OT:RR:CTF:ER H301924 ND
Ann Marie Paul, Center Director
Industrial and Manufacturing Materials
Center of Excellence and Expertise
U.S. Customs and Border Protection
301 E Ocean Blvd.
Long Beach, CA 70066
Attn: Fernando A. Biscarra, Supervisory Import Specialist
Re: Application for Further Review of Protest Number 2704-18-100926; Antidumping Duties; Multilayered Wood Flooring from the People’s Republic of China
Dear Center Director:
The purpose of this decision is to address the application for further review (“AFR”) of Protest Number 2704-18-100926, filed by Hanover Direct Import Inc. (“Hanover”) on May 18, 2018, regarding the assessment of antidumping duties (“ADD”) pursuant to the antidumping duty order in case A-570-970.
FACTS:
Between January 20, 2015, and November 27, 2015, Hanover entered fifty entries of multilayered wood flooring (“MLWF”) from the People’s Republic of China (“PRC”). According to the Automated Commercial Environment (“ACE”), Hanover was the importer of record and ultimate consignee, and Chinese manufacturer Dalian Penghong Floor Products Co. Ltd (“Penghong”) was the exporter. Hanover deposited ADD at the time of entry pursuant to the ADD order in case A-570-970, MLFW from the PRC. See Multilayered Wood Flooring from the People’s Republic of China: Amended Antidumping and Countervailing Duty Orders, 77 Fed. Reg. 5,484 (Feb. 3, 2012).
On July 5, 2017, the United States Department of Commerce (“Commerce”) issued a non-public Message to U.S. Customs and Border Protection (“CBP”), Message Number 7186311, which instructed CBP to liquidate all entries of MLWF from the PRC entered between December 1, 2014, and November 30, 2015, for which Penghong was the exporter. Message 7186311 enumerated ten “imported by or sold to” entities, which are identified as specific importers or customers. These ten entities include Customer X, and each entity has an individual rate at which any subject entries should be liquidated. Id. Commerce additionally instructed CBP to assess ADD at a general specified rate for all shipments of MLWF exported by Penghong and imported by, or sold to, a non-enumerated entity. Id. According to ACE, CBP liquidated Hanover’s fifty entries between November 24, 2017, and May 18, 2018, at the general rate specified for a non-enumerated entity.
Hanover filed the present protest, number 2704-18-100926, on May 18, 2018. Hanover initially protested the increased duty rate assessed on forty-eight entries, but amended its protest on June 20, 2018, to include the two additional entries (XXX-XXXX487-6 and XXX-XXXX555-0) liquidated by CBP pursuant to Message 7186311. In its protest, Hanover argues that for all fifty of the protested entries, Customer X was the enumerated entity to which MLWF exported by Penghong was sold. Therefore, Hanover concludes that its entries should have been liquidated at the individual rate Commerce specified for Customer X instead of the general rate applicable to a non-enumerated entity. Hanover asserts the protested entries should be reliquidated accordingly. In support of its argument, Hanover provided various documentation: entry summaries (CBP Form 7501), commercial invoices, packing lists, bills of lading, and Penghong’s U.S. sales database. The documentation identifies Hanover as the importer of record for the protested entries, as well as the ultimate consignee, and Penghong as the exporter of the imported MLWF. The commercial invoices and packing lists are printed on letterhead from Customer X, but do not indicate that any purchase from or by Custom X occurred. Although Hanover does not challenge the deemed liquidation of any entries in its protest, we note that forty-seven of the fifty entries deemed liquidated on January 5, 2018. Only entries (XXX-XXXX919-2, XXX-XXXX995-2, and XXX-XXXX996-0) were liquidated within six months of the liquidation instructions in Commerce Message 7186311 (July 5, 2017).
Regulations & Rulings (“RR”) requested additional documentation from Hanover. In response, counsel deKieffer & Horgan, PLLC, provided six commercial invoices from Penghong to Customer X, dated between December 20, 2014, and January 23, 2015. Hanover also submitted an untranslated proof of payment and bank slips, purportedly between Penghong and Customer X. On July 10, 2019, counsel informed RR that it was terminating its representation of Hanover, who had ceased operations. RR has since made several failed attempts to obtain further information from Hanover directly.
ISSUE:
Whether Hanover’s fifty entries of MLWF were properly liquidated?
LAW AND ANALYSIS:
As an initial matter, we find that this protest meets the criteria for further review. Pursuant to 19 U.S.C. § 1514(a)(2), a protestable issue was raised by claiming that CBP erred as to the “amount of duties chargeable” upon liquidation of the fifty entries at issue. Pursuant to 19 C.F.R. § 174.24(b), the protest qualifies for further review because it alleges a question of law and fact which has not previously been ruled upon.
As concerns the timeliness of this protest, we note that pursuant to 19 U.S.C. § 1514(c)(3)(A), a protest must be filed “within 180 days after” liquidation of the subject entries. Hanover filed protest 2704-18-100926 with respect to forty-eight entries on May 18, 2018. Of these entries, three (XXX-XXXX919-2, XXX-XXXX995-2, and XXX-XXXX996-0) were liquidated on November 24, 2017. Accordingly, Hanover had until Wednesday May 23, 2018, to file a timely protest of these three entries. The remainder of these entries deemed liquidated on January 5, 2018. Accordingly, Hanover had until July 5, 2018, to protest these remaining entries. Hanover’s protest was therefore timely filed on May 18, 2018, within 180 days of the deemed liquidation date for the subject entries. Hanover amended its protest on June 20, 2018, to include two additional entries (XXX-XXXX487-6 and XXX-XXXX555-0) that had deemed liquidated on January 5, 2018. Hanover’s amendment was also timely since it was prior to the July 5, 2018, protest deadline. We note that Hanover did not dispute the deemed liquidation of any entry at issue in this protest.
