PRO 2-05
OT:RR:CR:ED H187175 ASL
Port Director
U.S. Customs and Border Protection
2350 N. Sam Houston Pkwy E.
Suite 1000
Houston, TX 77032-3100
Att: Ms. Linda Finnerty, Senior Import Specialist
RE: Protest 5309-11-100027 for JLS Trading concerning the testing of imported goods for the presence of honey
Dear Port Director:
The above-referenced Protest was forwarded to this office for further review on September 9, 2011. We have considered the points raised by your office and the Protestant. Our decision follows.
FACTS:
JLS Trading, Inc. (“JLS”) is the importer of record on two entries, numbers XXX-XXX-211-1 and XXX-XXX-210-3, of what JLS asserts is a “honey and rice syrup mixture” (syrup) from the People’s Republic of China (“PRC”). The syrup is described as “Glucose, 20-50% Fructose 0” and, according to the entry summaries, classified under subheading 1702.40.4000, of the Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for:
glucose and glucose syrup, containing in the dry state at least 20 percent but less than 50 percent by weight of fructose, excluding invert sugar: Blended syrups described in additional U.S. note 4 to chapter 17: Other...Other.
The duty was 5.7 percent per kilogram. Samples of the entered goods were sent to U.S. Customs and Border Protection’s (“CBP”) Laboratories and Scientific Services Directorate (“LSSD”) with a request for an opinion as to the percentage of honey contained in the goods. LSSD tested the sample for the presence of C-4 plant sugar, which is derived from corn. The LSSD Report dated August 13, 2009, states that the Association of Analytical Communities (“AOAC”) official method 998.12, and analysis by Isotope Ration Mass Spectrometry (“IRMS”) showed the presence of C-3 sugars and proteins. Honey is composed primarily of C-3 sugars. C-3 sugars are also derived from plants including rice, among others. Because the sample contained C-3 sugars and protein but was not adulterated with C-4 plant sugar which is derived from corn, the LSSD determined that “the sample in each bottle contain[ed] greater than 50% honey . . . .” Based on the published scope of the antidumping (“AD”) order for case A-570-863, AD duties were assessed. See Notice of Final Determination of Sales at Less Than Fair Value; Honey From the People's Republic of China, 66 Fed. Reg. 50,608 (Oct. 4, 2001).
By Notice of Action dated August 24, 2009, CBP advised JLS that the CBP's LSSD, had determined that the goods imported “were comprised of greater than 50% honey, with a color classification of white” and within the scope of antidumping duty order for Case A-570-863. The applicable subheading was changed to 0409.00.0042, HTSUS, which provides for light honey. The duty assessed was 1.9 cents per kilogram. The entries were liquidated on July 16, 2010, with antidumping duties assessed at $X.XX per kilogram. JLS filed the instant protest on January 12, 2011. Further review was granted and the protest was forwarded to this office.
JLS asserts that the imported syrup is more than 50 percent by weight rice syrup and therefore, cannot contain more than 50 percent by weight of honey. JLS sent LSSD’s report to a private laboratory for comments. This private lab advised that, "[t]he method AOAC 998.12 is not appropriate for differentiating between honey and C-3 plant sugars syrups such as rice. It can only detect C-4 plant sugars" from corn or cane. JLS' lab further states that IRMS analysis can detect C-3 sugars but cannot distinguish between the C-3 sugars found in rice syrup and found in honey. On April 18, 2012, LSSD agreed that the methods used to test the goods could detect both C-3 and C-4 sugars but could not differentiate between C-3 sugars derived from rice and those in honey. LSSD explained that it was not aware at the time that honey was being blended with rice syrup because the common syrup used in blends was corn syrup, a C-4 sugar. See LSSD Lab Report to Regulations and Rulings, April 18, 2012. JLS' private lab also stated, “one can detect the presence of honey through the microscopic observation of pollen, . . . ." See Eurofins Lab Report to JLS, March 1, 2011. LSSD agreed and tested a retained portion of the sample in this way. See LSSD Lab Report to Regulations and Rulings, April 18, 2012.
