LIQ-4-01/PRO-2-01 RR:IT:EC 226285 CB
Port Director
U.S. Customs Service
c/o Protest and Control Section
6 World Trade Center, Rm. 761
New York, NY 10048-0945
RE: Application for further review of Protest No. 1001-95-102472
under 19 U.S.C. 1514(c)(2);
Protestability Under 19 U.S.C. 1514; Deemed Liquidation;
19 U.S.C. 1504; Reimbursement
Certification; 19 U.S.C. 1677g; Assessment of Interest; Failure
to
Make Cash Deposit
Dear Sir:
The above-referenced protest was forwarded to this office
for further review. We have considered the evidence provided,
and the points raised, by your office and the protestant. Our
decision follows.
FACTS:
According to the file, on January 24, 1993, the importer
entered certain merchandise (fresh salmon). The protestant acted
as surety for the entry. Liquidation was suspended pending
completion of an antidumping duty investigation. The suspension
was lifted on June 24, 1994, and the entry was liquidated on
September 23, 1994. Pursuant to Commerce's instructions, Customs
issued liquidation instructions on June 24, 1994.
On January 3, 1995, a Formal Demand on Surety was issued by
Customs. On March 17, 1995, protestant filed a protest
requesting a stay of "... any further action on this protest
until FOIA documents have been received and surety has had an
opportunity to supplement this protest." Protestant stated that
it was filing a "protective protest" and alleged general grounds
on which the protest was based. Additionally, surety protested
the liquidation of the entry on the basis that it had deemed
liquidated by operation of law. Thereafter, on April 25, 1995
(the supplement is dated April 20 but was not received and filed
with Customs until April 25, 1995), protestant filed a
"Supplement to Protest 1001-95-102472." In the supplement
protestant objected to Customs decision to assess double the
antidumping duties on the subject entry based on the importer's
failure to provide a reimbursement statement. Furthermore,
protestant objected to Customs assessment of interest on the
entry.
ISSUE:
Should the subject protest be granted?
LAW AND ANALYSIS:
Initially, we note that the required certification that the
protest is not being filed collusively to extend another
authorized person's time to protest, as required for a protest by
a surety (see 19 U.S.C. 1514(c)(2)), was provided. Pursuant to
19 U.S.C. 1514(c)(2), a surety may file a protest within 90 days
from the date of mailing of notice of demand for payment against
its bond. The demand for payment was issued on January 3, 1995.
Therefore, the surety's protest, and any amendments thereto, must
have been filed no later than April 3, 1995. The subject protest
was filed on March 17, 1995. Thus, it is noted that the initial
protest was timely filed. We also note that liquidation of an
entry is protestable pursuant to 19 U.S.C. 1514(a)(5).
Pursuant to 19 U.S.C. 1514(c)(1)(A) through (D) the initial
protest is statutorily inadequate. The initial protest, which as
previously stated was timely filed, did no more than identify the
entry protested, the date of entry, the date of liquidation, and
the demand date, make the non-collusion statement required by the
statute for a surety protest, and provide a string of potential
claims as a protective action. In view of the requirement in 19
U.S.C. 1514 that "[a] protest must set forth distinctly and
specifically ... each decision described in [19 U.S.C. 1514(a)]
as to which protest is made ... [and] the nature of each
objection and the reasons therefor ...", the initial protest does
not appear to be sufficient. See, in regard to the foregoing,
Mattel, Inc. v. United States, 72 Cust. Ct. 257, 262, C.D.
4547, 377 F. Supp. 955 (1974), in which the court summarized
prior court decisions on this issue as follows: "In short, the
court, taking a liberal posture, has held that however cryptic,
inartistic, or poorly drawn a communication may be, it is
sufficient as a protest for purposes of section 514 if it conveys
enough information to apprise knowledgeable officials of the
importer's intent and the relief sought." It is difficult to see
how the initial protest met even this standard.
