• HQ 230339
• Jun 25, 2004

• Type : Protest • HTSUS :
•  Related:   966932; 229257; 228931; 228838; 226215; 227689; 226263   

LIQ-4-01; LIQ-11 RR:CR:DR 230339 RDC

Bureau of Customs and Border Protection
Port Director
301 E. Ocean Blvd., Suite 1400
Long Beach, CA 90802

RE: Protest number 2704-04-100050; antidumping duty; liquidation instructions; Freshwater Crawfish Tail Meat; crawfish tail meat; 19 U.S.C. § 1514; new shipper review; surety.

Dear Port Director:

The above-referenced Protest was forwarded to this office for further review and received on February 25, 2004. We have also received the “supplement” to the Protest which was received at the port on April 26, 2004. We have considered the points raised by your office and the Protestant. Our decision follows.

FACTS:

Highlands Insurance Co., (Highlands), as the surety for the importer, JCOF (USA) International, Inc. (JCOF), filed the instant Protest on December 31, 2003; at issue are four entries of freshwater crawfish tail meat imported by JCOF. The protested entries, numbers 226-4, 776-8, 576-3 and 283-4, were entered in September, November and December of 2000 and were subject to antidumping case number A 570-848, Freshwater Crawfish Tail Meat, (crawfish tail meat), from the People’s Republic of China. The provided entry summaries show antidumping duty of 201.63 percent ad valorem, $387,129.60, for each entry, which was secured by a bond. According to the invoices, packing lists and bills of lading accompanying the entry summaries, the exporter and shipper of the crawfish tail meat was Yangzhou Lakebest Foods Co., LTD (Yangzhou).

Attached to each entry summary is a CF 301, identified as a single transaction bond and issued by Highlands as the surety for the principal, JCOF. Each bond reflects the entry number for the entry summary to which it is attached and reflects as the “execution date” the entry date of the respective entry. The “rating code” reflected on each bond is “4,” which corresponds to an explanation of the rating codes at the top of each bond as “AD / CVD. The Customs Regulation in which the conditions of the bond are codified is stated as 19 C.F.R. § 113.62. The liability limit on each bond is $387,130.00. Also provided by the port via facsimile is a copy of another CF 301 issued by Highlands as the surety for the principal, JCOF, and identified as a “continuous bond. This bond is dated April 10, 2000 and the liability limit is $600,000.

On November 15, 1999, the Department of Commerce (DOC), published a Notice of Initiation of New Shipper Antidumping Reviews for the period September 1, 1998, through August 31, 1999, for antidumping case number A-570-848, crawfish tail meat (64 Fed. Reg. 61,833). This DOC notice advised that it would

instruct the U.S. Customs Service to allow, at the option of the importers, the posting of a bond or security in lieu of a cash deposit for each entry of the merchandise exported by the companies listed . . . , until the completion of the reviews.

At its request Yangzhou was included in this new shipper review and was one of the companies listed by the DOC in the notice. On February 7, 2000, CBP issued Message number 0038209 from the DOC. This message instructed CBP to permit importers to post a bond to secure antidumping duty on entries of crawfish tail meat when shipped by entities, like Yangzhou, included in the new shipper review. According to the DOC instructions, this option was to remain in effect until publication of the final results of the new shipper review. On October 11, 2000, the Preliminary Results of the New Shipper Review were published (65 Fed. Reg. 60,399). The final results of this new shipper review were published on April 24, 2001, (66 Fed. Reg. 20,634).

(The Protestant states in its Protest that “On October 16, 2002, approximately 1,065 days after initiating the new shipper review the [DOC] published their preliminary results for the subject supplier. See 67 F[ed.] R[eg.] 63,877.” The Protestant also states that “on April 21, 2003, approximately 187 days after publishing the preliminary results, the [DOC] published their final results for the subject supplier. See 68 F[ed.] R[eg.] 19,504.” Thus, Highlands concludes that 1,252 days elapsed between initiating the new shipper review and final results. However, we note that the DOC notice published at 67 Fed. Reg. 63,877 is a Notice of Preliminary Results of Antidumping Duty Administrative Review and that the notice at 68 Fed Reg. 19,504 is a notice of Final Results of Antidumping Duty Administrative Review. Since the results of this administrative review are not relevant to the new shipper review, we disregard these notices. We also note that the Federal Register cites and dates of publication stated in the “supplemental legal argument” pertain to the new shipper review and are correct.)

