PRO-2-02/LIQ-9-02/BON-2-CO:R:C:E 224566 SLR
Regional Commissioner of Customs
New York Region
ATTN: Head, Protest and Control Section
6 World Trade Center, Room 762
New York, New York 10048-0945
RE: Application for Further Review of Protest 1001-91-000220;
Notice of Redelivery; Timeliness; False Designation of
Country of Origin; 15 U.S.C. 1124/1125; Executive Order
12725 of August 9, 1990; United States v. Utex
International, Inc.
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:
The importer made 5 entries of ladies wearing apparel,
marked with Kuwait as the country of origin. One of the entries
was dated April 10, 1990, while the others were dated April 12,
1990. The April 10, 1990 entry was originally liquidated
"no change" on July 27, 1990, as were the April 12, 1990 entries
on August 3, 1990. On September 21, 1990, Customs voluntarily
reliquidated under 19 U.S.C. 1501 all 5 entries on the basis
of a Headquarter's telex (discussed below). Subsequently, on
October 23, 1990, Customs issued Notices of Redelivery (CF 4647)
against all 5 entries, stating in the "Remarks" section of the
form: "Merchandise has been determined to bear a false
designation of Country of Origin, marked Kuwait, in violation
of 15 U.S.C. 1124/1125 and is therefore ordered redelivered."
Notices of Liquidated Damages were issued against the
importer on December 21, 1990, for failure to redeliver the
wearing apparel covered by the 5 entries. The importer filed
the instant protest against the untimeliness of the Notices of
Redelivery on January 10, 1991, and requested further review.
The importer does not challenge the substantive issue of false
designation of country of origin but instead challenges the
legality of the issuance of the Notices of Redelivery.
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As indicated in the file, the action on the liquidated
damages case has been suspended pending resolution of this
protest. It is our understanding that the merchandise cannot be
redelivered because by the time the protestant received the
Notices of Redelivery, more than 6 months after entry, the
merchandise had been delivered to its customers.
The protestant alleges that the Notices of Redelivery are
unlawful because "the entries . . . liquidated on July 27, August
3 and September 21, 1990 . . . have not been reliquidated and the
period for reliquidation fixed under 19 U.S.C. 1501 has expired.
Thus, the origin of the subject matter was final prior to the
issuance of the Notices of Redelivery. The notices of redelivery
were, therefore, untimely. United States v. Utex International,
Inc., 857 F.2d 1408 (Fed. Cir. 1988); C.S.D. 89-100, 23 Cust Blt.
& Dec. No. 24 at 16 (October 25, 1989)." [We note that the
above-quoted language reveals protestant's misunderstanding of
the correct liquidation/reliquidation dates for the 5 entries.]
The Area Director takes the position that the protest should
be denied because the entries were, in fact, reliquidated within
the time frame of 19 U.S.C. 1501 in accordance with the
instructions issued by a Headquarters' telex from the Director,
Office of Trade Operations, regarding Executive Order 12725 of
August 9, 1990, entitled "Blocking Kuwaiti Government Property
and Prohibiting Transactions with Kuwait."
Telex VBT-90-I-04, dated August 21, 1990, instructed the
field offices, on the basis of the executive order, to detain or
seize textile shipments claimed to be manufactured in Kuwait
which bear false designations of origin, depending on the
manufacturer. The certain listed manufacturers, one of which was
the manufacturer on the subject 5 entries, were found not to have
the capability to produce textiles or apparel in commercial
quantities based upon actual plant visits by U.S. Customs. The
telex said that it applied to shipments "where the merchandise
has been released and the entry is not finally liquidated. If
the entry was liquidated, reliquidate (if not final) under 19
U.S.C. 1501 and issue a demand for redelivery."
ISSUE:
Whether the Notices of Redelivery were untimely.
LAW AND ANALYSIS:
We note that the decision to issue a Notice of Redelivery
is protestable under 19 U.S.C. 1514(a)(4) and that the protest
and the application for further review was timely filed on
January 10, 1991, within ninety-days of the issuance of the
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Notices of Redelivery on October 23, 1990. See 19 U.S.C. 1514
and 19 CFR Part 174. The protestant did not request immediate
action under 19 CFR 174.21(b).
Customs may demand the return of inadmissible goods that
have been released from Customs custody, however, such a demand
must be made before liquidation becomes final. Section
141.113(b) of the Customs Regulations (19 CFR 141.113(b))
provides:
If at any time after entry the district director
finds that any merchandise contained in an
importation is not entitled to admission into the
commerce of the United States for any reason not
enumerated in paragraph (a) of this section
[relating to marking of certain merchandise],
he shall promptly demand the return to Customs
custody of any such merchandise which has been
released. (Emphasis added.)
