Customs Ruling HQ 230516 - Application for Further (AFR) Review of Protest number 2809-04-100265; surety, antidumping duty; new shipper review; HRL 230339; surety number; Customs bond. Dear Port Director:

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HQ 230516
Feb 10, 2005

Type : • HTSUS :
Related: 230339

LIQ-4-01; LIQ-11 RR:CR:DR 230516RDC

Port Director
Customs & Border Protection
555 Battery Street
San Francisco, CA 94111
Att: Richard Peltier

RE: Application for Further (AFR) Review of Protest number 2809-04-100265; surety, antidumping duty; new shipper review; HRL 230339; surety number; Customs bond.

Dear Port Director:

The above-referenced Protest was received in this office on 6/29/2004 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, American Home Assurance Company (American Home), as surety for Panjee Co., Ltd (Panjee), protests its liability for antidumping duties (AD), assessed on entry number DZ1-xxxx511-0, entered 11/21/2001. The CF 7501, Entry Summary, reflects that merchandise imported by Panjee was subject to antidumping case A-570-851-016, “Certain Preserved Mushrooms from the People's Republic of China,” manufactured by Shantou Hongda Industrial General Corporation (Shantou). No antidumping duty was deposited on entry, but a bond was posted to secure the AD duty. The entry summary reflects that the CBP surety identification number for the entry bond and the antidumping duty bond is 891. According to CBP’s Automated Commercial System (ACS), surety number 891 is assigned to Washington International Insurance Co. and surety number 069 is assigned to American Home Assurance Company. Panjee’s Customs broker, East West Associates, Inc., (East West), on 11/2/2001, prepared the entry summary.

A copy of the CF 301, Customs Bond, number EWA9063827041580, reflects that on 11/9/2001, a single transaction bond was issued by American Home at 175 Water Street, New York, N.Y. 10038, surety number 069, by its attorney-in-fact, Glenn A. Stebbings. Stebbings’ identification number is provided. East West procured the bond. Panjee is listed as the principal and its importer number as reflected in ACS is given. Entry number DZ1-xxxx511-0 is stated as the transaction secured by this bond and the rating code “4,” indicating antidumping and countervailing duties per 19 C.F.R. § 113.62 is indicated.

On 7/11/2003, the Department of Commerce (DOC), International Trade Administration (ITA), published the Notice of Final Results and Partial Rescission of the New Shipper Review for case A-570-851. The period of review was 2/1/2001 to 1/31/2002 and exporter Shantou, among others was subject to the review (68 Fed. Reg. 41,304). According to this Notice, the weighted-average antidumping margin determined for the preserved mushrooms exported by Shantou during the review period was 122.07 percent ad valorem.

On 8/8/2003, Message number 3220203 was issued by CBP Headquarters and contained liquidation instructions from the DOC for entries subject to antidumping case A-570-851-016 entered during the period of review between 2/1/2001 and 1/31/2002. These instructions directed that entries from Shantou for which Panjee was the importer be liquidated and an antidumping duty rate of $1.86 per kilo be assessed at liquidation. The protested entry was liquidated on 9/19/2003 and $1.86 per kilo in antidumping duty was assessed. According to CBP’s National Finance Center (NFC), the first demand for payment against American Home’s bond as surety for Panjee on the protested entry was mailed 3/11/2004. Protest 2809-04-100118 filed by American Home was received by CBP on 5/11/2004 and subsequently forwarded to this office.

ISSUE:

Is American Home Assurance Co. liable for the antidumping duty assessed on entry number DZ1-xxxx511-0 as surety for Panjee Co., Ltd.?

LAW AND ANALYSIS:

We note that the Protest was filed timely. A surety against whose bond a claim has been made may file a protest “within 90 days from the date of mailing of notice of demand for payment against its bond.” (19 U.S.C. § 1514(c)(3), (see also 19 C.F.R. § 174.12(e)). According to the NFC, the first demand for payment against American Home’s bond for the entry protested was mailed 3/11/2004. Consequently, since the notice of demand was mailed to American Home on 3/11/2004, the Protest received 5/11/2004 was timely, i.e., filed within 90 days from mailing of the demand notice. Further, the certification required by § 1514(c)(3)(B) was made on page one of the “Attachment to Protest.”

Among the contentions by the Protestant, which, it concludes, relieves it of liability for the antidumping duty assessed on the protested entry, are the following:

- American Home was “prejudiced” by the DOC’s failure to follow DOC regulations; - the importer committed fraud against CBP and the surety; - CBP did not give notice to American Home that the liquidation of the protested entry was suspended; - the distribution of antidumping duties to affected U.S. businesses per 19 U.S.C. § 1675c renders the collection of antidumping duty an unconstitutional civil penalty.

American Home also requests that CBP compromise the claim against it per 19 U.S.C. § 1617. Since each of these issues was conclusively addressed in HRL 230339, 6/25/2004, (attached) and rejected as a basis to absolve American Home of liability, they are not addressed here.