The protested entries were liquidated on August 1, 2003. At liquidation antidumping duty of 223.01 percent ad valorem, $428,179.20, per the DOC instructions contained in message number 3122210 (May 2, 2003), was assessed against each entry. Interest applied to the amount of antidumping duty from the date of entry until the date of liquidation was also assessed. The first demand on the surety, Highlands, was mailed on October 9, 2003.

Highlands contends that it is not liable for the antidumping duties billed to it as surety for the importer of record, JCOF, because: 1) CBP did not notify Highlands of the suspension 2) CBP did not inform Highlands of “the increased risk [it] undertook when issuing the bonds” due to the importer’s abuse of the new shipper review process; 3) Highlands was “prejudiced by the DOC’s actions because it took the DOC 1065 [330] days to publish the preliminary results of the new shipper review and the final results were published 187 days after the preliminary results; 4) fraud committed by the importer absolved Highlands of liability for the duties; 5) a continuous bond may not be used to secure antidumping duties over 5 percent; 6) Highlands also disputes that interest assessed because it contends that interest is not payable when antidumping duty is secured by bond. In its supplement the Protestant raises the same the six issues raised in its Protest and makes two additional claims: “duties collected under the Byrd Amendment amount to an unconstitutional civil penalty” and requests an offer in compromise per 19 U.S.C. § 1617.

ISSUES:

1. Is Highlands, as the surety for the importer of record, liable for the unpaid antidumping duty assessed and billed?

2. Is interest assessed on antidumping duty due when, per the DOC, no cash deposit of estimated duty was due and the payment of the antidumping duty was secured by bond?

LAW AND ANALYSIS:

We note initially that the instant Protest was timely filed per 19 U.S.C. § 1514, i.e., within 90 days from the date of mailing to the surety of the notice of demand for payment. Under 19 U.S.C. § 1514(a) “decisions of the Customs Service, including the legality of all orders and findings entering into the same, as to . . . the liquidation or reliquidation of an entry . . . are final unless a protest of that decision is filed (19 U.S.C. § 1514(a)). 19 U.S.C. § 1514(c)(3)(B), states in pertinent part:

A protest by a surety which has an unsatisfied legal claim under its bond may be filed within 90 days from the date of mailing of notice of demand for payment against its bond. If another party has not filed a timely protest, the surety's protest shall certify that it is not being filed collusively to extend another authorized person's time to protest as specified in this subsection.

The demand for payment of the antidumping duty and interest assessed against the protested entries and against Highlands’ bonds was mailed October 9, 2003. The instant Protest was filed on December 31, 2003. Further, the certification required by § 1514(c)(3)(B) was made on page one of the “Attachment to Protest.” Per § 1514(a)(5), the matter protested, the liquidation of the subject entry, is subject to protest.

However, the “supplemental legal argument” received at the port on April 26, 2004, is untimely. As stated in HRL 966932 (March 10, 2004),

Per 19 U.S.C. § 1514 (c)(1)(D):

A protest may be amended, under regulations prescribed by the Secretary, to set forth objections as to a decision or decisions described in subsection (a) which were not the subject of the original protest, in the form and manner prescribed for a protest, any time prior to the expiration of the time in which such protest could have been filed under this section. New grounds in support of objections raised by a valid protest or amendment thereto may be presented for consideration in connection with the review of such protest pursuant to section 515 of this Act [19 USCS § 1515] at any time prior to the disposition of the protest in accordance with that section.

(Emphasis added.) Therefore, per § 1514, a protest may be amended only "prior to the expiration of the time in which such protest could have been filed under [section 1514]." Thus, the Protestant here may not supplement the claims raised in its Protest more than 90 days after the demand on the surety was mailed. The notice of demand on Highlands was mailed October 9, 2003 and thus, the Protestant had until January 7, 2004, to amend its Protest. Therefore, the supplement received on April 26, 2004, is untimely.

