LIQ 4-01
OT:RR:CTF:ER
H287014 ABH
Port Director
U.S. Customs and Border Protection
Protest & Control
1100 Raymond Blvd, Suite 402
Newark, NJ 07102
Attn: Jennifer Tagliaferro, Supervisory Entry Specialist
Re: Application of Further Review for Protest 4601-16-100372; Crossroads Ingredients LLC; Antidumping Duties; Glycine;
Dear Port Director:
The purpose of this correspondence is to address the application for further review (“AFR”) of Protest Number 4601-16-100372, dated April 20, 2016, filed by Crossroads Ingredients LLC (“Crossroads”), regarding the assessment of antidumping duties on entries of glycine.
FACTS:
On November 12, 2014, Crossroads made entry number XXX-XXXX990-4 of glycine as a type “01” entry with the country of origin indicated as Germany on the entry summary. On July 22, 2015, U.S. Customs and Border Protection (“CBP”) issued a CBP Form 28, request for information. CBP sought information regarding the manufacturer and suppliers of the glycine, in light of the antidumping order on glycine from the People’s Republic of China (“PRC” or “China”), case A-570-836. See Antidumping Duty Order: Glycine from the People’s Republic of China, 60 Fed. Reg. 16,116 (Mar. 29, 1995).
In response to this request, Crossroads inquired with its supplier, Bulk Medicines & Pharmaceutical GmbH (“BMP”), which informed Crossroads that the glycine was sourced in India, but would not disclose the identity of the manufacturer. Crossroads states that it conducted its own inquiry into the country of origin of the glycine and seems to admit that the glycine covered by the protested entry has China as the country of origin.
On May 22, 2015, the Department of Commerce (“Commerce”) issued automatic liquidation instructions for glycine from the PRC that was entered between March 1, 2014 to February 28, 2015. See Commerce Message Number 5142314 (May 22, 2015). Pursuant to Message Number 5142314, suspension of liquidation on merchandise covered by the protested entry lifted on April 30, 2015. Id. Absent a timely liquidation on or before October 30, 2015, the entry liquidated by operation of law (“deemed liquidated”), pursuant to 19 U.S.C. § 1504(d). CBP posted notice of deemed liquidation and reliquidation on March 18, 2016, and issued a Notice of Action to Crossroads with a Bill on April 8, 2016. The entry was first liquidated on March 18, 2016, with zero antidumping duties assessed. CBP reliquidated the entry on April 8, 2016, and assessed antidumping duty in the amount of $262,426.75 plus $10,568.41 interest.
On April 20, 2016, Crossroads protested the reliquidation and assessment of antidumping duties, and it argues that the amendments to 19 U.S.C. § 1501, by the Trade Facilitation and Trade Enforcement Act of 2015, Pub. L. No. 114-125, § 911, 130 Stat. 122, 240 (February 24, 2016) (“TFTEA”) renders CBP’s reliquidation untimely. Crossroads argues that even if the reliquidation were valid, the bill should be compromised for the amount tendered with the Protest. The Port disagrees.
ISSUES:
Whether CBP’s reliquidation of Crossroads’ entry was timely.
If the reliquidation was valid, whether the bill should be compromised as requested by Crossroads.
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). Liquidation of Crossroads’ entries occurred on March 18, 2016, and this protest was filed on April 20, 2016, within 180 days. Additionally, further review is warranted because “the protest involves 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). Specifically, we will examine whether the amendments to 19 U.S.C. § 1501, pursuant to TFTEA, are applicable to the entry at issue. Accordingly, the criteria for further review is satisfied per 19 C.F.R. § 174.24(b) and 19 C.F.R. § 174.26(b)(1)(iv).
Whether CBP’s reliquidation of Crossroads’ entry was timely.
CBP’s reliquidation of Crossroads’ entry was timely because CBP reliquidated the entry within 90 days of the notice of deemed liquidation. Contrary to Crossroads’ assertions, the amendments made to 19 U.S.C. § 1501, by TFTEA do not apply retroactively to entries made prior to its date of enactment, February 24, 2016.
Prior to the enactment of TFTEA, section 501 of the Tariff Act of 1930, as amended (19 U.S.C. § 1501) provided that CBP could voluntarily reliquidate an entry “within ninety days from the date on which notice of the original liquidation is given or transmitted to the importer, his consignee or agent.” 19 U.S.C. § 1501 (2004) (emphasis added). As a historical note, CBP did not have the authority to reliquidate deemed liquidated entries until December 3, 2004, when Congress gave CBP the statutory authority to voluntary reliquidate an entry that liquidated in accordance with 19 U.S.C. § 1504. See Miscellaneous Trade and Technical Corrections Act of 2004, Pub. L. No. 108-429, 118 Stat. 2598 (codified in 19 U.S.C. § 1501); see also Norsk Hydro Can., Inc. v. United States, 472 F.3d 1347, 1362 n.26 (Fed. Cir. 2006) (noting that “[s]ince § 1504(d) is the deemed liquidation provision, it follows that deemed liquidations are subject to reliquidation by Customs”).
CBP’s implementing regulations further clarify the ability for CBP to reliquidate deemed liquidated entries. Section 173.3 of CBP’s regulations state that “within 90 days from the date notice of deemed liquidation . . . is given to the importer . . . the port director may reliquidate on his own initiative . . . .” 19 C.F.R. § 173.3. Section 159.9 provides the process for providing proper notice of liquidation and permits “a reasonable period after each liquidation by operation of law” to provide such notice. 19 C.F.R. § 159.9(c)(2)(ii); see also HQ H136435 (May 22, 2014) (holding that CBP timely reliquidated deemed liquidated entries within 90 days from the date notice of the underlying deemed liquidation occurred).