Upon receipt of this Application for Further Review at CBP Headquarters, we forwarded a copy of JLS' lab report to LSSD for review and comment. In a Memorandum dated April 18, 2012, LSSD advised that based on information received subsequent to the first lab report issued in 2009, its methods for testing for honey had changed. LSSD had retained a portion of the original sample and tested that using a different method than used on the first sample. Specifically, LSSD prepared three microscope slides with which to compare a sample of the entered goods. The first slide contained 5 percent honey and 95 percent syrup, the second contained 50 percent honey and 50 percent syrup, and the third was 100 percent honey. A sample of the imported syrup was mounted on a fourth microscope slide. The slides were compared for the amount of pollen observed in the sample and the other laboratory prepared slides with known quantities of honey. LSSD determined that since a visual examination of the slides showed that the sample contained more pollen and bee parts than the 50 percent honey and 50 percent syrup slide, the sample contained more than 50 percent honey. See LSSD Lab Report to RR, April 18, 2012.
ISSUE:
Whether the imported syrup contains more than 50 percent honey by weight.
LAW AND ANALYSIS:
We note that the instant protest was timely filed, within 180 days from the date of liquidation. 19 U.S.C. § 1514(c)(3)(A). CBP liquidated JLS’ entries on July 16, 2010, and this protest was filed on January 12, 2011, within the 180 days. Further, the protestant requests further review per 19 C.F.R. § 174.24(b). CBP’s regulations provide for further review of a protest when, inter alia, 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
19 C.F.R. § 174.24(b). Upon review of the application for further review, we find that there are legal arguments that have not been the subject of a ruling or court decision. See 19 C.F.R. § 174.24(b) and 19 C.F.R. § 174.26(b)(1)(iv). Accordingly, further review is warranted.
Generally, assessed antidumping duties properly applied by CBP are not protestable, 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). However, inasmuch as JLS 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) (holding that correcting a ministerial, factual error of CBP is protestable).
JLS argues that the imported syrup contained more than 50 percent by weight of rice syrup and thus, less than 50 percent by weight honey and, consequently, is not subject to antidumping case A-570-863. JLS successfully challenged LSSD’s methods of testing the syrup for honey using AOAC official test method 998.12 and analysis IRMS testing results with its own lab report. CBP tested another sample of the imported syrup using microscopic observation of the relative amounts of pollen found in honey and rice syrup blends and concluded, from the amount of pollen contained in the syrup, that it was more than 50 percent honey by weight. JLS offered no evidence to rebut the presumption of correctness. Despite providing no rebuttal, CBP’s lab results are no longer valid. Therefore, CBP is unable to prove that the imported syrup is more than 50 percent by weight honey and as a result is not subject to antidumping duty case A-570-863.
With respect to the reliability of CBP laboratory tests, "[i]t is well settled that the methods of weighing, measuring, and testing merchandise used by [CBP] officers and the results obtained are presumed to be correct." Aluminum Company of America v. United States, 60 C.C.P.A. 148, 151,477 F.2d 1396, 1398 (1973). Absent a conclusive showing that the testing method used by the CBP laboratory is in error, or that the CBP's laboratory results are erroneous, there is a presumption that the results are correct. See Exxon Corp. v. United States, 462 F. Supp. 378, 381 (1978). The initial burden of proof in challenging the reliability of CBP's testing methods lies with the protestant. A protestant may rebut the presumption of correctness by showing that CBP's methods or results are erroneous. If a prima facie case is made out, the presumption is destroyed and the government has the burden of going forward with the evidence. See Libas, Ltd. v. United States, 24 C.I.T. 893, 894, 118 F. Supp. 2d 1233, 1234 (Ct. Int'l Trade 2000). We note that in this case, a precise measuring of the amount of honey contained in the syrup blend is not necessary. All that must be determined is that the syrup is more than 50 percent by weight honey for it to be subject to the antidumping duty order on honey from the People's Republic of China. The scope of that order, at the time of entry, covered “natural honey, artificial honey containing more than 50 percent natural honey by weight, preparations of natural honey containing more than 50 percent natural honey by weight, and flavored honey.”
