• HQ 230108
• May 04, 2006

• Type : Protest • HTSUS :
•  Related:   545017; 543904; 210751   

LIQ-4-01; LIQ-11 RR:CR:DR
230108RDC

Customs and Border Protection
Los Angeles International Airport-Cargo Operations
Port Director
11099 South La Cienega Blvd.
Los Angeles, CA 90045
Att: Suzanne McCarthy

RE: Protest number 2720-03-100261; 19 U.S.C. § 1504(d); 19 U.S.C. § 1514; antidumping duty; International Trading Co. v. United States, (110 F. Supp. 2d 977 (Ct. Intl. Trade 2000)) (aff’d 281 F.3d 1268 (Fed. Cir. 2002)); removal of suspension of liquidation; suspension of liquidation; deemed liquidation; liquidation by operation of law; notice to CBP; 19 C.F.R. § 159.1; Fujitsu Gen. America, Inc. v. United States (110 F. Supp. 2d 1061 (Ct. Int’l Trade 2000)); (aff’d 283 F.3d 1364 (Fed. Cir. 2002)); liquidation instructions.

Dear Sir or Madam:

On September 3, 2003, the above-referenced protest was received in this office pursuant to a request for further review. We have considered the points raised by your office and the protestant. Our decision follows.

FACTS:

The protestant, UPS Customhouse Brokerage, Inc., (“UPS”), protests the liquidation of 49 entries with additional duty imposed because of CBP’s adjustment to the value of the entered goods. According to UPS, “UPS is not an actual party in interest, and UPS declared the actual owner, purchaser or consignee of the merchandise on each entry to be Gallop” [Couriers, Inc.] (“Gallop”). The goods entered are described as “Dynamic Random Access Memory Semiconductors” or “DRAMS” and according to UPS were entered between May 5, 1999, and July 23, 1999. It is undisputed that the entries were subject to antidumping duty case number A-580-812, Dynamic Random Access Memory Semiconductors of One Megabit or Above From the Republic of Korea.

The port has supplied photocopies of the entry documents for eight of the protested entries: 342-3; 892-1; 570-3; 076-4; 577-8; 713-6; 248-3; 129-5. We assume these eight are representative of the 49 protested entries. On six of these entry summaries (CBP Form 7501) and the entry / immediate delivery forms, (CF 3461), UPS is named as the importer of record. However, the CF 7501 for entry 713-6 shows UPS as the importer of record but the CF 3461 shows Gallop as the importer. Further, the CF 7501 for entry number 129-5 shows Gallop as the importer of record and the consignee; the CF 3461 shows Gallop as the consignee but UPS as the importer. All eight entry summaries and the CF 3461s state that the ultimate consignee is Gallop. These entry summaries also state that the imported merchandise was not obtained pursuant to a purchase or purchase agreement. The CF 7501s reflect that the entries were liquidated per “HQ’s 3076204, 3/17/03” which is a reference to liquidation instruction message number 3076204. The entry summaries reflect antidumping case number A-580-812-001 and assert antidumping duty of 9.04 percent ad valorem.

Attached to these entry summaries are invoices addressed to Gallop from Trend Tronic, Co., Ltd. of Taiwan. No other parties are identified on the commercial invoice. These invoices state the price of the imported merchandise. Also attached to the CF 7501s is one of two versions of an “antidumping duties reimbursement statement.” All the certificates are signed by a representative of Gallop. All these certificates identify “Lucky Gold Star” as the manufacturer of the DRAMS. Some certificates also state that Lucky Gold Star is the shipper of the DRAMS and these identify the shipper as the “party responsible for ADD.”

According to the port, and not disputed by the protestant, all the DRAMS entered with the protested entries were manufactured by Hyundai Industries Co., Ltd. or by Lucky Gold Star. Lucky Gold Star became LG Semicon Co., Ltd. Hyundai Industries Co. and LG Semicon became Hynix Semiconductor, Inc. See Hynix Semiconductor, Inc., v. United States, 248 F. Supp. 2d 1297, 1300, n1 (Ct. Intl. Trade 2003), which stated:

Hyundai Industries Co., Ltd. (“Hyundai”) and LG Semicon Co., Ltd. (“LG Semicon”) were the two manufacturers named by Micron in the administrative review. In 1999, Hyundai acquired and subsequently integrated LG Semicon into its operations. . . . . As a result, Commerce treated Hyundai and LG Semicon as one entity when completing the administrative review for the Preliminary Results. . . . . . During the administrative review, Hyundai Electronics Industries Co., Ltd. and Hyundai Electronics America changed their names to Hynix Semiconductor, Inc. and Hynix Semiconductor America, Inc., respectively.

See also Notice of preliminary results of antidumping duty administrative review: Dynamic Random Access Memory Semiconductors of One Megabit or Above From the Republic of Korea: Preliminary Results of Antidumping Duty Administrative Review (66 Fed. Reg. 30,688, 30,691, June 7, 2001), which states in part:

Hyundai's acquisition of LG began in January 1999 with the announcement that LG had decided to sell all of its shares to Hyundai. Then, on April 20, 1999, the purchase price of LG's stock was agreed upon, and it was agreed that LG would no longer make any major decisions without the consent of Hyundai. On May 20, 1999, Hyundai purchased LG's stock and on July 7, 1999, Hyundai took over formal management of LG's business operations. The acquisition process was completed on October 13, 1999, and on that date LG ceased to exist as a separate entity and became a part of Hyundai's operations. Thus, pursuant to section 771(33)(E) of the Act, the Department has preliminarily determined that Hyundai and LG were affiliated from the beginning of the POR until October 13, 1999 because of Hyundai's controlling interest in and control of LG.

