PRO 2-05
OT:RR:CTF:ER
H247240 ABH

Port Director
Port of Champlain
U.S. Customs and Border Protection
237 West Service Road
Champlain, NY 12919

Attn: Jodie Basmajian, Import Specialist; Rebecca Rabideau, Supervisory Import Specialist

Re: Application of Further Review for Protest 0712-13-100133; Antidumping duties; Zinc Drive Nail Anchors

Dear Port Director:

The purpose of this correspondence is to address the application for further review (“AFR”) of Protest Number 0712-13-100133, dated September 18, 2013, filed by Cobra Anchors Co., LTD (“Cobra”), regarding the assessment of antidumping duties on zinc drive nail anchors imported from the People’s Republic of China (“China”).

FACTS:

On July 13, 2011, Cobra, a Canadian company, imported into the United States zinc drive nail anchors (hereinafter “anchors”) from Canada. The anchors were produced in China. Cobra classified the anchors under subheading 7907.00.6000, HTSUS, and the classification of the anchors is not in dispute. Cobra entered the anchors as a Type 01 entry and not as a Type 03 entry (antidumping/countervailing duty consumption entry). Accordingly, Cobra did not include antidumping or countervailing duties with the filing of its entry summary. According to Cobra, on July 12, 2013, CBP issued a notice of liquidation and rate advanced the subject merchandise pursuant to the antidumping duty rate applicable to Certain Steel Nails from People’s Republic of China, A-570-909. Cobra filed its protest and application for further review on September 18, 2013.

ISSUES:

Whether the entry at issue liquidated by operation of law on July 13, 2012. Whether the imported merchandise was within the scope of the antidumping duty order by which CBP rate advanced the subject merchandise. Whether CBP properly assessed the subject antidumping duties.

LAW AND ANALYSIS:

It is the opinion of your office that this protest meets the criteria for further review. We agree and are of the opinion that this protest involves questions of law and fact which have not been previously ruled upon. 19 C.F.R. § 174.24(b).

Whether the entry at issue liquidated by operation of law on July 13, 2012.

Cobra argues that pursuant to 19 U.S.C. § 1504, the July 13, 2011 entry should be deemed liquidated at the rate of duty, value, quantity, and amount of duties asserted by Cobra at the time of filing its entry summary, i.e., without antidumping duties. Section 1504(a)(1) states that,

[u]nless an entry is extended under subsection (b) of this section . . . an entry of merchandise for consumption not liquidated within 1 year from: (A) the date of entry of such merchandise; . . . 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.

Cobra argues that CBP never issued a notice of extension as required by 19 U.S.C. § 1504 and 19 C.F.R. § 159.12(b). Section 159.12(b) states that,

[i]f the port director extends the time for liquidation . . . he promptly will notify the importer or the consignee and his agent and surety on CBP Form 4333-A, appropriately modified, that the time has been extended and the reasons for doing so. Cobra also asserts that the entry was not subject to any suspension by statute or court order pursuant to 19 C.F.R. § 159.12(c). Section 159.12(c), similar to § 159.12(b), requires notification of statutory or court ordered suspensions.

CBP’s Automated Commercial System (“ACS”) indicates that CBP extended the entry on May 19, 2012, and again on April 20, 2013. On June 8, 2013, CBP suspended the entry. For each extension and for the suspension, ACS indicates under the “Extension Suspension History Query,” that a copy of the notice was sent to the importer at the mailing address of Cobra Anchors Co, LTD, 8051 Metropolitain Blvd. E, Montreal QC H1J1J, CANADA, and to the surety at the mailing address of Washington International Ins. Co., 1475 E. Woodfield Rd, Ste. 500, Schaumburg, IL 60173. Because “[g]overnment officials are entitled to a presumption that their duties are performed in the manner required by law,” Int’l Cargo & surety Ins. Co. v. United States, 15 C.I.T. 541, 544 (1991), the presumption arises that proper notice was mailed by CBP to Cobra at the addresses indicated in the ACS system.

Whether the imported merchandise was within the scope of the antidumping duty order by which CBP rate advanced the subject merchandise.

At the time of filing its protest, Cobra had sought a scope ruling from the U.S. Department of Commerce (“Commerce”) to determine whether its anchors were subject to the antidumping order on certain steel nails from China (A-570-909). On September 27, 2013, Commerce issued Message Number 3270301 and instructed CBP to suspend liquidation of Cobra’s entries of zinc anchors from China because the anchors were within the scope of the antidumping order. “Customs merely follows Commerce’s instructions in assessing and collecting duties.” Mitsubishi Elecs. Am. v. United States, 44 F.3d 973, 977 (Fed. Cir. 1994). Accordingly, the imported merchandise was within the scope of the antidumping duty order by which CBP rate advanced the entry at issue.