American Home raises two additional arguments to support its claim that it is not liable for the antidumping duty billed to it as surety for the importer of record, Panjee. First, American Home contends that the “[n]ew shipper review bonding option does not apply to sales by exporter of subject merchandise produced or supplied by uncertified companies.” Specifically, the Protestant states that because Shantou Hongda did not provide the certification required by “Customs[’] Regulation” 19 C.F.R. § 351.21(b)(2)(ii) for Li Xi Cannery as the entity which “produced or supplied” the merchandise, “the DOC should have refused to initiate a N[ew] S[hipper] R[eview] for Shantou Hongda.” Instead, American Home states, the DOC “should have required [Shantou’s] importers to pay the PRC-wide cash deposit rate of 198.63% instead of” permitting importers to post a bond. This argument fails for several reasons.

The Protestant does not raise an issue that is protestable under 19 U.S.C. § 1514, under which authority this Protest was filed. As we stated in HRL 230339 (6/25/2004), “Section 1514 of Title 19 provides that the proper filing of a protest is an exception to the finality of certain, enumerated “decisions of [Customs and Border Protection]” (19 U.S.C. § 1514(a)). American Home complains of a DOC action, which CBP is powerless to remedy. Contrary to the Protestant’s description of the regulation cited, 19 C.F.R. § 351.214(b)(2)(ii), this regulation is issued by the DOC not CBP. (See Notice of Final Rule, 62 Fed. Reg. 27,296 (5/19/1997)). Section 351.214 is included in Title 19, Customs Duties, Chapter III, Part 351, subpart B, Antidumping and Countervailing Duty Procedures, which is promulgated by the DOC - not CBP. Part 351, in part, implements 19 U.S.C. § 1675. Section 1675(a)(2)(B), requires, upon the beginning of a new shipper review, “[t]he administering authority,” i.e., the DOC, to direct CBP to permit at the importer’s option, the posting of a bond instead of depositing the estimated AD in cash. (19 U.S.C. §1675(a)(2)(B)(iii)).

While both CBP and Commerce play a part in the enforcement of the antidumping laws, their roles are separate and distinct. The courts have held that CBP’s role in the antidumping process is simply to follow Commerce's instructions in collecting deposits of estimated duties. (See, Fujitsu Ten Corporation of America v. United States, 957 F. Supp. 245 (1997); and American Hi-Fi International, Inc. v U.S., 19 C.I.T. 1340 (Ct. Int’l Trade 1995)). In Mitsubishi Electronic America Inc. v. United States, 44 F.3d 973, 977 (Fed. Cir. 1994)) the Federal Circuit Court held that §1514 does not apply to decisions made by other agencies, but applies only to the CBP decisions named in the statute. CBP cannot "modify . . . [Commerce's] determinations, their underlying facts, or their enforcement." Royal Business Machs., Inc. v. United States, 507 F. Supp. 1007, 1014 n.18 (Ct. Int'l Trade 1980), aff'd, 669 F.2d 692 (CCPA 1982). Consequently, with regard to the Protestant’s contention that “the DOC should have refused to initiate a N[ew] S[hipper] R[eview] for Shantou,” American Home raises no issue that is protestable under 19 U.S.C. § 1514 and we are without authority to address this contention.

Second, American Home states that because the entry summary reflects that surety number “891” issued the bond securing the antidumping duty and American Home’s surety number is 069, CBP “is precluded from collecting antidumping duties where it specifically relied on another surety to secure the subject antidumping duties.” The Protestant offers no support for its position. According to the entry summary prepared by East West, a bond issued by surety identification number 891 was posted to secure the AD duty. ACS reflects that surety number 891 is assigned to Washington International Insurance Co. However, the copy of the single transaction bond reflects that the bond procured by East West was issued by American Home, surety number “069.” Apparently, American Home concludes that because the Protestant’s broker made a typographical error when preparing the entry summary, i.e., indicating the incorrect surety identification number, American Home is not liable under the bond it issued.

The Customs Bond for the entry at issue, number DZ1-xxxx511-0, reflects that CBP did in fact rely on the Protestant to secure the AD duty. The bond reflects that on 11/9/2001, a single transaction bond was issued by American Home Assurance Company at 175 Water Street, New York, N.Y. 10038, surety number “069,” by its Attorney-In-Fact, Glenn A. Stebbings. Stebbings’ identification number is provided. Panjee is listed as the principal and its importer number is given. The rating code “4” indicates that the bond is meant to secure payment of antidumping duties. American Home does not dispute that it issued the bond number EWA9063827041580, or that the information contained on the bond is correct. Consequently, American Home’s position that it is relieved of its obligation under this bond because CBP relied on another surety to secure the AD duty is without merit.

With regard to the Protestant’s contention that “the DOC should have refused to initiate a N[ew] S[hipper] R[eview] for Shantou,” American Home raises no issue that is protestable under 19 U.S.C. § 1514. Moreover, there is no support for the Protestant’s position that it is not liable for the AD duty secured by the bond it issued because of a typographical error on the entry summary. Accordingly, American Home is liable for the antidumping duty assessed on entry number DZ1-xxxx511-0 and billed to it as surety for the importer of record on that entry.

HOLDING:

American Home Assurance Co. as surety for Panjee Co., Ltd. is liable for the antidumping duty assessed on entry number DZ1-xxxx511-0.

The Protest should be DENIED in full. In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director
Commercial Rulings Division