A CF 28, Request for Information, dated June 18, 1999, was sent to Gallop stating: “please provide purchase orders and proof of payment for each shipment listed on the attached sheet” and “a copy of contract (or purchase order and seller’s confirmation thereof) covering this transaction, and any revisions thereto.” Attached to the CF 28 is a sheet listing some of the protested entries. The CF 28 also requested that Gallop answer the following question: “are you related (see reverse) in any way to the seller of this merchandise?” This request for information lists Trend Tronic as the manufacturer / seller / shipper and UPS as the broker. No purchase orders or proof of payment were provided. However, in reply, Gallop sent a letter from an Executive Vice President of Gallop, dated July 29, 1999. This letter states:

In regards [sic] to your request for information (dated 6-18-99), Gallop Couriers, Inc., is not related to the Seller of this merchandise (DRAMS). We are not involved in any financial transactions involving this product. Gallop Couriers is simply Top Phil’s/Trend Tronic’s receiving, distribution and transportation agent in the United States. We distribute this product which is shipped here free domicile via United Parcel Service.

On October 12, 2001, the DOC published the Notice of Final Results of Antidumping Duty Administrative Review for the period May 1, 1999, through December 31, 1999 (66 Fed. Reg. 52,097). This notice stated in part:

The merchandise covered by this order is DRAMS from the Republic of Korea. The review covers two manufacturers, Hyundai Electronics Industries Co., Ltd. and Hyundai Electronics America (collectively Hyundai), and LG Semicon Co., Ltd. and LG Semicon America (collectively LG), and six resellers of subject merchandise to the United States. The period of review (POR) is May 1, 1999, through December 31, 1999.

On December 10, 2001, Hynix Semiconductor, Inc. and Hynix Semiconductor America, Inc., filed suit in the Court of International Trade to challenge these final results. (See Hynix Semiconductor, Inc., v. United States, 248 F. Supp. 2d 1297, 1301 (Ct. Intl. Trade 2003)).

On May 8, 2002, the Department of Commerce (Commerce) message number 2128214 was issued. That message in part advised that

On 3/12/2002, the U.S. Court of International Trade issued a preliminary injunction enjoining liquidation of certain entries which are subject to the antidumping duty order or finding on DRAMS from Korea (A-580-812), manufactured or exported by Hynix Semiconductor Inc. and Hynix Semiconductor America Inc. for the period 5/1/1999 through 12/31/1999. 2. Accordingly, until further notice, do not liquidate entries of subject merchandise which was produced or exported by Hynix Semiconductor Inc. and Hynix Semiconductor America Inc. and which was entered, or withdrawn from warehouse, for consumption during the period 5/1/1999 through 12/31/1999. Continue to suspend liquidation of other entries until liquidation instructions are provided.

On November 22, 2002, message number 2326202 was issued and stated in part:

On 11/21/2002, the Department of Commerce received an amended preliminary injunction enjoining liquidation of certain entries which are subject to the antidumping duty order on DRAMS from Korea (A-580-812), produced by Hynix Semiconductor Inc. and imported into the United States by Hynix Semiconductor America Inc. during the period 05/01/1999 through 12/31/1999. This Preliminary injunction amends a previous injunction issued by the U.S. Court of International Trade enjoining liquidation of certain entries which are subject to the antidumping duty order on DRAMS from Korea (A-580-812) which were manufactured or exported by Hynix Semiconductor, Inc. and Hynix Semiconductor America, Inc., and is referenced in Message 2128214 on 05/08/2002. The amended injunction is clarified to apply only to entries manufactured by Hynix Semiconductor, Inc. and imported into the United States by Hynix Semiconductor America, Inc.

(Emphasis added.) This message also advised CBP to “continue to suspend liquidation of other entries until Liquidation instructions are provided.” On January 13, 2003, message number 3013201 which contained in part the following liquidation instructions, was issued:

For all shipments of DRAMS from Korea produced by Hynix Semiconductor, and imported by entities other than Hynix Semiconductor America, Inc., and entered or withdrawn from warehouse for consumption during the period 05/01/1999 through 04/30/1999, assess antidumping duties at the cash deposit rate in effect on the date of entry. . . . . These instructions constitute the immediate lifting of suspension of liquidation of entries for the merchandise and period listed above.

Upon assessment of antidumping duties, customs should require that the importer provide a reimbursement statement as described in section 351.402(f)(2) of the Commerce Department regulations. The importer should provide the reimbursement statement prior to liquidation of the entry. If the importer has been reimbursed antidumping duties, customs should double the antidumping duties in accordance with the above-referenced regulation.

A CF 29, Notice of Action, dated March 26, 2003, referencing 48 of the protested entries was sent to UPS. Entry number 129-5 is included in the protest but does not appear on this CF 29. This notice advised that “at the time of entry, various types of 16 Megabit DRAMS were undervalued at $0.20 or $0.25 per unit. Each entry is being re-appraised at the Daily Spot Market Prices provided by Lehman Brothers, American IC Exchange (AICE). . . . . You will receive a bill for the additional antidumping duties and MPF . . . plus applicable interest . . . .” Included with the file is another CF 29 dated March 26, 2003, addressed to Gallop which references a list of entries including entry number 129-5 which is included in the instant protest by UPS. This CF 29 also states that the DRAMS entered were undervalued, but at “$0.20 to $4.00 per unit,” and that the DRAMS were being re-appraised and additional antidumping duty and MPF were going to be due.

According to Customs’ Automated Commercial System, (“ACS”), the protested entries were liquidated on April 11, 2003, with additional antidumping duty and Harbor Maintenance Fee assessed because of the increase in the value of the goods as a result of CBP’s re-appraisement. The instant protest, number 2720-03-100261, was filed on July 9, 2003, and forwarded to this office on August 26, 2003. A copy of a CF 3347, Declaration of Owner, executed on July 1, 2003, by the attorney-in-fact for Gallop is attached to the protest. The CF 3347 states that Gallop is the owner of the goods entered with the protested entries and lists UPS as the “nominal consignee or authorized agent.” In its protest UPS raises the following claims: 1) the entries were deemed liquidated at the value entered; 2) CBP exceeded its ministerial function in liquidating these antidumping entries; 3) Gallop Couriers, Inc. not UPS is the owner of the merchandise, hence Gallop is liable for the additional antidumping duty owed; and 4) CBP was required to use transaction value to liquidate the entries.

