LIQ-4-01; PRO-2-02
RR:CR:DR 228787 LLB
Category: Liquidation and Protests
Port Director of Customs
Hemisphere Center
Routes 1 & 9 South, Room 200
Newark, New Jersey 07114
Attn: Lawrence Ryan, Chief
Residual Liquidation and Protest Branch
Re: Protest No. 1001-98-104634; antidumping duties; suspension of liquidation; deemed liquidation; 19 U.S.C. §§ 1504(d), 1514(a), & 1677g(a); American Hi-Fi International, Inc. v. United States, 936 F. Supp. 1032 (Ct. Int’l Trade 1996); Nunn-Bush v. United States, 784 F.Supp. 892 (Ct. Int’l Trade 1992); Fujitsu General America, Inc. et. al v. United States, 110 F. Supp. 2d 1061 (Ct. Int’l Trade 2000), aff’d, 283 F.3d 1364 (Fed. Cir. 2002); International Trading Co v. United States, 281 F.3d 1268 (Fed. Cir. 2002); Rheem Metalurgica S/A v. United States, 106 F.3d 1357(Fed. Cir. 1998); American Permac v. United States, 642 F.Supp. 1187 (Ct. Int’l Trade 1986); United States v. Mexican Petroleum Corporation, 28 C.C.P.A. 90 (1940); Timken Co. v. United States, 37 F.3d 1470(Fed Cir. 1994); HQ 227689 (November 24, 1998); HQ 226263 (December 10, 1996)
Dear Mr. Ryan:
The above-referenced protest was forwarded to this office for further review. We have considered the arguments raised by the protestant, General Bearing Corporation, as well as your office. Our decision follows.
FACTS
The subject protest covers 2 entries of ball bearings, entry numbers xx-1806 and xx-6069 made on February 16, 1989 and April 6, 1989. According to the record before us, the ball bearings were manufactured by Asahi Seiko Co., Ltd. (Asahi) of Japan. Prior to entry, the Department of Commerce (Commerce) made a preliminary determination that the merchandise was subject to a dumping margin of 44.76%. Accordingly, Commerce directed Customs to collect cash deposits or require bonds in the amount of estimated antidumping duties and to suspend liquidation of the entries. See Preliminary Determinations of Sales at Less than Fair Value: Antifriction Bearings (Other Than Tapered Bearings) and Parts
Thereof From Japan, 53 Fed. Reg. 45343 (November 9, 1988). For entry number 1806, the protestant posted a bond for $42,100 and for entry number 6069, the protestant posted a bond for $15,300.
On May 3, 1989, Commerce made its final determination regarding the ball bearings determining that the merchandise was subject to a dumping margin of 45.83%, which was reflected in the antidumping order published shortly thereafter. See Antidumping Duty Orders: Ball Bearings, Cylindrical Roller Bearings, and Spherical Plain Bearings, and Parts Thereof From Japan, 54 Fed. Reg. 20904 (May 15, 1989). Commerce also directed Customs to continue to suspend liquidation of the entries. Id. On June 11, 1990, the entries continued to be suspended as Commerce initiated review of ball bearings from, inter alia, Japan for the period of November 9, 1988 through April 30, 1990. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Japan et al. Initiation of Antidumping Administrative Reviews. 55 Fed. Reg. 23575 (June 11, 1990).
On July 11, 1991, Commerce published its final results of the administrative review for the subject period indicating no change in dumping margin from the antidumping order. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Japan; Final Results of Antidumping Duty Administrative Reviews) 56 Fed. Reg. 31754 (July 11, 1991)(Determining antidumping margin for Asahi at 45.83%). A group of manufacturers challenged Commerce’s findings in the Court of International Trade (CIT). Federal-Mogul Corporation v. United States, 822 F.Supp. 782 (Ct. Int’l Trade 1993). The CIT enjoined liquidation pending a final court decision. See Message 228116(September 4, 1992)(Instructing the suspension of liquidation for all entries of ball bearings, manufactured by, inter alia, Asahi Seiko, between November 9, 1988 and April 30, 1990 pursuant to preliminary injunction issued by the CIT).