Further, the two additional issues raised by the supplement are not within the "new ground" exception to the 90-day filing requirement per 19 U.S.C. § 1514(c)(1). In this supplement Highlands challenges the constitutionality of 19 U.S.C. § 1675c and requests an offer in compromise per 19 U.S.C. § 1617. Neither of these arguments are raised in the timely Protest. If a supplemental claim is going to be considered “a new ground” in support of a protest, the protest must itself be valid and give CBP notice that the issue raised by the new ground is being protested (see Pagoda Trading Corp. v. United States, 804 F.2d 665 (Fed. Cir. 1986); Fujitsu Gen. Am., Inc. v. United States, 283 F.3d 1364 (U.S. App. 2002). Since Highlands did not raise the constitutionality of 19 U.S.C. § 1675c nor request an offer in compromise in its December 31, 2003, Protest, these issues raised in its supplement do not constitute a new grounds exception to the 90-day time limit and are, therefore, untimely.

Moreover, even if timely filed, these two additional issues presented by the supplement are not protestable CBP decisions and therefore, per 19 U.S.C. § 1514, this office is without authority to rule on these issues. Section 1514 of Title 19 provides that the proper filing of a protest is an exception to the finality of certain, enumerated “decisions of [Customs and Border Protection]” (19 U.S.C. § 1514(a)). In Fujitsu Ten Corp. v. United States, 957 F. Supp. 245 (Ct. Intl. Trade 1997), the plaintiff protested CBP’s liquidation of entries without refund of estimated antidumping duties, Commerce's failure to continue suspension of liquidation pending the outcome of a scope inquiry and, that the importer was required to deposit antidumping duties because the antidumping order “on its face” did not apply to its entered goods. In Fujitsu Ten the Court of International Trade, (CIT), held,

The plain language of sections 1514(b) and 1516a, however, forecloses protest to Customs as a remedy here. In fact, section 1514(a), which delineates the issues that are protestable to Customs, itself excludes the matters described by subsection 1514(b) unambiguously:

except as provided in subsection (b) of this section . . . decisions of the appropriate customs officer . . . shall be final and conclusive upon all persons . . . unless a protest is filed in accordance with this section, or unless a civil action . . . is commenced in the United States Court of International Trade . . . .

(Id. at 248-49.) Accordingly, since Highlands’ challenge to the constitutionality of 19 U.S.C. § 1675c and request for an offer in compromise do not involve any CBP decision, these two issues are not subject to protest per § 1514.

In the supplement the first issue Highlands asserts is that 19 U.S.C. § 1675c, the Continued Dumping and Subsidy Offset Distribution Act (CDSOA), which requires collected antidumping duty to be distributed to domestic entities affected by dumping, is violative of the Fifth Amendment to the Constitution of the United States. The Protestant states that under the CDSOA importers are deprived of property which is then distributed to domestic producers without “full due process under the Fifth Amendment to the Constitution.” Highlands concludes that because this distribution per § 1675c of antidumping duties is unlawful, it should not be compelled to pay the antidumping duty on the entries at issue.

The equal protection clause of the Due Process Clause of the Fifth Amendment of the U.S. Constitution provides: “No person shall . . . be deprived of life, liberty, or property without due process of law . . . .” In Cook v. Babbitt, (819 F. Supp. 1, 11 (D. DC 1993)), the court stated that "[i]n essence, the guarantee of equal protection of the laws requires that similarly situated persons be treated similarly," citing City of Cleburne v. Cleburne Living Center, Inc., (473 U.S. 432, 439, 105 S. Ct. 3249, 87 L. Ed. 2d 313 (1985)). (We note that since Highlands identifies no others “similarly situated” to it that are being treated dissimilarly, the Protestant has not substantiated its argument based on the Fifth Amendment.) In U.S. Shoe Corp. v. United States, (907 F. Supp. 408, (Ct. Intl. Trade 1995); aff'd by: 523 U.S. 360, 1998; cf. Swisher Int’l Inc. v United States, 205 F.3d 1358 (CAFC 2000)) the plaintiff filed suit in the CIT challenging the constitutionality of the Harbor Maintenance Tax (HMT).