ISSUES:

1. Were the entries deemed liquidated as entered per § 1504(d)? 2. Did CBP exceed its ministerial function when liquidating the protested entries? 3. Whether transaction value was an appropriate basis of appraisement? 4. Whether the appraised value of the imported merchandise was properly determined at the time of liquidation? 5. Did UPS comply with 19 U.S.C. § 1485(d) so as to transfer liability for the payment of additional duty from UPS as the importer of record to Gallop? 6. Is UPS liable for the additional antidumping duty due on entry numbers 342-3 or 248-3?

LAW AND ANALYSIS:

We note initially that the instant protest was timely filed, i.e., within 90 days of the liquidation of the entries (19 U.S.C. § 1514(c)(3)(B)). 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 within 90 days of the notice of liquidation (19 U.S.C. §1514(c)(3)(B)). The subject entries were liquidated on April 11, 2003, and this protest was filed on July 9, 2003.

Generally, antidumping duty rates correctly applied by CBP are not protestable, (Fujitsu Ten Corp. v. United States, 957 F. Supp. 245; Ct. Intl. Trade 1997)) because “Customs has a merely ministerial role in liquidating antidumping duties” (Mitsubishi Electronics America, Inc. v. United States, 44 F.3d 973, 977 (Fed. Cir. 1994)). CBP “may not independently modify, directly or indirectly the determinations, [the Department of Commerce’s] underlying facts, or their enforcement” (Royal Business Machines Inc. v. United States, 507 F. Supp. 1007, 1014 n.18 (Ct. Int'l Trade 1980), aff'd, 69 C.C.P.A. 61, 669 F.2d 692 (CCPA 1982)). However, the determination of the appraised value of the merchandise is a proper subject for protest per §§ 1514(a)(1). Further, inasmuch as UPS protests the liquidation, i.e., disputes the application by CBP of Commerce’s liquidation instructions, this matter is protestable. (See Xerox Corp. v. United States, 289 F.3d 792 (Fed. Cir. 2002)).

The protestant requests further review per 19 C.F.R. 174.25(b). It is the opinion of the port that this protest warrants further review. Under 19 U.S.C. § 1515(a), “[u]pon the request of the protesting party . . . a protest may be subject to further review by another appropriate customs officer, under the circumstances and in the form and manner that may be prescribed . . . in regulations.” 19 C.F.R. § 174.24(b) provides for further review of a protest when the decision against which the protest was filed:

(b) Is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts;

The protestant seeks further review per 19 C.F.R. § 174.24(b), because “neither the Commissioner of Customs or his designee, nor the Customs courts have considered whether CBP properly liquidated the entries subject to this protest.” We agree that further review is warranted.

1. Were the entries deemed liquidated as entered per § 1504(d)?

UPS contends that “a minimum of eight months elapsed during which suspension of liquidation was removed” and since CBP did not liquidate the entries during that time, the protested entries were deemed liquidated as entered per 19 U.S.C. § 1504 under International Trading Co. v United States, (281 F.3d 1268 (Fed. Cir. 2002)). UPS calculates the elapse of eight months in this way: five months between the Notice of Final Results of Administrative Review (October 12, 2001) and the CIT’s injunction (March 12, 200[2]), plus the three months between the liquidation instructions (January 13, 2003) and the liquidations (April 11, 2003).

Section 1504(d) (1999) provides

Except as provided in section 751(a)(3) [19 USCS § 1675(a)(3)], when a suspension required by statute or court order is removed, the Customs Service shall liquidate the entry, unless liquidation is extended under subsection (b), within 6 months after receiving notice of the removal from the Department of Commerce, other agency, or a court with jurisdiction over the entry. Any entry (other than an entry with respect to which liquidation has been extended under subsection (b)) not liquidated by the Customs Service within 6 months after receiving such notice shall be treated as having been liquidated at the rate of duty, value, quantity, and amount of duty asserted at the time of entry by the importer of record.

(19 U.S.C. § 1504(d) (1999)). First, UPS’ reliance on International Trading Co. v. United States, (281 F.3d 1268 (Fed. Cir. 2002)) to conclude that the October 12, 2001, Notice of Final Results of Administrative Review began the § 1504(d) 6 month period is misplaced. In International Trading, the final results of administrative review were not challenged in court. UPS’ conclusion that the six months between notice and deemed liquidation need not run consecutively, but may be cobbled together from smaller periods is also unjustified. This conclusion presupposes that there is not one final event that lifts suspension of liquidation nor one notice to CBP. Both these arguments are counter to the CAFC’s explanation, as quoted below, of the statutory scheme underpinning suspension of liquidation.

In International Trading Co. v. United States, (110 F. Supp. 2d 977 (Ct. Intl. Trade 2000) (aff’d 281 F.3d 1268 (U.S. App. 2002)), the liquidation of an entry was suspended pending an administrative review of the antidumping duty order (see 19 U.S.C. §1673b(d)). Commerce published the final results of the administrative review and more than six months later, sent liquidation instructions to CBP. CBP liquidated the entries in accordance with these instructions. The importer filed suit claiming that the entries were deemed liquidated per 19 U.S.C. § 1504(d) (1993) at the rate asserted upon entry. The plaintiff argued that the notice of final results of the administrative review was notice to CBP that the suspension of liquidation had been lifted and, since CBP did not liquidate within 6 months of receiving such notice, the entries liquidated by operation of law per § 1504(d).

The CAFC in International Trading affirmed the CIT’s ruling that suspension of liquidation because of an administrative review is removed upon publication of the final results of the administrative review. (See 281 F.3d 1268, 1271.) The CAFC found that when liquidation is suspended pending an administrative review, “publication of the final results in the Federal Register constitutes notice to CBP within the meaning of section 1504(d)” (id. at 1275) that the suspension is lifted and CBP must liquidate relevant entries within 6 months of the notice. The CAFC explained the basis for its decision in this way:

The statutory scheme governing suspension of liquidation supports the trial court's conclusion that suspension of liquidation was removed when the final results of the administrative review were published in the Federal Register. Liquidation of a particular class of entries is suspended when Commerce publishes in the Federal Register an affirmative preliminary or final determination in an antidumping investigation covering those entries. See 19 U.S.C. §§ 1673b(d) (1988); 1673d(c)(1)(C) (1994). Liquidation is suspended in that setting because it is not possible, at that point, to determine what duties will be assessed against those entries. It follows logically that suspension should be removed as soon as it is possible to determine the appropriate duties, which occurs when the antidumping duty order is issued or the final results of an administrative review are announced.