During the course of the CIT proceeding, the protestant initiated bankruptcy proceedings. See General Bearing Corporation v. United States, No. 91-B-21424 (Bankr. S.D.N.Y. 1992). Shortly thereafter, Commerce, Customs, and the protestant entered into a settlement agreement with the protestant regarding the liquidation of certain entries made between November 1, 1988, and April 30, 1992. See General Bearing Corporation v. United States, No. 91-B-21424 (Bankr. S.D.N.Y. September 24, 1992)(Stipulation and Order of Settlement). Liquidation of these entries, per the settlement agreement, would be pursuant to liquidation instructions issued to Customs from Commerce. See General Bearing Corporation v. United States, No. 91-B-21424 (Bankr. S.D.N.Y. March 5, 1993)(Supplemental Stipulation and Order of Settlement). The agreement also indicated that with regard to payment due on entries covered by surety bonds, Customs would attempt to initially secure payment from protestant’s surety. Stipulation and Order of Settlement at ¶ 12.
After years of litigation, the CIT affirmed the final remand results of Commerce and ordered the cases dismissed on November 13, 1996. Federal-Mogul Corporation v. United States, Slip-op 96-183 (Ct. Int’l Trade November 13, 1996). On June 17, 1997, Commerce published notice of the CIT’s decision and its amended final results of its administrative review for the period of November 9, 1988 through April 30, 1990. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Germany et al.; Amended Final Results of Antidumping Duty Administrative Reviews) 62 Fed. Reg. 32755 (June 17, 1997). In its final amended determination, Commerce determined that there was no change to the original antidumping margin for Asahi Seiko as a result of the litigation. Id. On July 24, 1997, Commerce issued the following liquidation instructions to Customs, in pertinent part:
1. For all shipments of ball bearings and parts thereof from Japan produced by Asahi Seiko . . . entered or withdrawn from warehouse for consumption during the period 11/09/88 through 04/30/90, assess a dumping liability equal to 45.83 percent of the entered Customs value, except if paragraph 2 is applicable.
2. If a bond or cash deposit was collected as security for an estimated antidumping duty for any shipment or merchandise described in paragraph 1 that was entered, or withdrawn from warehouse, for consumption during the period November 9, 1988 through May 16, 1989, assess a dumping liability equal to 45.83 percent of the entered Customs value or equal to the amount of the bond or cash deposit, whichever is less.
. . .
4. . . . The interest provisions are not applicable to cash or bonds posted as estimated antidumping duties before the date of the publication of the antidumping order, which is May 15, 1989.
On July 23, 1998, Commerce issued the following liquidation instructions to Customs in pertinent part:
1. Below is a list of liquidation instructions that have been sent to date for AFBS (Ball Bearings . . .) from Japan for the period 11/9/88 through 4/30/90:
. . .Ashahi Seiko 7/24/97 . . .
2. If you are still suspending liquidation on any entries of AFBS from Japan during the period 11/9/88 through 4/30/90 after applying all of the above liquidation instructions, you should now liquidate such entries at the deposit rate required at the time of entry of the merchandise.
. . .
4. . . . The interest provisions are not applicable to cash or bonds posted as estimated antidumping duties before the date of the publication of the antidumping order, which is May 15, 1989.
According to the Automated Commercial System (ACS), Customs liquidated the subject entries on August 7, 1998. ACS indicates that both entries were liquidated with antidumping duties at 45.83% with interest. The record before us reflects that Customs issued bills to the protestant for both entries reflecting an antidumping duty assessment of 45.83% ad valorem plus interest.
On November 3, 1998, the protestant timely filed its protest and application for further review arguing 1) that pursuant to the settlement agreement between the protestant, Commerce, and Customs, Customs does not have the authority to collect antidumping duties and interest from the protestant, rather, Customs must collect the foregoing from protestant’s surety and 2) no interest is due on the entries insofar as the entries were filed prior to the issuance of the antidumping order.
ISSUES
1.Whether Customs erroneously liquidated the entries with interest
2. Whether the entries liquidated by operation of law pursuant to 19 U.S.C. § 1504(d)
3. Whether issues involving collection of antidumping duties pursuant to a settlement agreement entered into between the Department of Commerce, Customs, and the protestant is protestable under 19 U.S.C. § 1514(a)
Issue 1
The protestant argues that Customs failed to follow the liquidation instructions insofar as it assessed interest on the entries. Initially, we note that Customs failure to follow liquidation instructions is protestable under 19 U.S.C. § 1514. See e.g., ABC International Traders, Inc. v. United States, 19 CIT 787, 791 (1995)( “... [c]laims [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.”); see also, American Hi-Fi International, Inc. v. United States, 936 F. Supp. 1032, 1037 (Ct. Int’l Trade 1996)([j]urisdiction for actions challenging Customs’ failure to follow Commerce’s actual liquidation instructions ... is found under 28 U.S.C. §1581(a).”). Both the July 24, 1997 and the July 23, 1998, liquidation instructions provide identically, in pertinent part:
4. . . . The interest provisions are not applicable to cash or bonds posted as estimated antidumping duties before the date of the publication of the antidumping order, which is May 15, 1989.
