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HQ 221017

November 19, 1990

PRO-2-02 CO:R:C:E 221017 C

CATEGORY: ENTRY LIQUIDATION

District Director of Customs
U.S. Customs Service
New York Seaport Area
Customhouse, 6 World Trade Center
New York, New York 10048

RE: 19 U.S.C. 1514; final liquidation; post-liquidation redelivery notice invalid; protest no. 1001-8-007981

Dear Sir:

This responds to the referenced protest, approved for further review on October 24, 1988. Based on the scanty information provided, we understand the facts as follows: Protestant filed a consumption entry for imported cheese. The entry was liquidated on May 6, 1988. Subsequently, a notice of refusal of admission was issued on June 27, 1988, by the Food and Drug Administration (FDA), and a notice of redelivery was issued on July 6, 1988, by Customs.

Since protestant filed this protest within 90 days of the issuance of the redelivery notice, and since that is the Customs decision against which protestant lodges its protest, the protest was timely filed in accordance with 19 U.S.C. 1514(c)(2)(B).

Protestant argues that the redelivery notice is invalid and should be cancelled, asserting that the Court of Appeals for the Federal Circuit's opinion in United States v. Utex International, 857 F. 2d 1408 (1988), is supportive. Protestant put it this way: "[T]he Court of Appeals for the Federal Circuit held that liquidation is final on the issue of admissibility absent timely reliquidation or protest." The court stated the following: "But absent timely reliquidation or protest it [liquidation] was final as to all aspects of the entry." Id. 1412.

In Utex, Customs liquidated an entry of shrimp before issuing a notice of redelivery on the basis of FDA's issuance of a notice of refusal of admission. Ultimately, the court concluded that a redelivery notice is invalid if issued after liquidation has become final. Liquidation is final on the date of original liquidation if there is no subsequent reliquidation under applicable statutes, or if no protest is filed. Thus, the effect of reliquidation or protest under applicable statutes is to toll the calendar on final liquidation: If there is no reliquidation or protest, liquidation is effectively final on the date of original liquidation; if there is reliquidation or protest, the finality of liquidation is tolled and liquidation will become final at a later date.

In Utex, because there was no reliquidation or protest, and because Customs did not suspend liquidation pending the FDA's determination, the liquidation was effectively final on the date of original liquidation. The redelivery notice, post-dating the final liquidation, was invalid.

In the aftermath of Utex, Customs issued telex instructions to the field. Where a notice of refusal of admission is issued after liquidation, and 90 days from the date of liquidation have not passed, Customs will reliquidate under 19 U.S.C. 1501 and issue a redelivery notice. The CF 4647 will notify the importer that the entries "are being reliquidated" because of inadmissibility, and that notice of such will be posted in accordance with regulations (19 CFR 159). The importer will be informed that it has 30 days from the date of the reliquidation notice to redeliver the merchandise. Reliquidation under section 1501 supersedes the original liquidation. The reliquidation, in this way, has the effect of tolling the "finalization" of liquidation until after the importer is notified of inadmissibility and the redelivery requirement. The foregoing telex instruction post-dates the events addressed by the instant protest and was not followed in this case.

The instant protest was filed against Customs decision to demand redelivery. It does not challenge the liquidation of May 6, 1988. Therefore, since there was no reliquidation under 19 U.S.C. 1501, or protest under 19 U.S.C. 1514, within 90 days of the liquidation, the liquidation became final as of May 6, 1988. As in Utex, the redelivery notice post-dates final liquidation and is therefore invalid. The Utex court suggested that had the liquidation in that case been timely protested, Customs might have been able to address the issue of finality. (See the discussion at page 1411 of the opinion, 857 F. 2d 1408 (1988).) That did not happen in Utex, nor did it happen on the facts of this protest. The demand for redelivery issued on July 8, 1988, subsequent to liquidation, and in the absence of timely (voluntary) reliquidation or protest (of the liquidation), was invalid.

Based on the foregoing, you are instructed to grant the protest.

Sincerely,

John Durant, Director

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