As to the "supplemental" protest, we note that under 19
U.S.C. 1514, "[n]ew 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 ...
at any time prior to the disposition of the protest ...." Also
under 19 U.S.C. 1514, a protest may be amended only "prior to
the expiration of the time in which such protest could have been
filed under [19 U.S.C. 1514]." Thus, the "supplemental" protest
was not timely as an amendment of the initial protest (i.e., it
was filed more than 90 days after the demand on the surety) and,
accordingly, it could only be considered if it raises new grounds
in support of objections raised by a valid protest or amendment.
As stated above, the validity of the initial protest is doubtful.
Although there are serious procedural problems with this protest,
we are addressing the substantive issues raised in the
"supplemental protest."
The controlling statute, in regard to the deemed liquidation
issue raised by protestant, is 19 U.S.C. 1504. This provision
was amended by section 641 of Public Law 103-182, the North
American Free Trade Agreement Implementation Act (107 Stat.
2057, 2204), enacted December 8, 1993. As amended, 19 U.S.C.
1504 provides that an entry, where liquidation has been
extended, deem liquidates on its fourth-year anniversary; any
entry whose liquidation is suspended and such suspension is
subsequently removed but the entry is not liquidated within six
months after Customs receives notice of the removal is deemed
liquidated at that time.
Section 1504 provides, in pertinent part, that, except as
otherwise provided, an entry not liquidated within one year from
the date of entry 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. The exception to this general
rule is that Customs can extend or suspend the time for
liquidation. When liquidation of any entry is suspended, Customs
is required to provide notice of the suspension to the importer
of record and to any authorized agent and surety of such importer
of record. The subject entry was liquidated more than one year
after the date of entry. Presumably, the protestant asserts
that it deemed liquidated pursuant to section 1504(a)(1).
As previously stated, 19 U.S.C. 1504(c) provides that if
liquidation is suspended, notice of such suspension shall be
provided to the importer of record, etc. A review Customs
records shows that one notice of suspension was issued for the
subject entry. The extension date was March 27, 1993. Thus,
liquidation of the subject entry was properly suspended. As
stated above, 19 U.S.C. 1504 provides that once a suspension is
lifted, the entry must be liquidated within 6 months of the
lifting of the suspension; otherwise, it will be deemed
liquidated. In the instant case, the suspension was lifted on
June 24, 1994 and this entry was liquidated on September 23,
1994. Liquidation was prior to the six-month anniversary. Thus,
the subject entry did not deem liquidate.
In its "supplemental" protest, the surety contends that
since a cash deposit was not made by the importer, the subject
entry should have liquidated without the imposition of interest.
Regarding the assessment of interest, the liquidation
instructions for the subject merchandise state the following
concerning interest:
The assessment of antidumping duties by the Customs
Service is subject to the provisions of section 778
of the Tariff Act, which requires interest
overpayments or underpayments of the amounts
deposited as estimated antidumping duties. The rate
at which such interest is payable is the rte in
effect under section 6621 of the Internal Revenue
Code for such periods. Interest shall be calculated
through the date of liquidation.
In Timken Co. v. United States, 37 F.3d 1470 (Fed. Cir.
1994), the court held that "... the requirement to make cash
deposits of estimated duties, under the duty order, triggers the
interest provision. Without the duty order, the importer has no
obligation to make a cash deposit and consequently no obligation
to pay interest." Id. at 1477. In the instant case, the
antidumping duty order was issued on April 5, 1991. The order
required that a cash deposit of estimated antidumping duties be
made on all unliquidated entries, or withdrawals from warehouse
for consumption, made on or after the date of publication of the
order in the Federal Register (April 12, 1991). See 56 Fed.
Reg. 14920 (1991). The fact that the importer failed to make a
cash deposit, as required, does not relieve it of the obligation
to pay interest for underpayments. As stated by the Court of
International Trade in American Hi-Fi International, Inc. v.