In U.S. Shoe Corp. the government argued that subject matter jurisdiction per jurisdiction was a conferred per 28 U.S.C. § 1581(a), after a protest per § 1514 against the collection of the HMT had been denied. The CIT disagreed and stated:

Customs does not determine the application, policies, or rates of the Tax, but merely serves to implement its provisions. As distinguished from National Corn Growers Ass'n v. Baker, 6 Fed. Cir. (T) 70, 840 F.2d 1547 (1988), where the policies and rates in question were those of Customs, and "peculiarly within the ambit of the Customs Service to correct," 6 Fed. Cir. (T) at 82, 840 F.2d at 1556, Customs is powerless to correct the constitutional infirmities raised by plaintiff. See Califano v. Sanders, 430 U.S. 99, 109, 51 L. Ed. 2d 192, 97 S. Ct. 980 (1977) (finding administrative hearing procedures unsuited to resolving constitutional issues). In short, Customs must simply follow the path enacted by Congress.

(Id. at 420). (See also HRL 229257, January 10, 2002, and HRL 228931, August 9, 2001.) Accordingly , the constitutionality of 19 U.S.C. § 1675c is not protestable per 19 U.S.C. § 1514.

With regard to the Protestant’s request for compromise per § 1617, the relief sought by the Protestant is not available from CBP or the Department of Homeland Security. The Secretary of Treasury's (now Department of Homeland Security under the delegation order) functions under 19 U.S.C. § 1617 have been transferred to Secretary of Commerce, insofar as those functions relate to settlement of claims for antidumping duties. (See Committee to Preserve American Color Television v United States, 527 F Supp 341 (Ct. Int’l Trade 1981)). (See also HRL 228838, September 27, 2002, which held that claims raised pursuant to 19 U.S.C. § 1617 are not properly the subject of protests.) Thus, requests for offers in compromise do not present CBP decisions and are not subject to protest per § 1514. Therefore, the two additional claims presented in the supplement do not involve CBP decisions are not protestable.

1. Is Highlands, as the surety for the importer of record, liable for the unpaid antidumping duty assessed and billed?

First, the Protestant argues that because CBP failed to provide it with notice of the suspension of liquidation, the Protestant is not liable for the antidumping duty billed to it. Liquidation of an entry is limited by 19 U.S.C. § 1504(a) which provides, in relevant part, that

Unless an entry is extended under subsection (b) or suspended as required by statute or court order, except as provided in section 751(a)(3) [19 USCS § 1675(a)(3), judicial review of Administrative Review], an entry of merchandise not liquidated within one year from: (1) 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 of record.

(19 U.S.C. § 1504 (a)). The protested entries were made during September, November and December of 2000, and liquidation was suspended per 19 U.S.C. § 1675(a) (see Freshwater Crawfish Tail Meat From the People's Republic of China; Initiation of New Shipper Antidumping Reviews for the period September 1, 1998, through August 31, 1999 (64 Fed. Reg. 61,833, November 15, 1999)).

Section 1504(c) requires that:

If the liquidation of any entry is suspended, the Secretary shall by regulation require that notice of the suspension be provided, in such manner as the Secretary considers appropriate, to the importer of record and to any authorized agent and surety of such importer of record.

(19 U.S.C. § 1504(c)). The applicable Regulation at 19 C.F.R. § 159.12 provides:

If the liquidation of an entry is suspended as required by statute or court order, as provided in paragraph (a)(2) of this section, the port director promptly shall notify the importer or the consignee and his agent and surety on Customs Form 4333-A, appropriately modified, of the suspension.

