OT:RR:CTF:ER H236481 ASL
Port Director
U.S. Customs and Border Protection
3150 Tchulahoma Road
Memphis, TN 38118
Attn: Maria Jackson, Import Specialist
Re: Application for Further Review of Protest No. 2006-1210-1072 on entries of Certain Preserved Mushrooms from the People’s Republic of China under Antidumping Order A-570-851.
Dear Port Director:
The purpose of this correspondence is to address the Application for Further Review (“AFR”) of Protest No. 2006-1210-1072, dated September 7, 2013, which we received September 12, 2013. The protesting party is Ullico Casualty Company (“Ullico”).
FACTS:
On January 23, 2010, Expedition Trading Company (“ETC”) entered mushrooms subject to antidumping case A-570-851, Certain Preserved Mushrooms From the People's Republic of China. See Notice of Amendment of Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Certain Preserved Mushrooms From the People's Republic of China, 64 Fed. Reg. 8308 (Feb. 19, 1999). These mushrooms were produced and exported by Blue Field (Sichuan) Food Industrial Co., Ltd. (“Blue Field”).
On February 19, 2000, the U.S. Department of Commerce (“Commerce”) issued an amended final determination finding that certain preserved mushrooms from the People’s Republic of China (“PRC”) were being sold, or likely to be sold, at less than fair value within the United States. Id. Subsequently, on October 19, 2005, Commerce issued notice of its final results of the eighth new shipper review. The new shipper review instructed Customs and Border Protection (“CBP”) to require cash deposits of 0.00 percent for mushrooms produced and exported by Blue Field. See Certain Preserved Mushrooms from the People’s Republic of China: Notice of Final Results of the Eighth New Shipper Review, 70 Fed. Reg. 60789 (Oct. 19, 2005) and Message No. 6013207 (Jan. 13, 2006). For any other combination, mushrooms produced by Blue Field, but exported by another party or produced by another party and exported by Blue Field, CBP was to require a cash deposit rate of 198.63 percent. Id. At the time of entry, the importer of record, ETC, submitted CBP Form 7501, an invoice, a packing list, a sea waybill, and a non-reimbursement certificate. The 7501 identified ETC as the importer of record and that the mushrooms were produced by Blue Field. The invoice and accompanying packing list showed a sale of mushrooms from Blue Field to ETC; and the sea waybill identified the shipper as Blue Field. At the time of entry, ETC identified Blue Field as the producer and exporter of the mushrooms and that the entry was subject to a cash deposit of 0.00 percent. By letter dated January 13, 2010, Ullico, as surety for ETC, requested that CBP terminate its continuous bond on February 12, 2010.
On November 10, 2011, Commerce published its amended final results of the antidumping duty administrative review, for the period of review from February 2, 2009, to January 31, 2010 and found an antidumping rate of 2.17 percent for exports by Blue Field. See Certain Preserved Mushrooms From the People’s Republic of China: Amended Final Results of Antidumping Duty Administrative Review, 76 Fed. Reg. 70112 (Nov. 10, 2011). On November 25, 2011, Commerce sent importer specific liquidation instructions to CBP to liquidate entries of mushrooms exported by Blue Field and imported by, or sold to ETC at a higher rate than the 0.00 percent cash deposit rate. Message No. 1329308 (Nov. 25, 2011)(Non-Public). On December 30, 2011, CBP liquidated the entry according to these instructions. On May 20, 2012, Ullico, as surety for ETC, was billed for the antidumping duties due as a result of liquidation. On September 12, 2012, Ullico filed the instant protest arguing that it is not liable under its bond for the amount of cash deposit that should have been deposited at entry. Alternatively, Ullico argues that its bond was terminated prior to it being obligated, and it is thus not liable to pay the antidumping duties.
ISSUES:
Whether Ullico’s bond is liable for the antidumping duties.
Whether Ullico’s bond was terminated prior to being obligated.