(Id. at 1272.) (Emphasis added.) Thus, the CAFC explained that the statutory scheme providing for suspension of liquidation is intended to delay liquidation of entries until the amount duty assessable may be determined conclusively. Final results of an administrative review which results are challenged in court do not necessarily provide conclusively the amount duty assessable because the court proceedings may change the rate of antidumping duty.

In UPS’ case, suit was filed on December 10, 2001 to challenge the final results of administrative review. Thus, it was not possible to determine what antidumping duties should have been assessed in order to liquidate the entries within six months of the publication (October 12, 2001) of the final results of administrative review because those results were subject to modification due to the suit. (See Hynix Semiconductor, Inc., v. United States, 248 F. Supp. 2d 1297, 1301 (Ct. Intl. Trade 2003)). Therefore, since the final results of the administrative review did not provide conclusively the amount duty assessable, publication of those results could not have lifted the suspension of liquidation on the protested entries.

Under NEC Solutions, (NEC Solutions (America), Inc. v. United States, 277 F. Supp. 2d 1340 (Ct. Intl. Trade 2003) aff’d 441 F3d 1340 (Fed. Cir. 2005)), Commerce’s message number 2326202 issued on November 22, 2002, constituted notice to CBP that liquidation of DRAMS subject to antidumping case A-580-812 and manufactured by Hynix Semiconductor Inc. and Hynix Semiconductor America Inc., but imported by other than these manufacturers, ceased to be enjoined. Message number 2326202 stated in part:

On 11/21/2002, the Department of Commerce received an amended preliminary injunction . . . . The amended injunction is clarified to apply only to entries manufactured by Hynix Semiconductor, Inc. and imported into the United States by Hynix Semiconductor America, Inc.

(Emphasis added.) In NEC Solutions, the plaintiff argued that CBP received notice that a court-ordered suspension of liquidation had been lifted by an e-mail message that stated “there should be no unliquidated entries of” the goods “held for antidumping purposes . . .” which message was then electronically transmitted to “Customs Electronic Bulletin Board,” which is accessed by the public.

The CIT in NEC Solutions stated

taken together, Int'l Trading [281 F.3d 1268 (Fed. Cir. 2002)] and Fujitsu [110 F. Supp. 2d 1061 (Ct. Int’l Trade 2000)] make clear that, while specific liquidation instructions from Commerce may be sufficient, [ ] they are not the exclusive method of § 1504(d) notice. The question before the court, therefore, is whether the communications raised by NEC are adequate.

(Id. at 1345.) In NEC Solutions, CBP argued that the described message from the DOC was not § 1504 notice because it did not advise that the suspension of liquidation had lifted nor did it provide the precise duty rate to be applied. The CIT rejected this argument and stated:

Determining the sufficiency of notice under § 1504(d) poses a problem because, as Defendant concedes, [§ 1504(d)] does not define or otherwise explain the requirements for such notice. While it is clear from Int'l Trading and Fujitsu that publication in the Federal Register of the agency's final results or the court's final decision are sufficient, it is less clear what is not. . . . . It is true that, in Int'l Trading, the court held that inclusion of the duty amount, in the absence of express language that the suspension has been lifted, is sufficient. 281 F.3d at 1276 (“'Notice' of the duty to be paid is, in effect, notice of the removal of suspension.”). The court, however, did not hold that informing Customs of the applicable duty rate was the exclusive alternative method of providing § 1504(d) notice or that is was a strict requirement.

(Id. at 1346-47.) Further, the NEC court stated:

Fujitsu and Int'l Trading do not specify the requirements for § 1504(d) notice, except to state that notice should be “unambiguous.” The issue, therefore, is whether this particular e-mail unambiguously provided notice to Customs that the suspension had been lifted. . . . . . . the court finds that a reasonable Customs official, with knowledge in these matters, would have read the message to provide unambiguously that any suspension of liquidation on NEC's entries had been removed. It is important to note that Customs then posted the message to its Electronic Bulletin Board, which is apparently “a familiar manner” for Customs to disseminate Commerce's liquidation information to Customs officials. Messages are posted only where Commerce expressly “allows disclosure to the public,” therefore, there is no question that Commerce was aware that both Customs and the public (i.e. the parties) would have access to this information.

(Id. at 1348.) The CIT in NEC concluded that the above described e-mail was “sufficient to serve as § 1504(d) notice” to CBP that suspension of liquidation had lifted. (Id.)

Following the CIT’s reasoning in NEC, message number 2326202 issued November 22, 2002, is the earliest communication which could constitute § 1504(d) notice to CBP that the court-ordered injunction issued March 12, 2002, was lifted with regard to the protested entries. Notwithstanding that this message also advised CBP to “continue to suspend liquidation of other entries until Liquidation instructions are provided,” a reasonable CBP official, with knowledge in these matters, would have read the message to provide unambiguously that the suspension of liquidation on entries of DRAMS produced but not exported by Hynix had been removed.

The final criterion for a deemed liquidation to take place is that CBP must have failed to liquidate the entry within six months of receiving notice that the suspension of liquidation had lifted. Thus, because CBP received such notice on November 22, 2002, and liquidated the protested entries on April 11, 2003, less than six months had elapsed between notice and liquidation. Therefore, the protested entries are not deemed liquidated as entered under the courts’ decisions in International Trading, Fujitsu or NEC solutions.