(19 C.F.R. § 159.12(c)). Since the suspension of liquidation of the entry was required by statute, i.e., § 1675(a), liquidation of the protested entry was properly suspended. According to ACS, a “Notice of Suspension” was sent to Highlands for each of the four protested entries on September 30, November 18, December 2, and December 30, 2000, respectively, to advise that liquidation of that entry was suspended. In C.S.D. 83-20 (17 Cust. B. & Dec. 754, December 20, 1982) the third holding stated “[w]here Customs[’] computer indicated a notice of extension has been sent to the surety, Customs routine office practice of mailing such notices of extension within a week after such notices are generated is sufficient evidence of mailing the notice, even though a surety claims it did not receive such notice.” (C.S.D. 83-20 originally contained three holdings; however, the first two holdings were reversed by a Headquarters Ruling letter dated March 24, 1983, leaving only the remaining third holding valid. See 17 Cust. Bull. No. 19 at 8 (May 11, 1983)).

In Hanover Insurance Co. v. United States, (23 Int'l Trade Rep. (BNA) 1495 (Ct. Intl. Trade 2001)) the plaintiff was a surety that contended it was not liable for additional antidumping duty assessed on an entry because it did not receive notice that the liquidation of that entry had been suspended. Customs contended it had provided the surety with notice. Both sides moved for summary judgment. In Hanover the Court of International Trade, (CIT) stated:

In cases turning on the alleged giving of notice and lack of receipt thereof, there is a presumption that letters or other communications, properly addressed, stamped, and deposited in the mail, are received by the addressee in due course. . . . That presumption is rebuttable by proof of non-receipt. . . . Where a notice is required to be given by Customs officials, the burden of going forward with the evidence initially falls upon the plaintiff because the notice is deemed to have been given by virtue of the presumption of regularity which attaches to official acts. However, the burden of proof then is on the Government because it is the Government's statutory responsibility to provide the notice. The proofs offered by a plaintiff at this point are directed toward negating the presumed deliver by way of evidence of non-receipt, non-issuance, or non-delivery of the notice. When the plaintiff has met this initial requirement, the burden of going forward shifts to the Government to establish that notice was given. . . . Intra-Mar Shipping Corp. v. United States, 66 Cust. Ct. 3, 5-6, Cust. Dec. 4160 (1971) (citations omitted). See also Int'l Cargo & Sur. Ins. Co. v. United States, 15 C.I.T. 541, 544, 779 F. Supp. 174, 177 (1991); F.W. Myers & Co., Inc. v. United States, 6 C.I.T. 215, 215-16, 574 F. Supp. 1064, 1065 (1983).

(Id.) Thus, where CBP is required to give notice, as in 19 U.S.C. § 1504(c)), there arises a rebuttable presumption that notice was provided. It is then incumbent upon the one asserting it did not receive the notice to rebut this presumption with proof that notice was not provided. If such proof is offered, CBP must then provide evidence that notice was given.

The CIT described Hanover’s evidence supporting that it did not receive any notice of suspension of liquidation in this way:

the plaintiff ha[d] submitted affidavits from the Hanover employees and broker responsible for handling suspension notices received from Customs. The sum and substance of each affiant is that he or she has no recollection of ever receiving or reviewing a Notice of Suspension of Liquidation . . . .

(Id.) The Hanover Court stated that the Customs’ evidence supporting that it had provided the surety with notice of the suspension was

a computer printout from the Customs extension/suspension history file, accompanied by written attempts under oath by two Service employees to explain standard operating procedures for printing, mailing, and recording notices of suspension of the kind at issue herein.

(Id.) Ultimately, the CIT in Hanover held that whether notice of the suspension of liquidation was received was ultimately a question of fact to be decided by the trier of fact at trial. (In Hanover a trial was conducted subsequently on the factual issue of whether or not the plaintiff surety had received notification of the extension of liquidation. See Hanover Insurance Co. v. United States, 24 Int'l Trade Rep. (BNA) 1756 (Ct. Intl. Trade 2002)).

