OT:RR:CTF:EPDR H332125 IPW
Center Director Automotive and Aerospace
985 Michigan Ave, Suite 500
Detroit, MI 48226 Attn.: Laura Rosenberger, Supervisory Import Specialist
RE: Application for further review of Protest No. [xxxx-xx-xx7803]; [x]; reliquidation
Dear Center Director:
The above-referenced Protest was forwarded to this office for further review and was received on November 15, 2021. We have considered the points raised by your office and the Protestant. Our decision follows.
The protestant has asked that certain information submitted in connection with this AFR be treated as confidential. Inasmuch as this request conforms to the requirements of 19 C.F.R. § 177.2(b)(7), the request for confidentiality is approved. The information contained within brackets will not be released to the public and will be withheld from published versions of this response.
FACTS:
On February 1, 2018, [x] (hereinafter, the “protestant”) entered half shafts and drive shafts claiming U.S.- Korea Free Trade Agreement (“KORUS”) preferential tariff treatment (xxx-xxxx-1194). U.S. Customs and Border Protection (“CBP”) liquidated the entry with the preferential tariff treatment on February 25, 2018. On July 22, 2019, CBP issued a Letter of Investigation to the protestant. Subsequently, on July 10, 2020, CBP’s Trade Regulatory Audit (“TRA”) made a demand for records to substantiate their claim of KORUS preferential tariff treatment. The July 10, 2020, request demanded entry records relevant to 30 entries, including xxx-xxxx-1194, that was originally due by July 28, 2020, but was extended until December 21, 2020. Upon failing to fully meet the record demand by December 21, 2020, a penalty action against the protestant began. On May 18, 2021, CBP sent a notice of action to notify the protestant that the merchandise did not qualify for KORUS preferential tariff treatment and that the merchandise will be reliquidated. On May 21, 2021, CBP reliquidated the entry with a duty rate of 2.5%.
On November 15, 2021, 178 days after the reliquidation, the protestant protested on the grounds that the reliquidation was untimely and that the merchandise qualifies for KORUS preferential tariff treatment.
ISSUE:
Whether CBP’s reliquidation was timely.
LAW AND ANALYSIS:
As an initial matter, we find that the instant 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. The protestant filed the protest on November 15, 2021, which is within 180 days of the reliquidation date on May 21, 2021. We also find that this protest meets the criteria for further review. Pursuant to 19 C.F.R. § 174.24(b), this protest involves questions of law and fact which have not previously been ruled upon.
The failure to provide entry documents subject to a demand can result in reliquidation, “notwithstanding the time limitation in 19 U.S.C. 1514 or 1520,” at the applicable Harmonized Tariff Schedule of the United States (“HTSUS”) column 1 general rate of duty if the demanded entry record relates to the eligibility of merchandise for a column 1 special rate of duty in the HTSUS, and if the entry liquidated within the 2-year period preceding the date of the demand. 19 U.S.C. § 1509 g(2)(C)(ii); 19 C.F.R. § 163.6(b)(2)(i)(b). Here, the entry liquidated on February 25, 2018, and the demand for the entry records was made on July 10, 2020, beyond the 2-year period that would allow for reliquidation notwithstanding the time limitation in 19 U.S.C. § 1514 or § 1520. As such, we turn to whether the reliquidation was made within the time limitation in 19 U.S.C. § 1514 or § 1520.
A liquidation may be reliquidated in any respect by CBP within 90 days from the date of the original liquidation. 19 U.S.C. § 1501. Liquidation is final on all parties unless protested within 180 days of the decision protested. 19 U.S.C. § 1514. Therefore, if the timeframes for reliquidation and filing a protest have passed, liquidation is final. Here, the entry was liquidated on February 25, 2018. CBP had until May 26, 2018, 90 days later, to voluntarily reliquidate the entry. The protestant had until August 24, 2018, 180 days later, to protest the liquidation. After that point, the liquidation became final “on all parties.” Therefore, CBP’s reliquidation on May 21, 2021, 1181 days later, was untimely.
An untimely reliquidation by CBP under 19 U.S.C. § 1501 is not void, but voidable if timely protested. See Philip Morris v. United States, 716 F. Supp. 1479 (CIT 1989); Headquarters Ruling (“HQ”) 222875 (holding that untimely liquidations that were protested timely were void, but untimely liquidations that were not protested timely were final) (May 15, 1991); see also HQ H320726 (June 5, 2023). As the protest in this case was filed timely, the reliquidation on May 21, 2021, is void. Because the reliquidation is void, we will not consider the protestant’s argument that the merchandise qualifies for KORUS preferential tariff treatment.
HOLDING:
CBP’s reliquidation was not timely. Therefore, the protest is GRANTED 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,
For Yuliya A. Gulis, Director
Commercial & Trade Facilitation Division