2. Did CBP exceed its ministerial function when liquidating the protested entries?

The protestant argues that CBP abused its authority by “waiting four years after these entries to inform UPS of a significant change to the declared values – a matter completely unrelated to the reason for the suspension of liquidation, i.e., the antidumping case.” CBP is mandated by statute to determine the value of entered merchandise. 19 U.S.C. § 1500 requires CBP to:

(a) fix the final appraisement of merchandise by ascertaining or estimating the value thereof, under section 402 [19 USCS § 1401a], by all reasonable ways and means in his power, any statement of cost or costs of production in any invoice, affidavit, declaration, other document to the contrary notwithstanding; (b) fix the final classification and rate of duty applicable to such merchandise; (c) fix the final amount of duty to be paid on such merchandise and determine any increased or additional duties, taxes, and fees due or any excess of duties, taxes, and fees deposited; (d) liquidate the entry and reconciliation, if any, of such merchandise; . . . .

(19 U.S.C. § 1500).

Concerning the role of CBP in liquidating antidumping duties, under the applicable statutes, the Department of Commerce has the authority to calculate and determine antidumping duties. Per 19 U.S.C. 1673, Commerce calculates and determines the antidumping duty rate. Commerce then directs CBP to collect the estimated duties. (See 19 U.S.C. § 1673e(a)(1) (1990)). CBP is required to collect the antidumping duties imposed by the Department of Commerce per 19 U.S.C. § 1673(g). In Mitsubishi Electronics America, Inc. v. United States, 44 F.3d 973 (Fed Cir. 1994) the court stated:

Customs merely follows Commerce's instructions in assessing and collecting duties. Customs does not determine the “rate and amount” of antidumping duties under 19 U.S.C. § 1514(a)(2). Customs only applies antidumping rates determined by Commerce. Further, Customs has a merely ministerial role in liquidating antidumping duties under 19 U.S.C. § 1514(a)(5).

(Id. at 977.) Therefore, the DOC is required to determine the rate of antidumping duty to be assessed. CBP’s ministerial role is to follow the liquidation instructions and to compute the duty by applying the antidumping duty rate set by the DOC to the appraised value as determined by CBP.

The liquidation instructions contained in message number 3013201 directed CBP Port Directors to, among other things, “assess antidumping duties at the cash deposit rate in effect on the date of entry” and “[i]f the importer ha[d] been reimbursed antidumping duties, customs should double the antidumping duties in accordance with [351.402(f)(2)].” With regard to the instant protest, CBP fulfilled its statutory obligation requiring it to determine the value of the entered goods and followed the liquidation instructions by assessing antidumping duties at the cash deposit rate in effect on the date of entry upon liquidation. In addition, CBP was required to double the antidumping duties due per 19 C.F.R. § 351.402(f). DOC regulation § 351.402(f) requires the importer to certify prior to liquidation that it has not been reimbursed for or had paid on its behalf, all or part of the antidumping duties assessed by filing a reimbursement certificate described in § 351.402(f). Section 351.402(f)(3) provides that if an importer fails to file the required certificate, the presumption will be that the importer was reimbursed for the antidumping duty. CBP, per the liquidation instructions, will then collect double the antidumping duties due.

Insofar as UPS is the importer of record for the protested entries and did not transfer liability for duty to another party (see discussion below), UPS was required to file a reimbursement certificate prior to liquidation as described in § 351.402(f). However, all the reimbursement certificates provided for the protested entries are signed by a representative of Gallop. Consequently, the importer of record, UPS, failed to provide a reimbursement certificate as required by § 351.402(f). Thus, UPS is liable per the liquidation instructions for antidumping duties at double the cash deposit rate in effect on the date of entry. Moreover, some of the certificates provided state that the shipper of the DRAMS, identified as Lucky Gold Star, is the “party responsible for ADD [antidumping duty].” Therefore, these certificates certify that, on these entries, Lucky Gold Star paid the antidumping duty on behalf of the importer of record, UPS.

Consequently, even if UPS had executed these certificates, instead of Gallop, UPS would still be liable § 351.402(f) for double the antidumping duty on entries for which these certificates were provided because they certify that the antidumping duty was paid by Lucky Gold Star on behalf of UPS as the importer. Thus, contrary to the protestant’s assertion, CBP did not exceed its ministerial authority when it determined the value of the entered DRAMS and assessed the antidumping duty at the cash deposit rate in effect on the date of entry. In addition, insofar as UPS did not to file a reimbursement certificate certifying that it was not reimbursed nor had paid on its behalf, the antidumping duty due on the entries, UPS is liable for antidumping duties equal to double the cash deposit rate in effect on the date of entry.

3. Whether transaction value was an appropriate basis of appraisement?

The protestant contends that the merchandise should have been appraised under the transaction value method and that CBP “departure” from transaction value was “erroneous.” Section 500 of the Tariff Act of 1930, as amended, provides inter alia, that the Customs Service shall fix the final appraisement of merchandise, its classification and rate of duty and the final amount of duty to be paid, and liquidate the entry and reconciliation, using all reasonable ways and means (see 19 U.S.C. § 1500). The evidence provided reflects that the merchandise covered by the protested entries was valued based on the appraised value determined at the time of liquidation. The port requested value information from Gallop under cover of a CF-28 dated June 18, 1999. In response, Gallop advised that it was an agent of the seller, rather than a buyer of the merchandise. As discussed further below, this information was the basis of the port’s rejection of transaction value.

Merchandise entered into the United States is appraised in accordance with § 402 of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979, (“TAA”), (19 U.S.C. § 1401a). The primary basis of appraisement under the TAA is transaction value, which is defined as “the price actually paid or payable for the merchandise when sold for exportation to the United States,” plus amounts for certain statutorily enumerated additions to the extent not otherwise included, including selling commissions. 19 U.S.C. § 1401a(b)(1)(A)-(E). Inasmuch as the transaction value method requires a sale for exportation to the U.S., there must be a bona fide sale between the buyer and seller in order for merchandise to be appraised on this basis. In the instant case, there was no sale.