In the instant case, Highlands states that “Customs failed to notify surety that the liquidation of the subject entries . . . was suspended.” According to ACS, a “Notice of Suspension” was sent to Highlands within two weeks of entry for each of the protested entries to advise that liquidation was suspended. Per the reasoning in Hanover Insurance, because CBP is required by § 1504(c) to provide notice of the suspension of liquidation to Highlands as the surety for the importer, and CBP’s computer system shows that notice was sent to Highlands, there is a rebuttable presumption that CBP provided Highlands with notice of the suspension of liquidation. (See also A.N. Deringer, Inc. V. United States, 18 Int'l Trade Rep. (BNA) 2105 Ct. Intl. Trade 1996) wherein plaintiff broker asserted it did not receive notice of extension, the CIT held, “the onus upon the government is to establish proper mailing of the requisite notices; it then falls to the plaintiff to establish non-receipt.)

Therefore, the burden to prove non-receipt of the notice is then on Highlands. However, Highlands provides no evidence that it did not receive the notice. Mere assertions made by counsel are not evidence. (See Bar Bea Truck Leasing Co., Inc. V. United States, 5 CIT 124, 126 (1983)). Thus, because Highlands has not provided any evidence that it did not receive the notice, it has not successfully rebutted the presumption that CBP provided it with notice of the suspension of liquidation, and Highlands is not relieved of the obligation to pay the amount billed as surety for the importer.

Second, the Protestant contends that “Customs knew, or should have known, of the importers’ abuse of the NSR [new shipper review] process yet failed in [its] responsibility to inform surety of facts which materially increased surety’s risk when issue the subject bonds.” Highlands states that, at the time of entry, it was unaware that the bonds required were to secure antidumping duty. Highlands concludes that CBP’s failure to advise it of this increased risk absolved Highlands from obligation to pay the bills issued to it. Here, the Protestant provides no legal basis, statutory or precedential for this contention; the Protestant merely recites the facts and its conclusions drawn from those facts. We are aware of no principle of surety law which requires the third party beneficiary of a contract to advise an obligor of the risks associated with the contract. Moreover, failure to inform a surety of the risk associated with a bond is not, as discussed above, a CBP decision as enumerated in § 1514. This argument is not properly the subject of a protest and we are without authority to address Highlands’ contentions here.

However, we note, with regard to Highlands’ representation that, at the time of entry, it was unaware that the bonds required were to secure antidumping duty, we draw the Protestant’s attention to the face of the single transaction bonds issued by Highlands for all four entries. The “rating code” “4,” is in the upper left hand corner, in the box marked “rating code” on each bond. Directly beside this box on each bond is an explanation of the rating codes. The number “4” corresponds to “AD / CVD,” which is a commonly used reference to antidumping and countervailing duty. Thus, Highlands knew, or should have known, from the face of the bonds it issued that the goods entered were subject to either antidumping and countervailing duty. We also note that the Protestant, Highlands Insurance Company, is an insurance company and, presumably, is in the business of calculating risks associated with the contracts it issues.

Third, Highlands asserts that it was “prejudiced by the DOC’s actions because it took the DOC 1065 days to publish the preliminary results of the new shipper review” and the final results were published 187 days after the preliminary results. (As stated in the Facts portion, Highlands used the dates of publication for the administrative review notices – not the new shipper review notices – when calculating the 1065 days. The DOC published the Notice of Initiation of the New Shipper Antidumping Review that included Yangzhou on November 15, 1999. On October 11, 2000, the Preliminary Results of the New Shipper Review were published (65 Fed. Reg. 60,399) and the final results of this new shipper review were published on April 24, 2001, (66 Fed. Reg. 20,634). Consequently, approximately 335 days elapsed between the Notice of Initiation and the publication of the preliminary results, and 550 days elapsed between the publication of the Preliminary and Final Results Notices.) However, as explained below, we need not address this argument here.

While both CBP and Commerce play a part in the enforcement of the antidumping laws, their roles are separate and distinct. The courts have 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 Electronic America Inc. v. United States, 44 F.3d 973, 977 (Fed. Cir. 1994)) the Federal Circuit Court held that §1514 does not apply to decisions made by other agencies, but applies only to the CBP decisions named in the statute. CBP cannot "modify . . . [Commerce's] determinations, their underlying facts, or their enforcement." Royal Business Machs., Inc. v. United States, 507 F. Supp. 1007, 1014 n.18 (Ct. Int'l Trade 1980), aff'd, 669 F.2d 692 (CCPA 1982). Consequently, with regard to the Protestant’s that it was “prejudiced by the DOC’s failure to act timely” in conducting the new shipper review, the Protestant raises no issue that is protestable under 19 U.S.C. § 1514 and we are without authority to address this contention.