After the enactment of TFTEA, however, 19 U.S.C. § 1501 was amended to state that CBP can voluntarily reliquidate an entry “within 90 days from the date of the original liquidation” and removed the previous language concerning notice. Section 1504(d), 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). Thus, in the case of deemed liquidations, the effect of the change to § 1501, under TFTEA, requires CBP to voluntarily reliquidate within 90 days from the date of the deemed liquidation, and not the date on which notice was provided. See United States v. Great Am. Insur. Co., 229 F. Supp. 3d 1306, 1323 (Ct. Int’l Trade 2017). “[I]n the context of deemed liquidations, this is significant because those two dates do not necessarily (or even likely) coincide.” Id. at 1325.
TFTEA did not expressly state the temporal applicability of the changes to § 1501. The U.S. Court of International Trade (“CIT”) in Great Am. Insur., Co., however, directly addressed the issue of whether TFTEA’s changes to § 1501 applied retroactively to entries made before TFTEA’s date of enactment, February 24, 2016. The CIT discussed the U.S. Supreme Court’s “deeply rooted” presumption against the retroactive applicability of legislation, as “‘individuals should have an opportunity to know what the law is and to conform their activity accordingly.’” Id. at 1323 (quoting Landgraf v. USI Film Products, 511 U.S. 244, 265 (1994). Pursuant to Landgraf, a court must first look to “whether Congress has expressly prescribed the statute’s proper reach.” Landgraf, 511 U.S. at 280. “Absent such language, a court should try to draw a comparably firm conclusion about the temporal reach specifically intended by applying [the courts] normal rules of construction.” Great Am. Insur., Co., 299 F. Supp. 3d at 1324 (citation and quotations omitted). “If both efforts fail, the court asks whether the statute has impermissible ‘retroactive consequence,’ defined as an application of the statute that ‘affect[s] substantive rights, liabilities, or duties [on the basis of] conduct arising before [its] enactment.” Id. In order to determine whether a statute has an “impermissible retroactive consequence,” a court must consider three factors set out by Landgraf. Id. First, “the nature and extent of the change of the law,” second, “the degree of connection between the operation of the new rule and a relevant past event,” and third, “familiar considerations of fair notice, reasonable reliance, and settled expectations.” Id. The CIT determined that “because all three Landgraf factors points to an impermissible retroactive effect, CBP’s ‘substantive rights, liabilities, or duties’ would be negatively affected by applying the 2016 [TFTEA] amendments . . . .” Id. at 1325-26. Accordingly, the CIT determined that in this instance it also must apply the presumption against retroactivity, absent a clear indication from Congress that it intended the TFTEA amendments to apply to entries made before February 24, 2016. Id. at 1326.
Because Crosssroads’ entry was made on November 12, 2014, prior to TFTEA’s enactment, the TFTEA changes to § 1501 do not apply. Thus, pursuant to 19 C.F.R. § 159.9(c)(2)(ii), CBP had “a reasonable period after each liquidation by operation of law” to provide notice and then had 90 days to voluntarily reliquidate after such notice was given. The CIT recognized in Great Am. Insur. Co., that “although case law is scant on what constitutes reasonableness for purposes of 19 C.F.R. § 159.9(c)(2)(ii), reasonableness is an inherently fact-specific inquiry.” Id. at 1328.
As mentioned above, the entry liquidated by operation of law on October 30, 2015—six months after Commerce lifted the suspension of liquidation on the merchandise covered by the protest entry on April 20, 2015. CBP posted notice of the deemed liquidation on March 18, 2016, which was less than six months after the entry deemed liquidated. Under the specific facts of Great Am. Insur. Co., the CIT found that posting of notice ten months after the date of deemed liquidation constituted a “reasonable time” for CBP to post notice. Id. at 1328. The Protestant offered no argument as to why the six months at issue in this case does not constitute a “reasonable time” for CBP to post notice. Accordingly, as Section 501, as amended under the Miscellaneous Trade and Technical Corrections Act of 2004, is applicable to Crossroads’ 2014 entry, and we find that CBP posted notice within a reasonable period after the liquidation by operation of law. CBP then reliquidated the entry on April 8, 2018 and assessed the antidumping duties at issue in this protest. The reliquidation was well within CBP’s authority to reliquidate within 90 days of posting notice of the deemed liquidation. Accordingly, CBP’s reliquidation of Crossroads’ entry was timely.
If the reliquidation was timely, whether the bill should be compromised as requested by Crossroads.
As discussed above, we find that CBP’s reliquidation of entry number XXX-XXXX990-4, was timely; however, pursuant to 19 U.S.C. § 1617:
[u]pon a report by a customs officer, United States attorney, or any special attorney, having charge of any claim arising under the customs laws, showing the facts upon which such claim is based, the probabilities of a recovery and the terms upon which the same may be compromised, the Secretary of the Treasury is authorized to compromise such claim, if such action shall be recommended by the General Counsel for the Department of the Treasury.
19 U.S.C. § 1617. Accordingly, as the authority to make such recommendation is with the Office of General Counsel (“OGC”) and its duly authorized delegates, we recommend that the port discuss Crossroads’ offer in compromise with OGC or the appropriate delegate.
HOLDING:
Based on the above, Crossroads’ protest should be DENIED because the amendments made to 19 U.S.C. § 1501, under TFTEA do not apply to the entry at issue, and CBP timely reliquidated the entry number XXX-XXXX990-4. Additionally, pursuant to 19 U.S.C. § 1617, the Port is advised to discuss Crossroads’ offer of compromise with the Office of General Counsel.
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 of 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 & Trade Facilitation Division