By its own admission, Gallop was not the buyer of the imported merchandise. In a letter dated June 18, 1999, Gallop’s Executive Vice President, responding to a request for purchase orders and proof of payment, advised that Gallop was the seller’s receiving, distribution and transportation agent, rather than the buyer. Gallop did not provide any documentation relative to a sale for exportation to the U.S., or a post-importation sale in the U.S. Thus, the record reflects that there was no sale between Gallop and Trend Tronic and that, consequently, since Gallop was an agent rather than a buyer, there was no sale for exportation to the U.S. No evidence has been presented relative to the ultimate purchaser(s) in the U.S. Therefore, the transaction value method, which was the basis of appraisement claimed by the importer of record at the time of entry, is inapplicable. Accordingly, the port properly rejected the use of the transaction value method in the instant case.

Furthermore, the port advised the importer of record that the transaction value method was an unacceptable basis of appraisement. In this regard, § 152.2, CBP Regulations, provides:

If the port director believes that the entered rate or value of any merchandise is too low, or if he finds that the quantity imported exceeds the entered quantity, and the estimated aggregate increase in duties on that entry exceeds $15, he shall promptly notify the importer on Customs Form 29, specifying the nature of the difference on the notice. Liquidation shall be made promptly and shall not be withheld for a period of more than 20 days from the date of mailing of such notice unless in the judgment of the port director there are compelling reasons that would warrant such action.

19 C.F.R. § 152.2; see also 19 C.F.R. § 152.103(m). The port issued a CF-29 dated March 26, 2003, specifying the nature of the difference. Liquidation followed accordingly. The liquidation of the protested entries was therefore consistent with the requirements of 19 C.F.R. §§ 152.2, 152.103(m).

4. Whether the appraised value of the imported merchandise was properly determined at the time of liquidation?

When imported merchandise cannot be appraised based on transaction value, it is to be appraised in accordance with the remaining methods of valuation, applied in sequential order. The alternative methods of appraisement in order of precedence are: the transaction value of identical merchandise; the transaction value of similar merchandise; deductive value; and computed value. If the value of imported merchandise cannot be determined under these methods, it is to be determined in accordance with § 402(f) of the TAA. 19 U.S.C. § 1401a(a)(1).

In the instant case, the port appraised the imported merchandise under § 402(c) of the TAA based on the transaction value of similar merchandise, with reference to list prices for DRAMS on the American IC Exchange. (The American IC Exchange was acquired by NECX.com LLC. Boston Business Journal, http://boston.bizjournals.com/boston/stories /2000/07/03/daily10.html.) For purposes of § 402(c), however, merchandise must be similar to that being appraised. In addition, it must have been sold for export to the United States, and have been exported to the United States, at or about the same time as the merchandise being appraised. Moreover, merchandise is not considered similar unless it was produced in the same country as the merchandise being appraised. The record does not support a finding that merchandise listed on the American IC Exchange meets these requirements. Accordingly, § 402(c) of the TAA was not an appropriate method of appraisement in the particular circumstances of this case.

After the transaction value of similar merchandise, the next potentially applicable method of appraisement is deductive value. As a general matter, if the merchandise concerned is sold in the condition as imported at or about the time of the merchandise being appraised, the deductive value is based on the unit price at which the merchandise concerned is sold in the greatest aggregate quantity. As noted above, Gallop Couriers is the seller’s U.S. receiving, distribution and transportation agent. There is no information in the record about the sale in the U.S. of the imported merchandise, nor any indication that Gallop provided any such information in connection with the CF-28. Absent any information in this regard, the deductive value method is inapplicable.

If deductive value information is inapplicable, the next applicable method of appraisement in order of sequence is computed value. However, computed value information is unavailable; consequently, this method of appraisement is also inapplicable. When the value of imported merchandise cannot be determined under sections 402(b)-(e) of the TAA, it may be appraised on the basis of a value derived from one of those methods, reasonably adjusted to the extent necessary to arrive at a value. However, it may not be appraised, inter alia, based on the price on the domestic market in the country of export, the selling price in the U.S. of merchandise produced in the U.S., minimum values or arbitrary or fictitious values. 19 U.S.C. § 1401a(f); 19 C.F.R. § 152.108.

Section 402(f) of the TAA provides that imported merchandise is to be appraised on the basis of a method derived from one of the methods set forth in sections 402(b)-(e), such methods reasonably adjusted to the extent necessary to arrive at a value. However, there are certain prohibited bases of appraisement under § 402(f), including the selling price of merchandise produced in the United States, minimum values and arbitrary or fictitious values. 19 U.S.C. § 1401a(f)(2).

Under § 500 of the Tariff Act of 1930, as amended, which constitutes Customs and Border Protection’s general appraisement authority, the appraising officer may:

fix the final appraisement of merchandise by ascertaining or estimating the value thereof, under section 1401a of this title, by all reasonable ways and means in his power, any statement of cost or costs of production in any invoice, affidavit, declaration, other document to the contrary notwithstanding....

19 U.S.C. § 1500(a) (emphasis added).

In this regard, the Statement of Administrative Action (SAA), which forms part of the legislative history of the TAA, provides in pertinent part:

Section 500 is the general authority for Customs to appraise merchandise. It is not a separate basis of appraisement and cannot be used as such. Section 500 allows Customs to consider the best evidence available in appraising merchandise. It allows Customs to consider the contract between the buyer and seller, if available, when the information contained in the invoice is either deficient or is known to contain inaccurate figures or calculations…. Section 500 authorize (sic) the appraising officer to weigh the nature of the evidence before him in appraising the imported merchandise. This could be the invoice, the contract between the parties, or even the recordkeeping of either of the parties to the contract….

In those transactions where no accurate invoice or other documentation is available, and the importer is unable, or refuses, to provide such information, then reasonable ways and means will be used to determine the appropriate value, using whatever evidence is available, again within the constraints of section 402.

Statement of Administrative Action, H.R. Doc. No. 153, 96 Cong., 1st Sess., pt 2, reprinted in, Department of the Treasury, Customs Valuation under the Trade Agreements Act of 1979 (October 1981), at 67. In this case, it is our position that the value of the DRAMS may be determined under § 402(f) using all reasonable ways and means, provided the basis of valuation is not specifically precluded. To this end, the value of the imported DRAMS should be determined, if possible, on the basis of a method derived from sections 402(b)-(e) of the TAA.