The bonds posted by the protestant’s surety are not dated and there has not been an allegation as to when the bonds were posted; therefore, it cannot be determined whether the bonds were posted before May 15, 1989 and thus, whether assessment of interest was appropriate under the liquidation instructions.
However, 19 U.S.C. § 1677g(a) provides “[i]nterest shall be payable on overpayments and underpayments of amounts deposited on merchandise entered, or withdrawn from warehouse, for consumption on and after” the date of publication of a countervailing or antidumping duty order. The entries were made on February 16, 1989 and April 6, 1989, and the antidumping order was published on May 15, 1989; therefore, since the entries were made prior to the publication of the antidumping duty order, the entries are not eligible for the assessment of interest pursuant to § 1677g(a). Further, courts have conclusively held that 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). Since there is no evidence in the record that the protestant was required to make or made a cash deposit on or after the May 15, 1989, antidumping order, the interest provisions of 1677g(a) do not apply.
Issue 2
Based on our review of the records it appears that the entries liquidated by operation of law. In Nunn-Bush v. United States, 784 F.Supp. 892 (Ct. Int’l Trade 1992), the court held that the lifting of the court-ordered injunctions against the liquidation terminated the suspension of liquidation. The court held that because the suspension of liquidation was removed before the end of the four-year period set in 19 U.S.C. § 1504(d)(1984 ed.), the entries were liquidated by operation of law. The Nunn-Bush decision interpreted 19 U.S.C. § 1504 before the December 3, 1993 and December 8, 1994 amendments. Pursuant to Nunn- Bush, a deemed liquidation occurred if an entry remained unliquidated at the end of the fourth year from the date of entry, unless liquidation had been extended. 784 F. Supp. at 896. The current version of 19 U.S.C. 1504(d) requires the suspension of liquidation to be removed and Customs to be notified before liquidation by operation of law occurs. Fujitsu General America, Inc. et. al v. United States, 110 F. Supp. 2d 1061, 1069 (Ct. Int’l Trade 2000), aff’d, 283 F.3d 1364 (Fed. Cir. 2002); International Trading Co v. United States, 281 F.3d 1268 (Fed. Cir. 2002). Thus, it must be determined when suspension of liquidation was removed. Our review of the records indicate that there are two potential dates on which suspension of liquidation was removed. We will discuss each in turn.
On September 4, 1992, the CIT enjoined liquidation of entries of ball bearings manufactured by Asahi Seiko. See Message No. 228116 (Instructing the suspension of liquidation for all entries of ball bearings entered by inter alia, Asahi Seiko between November 9, 1988 and April 30, 1990 pursuant to preliminary injunction issued by the CIT). Based on our review of the stipulation orders in the protestant’s bankruptcy proceeding, it appears that the Government moved the CIT to modify its injunction to exclude ball bearings imported by the protestant for the period of November 9, 1988 through April 30, 1990. See Stipulation and Order of Settlement, p. 3, ¶ 3 (September 24, 1992) and Stipulation and Order Amending the Stipulation and Order of Settlement , p. 1, ¶¶ 2 & 3. The Government’s motion was apparently granted on November 2, 1992. See Stipulation and Order Amending the Stipulation and Order of Settlement , p. 1, ¶ 3. Thus, the suspension of liquidation was removed on November 2, 1992. The subject entries were made February 16, 1989 and April 6, 1989. Four years from those dates respectively were February 16, 1993 and April 6, 1993. Hence, the entries deemed liquidated on the foregoing dates pursuant to the pre-1993 amendment version of § 1504(d). However, since this office has not been provided with the Government’s motion to modify the injunction nor the CIT’s order granting the motion, we cannot determine if the motion or the CIT’s order apply to all of the protestant’s entries for the subject time period. Therefore, we will examine whether the suspension of liquidation was lifted by any other event subsequent to November 2, 1992.
