LIQ-4-01-CO:R:C:E 223539 SLR
District Director
U.S. Customs
909 First Ave., Rm 2039
Seattle, WA 98174
RE: Protest for Further Review No. 3001-91-100773;
19 U.S.C. 1504(a); 19 U.S.C. 1504(b)(1);
19 U.S.C. 1504(b)(2); 19 U.S.C. 1677g(a)
Dear Sir:
The above-referenced protest was forwarded to this office
for further review. We have considered the points raised, and
our decision follows.
FACTS:
This protest involves various entries filed on July 20,
1983, June 6, 1984, and July 6, 1984. The merchandise is
fish netting from Japan -- the subject of an affirmative dumping
finding (T.D. 72-158) published by the Department of the
Treasury.
Pursuant to the Trade Agreements Act of 1979 (the 1979 Act),
all outstanding dumping findings were made subject to
administrative review by the Department of Commerce (Commerce)
(45 FR 20511). These reviews form the basis for the assessment
of antidumping duties on reviewed entries and for cash deposits,
including interest, on future entries.
On August 21, 1990, Commerce published the final results
of an administrative review pertaining to fish nets and netting
from Japan exported by Nagaura Seimosho (the exporter at issue)
for the time period 6/1/82 -- 5/31/84 (55 FR 34042). Therein,
Customs was instructed to assess antidumping duties against all
subject entries of said merchandise at the rate of 18.30 percent
ad valorem. Customs issued liquidation instructions to all field
offices on November 23, 1990, and the subject entries were
liquidated on December 28, 1990.
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The protestant-surety, Washington International, protests
the liquidation of the subject entries arguing that Customs
improperly "extended" liquidation beyond the one year limitation
set forth in 19 U.S.C. 1504(a). The protestant-surety maintains
that the entries were liquidated "as entered" by operation of law
upon the expiration of the one year period.
In the event Customs determines that the entries were
liquidated properly, the protestant-surety claims that no
interest is due on any amounts owed since at the time of entry
no cash deposits covering prospective dumping liabilities were
made. Rather, only bonds were posted.
ISSUES:
I. Whether Customs properly extended the liquidation
of the subject entries beyond the one year limitation of
19 U.S.C. 1504(a).
II. Whether interest is owed on the antidumping duties
imposed.
III. How should the interest be calculated?
LAW AND ANALYSIS:
ISSUE I: Whether Customs properly extended the liquidation
of the subject entries beyond the one year limitation of
19 U.S.C. 1504(a).
"Liquidation" of an entry of merchandise is defined as the
final computation by the Customs Service of all duties (including
any dumping or countervailing duties) accruing on that entry.
See generally Ambassador Division of Florsheim Shoes v. United
States, 748 F.2d 1560, 1562 (Fed. Cir. 1984). Section 504(a) of
the Tariff Act of 1930, as amended (19 U.S.C. 1504(a)), provides
that an entry of merchandise not liquidated within one year
from 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, his
consignee, or agent. However, Customs is permitted to extend
the one year period if additional information is needed for
the proper appraisement or classification of the merchandise
(19 U.S.C. 1504(b)(1)); if liquidation is suspended by
statute or court order (19 U.S.C. 1504(b)(2)); or if the
importer, consignee, or his agent requests an extension
(19 U.S.C. 1504(b)(3)). Customs must notify the importer
of an extension. (As the protestant-surety does not challenge
Customs notice of the extension, we will assume it was properly
issued.)
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An extension of liquidation may be based on 19 U.S.C.
1504(b)(1) if Customs has to wait for Commerce to furnish
information regarding antidumping liability. American Perimac,
Inc. and Boewe Maschinenfabrik, Gmbh v. United States, 10 CIT
535, 538, 642 F. Supp. 1187, 1191 (1986). Consequently, Customs
properly extended the liquidation of the subject entries pending
the outcome of an administrative review.
The extensions would also be based on 19 U.S.C. 1504(b)(2).
Prior to the issuance of T.D. 72-158, the Department of the
Treasury, upon a preliminary finding of sales at less than
fair market value, published, pursuant to section 201(b) of
the Antidumping Act of 1921, as amended (19 U.S.C. 160(b)(1)(B)),
a "Withholding of Appraisement Notice" (36 FR 20249) directing
officers to withhold the liquidation of fish nets and fish
netting from Japan. The Trade Agreements Act of 1979 repealed
the Antidumping Act of 1921. Nonetheless, the procedures for
imports for which there was a finding of dumping in effect
on January 1, 1980 remained in effect under the 1979 Act.