Section 141.113(f) of the Customs Regulations (19 CFR 141.113(f))
states the time limitation for demands for the return of
merchandise:
A demand of the return of merchandise to
Customs custody shall not be made after the
liquidation of the entry covering such
merchandise has become final.
Additionally, there are only two periods during which a
redelivery notice may be issued and enforced by a Customs bond
under the Customs Regulations. Section 113.62 of the Customs
Regulations contains the basic importation and entry bond
conditions, namely, 19 CFR 113.62(d) provides:
It is understood that any demand for redelivery
will be made no longer than 30 days after the date
that the merchandise was released or 30 days after
the end of the conditional release period
(whichever is later).
We have interpreted these provisions in ruling HQ 088880
dated March 19, 1992. See also HQ 223538 dated October 1, 1992.
In HQ 088880, we held that a notice of redelivery must be
"promptly" issued, that is, it must be issued either: (1) no
later than 30 days after the date the merchandise is released if
there is no occurrence establishing a conditional release period;
or (2) if there is an occurrence establishing a conditional
release period (e.g., see 19 CFR 12.80(e)(2), 19 CFR 134.3, and
19 CFR 151.11), no later than 30 days after the end of that
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period [e.g., if information or a sample is requested, within 30
days from the date of receipt by Customs of the information or
sample] (see Customs Service Decision (C.S.D.) 86-21). A notice
of redelivery may never be issued after liquidation becomes final
(United States v. Utex International Inc., 6 Fed. Cir. (T) 166
(1988)).
Contrary to the assertion of the protestant, at the time
when Customs issued the Notices of Redelivery for the 5 entries
in October 1990, these entries had not "finally" liquidated
because the 90-day period from the original liquidations on
July 27, 1990, and August 3, 1990, had not expired. Although we
reject protestant's argument that the liquidations were final
prior to the issuance of the Notices of Redelivery, we find that
the Notices of Redelivery were nevertheless untimely issued in
this case. The notices were issued more than 30 days after the
release of the merchandise from Customs custody, that is,
approximately 6 months for the April 1990 entries, and Customs
had taken no action within 30 days of the entries to establish a
different conditional release period for any of these entries
(e.g., a Request for Information (CF 28)). With respect to
enforcement of the bond provisions, we find that the notices were
not "promptly" issued in accordance with the time limitations of
19 CFR 113.62(d) and 19 CFR 141.113(b) and, therefore, the
protest against the Notices of Redelivery must be granted.
Further, the Assistant Commissioner, Office of Commercial
Operations, had issued instructions in 1989 to comply with the
appellate decision in Utex, supra. Entries that were liquidated,
but were within the reliquidation period of 19 U.S.C. 1501
(90 days from the original liquidation) were to be reliquidated
under that statute and a notice to redeliver the inadmissible
merchandise was to be issued. Because the liquidation or
reliquidation is the final Customs action on an entry, the notice
to redeliver had to be before or at the time that the liquidation
notice was posted. Issuing a notice to redeliver after the
posting a "no change" liquidation bulletin notice would be an
inconsistent act. See U.S. v. American Motorists Ins. Co., 10
CIT 19 (1986) and New Zealand Lamb Co. v. United States, Slip Op.
92-218 (CIT December 8, 1992), Vol. 27 Cust. B. & Dec., No. 1,
page 3 (January 6, 1993).
Finally, Executive Order 12725 of August 9, 1990 (55 F.R.
33091) was to take effect on the date of issue. The only
retroactive provision in the order dealt with property of Kuwaiti
origin exported from Kuwait after August 6, 1990. Inasmuch as
the gravamen of the demand for redelivery is that the merchandise
was not made in Kuwait it is unclear how an order establishing an
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embargo against Kuwaiti goods would apply to this merchandise.
In any event, by its terms it cannot apply to importations made
5 months before it was issued.
With regard to the pending liquidated damages case for the
importer's failure to redeliver the merchandise under 19 CFR
141.113(g), there appears to be no basis for it since the Notices
of Redelivery must be cancelled. It is our recommendation,
however, that a violation under 19 U.S.C. 1592 be considered on
the importer's declaration of a false statement as to the origin
of the goods on the entry documentation.
HOLDING:
In this case, the four Notices of Redelivery were untimely
since they were issued more than 30 days after release of the
merchandise and no conditional release period was established.
You are directed to allow the protest under consideration.
A copy of this decision should be attached to Customs Form 19,
Notice of Action, and sent to the protestant.
Sincerely,
John Durant, Director
Commercial Rulings Division