On November 13, 1996, the CIT affirmed the final remand results of Commerce and ordered the cases dismissed. Federal-Mogul Corporation v. United States, Slip-op 96-183 (Ct. Int’l Trade November 13, 1996). On June 17, 1997, Commerce published notice of the CIT’s decision and its amended final results of its administrative review for the period of November 9, 1988 through April 30, 1990. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Germany et al.; Amended Final Results of Antidumping Duty Administrative Reviews) 62 Fed. Reg. 32755 (June 17, 1997). Hence, pursuant to Fujitsu General suspension of liquidation was removed, and Customs was notified, on June 17, 1997. Because the suspension continued until after the 1993 amendments to 19 U.S.C. § 1504(d), pursuant to the holding in Travenol Laboratories v. United States, 118 F.3d 739 (Fed. Cir. 1997), the 1993 amendment would apply. Insofar as Customs did not liquidate the entries until August 7, 1998, the entries deemed liquidated because they were not liquidated within 6 months after the suspension of liquidation was removed. See 19 U.S.C. § 1504 (1994 ed.).
Regardless of whether the entries deemed liquidated pursuant to the pre-1993 version of § 1504 under Nunn-Bush or under the current version of § 1504, the entries would liquidate at the “amount of duty asserted at the time of entry by the importer of record.” “The amount of duties ‘asserted at the time of entry by the importer’, within the meaning of § 1504(a) and (d), is not what the importer desires to assert upon entry, but what the importer is required by Customs to assert when filing the entry summary.” Rheem Metalurgica S/A v. United States, 951 F.Supp. 241, 250 (Ct. Int’l Trade 1996)(emphasis in original) aff’d 160 F.3d 1357 (Fed. Cir. 1998) quoting American Permac v. United States, 642 F.Supp. 1187, 1195 n.12 (Ct. Int’l Trade 1986). In Rheem, the CIT held that the protestant’s handwritten notation of the appropriate investigation number on the CF 7501 as well as posting bonds to cover the countervailing duties were “actions sufficient to constitute an assertion of countervailing duties.” 951 F. Supp. at 250. Based on our review of the CF 7501s for the merchandise, it appears that the protestant did not assert that antidumping duties were due; however, the protestant did post bonds equivalent to 44.76% of the value of the merchandise on the entries. Thus, the facts of this case are distinguishable from Rheem. Nonetheless, the fact that the protestant posted a bond equivalent to the required antidumping duty deposit indicates that Customs required the protestant to post the bond before accepting the entries. See American Permac, supra. Therefore, the rate asserted at entry is 44.76%.
In conclusion, whether the entries deemed liquidated pursuant to the pre-1993 version of § 1504(d) under Nunn-Bush or under the current version of § 1504(d), the entries deemed liquidated at the amount asserted by the protestant at the time of entry.
Issue 3
The protestant argues that pursuant to the Stipulation and Order and Settlement Agreement, Customs is not allowed to collect antidumping duties from the protestant. Rather, the antidumping duties should be collected from the surety. As such, the protestant requests that Customs cancel the bills issued to the protestant. Pursuant to 19 U.S.C. § 1514(a),
. . .[d]ecisions of the Customs Service, including the legality of all orders and findings entering into the same, as to—
(1) the appraised value of merchandise;
(2) the classification and rate and amount of duties chargeable;
(3) all charges and exactions of whatever character within the jurisdiction of the Secretary of Treasury;
(4) the exclusion of merchandise from entry of delivery or a demand for redelivery to customs custody under any provision of the customs laws, except a determination appealable under section 1337 of this title;
(5) the liquidation or reliquidation of an entry, or reconciliation as to the issues contained therein, or any modification therefor;
(6) the refusal to pay a claim for drawback; or
(7) the refusal to reliquidate an entry under section 1520(c) of this title;
shall be conclusive upon all persons (including the United States and any officer thereof) unless a protest is filed in accordance with this section . . .
How Customs collects or issues bills are not Customs decisions enumerated in § 1514(a), therefore, are not protestable. See United States v. Mexican Petroleum Corporation, 28 C.C.P.A. 90 (1940)(holding that a demand for payment based on a prior liquidation is not a Customs decision upon which a protest may be filed).
HOLDING
1. Insofar as the entries were made before the publication of the May 15, 1989, antidumping order and there is no evidence in the record that the protestant was required to make or made a cash deposit on or after the date of the antidumping order, the interest provisions of 1677g(a) do not apply. The protest is GRANTED as to this issue.
2. The entries deemed liquidated at the amount asserted by the protestant at the time of entry pursuant to 19 U.S.C. § 1504(d), which was 44.76% ad valorem.
3. How Customs collects or issues bills is not a Customs decision enumerated in
§ 1514(a), therefore, is not protestable. The protest is DENIED as to this issue.
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,
Myles Harmon, Acting Director
Commercial Rulings Division