There are two means by which an importer may successfully overcome the presumption of correctness afforded to a CBP laboratory report. The Court of International Trade (“CIT”) stated in American Sporting Goods v. United States, 259 F. Supp. 2d 1302, 1308 (Ct. Int'l Trade 2003):
. . . the plaintiff in a case such as this may make out a prima facie case either by showing that Customs's results or methods are erroneous, Consolidated Cork [Corp v. United States], 54 Cust. Ct. [83 (1965)] at 85, or by "submitting evidence of analysis [that the plaintiff] applied to the merchandise which gave a result different from that claimed by the Government." Aluminum Co. [of America v. United States], 60 CCPA [148], at 151, 477 F.2d [1396 (1973)] at 1399.
See also, HQ H089795 (April 19, 2010) (stating that a "statement is insufficient to successfully overcome the presumption of correctness given to a CBP laboratory report because it does not offer sufficient information to call into question the results of the CBP laboratory report."). In the instant protest, JLS disputes the LSSD's initial method of determining the amount of honey in the syrup because the method used could not distinguish between C-3 sugars derived from rice (among others) and C-3 sugars in honey. Upon further review, LSSD also concluded that the methods used to test the goods could not differentiate between C-3 sugars derived from sugar and those in honey. Because LSSD and JLS' private lab concur on this point, the importer has shown that CBP's use of this method to determine the amount of honey in the syrup was not sufficient. Consequently, JLS has made out a prima facie case rebutting the presumption that the CBP lab was correct. As a result, CBP has the burden of going forward with the evidence. The evidence here is the LSSD determination that a microscopic comparison of the imported syrup and a slide prepared with 50 percent honey and 50 percent syrup showed that the imported syrup contained more pollen and bee parts than the test slide. Thus, LSSD concluded that the syrup contained more than 50 percent honey and was subject to the antidumping order. Subsequently, however, a federal court in Florida determined that this test did not meet the Daubert requirements in order to be used as evidence.
In United States v. Qiao Chu Wei Tang Lo, 3:11-cr-286(S3)-J-34TEM (D. Fla. Nov. 7, 2012), the U.S. government was prosecuting individuals for an alleged scheme to import Chinese honey into the United States by labeling it as a blend of honey and rice syrup to avoid antidumping duties. The critical issue was whether the imported syrup contained more than 50 percent honey, making it subject to the dumping order. In order to determine this, CBP relied on the same microscopic comparison test as is at issue in this protest. In Qiao, the defendants challenged the reliability of CBP’s test and filed a motion for a Daubert Hearing, a hearing to establish a standard of evidentiary reliability for scientific knowledge. The court concluded that the CBP Laboratory report did not meet the Daubert requirements and, therefore, could not be used as evidence to support the Government’s case. United States v. Qiao Chu Wei Tang Lo, 3:11-cr-286(S3)-J-34TEM (D. Fla. Nov. 7, 2012).
Furthermore, the court noted that Commerce, in an anti-circumvention preliminary determination, had concluded that “without the ability to test for the relative amount of honey in a blend of rice-syrup and honey, the ‘50 percent natural honey by weight’ threshold in the scope is without meaning.” Qiao, at 6 (citing Honey from the People’s Republic of China: Affirmative Preliminary Determination of Circumvention of the Antidumping Duty Order, 77 Fed. Reg. 37378, 37381 (June 21, 2012). As a result, Commerce determined that after December 7, 2011, all blends of honey and rice syrup, regardless of the percentage of honey, would be subject to the antidumping order. Id. Since the court determined that the microscopic analysis method did not meet the Daubert requirements, CBP’s results can no longer be presumed to be correct. Therefore, CBP can no longer rely on the test used in this case.
HOLDING:
CBP’s LSSD test was not sufficient to determine whether the syrup contains more than 50 percent of honey by weight and thus, is subject to antidumping duty order A-570-863. The Protest should be GRANTED in full.
No later than 60 days from the date of this letter, 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