In Headquarters Ruling Letter (HRL) 545017 dated August 19, 1994, we stated in regard to the use of all reasonable ways and means:

Based on the facts presented, especially in light of the fact that the protestant has not provided any other documentation such as invoices, contracts, or recordkeeping to show otherwise, we find that the protestant has not proffered sufficient evidence to prove that Customs employed unreasonable ways and means to ascertain the value of the imported merchandise. The appraising officer, under authority of section 500 and by utilizing a method of appraisement in accordance with section 402(f), appropriately considered all the evidence made available by the protestant and used “all reasonable ways and means in his power” to appraise the merchandise.

HRL 545017 at 3. See also, HRL 543904 dated March 20, 1987.

As noted above, there was no sale for exportation to the U.S. and thus no transaction value. Based on the documentation submitted, there was no information that would have enabled appraisement under sections 402(c)-(e) of the TAA, notwithstanding that the imported merchandise was apparently sold after importation and, therefore, could perhaps have been appraised under the deductive value method. Consequently, the imported DRAMS must be appraised under § 402(f). While there is no authority to appraise imported merchandise under § 402(c) of the TAA on the basis prices on the American IC Exchange, we find in the particular circumstances of this case, that such information is acceptable for purposes of § 402(f).

In the particular circumstances of this case, all “reasonable ways and means” must be used to appraise the merchandise, subject to the prohibitions in § 402(f)(2). 19 U.S.C. § 1500. To this end, we find that the appraised value in this instance may be based on the information on DRAM prices that was obtained from the American IC Exchange, an electronic exchange for semiconductors and semiconductor products. Such information is neither arbitrary nor fictitious, but represents a reasonable and transparent effort to establish a value in the absence of acceptable information from the parties to the transaction.

In this regard, we note that under transaction value, the price actually paid or payable may be arrived at through the application of a formula, such as the price in effect on the date of export in the London Commodity Market. 19 C.F.R. § 152.103(a). Furthermore, its use is not prohibited under § 402(f)(2) inasmuch as it is not based, e.g., on the selling price of merchandise produced in the U.S., or domestic prices in South Korea. Indeed, it is the only available information that can be quantitatively documented. Accordingly, we find that in the particular circumstances of this case, an appraisement under § 402(f) based on prices from the American IC Exchange reflects “all reasonable ways and means” for determining the value of the merchandise covered by the protested entries.

The appraised value of the imported merchandise was properly determined at the time of liquidation. The merchandise was not sold for exportation to the U.S. and therefore cannot be appraised under the transaction value method. There is no authority under § 402(c) of the TAA to appraise merchandise based on prices listed on a commodity exchange. The merchandise covered by the protested entries is properly appraised under § 402(f) of the TAA, using all reasonable ways and means in accordance with 19 U.S.C. § 1500.

5. Did UPS comply with 19 U.S.C. § 1485(d) so as to transfer liability for the payment of additional duty from UPS as the importer of record to Gallop?

UPS argues that since Gallop is the actual owner of the entered goods, Gallop is liable for any additional duty owed. Further, UPS contends that its initial declaration at the time of entry that it is not the owner or purchaser, along with its submission – contemporaneously with its protest - of the Declaration of Ownership form, fulfils the substantive requirements of 19 U.S.C. § 1485(d) “for removing any liability UPS may otherwise have for additional duties associated with these entries.”

We concur with the field’s position that UPS, not Gallop, is liable for additional duties. Section 505(a) of the Tariff Act of 1930, as amended (19 U.S.C. § 1505(a)) provides in pertinent part that “the importer of record shall deposit with the Customs Service at the time of making entry, or at such later time as the Secretary may prescribe by regulation, the amount of duties and fees estimated to be payable thereon.” Section 505(b) requires CBP to “collect any increased or additional duties and fees due, together with interest thereon, as determined on a liquidation or reliquidation.”

The law permits, under certain circumstances, the transfer of liability for the payment of additional or increased duties from the importer of record to another party. In this regard, § 485(d) of the Tariff Act of 1930, as amended (19 U.S.C. § 1485(d)), provides that:

An importer of record shall not be liable for any additional or increased duties if (1) he declares at the time of entry that he is not the actual owner of the merchandise, (2) he furnishes the name and address of such owner, and (3) within ninety days from the date of entry he produces a declaration of such owner conditioned that he will pay all additional and increased duties, under such regulations as the Secretary of the Treasury may prescribe. Such owner shall possess all the rights of an importer of record.

The regulation promulgated under the authority conferred by § 485(d) is § 141.20 of the CBP Regulations (19 C.F.R. § 141.20). Section 141.20 provides that in order to be relieved from statutory liability for additional duties, the consignee in whose name the entry summary was made must declare at the time of the filing of the entry summary that he is not the actual owner of the merchandise. (The reference to “consignee” in this particular context is an outdated expression for the contemporary term “importer of record”). In addition, he must furnish the name and address of the owner, and file both a declaration of the actual owner on a CF 3347 and a superseding bond of the actual owner on a CF 301 within 90 days from the time of entry.

UPS complied with the first two requirements of § 141.20, in that it declared on the entry summaries that it was not the actual owner of the imported goods, and furnished the name and address of Gallop to CBP. However, the company failed to meet the third requirement of that regulation, because the entries under protest were made in 1999 but the CF 3347 was only filed on July 1, 2003, well beyond the 90-day deadline. The failure to file a timely CF 3347 renders UPS ineligible for relief from statutory liability for the payment of increased and additional duties under 19 U.S.C. § 1485(d) and § 141.20. Further, there is no evidence that any “superseding bond[s]” of Gallop’s were filed within 90 days from the time of entry, thus resulting in additional lack of compliance with § 141.20. As importer of record, UPS remains obligated under the terms of its basic importation bond to “[p]ay, as demanded by Customs, all additional duties, taxes, and charges subsequently found due, legally fixed, and imposed on any entry secured by this bond” (19 C.F.R. § 113.62(a)(2)(ii)). Consequently, UPS’ assertion that CBP must proceed against Gallop instead of UPS to recover any additional duties is unpersuasive.