United States, CIT Slip Op. 96-121 (August 2, 1996), "[p]er
Timken, once a duty order issues from Commerce interest begins to
accrue,.... Whatever action Customs took or is permitted to take
under the continuous entry bond originally issued to secure
ordinary duties does not alter the interest requirement which
arises after the duty order issues. The statute is intended to
achieve a balance.... If the importer pays too little, or
nothing at all, it must pay interest on the shortfall." (vol.
30, no. 34, page 56, Customs Bulletin and Decisions, August 21,
1996)(citations omitted)
Additionally, protestant alleges that the importer of record
went out of business prior to liquidation of the entry. Thus,
that there is no possibility that either the importer or surety
will be reimbursed by the exporter for the dumping duties.
Protestant requests that the entry be reliquidated without the
penalty for lack of an antidumping affidavit. The Department of
Commerce has advised Customs regarding its interpretation of this
issue. According to Commerce, if the importer goes out of
business before the deadline for filing the certificate has
passed, Customs should not presume that reimbursement has
occurred. On the other hand, if the importer goes out of
business after the deadline for filing the certificate has
passed, Customs should presume that reimbursement occurred. In
the instant case, protestant has not presented any evidence to
substantiate its claim that the importer went out of business
prior to liquidation of the entry. In the absence of such
evidence, Customs cannot accept protestant's assertion.
Having said all of the above, this office finds that the
subject protest must be denied on the basis that the issues
raised in the supplemental protest are not protestable. The
subject protest is against the assessment of double the
antidumping duties based on the absence of the reimbursement
statement and the assessment of interest on the antidumping
penalty. In regard to the protestability under 19 U.S.C. 1514
of these matters, subsection (c)(2) of section 1514 provides that
protests may be filed with respect to merchandise which is the
subject of a decision specified in subsection (a) of section
1514. The decisions specified in this subsection are "[with
certain exceptions], decisions of the Customs service, including
the legality of all orders and findings entering into the same as
to [seven kinds of decisions are listed] ...." Thus, to be
protestable under section 1514, a decision must be a decision of
the Customs Service.
Generally, we have held that the role of Customs 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 HQ 225382, July 3, 1995; see also,
Mitsubishi Electronic America Inc. v. United States, 44 F.3d
973 (Fed. Cir. 1994)). However, if Customs fails to follow the
instructions of the Department of Commerce, that failure may be
subject to protest under 19 U.S.C. 1514 (see, e.g., ABC
International Traders, Inc. v. United States, CIT Slip Op. 95-97 (May 23, 1995) "... claims [that Customs erroneously
liquidated certain entries and failed to follow Commerce's
liquidation instructions] may be brought before the court under
28 U.S.C. 1581(a)(1988), after denial of protests by Customs."
(vol. 29, no. 24, page 51, 54-55, Customs Bulletin & Decisions,
June 14, 1995)). See also, in this regard, American Hi-Fi,
supra, ([j]urisdiction for actions challenging Customs' failure
to follow Commerce's actual liquidation instructions ... is found
under 28 U.S.C. 1581(a)")(vol. 30, no. 34, page 56, 62,
Customs Bulletin and Decisions, August 21, 1996).
In the instant case, there is no allegation that Customs
failed to follow Commerce's liquidation instructions but rather
protestant challenges the instructions themselves. These are not
protestable issues under 19 U.S.C. 1514. Thus, consistent with
the above authorities and analysis, the subject protest should be
denied.
HOLDING:
For all of the reasons stated above, i.e., the initial
protest is statutorily inadequate, the supplemental protest was
untimely, liquidation was properly suspended, and the issues
raised are not protestable, the subject protest should be DENIED.
In accordance with Section 3A(11)(b) of Customs Directive
099 3550-065, dated August 4, 1993, Subject: Revised Protest
Directive, this decision should be mailed by your office, 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 take steps to
make the decision available to Customs personnel via the Customs
Rulings Module in ACS and the public via the Diskette
Subscription Service, Freedom of Information Act, and other
public access channels.
Sincerely,
Director,
International Trade Compliance
Division