HQ 0221698 - Application for further review of Protest No. 2704-5- 003921; antidumping duty order concerning sorbitol crystalline from France; 19 U.S.C. 1677g - United States International Trade Commision Rulings

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HQ 221698

May 3, 1991

LIQ-4-01/LIQ-11-CO:R:C:E 221698 JR

CATEGORY: ENTRY LIQUIDATION

Regional Director of Customs
Commercial Operations Division
Pacific Region
One World Trade Center, Suite 534
Long Beach, CA 90831-0700

RE: Application for further review of Protest No. 2704-5- 003921; antidumping duty order concerning sorbitol crystalline from France; 19 U.S.C. 1677g

Dear Madame:

The above-referenced protest was forwarded to this office for further review. We have considered the issues raised and our decision follows.

FACTS:

The International Trade Commission (ITC) issued its final affirmative antidumping determination on March 29, 1982, that an industry in the United States is being materially injured by reason of imports of sorbitol from France. See 47 FR 14981, April 7, 1982. On April 9, 1982, the International Trade Administration (ITA) issued its final antidumping order stating that sales of sorbitol from France were less than the fair value. See 47 FR 15391-15392, April 9, 1982. The ITA ordered that all unappraised entries of this merchandise made on or after November 30, 1981 - the date from which final assessment of duty has been suspended - will be liable for the possible assessment of antidumping duties and a deposit of antidumping duties must be made on all such entries made on or after April 9, 1982.

This protest involves an entry made on an importation of French sorbitol crystalline at the port of Los Angeles on May 3, 1982, with a deposit of both estimated tariff and antidumping duties in accordance with the final order of the ITA. The entry was liquidated on June 14, 1985, with the refund of antidumping duties, after the liquidation of the entry had been suspended. On July 30, 1985, the importer timely filed a protest under 19 U.S.C. 1514(a) against Customs' nonpayment of interest on the refund of its overpayment of antidumping duties.

The importer/protestant contends that it is entitled to interest on the refund of antidumping duties received on each individual entry entered into the United States after the final antidumping duty order of April 9, 1982, pursuant to Section 621 of the Trade and Tariff Act of 1984 (codified at 19 U.S.C. 1677g). The protestant argues that the special liquidation notes to CIE's Supplement CIE-N-63/81, Supplement No. 2, issued on November 19, 1984, redesignated Supplement No. 3 on January 1, 1985, provides for interest on refunds of dumping duties deposited after April 9, 1982. Alternatively, interest should be refunded at a rate of 11% compounded daily from the date of entry to the date of liquidation.

The district office's position is that Section 621 of the Tariff and Trade Act (19 U.S.C. 1677g) is effective only for "determinations" made on or after October 30, 1984, regardless of the date of entry. The district office believes that the payment of interest on overpayments or underpayments under 19 U.S.C. 1677g is inapplicable to the entry in question since the signature on the Final Results of the Administrative Review of the Antidumping Duty Order is March 12, 1984 (see 49 FR 10695, dated March 22, 1984), which is before the listed effective date of 19 U.S.C. 1677g (October 30, 1984). Alternatively, the district asserts that the Tax Equity and Fiscal Responsibility Act of 1982 does not provide for the compounding of interest on antidumping or countervailing duties, but rather like interest paid on such refunds based on judgments or agreements with the Court of International Trade, should be computed on a simple basis.

ISSUE:

Whether interest is payable on the refund of an overpayment of estimated antidumping duties deposited prior to the amendment of 19 U.S.C. 1677g? If so, what rate of interest applies?

LAW AND ANALYSIS:

Prior to the enactment of the Trade Agreements Act of 1979, interest on underpayments or overpayments was not required by law. However, Section 778 of the Trade Agreements Act of 1979 (19 U.S.C. 1677g (1979) (hereafter "1979 Act"), provided that interest is payable on any overpayments or underpayments of estimated duties deposited on merchandise entered, or withdrawn from warehouse, for consumption on and after the publication of the final affirmative injury determination by the International Trade Commission. The 1979 Act set the interest rate at 8 percent per annum, or if higher, the rate in effect under section 6621 of title 26 on the date on which the rate or amount of the duty is finally determined. The interest was simple interest and was to be determined at the rate in effect on the date of final determination.

Section 778 was subsequently amended by section 621 of the Trade and Tariff Act of 1984 (hereafter "1984 amendment") to provide that interest shall be payable on the amounts deposited on merchandise entered, or withdrawn from warehouse, for consumption on or after the date of publication of a countervailing duty or antidumping duty order. The 1984 amendment provides that interest was generally payable at the rate in effect under 26 U.S.C. 6621. By virtue of section 6622 of title 26, interest calculated under section 6621 must be compounded. Thus, this amendment provided that interest be compounded and payable at the IRS rate for any period of time during which the entries were suspended. Pursuant to this method the interest payable would vary in accordance with the interest set forth under section 6621 for the periods of suspension. This amendment became effective on October 30, 1984.

In 1986, Congress clarified the effective date of the 1984 amendment by indicating that the 1984 amendment should apply to all entries unliquidated on or after November 4, 1984. Section 1886(b) of the Tax Reform Act of 1986, Pub. L. No. 99-514. The Court of International Trade in Canadian Fur Trappers Corp. v. United States, 691 F. Supp. 364 (CIT 1988), aff'd, 884 F.2d 563 (Fed. Cir. 1989) held that "the 1984 amendment cannot be applied for interest accruing before the effective date of that amendment." Canadian Fur Trappers involved entries made before the 1984 amendment, liquidated after October 30, 1984, but before the 1986 amendment indicating that they should be liquidated in accordance with the 1984 amendment. Thus, pursuant to the amendment, the entry in this case was made before this amendment but was liquidated after the Act became effective. Therefore, the entry should be liquidated in accordance with the 1984 amendment, since the law in effect at the time the entry is liquidated shall control. See CIT Order, dated August 25, 1988, Canadian Fur Trappers Corp. v. United States, Consolidated Court No. 86-07-00977 (86-05-00641).

We disagree with the district's finding that 19 U.S.C. 1677g, as amended in 1984, does not control the entry. At the time of entry on May 3, 1982, there was a final antidumping duty order by Commerce effective April 9, 1982. In our view interest would properly be assessed as of the date of entry rather than March 12, 1984, the date of the Final Results of the Administrative Review, as the district office asserts. We reject the protestant's argument that interest should be compounded from the date of entry to the date of liquidation. A combination of interest calculation appears to be the appropriate course of action in this case. It is our position that the entry would be subject to interest in accordance with the 1984 amendment, i.e., compound interest at the varying IRS rates on or after November 4, 1984, see 26 U.S.C. 6621, and the 1979 simple interest provision is applicable for interest accruing prior to the effective date of the 1984 Act from the date of entry.

HOLDING:

Interest is payable on the refund of an overpayment of estimated antidumping duties deposited prior to the amendment of 19 U.S.C. 1677g, that is, first at the rate of simple interest in accordance with the 1979 Act from the date of entry (May 3, 1982) until November 4, 1984, the effective date of the 1984 amendment, and subsequently, at the compounding rate of interest set forth in the 1984 amendment until the date of liquidation (June 14, 1985).

You are directed to allow the protest in part, as provided in the decision. A copy of this decision may be provided to the protestant.

Sincerely,

John Durant, Director

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