Whether CBP properly assessed the antidumping duties.

Cobra argues that if the goods were determined to be within the scope of the antidumping duty order, the entry should be reliquidated and a refund issued to Cobra because CBP assessed the antidumping duties on the original entered value. Cobra paid those assessed duties, plus interest. Cobra argues that the antidumping duties owed on its anchors are a “deductible and non-dutiable element of the value under 19 C.F.R. § 152.103(i)(2).”

As you are well aware, merchandise imported into the United States is appraised in accordance with 19 U.S.C. § 1401a. The preferred method of appraisement is transaction value, defined as the “price actually paid or payable for imported merchandise when sold for exportation to the United States,” plus five statutorily enumerated additions that are not relevant here. 19 U.S.C. § 1401a(b)(1). Pursuant to 19 U.S.C. § 1401a(b)(3)(B),

[t]he transaction value of imported merchandise does not include any of the following, if identified separately from the price actually paid or payable . . .: (B) The customs duties and other Federal taxes currently payable on the imported merchandise by reason of its importation . . . .

CBP’s regulations, 19 C.F.R. § 152.103(i)(2), identify the same exclusion from transaction value.

In HQ 545304, dated January 4, 1994, we determined that antidumping duties constitute “customs duties and other Federal taxes” such that they would not be included in transaction value, provided that the amount of the duties was identified separately from the price actually paid or payable for the imported merchandise. See also HQ 547612 (Dec. 27, 2001) (same); HQ 230074 (Mar. 9, 2004) (same).

Cobra states in its protest and application for further review that “[w]e agree that the parties did not contemplate AD duties at the time of entry . . . .” Accordingly, the statutorily mandated element that the antidumping duties be “identified separately from the price actually paid or payable,” is missing in this case. Indeed, whether the antidumping duties were identified separately from the price is a threshold question before the exclusion from transaction value can be applied pursuant to 19 U.S.C. § 1401a(b)(3)(B) and 19 C.F.R. § 152.103(i)(2). See e.g., HQ 547612 (Dec. 27, 2001) (“For the merchandise at issue, the terms of sale are [Delivery Duty Paid]. The price included antidumping duties paid by the seller, and the antidumping duties are identified separately from the price on the invoices presented . . . . Consequently there is no issue whether antidumping duties should be included in the transaction value in this case.”).

Cobra argues that because “the invoices and other commercial documentation clearly indicate the ‘duty, brokerage and freight included’ . . . the parties contemplated that all duties were included in the price.” Cobra seems to argue, without evidentiary substantiation, that the terms of sale were “Delivery Duty Paid” (“DDP”), which would mean that the U.S. duties were included in the price. Even if this were true, because the antidumping duties were not separately identified from the price actually paid or payable, as required by statute, CBP does not have the authority to deduct them from the price. HQ 546267 (Dec. 4, 1998). In order for CBP to allow the exclusion of the antidumping duties, Cobra must demonstrate that the price actually paid or payable included the antidumping duties at issue. HQ 229964 (Aug. 20, 2003). The specificity required by the statute is more than a general and generic statement that “duties” are included. Rather, the antidumping duties must be “identified separately from the price actually paid or payable for the imported merchandise.” 19 U.S.C. § 1401a(b)(3)(B). As mentioned above, Cobra stated in its protest and application for further review that “the parties did not contemplate [antidumping] duties at the time of entry.” Therefore, the entered value of the protested entry should not be adjusted to account for the additional antidumping duties assessed.

HOLDING:

Based on the above, proper notice of extension and suspension of the entry at issue was provided to Cobra by CBP and, accordingly, the July 13, 2011 entry should not be deemed liquidated at the rate of duty, value, quantity, and amount of duties asserted by Cobra at the time of filing its entry summary, i.e., without antidumping duties. Pursuant to Commerce’s scope determination, Cobra’s anchors are subject merchandise and properly subject to the antidumping order on certain steels nails from China (A-570-909). Finally, because Cobra did not contemplate antidumping duties and, as a result, did not separately identify such duties from the price payable, the entered value of the protested entry should not be adjusted to account for the additional antidumping duties assessed. Accordingly, Cobra’s protest should be DENIED IN FULL.

Consistent with the decision set forth above, you are hereby directed to deny the subject protest. This decision should be mailed by your office to the protestant no later than 60 days from the date of this letter. On that date, the Office of Trade will make the decision available to Customs personnel and to the public on the Customs 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 & Trade Facilitation Division