CLA-2 RR:CR:SM 562043 TJM
Port Director
Port of Otay Mesa
U.S. Customs Service
9777 Via de la Amistad
San Diego CA 92154
RE: AFR; Protest No. 2501-99-100028; Protest No. 2501-99-100027; liquidation; liquidation by operation of law; suspension of liquidation; country of origin; antidumping duties; antidumping order; China; Mexico; laboratory test; rebuttable presumption of correctness; fresh peeled garlic; Libas Ltd. v. U.S.; Daubert v. Merrell Dow Pharmaceuticals; 19 USC 1504; Am-Mex International
Dear Port Director:
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:
Am-Mex International of San Diego, CA, on behalf of various consignees, entered from Mexico fresh peeled garlic (classifiable in subheading 0703.20.0010, HTSUS) during the period of March 30, 1998, through August 4, 1998.
Protest No.
Entry Number
Date of Entry
Suspension
Notice of Suspension
Liquidation
2501-99-100028
xxx-xxxxx306
06/18/98
11/01/97-10/31/98
01/15/99
08/20/99
xxx-xxxxx952
08/04/98
11/01/97-10/31/98
01/15/99
08/20/99
xxx-xxxxx864
03/30/98
11/01/97-10/31/98
01/29/99
08/20/99
2501-99-100027
xxx-xxxxx590
07/27/98
11/01/97-10/31/98
01/15/99
08/20/99
xxx-xxxxx796
04/03/98
11/01/97-10/31/98
07/30/98
08/20/99
All five entries at issue were entered during the suspension period of November 1, 1997 through October 31, 1998. According to the ACS, notices of suspension were generated and timely issued to both the importer and surety for each of the entries.
In accordance with Anti-dumping Order #A570-831, dated July 19, 2000, for fresh peeled garlic from the People’s Republic of China, Customs officials at the port of Otay Mesa obtained a two-pound representative sample from entries at issue and sent it to the U.S. Customs Research Laboratory for analysis to verify the country of origin. The results of the analysis as reported in Customs Lab Report 0-1998-40181-001, dated November 2, 1998, was that the samples were “consistent with that of the reference sample from China.”
Due to the antidumping duties against Chinese-origin garlic entered between November 1, 1997, and October 31, 1998, the port liquidated the entries with a rate advance to account for the garlic as Chinese and not Mexican originating. A CF-29 Notice of Action was issued on July 19, 1999, informing the importer that a rate advance had been taken on the five entries due to the antidumping duties on Chinese-origin garlic.
On November 16, 1999, the importer through its counsel, timely filed these two protests. Counsel asserts that the entries as issue were liquidated as entered by operation of law because the merchandise was entered for consumption more than one year before Customs issued its Notice of Action (CF-29), dated July 16, 1999. Further, counsel notes that Customs did not issue a notice of extension of liquidation on any of the entries. Counsel posits that because more than one year had elapsed, the entries were liquidated as entered by operation of law prior to the Customs issuance of a rate advance or increase in duties.
Additionally, counsel asserts that the country of origin determination based on the Customs Research Laboratory is without foundation. Counsel argues that, pursuant to the Court decision in Libas, Inc. v. U.S., 118 F. Supp. 2d 1233 (Ct. Int’l Trade 2000), Customs has the burden of demonstrating that the test it employs to determine country of origin is reliable. In this case, counsel posits that Customs has failed to demonstrate that the laboratory test is reliable.
As evidence that the garlic is Mexican-origin, the protest contains a pro forma invoice and an inward cargo manifest showing that the port of lading is Tijuana, Mexico, and the port of arrival is San Diego, CA.
On February 6, 2002, the Duty and Refund Determination Branch provided a memorandum on the issue of whether the entries were liquidated as entered by operation of law. The analysis in the memorandum is incorporated here below.
LAW AND ANALYSIS:
I. Liquidation By Operation of Law
Am-Mex International as noted above made five entries from March 30, 1998, through August 4, 1998. All of the entries liquidated on August 20, 1999, more than one year after the dates of entry. Am-Mex claims that the five entries were liquidated by operation of law one year after their date of entry, thereby, precluding any imposition of antidumping duties subsequent to the one year period.
On the issue of liquidation, 19 U.S.C. § 1504 states, in pertinent part, that:
***************
(a) Liquidation
Unless an entry is extended under subsection (b) of this section or suspended as required by statute or court order, except as provided in section 1675(a)(3) of this title, an entry of merchandise not liquidated within one year from:
the date of entry of such merchandise; . . . .
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. . . .
Notice of suspension
If the liquidation of an entry is suspended, the Secretary shall by regulation require that notice of the suspension be provided, in such manner as the Secretary considers appropriate, to the importer of record and to any authorized agent and surety of such importer of record.