LAW AND ANALYSIS:
We note initially that the instant protest was timely filed, within 180 days from the date of mailing of notice of demand for payment against Ullico’s bond. 19 U.S.C. § 1514(c)(3). On May 20, 2012, CBP sent Ullico a demand for payment and this protest was timely filed on September 12, 2012, 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, protestant asserts that the underlying facts and arguments presented on the bond’s liability have not been addressed before. We agree that further review is warranted as the protest involves questions of law or fact that have not previously been ruled upon. Accordingly, the criteria for further review by this office are satisfied per 19 C.F.R. §§ 174.24(b) and 174.26(b)(1)(iv).
Ullico contends that CBP cannot use a bond to recover antidumping duties for which CBP was required to collect a cash deposit. Thus, Ullico believes the bond is unenforceable for the amount of cash deposit that CBP should have accepted at the time of entry. Furthermore, Ullico argues that its bond was terminated effective February 12, 2010, prior to the liquidation of the entry, and thus was not obligated. For the reasons set forth below, CBP finds that Ullico is liable under its bond for payment of antidumping duties.
While both CBP and Commerce play a part in the enforcement of the antidumping laws, their roles are separate and distinct. It is well settled that when assessing and collecting antidumping duties CBP merely follows Commerce's instructions. See Mitsubishi Electronics America, Inc. v. United States, 44 F.3d 973, 977 (Fed. Cir. 1994). The courts have consistently held that CBP's role in the antidumping process is simply to follow Commerce’s instructions in collecting deposits of estimated duties and in assessing antidumping duties, together with interest, at the time of liquidation. See Fujitsu Ten Corporation of America v. United States, 957 F. Supp. 245 (1997); and American Hi-Fi International, Inc. v U.S., 19 C.I.T. 1340 (Ct. Int'l Trade 1995). In Mitsubishi, the Court held that "CBP has a merely ministerial role in liquidating antidumping duties." 44 F.3d at 977. CBP simply takes the cash deposit rate and dumping margin determined by Commerce and applies it to the entries as directed by Commerce’s instructions. Accordingly, CBP must follow Commerce’s instructions with regard to the entries of mushrooms from the PRC.
On November 10, 2011, Commerce published its amended final results of the antidumping duty administrative review, for the period of review from February 2, 2009, to January 31, 2010. See Certain Preserved Mushrooms From the People’s Republic of China: Amended Final Results of Antidumping Duty Administrative Review, 76 Fed. Reg. 70112 (Nov. 10, 2011). On November 25, 2011, Commerce sent importer specific liquidation instructions to CBP to liquidate entries of mushrooms exported by Blue Field and imported by, or sold to ETC and to assess an antidumping duty rate. Message No. 1329308 (Nov. 25, 2011). On December 30, 2011, CBP liquidated the entry according to these instructions and did not receive payment from ETC. Thus, on May 20, 2012, Ullico, as surety for ETC, was properly billed for the increase of antidumping duty due as a result of liquidation in accordance with its bonding obligation.
Ullico argues that at the time of entry, CBP should have collected a cash deposit rate of 198.63 percent because while the mushrooms were produced by Blue Field, they were not exported by Blue Field and thus, CBP should not have accepted a 0.00 percent cash deposit. See Certain Preserved Mushrooms from the People’s Republic of China: Notice of Final Results of the Eighth New Shipper Review, 70 Fed. Reg. 60789 (Oct. 19, 2005) and Message No. 6013207 (Jan. 13, 2006). However, regardless of whether CBP should have collected a 0.00 percent cash deposit or a 198.63 percent cash deposit, Ullico’s bond is still liable up to the bond amount for any unpaid duties, including antidumping duties. It is well understood that the United States uses a “retrospective assessment system under which final liability for antidumping…duties is determined after merchandise is imported. 19 C.F.R. § 351.212(a) (2003); see 19 U.S.C. § 1675(a)(2).” SSAB N. Am. Div. v. United States Bureau of Customs & Border Prot., 571. F.Supp. 2d 1347, 1350-1352 (Ct. Int'l Trade 2008). “While importers entering merchandise subject to an antidumping duty order are required to make a cash deposit of estimated antidumping duties, this rate is not final where an administrative review is initiated.” Parkdale Int'l v. United States, 475 F.3d 1375, 1379 (Fed. Cir. 2007). Furthermore, the statutes and cases explain that “importers are responsible to pay the antidumping duties to which they are subject, including any increases over the deposit made upon entry for estimated antidumping duties. See 19 U.S.C. § 1673g(b)(4); 19 U.S.C. § 1675(a)(2)(C); 19 C.F.R. § 141.1(b)(1).” KYD, Inc. v. United States, 613 F. Supp. 2d 1371, 1382 (Ct. Int'l Trade 2009). A continuous bond can be used to secure payment of antidumping duties up to the bond amount. See H070919 (Oct. 14, 2009); H230339 (June 25, 2004); and H226215 (March 28, 1996). When an importer fails to pay CBP, the surety’s bond is obligated to pay for “all additional duties, taxes, and charges subsequently found due, legally fixed, and imposed on any entry secured by this bond,” which includes antidumping duties. 19 C.F.R. § 113.62. Thus, Ullico’s bond is liable, up to the bond amount, for the unpaid antidumping duties.
