OT:RR:CTF:EPDR H332938 ND
Category: Entry
Center Director
Base Metals
Center of Excellence and Expertise
U.S. Customs and Border Protection
610 S. Canal St. Room 300
Chicago, IL 60607
Attn: Monica Dunbar, Import Specialist
Re: Application for Further Review of Protest Number 410222102705; Antidumping Duties; Certain Steel Nails from the United Arab Emirates; A-520-804; Suspension of Liquidation; Deemed Liquidation; 19 U.S.C. § 1504; Voluntary Reliquidation; 19 U.S.C. § 1501
Dear Center Director:
The purpose of this decision is to address the application for further review (“AFR”) of protest number 410222102705 filed by Middle East Manufacturing Steel LLC (“MEM”) on January 7, 2022, regarding the reliquidation of entry numbers XXX-XXXX880-2, XXX-XXXX466-7, XXX-XXXX547-4, XXX-XXXX566-4, XXX-XXXX041-7, XXX-XXXX449-2, and XXX-XXXX450-0 with the assessment of antidumping duties (“ADD”). This protest is designated as the lead protest and addresses related facts, issues, and arguments presented in protest number 390122126569 filed by Navigators Insurance Company regarding the demand for payment on surety.
FACTS:
On November 3, 2011, the U.S. Department of Commerce (“Commerce”) published its affirmative preliminary determination in the ADD investigation on steel nails (“nails”) from the United Arab Emirates (“UAE”). See Certain Steel Nails from the United Arab Emirates: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination, 76 Fed. Reg. 68,129 (Nov. 3, 2011). Commerce directed CBP to suspend the liquidation of entries of nails from the UAE entered for consumption on or after November 3, 2011. See Commerce Message No. 1308304 (Nov. 4, 2011). Commerce published the ADD order in case number A-520-804 for nails from the UAE (“Order”) on May 10, 2012. See Certain Steel Nails from the United Arab Emirates: Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order, 77 Fed. Reg. 27,421 (May 10, 2012).
Between December 17, 2018, and March 29, 2019, MEM entered seven entries of nails from the UAE. According to the Automated Commercial Environment (“ACE”), U.S. Customs and Border Protection (“CBP”) rejected the entry summaries (CBP Form 7501) accompanying these entries for failure to pay cash deposits as required by the Order. MEM resubmitted the entry summaries between January 30, 2020, and February 28, 2020, to reflect the applicability of the Order and paid ADD cash deposits at a rate of 4.3%. See also Commerce Message No. 726308 (Sept. 19, 2017). In its protest, MEM acknowledges it erred in initially failing to pay ADD cash deposits on its entries.
On September 25, 2020, Commerce published its final results of administrative review for the period of review from May 1, 2018, through April 30, 2019. See Certain Steel Nails from the United Arab Emirates: Final Results of Antidumping Duty Administrative Review; 2018-2019, 85 Fed. Reg. 60,422 (Sept. 25, 2020). Commerce subsequently issued non-public liquidation instructions on October 15, 2020, directing CBP to liquidate entries of nails from the UAE produced and/or exported by MEM between May 1, 2018, and April 30, 2019. See Commerce Message No. 0289404 (Oct. 15, 2020). In these instructions, Commerce provided two possible ADD rates but failed to instruct CBP as to the context in which one rate applies over the other. Id.
On April 20, 2021, CBP suspended the liquidation of MEM’s entries in ACE. CBP liquidated MEM’s entries at one of the two ADD rates specified in Commerce Message 0289404 on July 13, 2021. CBP subsequently reliquidated the entries on July 16, 2021. According to ACE, CBP did not modify the assessment of ADD in its reliquidations.
MEM filed protest number 410222102705 on January 7, 2022, protesting the reliquidation of its entries. First, MEM argues that its entries deemed liquidated because CBP failed to liquidate within 180 days of Commerce’s September 25, 2020, liquidation instructions in Message 0289404, and failed to timely reliquidate within 90 days of the deemed liquidation date. Second, MEM argues that notwithstanding the deemed liquidation, CBP misinterpreted Commerce’s liquidation instructions and assessed the incorrect ADD rate when it liquidated its entries.
ISSUE:
Whether MEM’s entries deemed liquidated pursuant to 19 U.S.C. § 1504(d)?
LAW AND ANALYSIS:
As an initial matter, we note that this protest was timely filed. Pursuant to 19 U.S.C. § 1514(c)(3)(A), a party must file a protest within 180 days after the date of liquidation or reliquidation. CBP reliquidated the entries on July 16, 2021. MEM filed its protest on January 7, 2022, within 180 days of this reliquidation date. This protest also meets the criteria for further review. Specifically, it raises questions of law and fact concerning the liquidation of entry numbers XXX-XXXX880-2, XXX-XXXX466-7, XXX-XXXX547-4, XXX-XXXX566-4, XXX-XXXX041-7, XXX-XXXX449-2, and XXX-XXXX450-0, which have not been ruled upon by the Commissioner of CBP or his designee or by the Customs courts. See 19 C.F.R. § 174.24(b).
MEM protests the reliquidation of its entries with regard to the ADD rate assessed by CBP. According to MEM, its entries deemed liquidated because CBP failed to liquidate within 180 days of Commerce’s September 25, 2020, liquidation instructions in Message 0289404, and failed to timely reliquidate within 90 days of the deemed liquidation date. We note that Commerce Message No. 0289404 is dated October 15, 2020, not September 25, 2020. MEM further alleges that notwithstanding the deemed liquidation, CBP misinterpreted Commerce’s liquidation instructions in Message 0289404 and assessed the incorrect ADD rate when it liquidated its entries.