***************
All of the entries were suspended as required by statute. The U.S. Department of Commerce requires Customs to suspend liquidation when antidumping/countervailing duties issues arise, in order to accurately assess antidumping/countervailing duties on the entries, if any, within one year of the respective dates of entry. See 19 U.S.C. § 1673, et seq. Pursuant to 19 U.S.C. §1504(c), notices of suspension were generated and timely issued to both the importer and surety for each of the entries, as evidenced by the ACS records. On July 16, 1999, the port sent the CF 29 Notice of Action to the importer, notifying it of a rate advance, plus interest.
Therefore, the entries did not liquidate by operation of law one year after the date of entry because the port timely suspended liquidation of the entries, and the importer received timely notice of suspension of liquidation.
II. Customs’ Country of Origin Determination
On the issue of country of origin determination, this protest hinges on the reliability of the Customs Research Laboratory’s testing and its determination that the garlic at issue is Chinese origin. The Customs Research Laboratory after analyzing a sample of the merchandise, concluded that the sample “fresh peeled garlic, has a trace element profile which matches that of our Chinese reference samples.” See Customs Lab Report 0-1998-40181-001, dated November 2, 1998.
In Libas, Ltd. v. United States, 118 F. Supp. 2d 1233 (Ct. Int’l Trade 2000), the Court noted that Customs classification of goods is presumed to be correct, including methods of testing. The Court’s decision states, in pertinent part, that:
By statute, Customs’s classification of goods is presumed to be correct. See 28 U.S.C. § 2639 (1994). The presumption applies to every subsidiary fact necessary to support classification, see Commercial Aluminum Cookware Co. v. United States, 20 C.I.T. 1007, 1013, 938 F. Supp. 875, 881 (1996), including the “methods of weighing, measuring, and testing merchandise used by customs officer and the results obtained” therefrom. Exxon Corp. v. United States, 81 Cust. Ct. 87, 462 F. Supp. 378, 381 (Cust. Ct. 1978) (quoting Consolidated Cork. Corp. v. United States, 54 Cust. Ct. 83, Cust. Dec. 2512 (1965)), aff’d 607 F.2d 985 (C.C.P.A. 1979). An importer may rebut the presumption of correctness by “showing that [Customs’s] methods or results are erroneous” 462 F. Supp. at 382 (quoting same). “If a Prima facie case is made out, the presumption is destroyed and the Government has the burden of going forward with the evidence.” Id. (quoting same).
Libas, Ltd. v. U.S., 118 F. Supp. 2d 1233, 1234 (Ct. Int’l Trade 2000).
The Court in Libas, Ltd. v. U.S. noted in particular the higher court’s reference to the standard espoused by the U.S. Supreme Court in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 125 L. Ed. 2d 469, 113 S. Ct. 2786 (1993). The Libas Court noted that the reliability of Customs laboratory tests should be scrutinized according to the standards set forth in the Daubert case. They include: 1) whether a theory or technique, such as Customs’ test, has been tested; 2) whether it has been subjected to peer review and publication; 3) its known or potential rate of error; and 4) whether it is generally or widely accepted. See Daubert, 509 U.S. at 593-94. The Libas Court also noted that the Daubert standards relate not only to whether evidence is admissible, but also to how much or how little weight the Court should accord such evidence. See Libas Ltd. v. United States, 193 F.3d 1361,1366 (Fed. Cir. 1999).
In the instant case, the protestant has not offered any evidence to impeach the reliability of Customs Research Laboratory’s finding that the origin of the garlic is China. The laboratory report was made available to the protestant as noted in the CF 29, dated July 16, 1999. The protestant also did not request the remaining balance of the sample that the Customs Laboratory used for its tests. The initial burden of proof in challenging the reliability of Customs test methods lies with the protestant. As the Court noted in Libas, an importer may rebut the presumption of correctness by showing that Customs’ methods or results are erroneous. In this case, no evidence has been submitted to rebut the presumption of Customs correctness in its testing methods. Also, according to the Libas Court, if a prima facie case is made out, the presumption is destroyed and the Government has the burden of going forward with the evidence. No evidence was provided, for example, that another testing method would show that the same sample is Mexican-origin. In this instance, protestant has not made a prima facie case that the Customs Research Laboratory’s methods or findings in determining the country of origin of the garlic are erroneous.
Therefore, the merchandise at issue was correctly liquidated as originating in China. Accordingly, the protest should be denied in full.
HOLDING:
For the foregoing reasons, the entries were not liquidated as entered by operation of law. Furthermore, because prima facie evidence has not been provided to rebut the presumption of the validity of Customs laboratory’s finding on the country of origin of the garlic at issue, liquidation of the entries in this protest was correctly rate advanced pursuant to the appropriate antidumping order. Therefore, this protest should be denied in full.
This decision should be mailed by your office to the protestant no later than sixty days from the date of this letter. On that date, the Office of Regulations & Rulings will take steps to make the decision available to Customs personnel and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other means of public distribution.
Sincerely,
John Durant
Director
Commercial Rulings Division