HQ 0224520 - Application for Further Review of Protest 1001-91-000221; Notice of Redelivery; Timeliness; False Designation of Country of Origin; 15 U.S.C. 1124, 1125; Executive Order 12725 of August 9, 1990; United States v. Utex Internation- al, Inc. - United States International Trade Commision Rulings

United States International Trade Commision Rulings And Harmonized Tariff Schedule

faqs.org Rulings By Number Rulings By Category Tariff Numbers

faqs.org > Rulings and Tariffs Home > Rulings By Number > 1994 HQ Rulings > HQ 0224516 - HQ 0224829 > HQ 0224520

HQ 224520

July 21, 1993

PRO-2-02/LIQ-9-02/BON-2-CO:R:C:E 224520 JRS

CATEGORY: PROTEST LIQUIDATION

Regional Commissioner of Customs
New York Region
ATTN: Head, Protest and Control Section
6 World Trade Center, Room 762
New York, New York 10048-0945

RE: Application for Further Review of Protest 1001-91-000221; Notice of Redelivery; Timeliness; False Designation of Country of Origin; 15 U.S.C. 1124, 1125; Executive Order 12725 of August 9, 1990; United States v. Utex Internation- al, Inc.

Dear Sir:

The above-referenced protest was forwarded to this office for further review. We have considered the points raised by your office and the protestant. Our decision follows.

FACTS:

According to the file, the importer made 4 entries of ladies wearing apparel, marked with Kuwait as the country of origin, on March 21, March 28, May 1 and May 2, 1990. The March entries were originally liquidated "as entered" on July 27, 1990, as well as the May entries on August 24, 1990. On September 21, 1990, Customs voluntarily reliquidated under 19 U.S.C. 1501 all 4 entries on the basis of a Headquarter's telex (discussed below). Subsequently, Customs issued Notices of Redelivery (CF 4647) for the first 3 entries on October 23, 1990, and the fourth entry on October 25, 1990, stating in the "Remarks" section of the form: "Merchandise has been determined to bear a false designation of Country of Origin, marked Kuwait, in violation of 15 U.S.C. 1124/1125 and is therefore ordered redelivered."

Notices of Liquidated Damages were issued against the importer on December 21, 1990, for failure to redeliver the wearing apparel covered by the 4 subject entries. The importer filed the instant protest against the untimeliness of the Notices of Redelivery on January 10, 1991, and requested further review. The protestant does not challenge the substantive issue of false designation of country of origin but instead challenges the legality of the issuance of the Notices of Redelivery.

As indicated in the file, the action on the liquidated damages case has been suspended pending resolution of this protest. It is our understanding that the merchandise cannot be redelivered because by the time the importer received the Notices of Redelivery, more than 5-7 months after entry, the merchandise had been delivered to its customers.

The protestant alleges that the Notices of Redelivery are unlawful because the entries, liquidated on September 21, 1990, "have not been reliquidated and the period for reliquidation fixed under 19 U.S.C. 1501 has expired. Thus, the origin of the subject matter was final prior to the issuance of the Notices of Redelivery. The notices of redelivery were, therefore, untimely. United States v. Utex International, Inc., 857 F.2d 1408 (Fed. Cir. 1988); C.S.D. 89-100, 23 Cust Blt. & Dec. No. 24 at 16 (October 25, 1989)."

The Area Director takes the position that the protest should be denied because the entries were, in fact, reliquidated within the time frame of 19 U.S.C. 1501 in accordance with the instructions issued by a Headquarters' telex from the Director, Office of Trade Operations, regarding Executive Order 12725 of August 9, 1990, entitled "Blocking Kuwaiti Government Property and Prohibiting Transactions with Kuwait."

Telex VBT-90-I-04, dated August 21, 1990, instructed the field offices, on the basis of the executive order, to detain or seize textile shipments claimed to be manufactured in Kuwait which bear false designations of origin, depending on the manufacturer. The certain listed manufacturers, one of which was the manufacturer on the subject 4 entries, were found not to have the capability to produce textiles or apparel in commercial quantities based upon actual plant visits by U.S. Customs. The telex said that it applied to shipments "where the merchandise has been released and the entry is not finally liquidated. If the entry was liquidated, reliquidate (if not final) under 19 U.S.C. 1501 and issue a demand for redelivery."

ISSUE:

Whether the Notices of Redelivery were untimely.

LAW AND ANALYSIS:

We note that the decision to issue a Notice of Redelivery is protestable under 19 U.S.C. 1514(a)(4) and, that the protest and the application for further review was timely filed on January 10, 1991, within ninety-days of the issuance of the Notices of Redelivery on October 23 and 25, 1990. See 19 U.S.C. 1514 and 19 CFR Part 174. The protestant did not request immediate action under 19 CFR 174.21(b).