Generally, deemed liquidation is governed by section 504(d) of the Tariff Act of 1930, codified at 19 U.S.C. § 1504(a)(1). Pursuant to 19 U.S.C. § 1504(a)(1),
Unless an entry of merchandise for consumption is extended under subsection (b) of this section or suspended as required by statute or court order . . . . 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 by the importer of record.
However, the deemed liquidation framework promulgated by 19 U.S.C. § 1504(a)(1) does not apply for entries suspended subject to an ADD or countervailing duty (“CVD”) order. For entries subject to ADD, if the preliminary determination of the administering authority is affirmative in an ADD investigation, the administering authority shall:
. . . . order the suspension of liquidation of all entries of merchandise subject to the determination which are entered, or withdrawn from warehouse, for consumption on or after the later of – (A) the date on which notice of the determination is published in the Federal Register, or (B) the date that is 60 days after the date on which notice of the determination to initiate the investigation is published in the Federal Register.
19 U.S.C. § 1673b(d)(2); see also 19 U.S.C. § 1671b(d)(2); Headquarters Ruling (“HQ”) H307772 (Oct. 31, 2022); HQ H017002 (Oct. 31, 2011). Additionally, where Commerce suspends the liquidation of subject entries following the request for a periodic review covering those entries, CBP’s subsequent action or non-action cannot remove a valid suspension of liquidation by Commerce. See 19 U.S.C. § 1675; United States v. Great Am. Ins. Co. of NY, 791 F. Supp. 2d 1337 (Ct. Int’l Trade 2011). Upon receipt of Commerce’s request, this suspension becomes automatic. See United States v. Am. Home Assur. Co., 35 C.I.T. 585 (2011). The Court of International Trade (“CIT”) has determined that “Congress intended the statutory suspension of liquidation during a periodic review to override the possibility of deemed liquidation under § 1504.” Am. Permac, Inc. v. United States, 642 F. Supp. 1187, 1197 (Ct. Int’l Trade 1986). Accordingly, a deemed liquidation cannot occur while a suspension of liquidation is in place. See Am. Home Assur. Co., 35 C.I.T. at 591 (“A suspension of liquidation acts to stop liquidation, including a deemed liquidation, from occurring.”).
Deemed liquidation for entries suspended subject to an ADD or CVD order is governed by 19 U.S.C. § 1504(d). Under 19 U.S.C. § 1504(d), once a suspension of liquidation required by statute or court order is removed, entries subject to the suspension of liquidation must be liquidated within six months after CBP receives notice of the lifting of suspension, unless such entries are properly extended. If an entry is not liquidated within the six-month period, and CBP does not extend the liquidation, then the entry is deemed 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). Relevant case law has established that “publication of the final results [of Commerce’s administrative review in an AD or CVD case] in the Federal Register constitutes notice to Customs within the meaning of section 1504(d).” Int’l Trading Co. v. United States, 281 F.3d 1268, 1275 (Fed. Cir. 2002).
Therefore, for 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.” Fujitsu Gen. Am., Inc. v. United States, 283 F.3d 1364, 1376 (Fed. Cir. 2002). Moreover, pursuant to 19 U.S.C. § 1501, a liquidation or reliquidation, may be reliquidated in any respect by CBP, notwithstanding the filing of a protest, within 90 days from the date of the original liquidation. See also HQ H287014 (Nov. 8, 2019).
Here, the entries were suspended by statute pursuant to 19 U.S.C. § 1673b(d). See 76 Fed. Reg. 68,129 (Nov. 3, 2011). Statutory suspension of liquidation was continued by Commerce through the statutory authority granted by 19 U.S.C. § 1673b(d). See Commerce Message No. 1308304 (Nov. 4, 2011). Commerce subsequently published its final results of administrative review for the period of review from May 1, 2018, through April 30, 2019, in the Federal Register on September 25, 2020. See 85 Fed. Reg. 60,422 (Sept. 25, 2020). This publication removed the suspension of liquidation that was in place and provided notice to CBP to liquidate MEM’s entries within six months of this publication. See also Int’l Trade Co., 281 F.3d at 1268. Therefore, CBP had six months from the September 25, 2020, notice of the lifting of suspension, or until March 25, 2021, to liquidate MEM’s entries in accordance with the non-public liquidation instructions issued by Commerce in Message 0289404. Accordingly, the entries deemed liquidated on March 25, 2021, because CBP failed to liquidate the entries by this date as directed by Commerce.
Additionally, CBP had ninety days from the March 25, 2021, deemed liquidation date, or until June 23, 2021, to voluntarily reliquidate the entries pursuant to 19 U.S.C. § 1501. CBP liquidated the entries on July 13, 2021, and subsequently reliquidated the entries on July 16, 2021. Neither the July 13, 2021, liquidation, nor the July 16, 2021, reliquidation constitutes a timely reliquidation within 90 days of the March 25, 2021, deemed liquidation date. Therefore, MEM’s entries deemed liquidated on March 25, 2021, at the ADD rate MEM asserted. MEM initially entered the merchandise as not subject to ADD, or effectively a 0% duty rate. However, MEM acknowledged this error, resubmitted the entry summaries, and asserted that its entries were subject to an ADD cash deposit rate of 4.3% per the Order. Accordingly, MEM’s entries deemed liquidated pursuant to 19 U.S.C. § 1504(d) at the 4.3% ADD rate MEM asserted.
HOLDING: Based on the foregoing, the entries deemed liquidated on March 25, 2021, pursuant to 19 U.S.C. § 1504(d), at the 4.3% ADD rate MEM asserted. Accordingly, the protest should be GRANTED.
You are instructed to notify the Protestant of this decision no later than 60 days from the date of this decision. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to this notification. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel and the public on the Customs Rulings Online Search System (“CROSS”) at https://rulings.cbp.gov/, or other methods of public distribution.
Sincerely,
For Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division