6. Is UPS liable for the additional antidumping duty due on entry numbers 342-3 or 248-3?

UPS argues that since entry number 342-3 was released under a single transaction bond in Gallop’s name, UPS is not liable for additional duties on this entry. As stated above, per 19 U.S.C. § 1505, the importer of record is liable for payment of duties. The CBP Regulations at 141.1 provide:

The liability for duties, both regular and additional, attaching on importation, constitutes a personal debt due from the importer to the United States which can be discharged only by payment in full of all duties legally accruing, unless relieved by law or regulation.

(19 C.F.R. § 141.1(b)(a)). As the port notes, and the CF 3461 and entry summary reflect, UPS is listed as the importer of record on both documents. Section § 142.4 of the CBP Regulations states in part:

. . . if the entry summary is filed after the entry, the bond filed at the time of entry, as required by paragraph (a) of this section or by § 142.19, shall continue to be obligated unless a superseding bond is filed, as provided in § 141.20 of this chapter, or unless a bond of the type described in paragraph (a) of this section is filed under the circumstances described in paragraph (b)(2) of this section. If a superseding bond is filed, or if a bond is filed under the circumstances described in paragraph (b)(2) of this section, the obligations of the initial bond shall be terminated as to any liability which may accrue after the superseding or other bond becomes effective.

(19 C.F.R. § 142.4(b)(1)). Per § 142.4(b)(1)) when the CF 7501, entry summary, is filed after the 3461, entry, “the bond filed at the time of entry . . . shall continue to be obligated unless a superseding bond is filed” in accordance with § 141.20. We have already determined that UPS failed to transfer liability for the duties to Gallop as provided in § 141.20.

In the alternative, § 142.4(b)(1) provides that the bond filed at entry is obligated “unless a bond of the type described in paragraph (a) of this section is filed under the circumstances described in paragraph (b)(2) of this section.” Accordingly, we have only to determine if the requirements of § 142.4(b)(2) are met so as to terminate the liability of UPS’ bond. Section 142.4(b)(2) states:

If entry is made in the name of an agent, supported by the agent's bond, or in the name of a principal, supported by the principal's bond, and the entry summary thereafter is filed in the name of the other party, the party named in the entry summary shall file a bond on Customs Form 301, containing the bond conditions set forth in § 113.62 of this chapter. In this circumstance, the bond obligation of the party in whose name entry was made shall be terminated, as to liability which may accrue after the bond filed by the party named in the entry summary becomes effective, and the party filing the entry summary need not file the separate declaration of the actual owner and the superseding bond otherwise required under § 141.20 of this chapter.

(19 U.S.C. § 142.4(b)(2)). Hence if entry of the goods is made in one party’s name and the entry summary is filed in another’s name, the entity named on the entry summary is required to file a bond.

As stated, the CF 3461 for entry 342-3 reflects UPS as the importer of record and was filed on 7/23/1999, the entry and release date. The CF 7501, entry summary was filed on 8/2/1999, but also reflects UPS as the importer of record. Therefore, since both the entry and entry summary named UPS as the importer of record, UPS’ bond liability is not terminated under § 142.4(b)(2). We note that the CF 3461, entry, for 129-5 states UPS as the importer of record but that the entry summary reflects Gallop as both the consignee and importer of record. However, liability for the additional duties on this entry was not transferred because first, this entry does not meet the requirements of § 141.20, as stated above. Second, because we have no evidence that a second bond in Gallop’s name was ever filed for this entry, the requirements of § 142.4(b) are not met.

UPS also contends that it filed the entry summary for entry number 248-3 in Gallop’s name as the importer of record and refers to HRL 210751 to support its contention that liability was transferred to Gallop. However, The CF 7501 and CF 3461 for entry number 248-3 both reflect UPS as the importer of record and Gallop is identified as the ultimate consignee. Moreover, UPS' reliance on the precedent set in HRL 210751 is misplaced, because that ruling cites to, and presumes compliance with, § 142.2(b)(2), which as stated above authorizes the transfer of bond liability when the entry summary is filed in the name of a party who was not the designated importer of record on the entry, and a new bond in the name of the new importer of record is filed with the entry summary. Since the entry and the entry summary for entry number 248-3 both reflect UPS as the importer of record, the entry summary was not “filed in the name of a party who was not the designated importer of record on the entry . . . “ as required by § 142.2(b)(2). Further, there is no evidence that a new bond in Gallop’s name was filed with the entry summary. Accordingly, the entry documents associated with entry number 248-3 do not evidence compliance with § 142.4(b)(2) and liability was not transferred.

HOLDING:

1. The entries were not deemed liquidated as entered per § 1504(d). 2. CBP did not exceed its ministerial function when liquidating the protested entries and UPS is liable for antidumping duties equal to double the cash deposit rate in effect on the date of entry. 3. Modified transaction value was an appropriate basis of appraisement under § 402(f) of the TAA, using all reasonable ways and means in accordance with 19 U.S.C. § 1500. 4. The appraised value of the imported merchandise was properly determined at the time of liquidation under § 402(f) of the TAA, using all reasonable ways and means in accordance with 19 U.S.C. § 1500. 5. UPS did not comply with 19 U.S.C. § 1485(d) and no liability was transferred; therefore as importer of record, UPS remains obligated under the terms of its basic importation bond to pay any additional duties. 6. UPS is liable for the additional duties pursuant to the terms of its basic importation bond for the additional antidumping duty due on entry numbers 342-3 or 248-3.

The protest should be DENIED in full and insofar as UPS did not to file reimbursement certificates certifying that it was not reimbursed, nor had paid on its behalf, the antidumping duty due on the entries, UPS is liable for antidumping duties equal to double the cash deposit rate in effect on the date of entry.

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 CBP 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 Harmon, Director
Commercial and Trade Facilitation Division