Furthermore, CBP has ruled that even in instances where CBP erroneously accepted a bond in lieu of a cash deposit, it did not relieve the importer from his statutory obligation to pay the existing cash deposit requirement as published in the Federal Register. See H225382 (July 3, 1995) and H226751 (April 23, 1997), citing generally 19 U.S.C § 1673e. In HQ 225382, subsequent to the publication of an administrative review, cash deposits were due on entries of Japanese netting. When the importer failed to provide a cash deposit and CBP accepted a bond in lieu of the cash deposit, we held that “the fact that the subject entries were not rejected on the basis that a bond rather than cash was provided does not negate the fact that a cash deposit was not made, required by law. The Customs Service cannot waive the statutory requirement of 19 U.S.C. § 1673.”
Nevertheless, here, CBP properly collected 0.00 percent cash deposit because Blue Field was both the producer and exporter. Message No. 6013207 (Jan. 13, 2006). When ETC submitted its entry documents it identified Blue Field as both the producer and exporter. Furthermore, based on the relevant documentation, the exporter of the mushrooms was Blue Field, as no other party was identified, nor did Ullico suggest any other party acted as the exporter. The documentation establishes that there was a sale between Blue Field and ETC, which is evident from the invoices and packing lists. See H152586 (Dec. 20, 2013) (determining who the exporter was based on pro forma invoices, commercial invoices, and packing lists). Therefore, CBP properly collected a 0.00 percent cash deposit for ETC’s entry.
Additionally, Ullico argues that its bond cannot be liable for this entry because it was terminated prior to its obligation. On January 13, 2010, Ullico requested CBP terminate the bond at issue here beginning February 12, 2010. Ullico argues that the bond is obligated at the time of liquidation and because the entry was liquidated on December 30, 2011, Ullico argues that its bond had already terminated. However, Ullico is incorrect in its belief. CBP’s regulations state that “[t]he surety, as well as the principal, remains liable on a terminated bond for obligations incurred prior to termination.” 19 C.F.R. § 113.3. When an importer files a bond to secure payment of duty, an obligation against that bond is incurred, even though the final amount of duty owed is not determined until liquidation. See C.S.D. 81-29 (May 12, 1980). Under applicable law, the actual amount of duty may not be fixed for several years after the date of entry. Id. The termination of bond liability concerns the future obligation against the bond and it has nothing to do with cancelling existing liability. Thus, the effect of Ullico’s January 13, 2010 letter was to state that no new liabilities could be incurred against the bond after February 12, 2010. Since the entry occurred on January 23, 2010 and the bond had not yet been terminated, it was obligated for this entry and is liable to cover the unpaid duties of the importer.
HOLDING:
Ullico’s bond is liable to cover all additional duties, taxes, and charges found due on the entry that was secured by its bond and protest 2006-12-101072 should be DENIED.
No later than 60 days from the date of this letter, Regulations and Rulings of the Office of International Trade 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 by other means of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division