries subject to a CIT injunction are null and void. See Allegheny Bradford Corp. v. United States, 342 F. Supp. 2d 1162, 1169 (Ct. Int’l Trade 2004) (stating that in instances “…where liquidations violated an order of this Court, there is no meaningful protest to be had [at] the administrative level nor is a determination of Customs really at issue.” (citing Eurodif S.A. v. United States, 306 F. Supp. 2d 1288 (Ct. Int’l Trade 2004)). In Allegheny, the importer of record, Top Line, imported tube fittings from Taiwan that were subject to an antidumping order. The CIT issued an injunction on February 26, 2002, and on June 7, 2002, CBP liquidated Top Line’s entries. The CIT held that because of the voidance doctrine, CBP’s June 7, 2002, liquidation was null and void and had no legal effect. Id. The Court in Allegheny, stated that “improper liquidations are void ad initio… .’” Id. at 1170. Similarly, in the instant case, because the initial liquidation of the entry on July 11, 2003 was in violation of the CIT order temporarily enjoining the liquidation of the entry, that liquidation was null and void.
Because the liquidation of the subject entry in 2003 was null and void, it is necessary to determine whether the entry liquidated by operation of law. Section 1504(d) of Title 19 requires that CBP liquidate entries within six months after receiving "notice" that a suspension of liquidation of such entries has been removed. If CBP fails to timely liquidate the entries after receiving notice, the entries are "deemed" liquidated at the rate asserted at the time of entry. See Fujitsu Gen. Am., Inc. v. United States, 283 F.3d 1364, 1376 (Fed. Cir. 2002). "In order for a deemed liquidation to occur, (1) the suspension of liquidation that was in place must have been removed; (2) Customs must have received notice of the removal of the suspension; and (3) Customs must not liquidate the entry at issue within six months of receiving such notice." Id. CBP typically receives the relevant notice in the form of explicit liquidation instructions from Commerce. The courts, however, have recognized that other methods of notice are sufficient.
The court in Fujitsu Gen. Am., Inc. v. United States, 283 F.3d 1364, 1379 (Fed. Cir. 2002) addressed when notice of the removal of suspension of a court-ordered suspension occurred. The court stated that in cases where litigation comes to an end and the suspension of liquidation is removed, it is important that “an unambiguous and public starting point for the six-month liquidation period” is known. Id. at 1382. The court in Fujitsu found that Commerce’s subsequent publication of the court’s ruling in the Federal Register was such an “unambiguous and public starting point” and thus, constituted notice for purpose of 19 U.S.C. § 1504(d). Id.
In this case, Commerce notified CBP on July 3, 2001, in Message No. 3184201, that the CIT had enjoined liquidation of the entries. When the case concluded on September 12, 2008, the injunction dissolved after the court decision became final. The Federal Register notice providing notice of the lifting of suspension of liquidation was published on December 8, 2008. See 73 Fed. Reg. 74,457, supra. Therefore, this date is the “unambiguous and public starting point” for the purposes of 19 U.S.C. § 1504(d). Consequently, CBP had six months from this date, or until June 8, 2009, to liquidate the entry. Because CBP did not liquidate the entry until September 10, 2010, we find that the entry did liquidate by operation of law on June 8, 2009, pursuant to 19 U.S.C. §1504(d).
AHAC asserts that CBP liquidated the subject entry at the incorrect antidumping margin. When an entry liquidates by operation of law following the removal of suspension required pursuant to a court order, it is “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). The ADD rate asserted by the importer was 201.63% ad valorem. This rate, however, is higher than the final rate CBP applied pursuant to Commerce’s non-public message 8365208.
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.”
See Koyo Corporation of U.S.A. v. United States, 497 F.3d 1231, 1242-43 (Fed. Cir. 2007). 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 Commerce in the final results of an administrative review, CBP must apply the lower final rate. See also, HRL HQ H017002 (Oct. 31, 2011) (holding that CBP must liquidate an entry subject to antidumping duties at the ADD rate specified in Department of Commerce instructions rather than the deposit rate, even though the entries liquidated by operation of law, because the deposit rate was higher and therefore adverse to the party being assessed duty). Here, because the deposit rate of 201.63% is higher than the rate assessed by CBP pursuant to Commerce’s instruction, the deposit rate is adverse to AHAC. Accordingly, CBP must apply the lower final rate specified in the instructions issued by the Department of Commerce. See Message No. 8365208.
AHAC asserts that CBP improperly assessed interest in addition to antidumping duties. This issue has already been ruled upon. In Headquarters Ruling Letter (“HRL”) HQ 230339 (June 25, 2004), we held that "no interest is assessed on antidumping duty due when, per the DOC, no cash deposit of estimated duty was due and the payment of the antidumping duty was secured by bond." In HRL 230339, we stated that, "the courts have conclusively held that 19 U.S.C. § 1677g(a) requires interest only when a cash deposit of estimated duties is required under an antidumping order." Id. citing Timken Co. v. United States, 37 F.3d 1470, 1472-73 (Fed Cir. 1994) (holding that the requirement to make cash deposits of estimated duties under the antidumping duty order triggers the interest provision). Here, at the time of entry a cash bond was not required pursuant to the New Shipper Review for China Kingdom. See Department of Commerce Message No. 1003204 (providing for a cash deposit or a bond for entries on or after November 6, 2000) and Message No. 2016202 (Jan. 16, 2002) (providing for only cash deposits for entries on or after September 27, 2001). The entry at issue was secured by AHAC’s bond in lieu of a cash deposit. Because a cash deposit was not required, the interest provisions of 19 U.S.C. §1677g do not apply and this type of interest should not be assessed on the entry.
AHAC also states that CBP improperly doubled the antidumping duties assessed on the subject entry for failure to provide a reimbursement certificate, when in fact a blanket reimbursement certificate had been provided. However, a review of the information provided with the protest and AFR shows that CBP did not double the antidumping duties. Therefore, this issue is moot.
HOLDING:
The entry did deem liquidate by operation of law. Therefore, you are instructed to GRANT the protest with respect to this issue. The entry should be reliquidated without the assessment of interest on the entry as the interest provisions do not apply to bonded entries with no cash deposit. The ADD rate should not be changed, however, as the rate assessed is lower than the cash deposit rate in effect at the time of entry. You are instructed to DENY the protest with respect to protestant’s claim that CBP improperly doubled the antidumping duties assessed for failure to provide a reimbursement certificate.
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. Sixty days from the date of the decision, the Office International Trade, 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