Customs may demand the return of inadmissible goods that have been released from Customs custody, however, such a demand must be made before liquidation becomes final. Section 141.113(b) of the Customs Regulations (19 CFR 141.113(b)) provides:

If at any time after entry the district director finds that any merchandise contained in an importation is not entitled to admission into the commerce of the United States for any reason not enumerated in paragraph (a) of this section [relating to marking of certain merchandise], he shall promptly demand the return to Customs custody of any such merchandise which has been released (emphasis added).

Section 141.113(f) of the Customs Regulations (19 CFR 141.113(f)) states the time limitation for demands for the return of merchandise:

A demand of the return of merchandise to Customs custody shall not be made after the liquidation of the entry covering such merchandise has become final.

Additionally, there are only two periods during which a redelivery notice may be issued and enforced by a Customs bond under the Customs Regulations. Section 113.62 of the Customs Regulations contains the basic importation and entry bond conditions, namely, 19 CFR 113.62(d) provides:

It is understood that any demand for redelivery will be made no longer than 30 days after the date that the merchandise was released or 30 days after the end of the conditional release period (whichever is later).

We have interpreted these provisions in ruling HQ 088880 RFC, dated March 19, 1992. See also HQ 223538 SLR, dated October 1, 1992. In HQ 088880, we held that a notice of redelivery must be "promptly" issued, that is, it must be issued either: (1) no later than 30 days after the date the merchandise is released if there is no occurrence establishing a conditional release period; or (2) if there is an occurrence establishing a conditional release period (e.g., see 19 CFR 12.80(e)(2), 19 CFR 134.3, and 19 CFR 151.11), no later than 30 days after the end of that period [e.g., if information or a sample is requested, within 30 days from the date of receipt by Customs of the information or sample] (see Customs Service Decision (C.S.D.) 86-21). A notice of redelivery may never be issued after liquidation becomes final (United States v. Utex International Inc., 6 Fed. Cir. (T) 166

Contrary to the assertion of the protestant, at the time when Customs issued the Notices of Redelivery for the 4 entries in October 1990, these entries had not "finally" liquidated because the 90-day period from the original liquidations on July 27, 1990, and August 24, 1990, had not expired. Although we reject protestant's argument that the liquidation was final prior to the issuance of the Notices of Redelivery, we find that the Notices of Redelivery were nevertheless untimely issued in this case. The notices were issued more than 30 days after the release of the merchandise from Customs custody, that is, approximately 7 months for the March entries and 5 months for May entries, and Customs had taken no action within 30 days of entry to establish a different conditional release period for any of these entries (e.g., a Request for Information (CF 28)). With respect to enforcement of the bond provisions, we find that the notices were not "promptly" issued in accordance with the time limitations of 19 CFR 113.62(d) and 19 CFR 141.113(b) and, therefore, the protest against the Notices of Redelivery must be granted.

Further, the Assistant Commissioner, Office of Commercial Operations, had issued instructions in 1989 to comply with the appellate decision in Utex, supra. Entries that were liquidated, but were within the reliquidation period of 19 U.S.C. 1501 (90 days from the original liquidation) were to be reliquidated under that statute and a notice to redeliver the inadmissible merchandise was to be issued. Because the liquidation or reliquidation is the final Customs action on an entry, the notice to redeliver had to be before or at the time that the liquidation notice was posted. Issuing a notice to redeliver after the posting a "no change" liquidation bulletin notice would be an inconsistent act. See U.S. v. American Motorists Ins. Co., 10 CIT 19 (1986) and New Zealand Lamb Co. v. United States, Slip Op. 92-218 (CIT December 8, 1992), Vol. 27 Cust. B. & Dec., No. 1, page 3 (January 6, 1993).

Finally, Executive Order 12725 of August 9, 1990 (55 F.R. 33091) was to take effect on the date of issue. The only retroactive provision in the order dealt with property of Kuwaiti origin exported from Kuwait after August 6, 1990. Inasmuch as the gravamen of the demand for redelivery is that the merchandise was not made in Kuwait it is unclear how an order establishing an embargo against Kuwaiti goods would apply to this merchandise. In any event, by its terms it cannot apply to importations made 3 to 5 months before it was issued.

With regard to the pending liquidated damages case for the importer's failure to redeliver the merchandise under 19 CFR 141.113(g), there appears to be no basis for it since the Notices of Redelivery must be cancelled. It is our recommendation, however, that a violation under 19 U.S.C. 1592 be considered on the importer's declaration of a false statement as to the origin of the goods on the entry documentation.
HOLDING:

In this case, the four Notices of Redelivery were untimely since they were issued more than 30 days after release of the merchandise and no conditional release period was established.

You are directed to allow the protest under consideration. A copy of this decision should be attached to Customs Form 19, Notice of Action, and sent to the protestant.

Sincerely,

John Durant, Director

Previous Ruling Next Ruling