It is further undisputed that the liquidation instructions applicable to all fifty protested entries appear in non-public Message 7186311, issued by Commerce on July 5, 2017. In this Message, Commerce instructed CBP to liquidate all entries of MLWF from the PRC entered between December 1, 2014, and November 30, 2015, for which Penghong was the exporter. Commerce specified distinct ADD rates for MLWF that was “imported or sold to” ten enumerated entities, which include Customer X. Commerce also specified a general rate for exports not imported by or sold to a non-enumerated entity. Hanover asserts that all fifty entries were improperly liquidated because CBP failed to assess ADD at the individual rate specified for MLWF exported by Penghong and imported by, or sold to, Customer X. Hanover argues that CBP improperly instead assessed ADD at the general rate applicable to entities not enumerated by Commerce in the applicable liquidation instructions. Id.
In order to qualify for the individual rate applicable to MLWF “imported by or sold to” Customer X, Hanover must establish that each of the protested entries entailed a sale to Customer X. Given that Hanover was the importer of record for the subject entries, only the “sold to” Customer X criteria in Message 7186311 could possibly apply. In Message 7186311, Commerce expressly stated that a commercial invoice was sufficient proof of a sale to one of the enumerated customers. For this reason, we requested additional documentation from Hanover to clarify Customer X’s role in the import transaction and support its claim that it sold the imported MLWF to Customer X.
To determine whether a sale to Customer X occurred, CBP has traditionally looked to the documentation filed along with the entry, such as a commercial invoice. For example, in Headquarters Ruling Letter (“HQ”) H300287 (Feb. 25, 2019), we deemed the evidence presented by an importer, Ponko, to be sufficient proof that an enumerated company was the actual customer for merchandise imported and sold by Ponko. The sale to an enumerated company rendered Ponko’s imports eligible for that specific company’s individual rate in the applicable and non-public Commerce liquidation instructions. In that case, as herein, Commerce directed CBP to liquidate the relevant entries at the individual ADD rate specified for enumerated customers, or at a general PRC-wide rate for non-enumerated customers such as Ponko. The entry documents submitted to CBP listed Ponko as the importer of record and consignee on CBP Form 7501, so it appeared that Ponko was the only entity implicated in the import transaction. With its protest, Ponko submitted two additional invoices for each subject entry, demonstrating each shipment imported by Ponko was ultimately sold to one of the five customers enumerated in non-public Commerce Message Number 7305306 (Nov. 1, 2017). Ponko provided two invoices clearly establishing that an enumerated customer was purchasing the imported merchandise from Ponko. The invoice number on both invoices matched the invoice number listed on the corresponding CBP Form 7501. This fact is the key difference between the evidence in HQ H300287 and the facts herein. We note that Ponko’s invoices also identified the same merchandise and quantities as those identified on CBP Form 7501.
HQ H300287 serves as a framework for determining the sufficiency of documentation in relation to “importers” or “purchasers” for purposes of Commerce liquidation instructions. We must therefore review the documentation provided by Hanover in reference to the documentation provided by Ponko in HQ H300287. Akin to the entry documents in HQ H300287, Hanover is listed as the ultimate consignee and importer of record on the entry summaries, bills of lading, and commercial invoices. The commercial invoices and packing lists were printed on Customer X letterhead, listing: its address in Hong Kong, the shipper as Penghong, and the consignee as Hanover. The product descriptions and quantities listed on these invoices correspond to the data reported on CBP Form 7501. However, although the commercial invoices suggest the involvement of Customer X, they do not evidence that Hanover sold the MLWF it imported to Customer X. We note that in previous guidance to CBP, Commerce identified Penghong as a seller to Customer X in an administrative review, but never identified Hanover as a party to any import transaction with Pengong.
Ultimately, the commercial invoice provided by Hanover as proof of sale falls short of the invoice provided by Ponko in HQ H300287. The invoices provided by Ponko consisted of an invoice from the exporter to a specific company enumerated in the relevant liquidation instructions, and an invoice from that company to Ponko. The invoice numbers on each document matched the invoice number listed on CBP Form 7501. This allowed CBP to confirm that the importer of record, Ponko, was eligible for an individual ADD rate accorded to imports by enumerated importers or sales to enumerated customers. Here, there is no invoice number on CBP Form 7501 that corresponds to any commercial invoice, nor is there a second invoice from Penghong to Customer X. The single commercial invoice and packing list for each entry at issue explicitly identifies Hanover as the importer of record and consignee, and Penghong as the exporter. The only fact that connects the invoices and packing lists to Customer X is that Customer X’s name appears in the letterhead. Additionally, Hanover failed to provide a translated bank slip from Company X to Penghong or proof of payment by Hanover to Customer X.
Without additional evidence, the documentation provided by Hanover is not sufficient to prove that its imported MLWF was sold to Customer X. It is not dispositive that the product descriptions and quantities listed on CBP Form 7501 correspond to the merchandise listed on the commercial invoices, nor that the invoices and packing lists were printed on Customer X letterhead. Despite several attempts, we have not received the requested documentation from Hanover. Accordingly, we find that there is insufficient evidence that the MLWF imported by Hanover was sold to Customer X. Per Message 7186311, all fifty protested entries were properly liquidated at the rate specified for non-enumerated “sold to” entities.
HOLDING:
Based on the foregoing, CBP properly assessed ADD for all fifty of Hanover’s entries because Hanover failed to prove its eligibility for the Customer X rate per Commerce Message 7186311. The protest is hereby DENIED IN FULL.
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,
Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division