Consequently, as the liquidation of the subject merchandise
had been suspended by statute, Customs properly extended the
liquidation of the subject entries.
ISSUE II: Whether interest is owed on the antidumping duties
imposed.
Section 778 of the Tariff Act, as amended (19 U.S.C.
1677g(a)), provides that interest shall be payable on
underpayments of amounts deposited on merchandise entered,
or withdrawn from warehouse, for consumption on and after
the date of an antidumping order.
Interest is collectable only on cash deposits. No cash
deposits were required for imports of fish netting from Japan,
however, until the publication of a September 22, 1983
administrative review. Consequently, no interest is owed on the
July 20, 1983 entry.
Regarding the June 6, 1984 and July 6, 1984 entries,
Commerce, on April 30, 1984, published the final results of an
administrative review pertaining to fish nets and netting from
Japan (49 FR 18339). That review revealed that for the
time periods 06/01/80 -- 05/31/81 and 06/01/81 -- 05/31/82,
Nagaura Seimosho experienced a dumping margin of 4.30 and 0,
respectively. The review indicated that Commerce would
issue appraisement instructions on each exporter to the
Customs Service. It also directed that, "as provided by
[section] 353.28(b) of the Commerce Regulations, a cash deposit
of estimated antidumping duties based upon the most recent of the
above margins shall be required on all shipments of Japanese fish
netting of man-made fibers from these firms entered, or withdrawn
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from warehouse, for consumption on or after the date of the
publication of this notice" (49 FR 18341).
Pursuant to the April 30, 1984 administrative review, no
cash deposits were made for the June 6, 1984 and July 6, 1984
entries since the most recent dumping margin for Nagaura was "0".
Nevertheless, a requirement of a deposit of zero dollars is a
requirement of a cash deposit, and as an antidumping duty of
18.30 percent ad valorem was ultimately determined, interest
is owed on the underpayment of duties on these entries
represented by the difference between the amount deposited
(i.e., zero dollars) and the amount ultimately due.
ISSUE III: For the June 6, 1984 and July 6, 1984 entries, how
should the interest be calculated?
Formerly, section 778 of the Tariff Act, as amended by the
1979 Act, set the interest rate at 8 percent per annum, or if
higher, the rate in effect under section 6621 of title 26 on the
date on which the rate or amount of the antidumping duty is
finally determined. The interest was simple interest.
Section 778 of the Tariff Act, as amended by the Trade and
Tariff Act of 1984 (the 1984 amendment), sets the interest rate
in accordance with the rate in effect under 26 U.S.C. 6621.
Section 6622 of title 26 provides that interest calculated under
section 6621 must be compounded. Thus, interest is compounded
and payable at the IRS rate for any period of time during which
entries are suspended. Pursuant to this method, the interest
payable varies in accordance with interest set forth under
section 6621 for the periods of suspension. The 1984 amendment
to the Tariff Act became effective on October 30, 1984.
In 1986, Congress clarified the effective date of the 1984
amendment by indicating that the 1984 amendment should apply
to all entries unliquidated on or after November 4, 1984.
19 U.S.C. 1671 note (1980 & Supp. 1991). The Court of
International Trade, however, later held that the 1984 amendment
could not be applied for interest accruing before the effective
date of the amendment; rather, the 1984 amendment should apply
for interest accruing subsequent to that date. Canadian Fur
Trappers Corp. v. United States, 12 CIT 612, 691 F. Supp. 364
(1988), affd, 884 F.2d 563 (Fed. Cir. 1989). For the June 6,
1984 and July 6, 1984 entries, therefore, for the time period
prior to November 4, 1984, interest accrues according to
the 1979 Act. Otherwise, interest accrues according to
the 1984 amendment.
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HOLDING:
Customs properly extended the liquidation of the July 20,
1983, June 6, 1984, and July 6, 1984 entries. Moreover, interest
on underpayments of estimated dumping duties is owed on the
June 6, 1984 and July 6, 1984 entries. Customs, however, cannot
assess interest against the July 20, 1983 entry. Consequently,
you are instructed to grant the protest in part. A copy of this
decision should be attached to the Form 19 Notice of Action.
Sincerely,
John Durant, Director
Commercial Rulings Division