Fourth, Highlands advances the argument that, because the importer “purposefully and intentionally committed fraud” against its sureties and CBP, Highlands is not liable for the duties billed. As explained above, only CBP decisions are the proper subject of protests per § 1514. Since the Protestant’s conclusion that fraud on the part of the importer relieves it of liability for the antidumping duty does not involve a CBP decision as named in § 1514, we are without authority to rule on this issue.

Fifth, Highlands contends that, per T.D. 85-145, (September 5, 1985) a continuous bond may not be used to secure antidumping duties over 5 percent ad valorem. T.D. 85-145 states, in relevant part,

Unless specifically instructed by the Secretary of Commerce or a designee to accept another form of security or a cash deposit for estimated duties, [CBP] may accept, at its discretion, any one of the following forms of security for payment of estimated antidumping or countervailing duties, or both, on merchandise entered for consumption in the United States:

(3) If the amount of the estimated antidumping or countervailing duty is less than 5 percent ad valorem (or the equivalent), a continuous basic importation and entry bond, as described in 19 C.F.R. 113.62, in an amount sufficient to cover the amount of the estimated antidumping or countervailing duty, or both, determined by the Secretary of Commerce, and all other entry bonding requirement; . . . .

(19 Cust. B. & Dec. 331). Here, Highlands incorrectly applies T.D. 85-145. The relevant language reproduced above does not limit the surety’s liability to antidumping duty of 5 percent ad valorem on a continuous bond, as the Protestant would believe. This language merely gives CBP the option of using a continuous basic importation and entry bond alone, i.e., without requiring an additional bond to secure antidumping duty, when the estimated antidumping due is small, that is less than five percent ad valorem. We see no basis, and Highlands offers none, to construe the language of T.D. 85-145, to limit a surety’s liability independent of the liability amount contracted for and appearing on the face of the bond. Also, in HRL 226215 (March 28, 1996) we noted that a continuous bond could be used to secure payment of antidumping duty up to the bond amount.

2. Is the surety liable for interest on antidumping duty due when the DOC did not require a cash deposit of estimated duty, but instead permitted payment of such duty to be secured by bond?

Sixth and finally, Highlands argues that interest is not payable when antidumping duty is secured by bond and thus, it is not liable for the interest billed. We agree. The courts have conclusively held that 19 U.S.C. § 1677g(a) requires interest only when a cash deposit of estimated duties is required under an antidumping order. See Timken Co. v. United States, 37 F.3d 1470, 1472-73 (Fed Cir. 1994); American Hi-Fi International, Inc. v. United States, 936 F.Supp. 1032, 1038 (Ct. Int'l Trade 1996); see also, HQ 227689 (November 24, 1998); HQ 226263 (December 10, 1996).

As stated in the Notice of Initiation of New Shipper Antidumping Reviews (64 Fed. Reg. 61,833, November 15, 1999) and Message number 0038209, the importer was entitled to post a bond or other security in lieu of a cash deposit on the crawfish tail meat. Since the importer was not required to make a cash deposit the interest provisions of 1677g(a) do not apply and Highlands is not liable for interest on the unpaid antidumping duty.

HOLDINGS: 1. Highlands as surety for the importer of record is liable for the unpaid antidumping duty assessed against the four protested entries under the single transaction bonds issued to the importer of record as principal.

2. No interest is assessed on antidumping duty due when, per the DOC, no cash deposit of estimated duty was due and the payment of the antidumping duty was secured by bond.

The Protest should be DENIED in part insofar as the Protestant is liable for the unpaid antidumping duty assessed against the four protested entries and GRANTED in part with respect to the interest assessed on the unpaid antidumping duty. In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings 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 other methods of public distribution.

Sincerely,

Myles B. Harmon, Director
Commercial Rulings Division