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HQ 225107





September 20, 1994

LIQ-4-01-CO:R:C:E 225107 AJS

CATEGORY: LIQUIDATION

District Director of Customs
U.S. Customs Service
300 S. Ferry Street
Terminal Island
San Pedro CA 90731

RE: Protest 2704-93-103333; acrylic sheet; antidumping; 19 U.S.C. 1504(d); suspension of liquidation is lifted when Customs receives instructions from Commerce; American Permac v. U.S.; HQ 224778; Pagoda Trading Corp. v. U.S.; Canadian Fur Trappers Corp. v. U.S.; Nunn Bush Shoe Co. v. U.S.; section 632(d) NAFTA Implementation Act.

Dear Sir:

This is our decision in protest 2704-93-103333, dated October 14, 1993, concerning the lifting of liquidation suspensions.

FACTS:

The merchandise at issue is acrylic sheet from Japan. The sheet was manufactured by Nitto Jushi Kogyo and imported during the period October 1980 through July 1981. The subject entries were subject to an affirmative antidumping finding issued by the Treasury Department on August 20, 1976 (Treasury Decision 76-240). The subject entries were subject to the Department of Commerce's (DOC) second administrative review of the 1976 antidumping finding conducted in accordance with 19 U.S.C. 1675. This review covered entries of acrylic sheet imported from Japan during the period August 1, 1980 through July 31, 1981. The final results of the second administrative review covering acrylic sheet from Japan were published in the Federal Register on July 29, 1983 (48 Fed. Reg. 34,490). These results state that the DOC "shall determine and the U.S. Customs Service shall assess, dumping duties on all entries with purchase
dates during the period involved." These results also state that the DOC "will issue appraisement instructions on each exporter directly to the Customs Service."

Customs did not receive appraisement or liquidation instructions from the DOC for the subject entries until July 1, 1993. No reason is given for this delay. Based on these instructions, the subject entries were promptly liquidated on July 30, 1993.

ISSUE:

Whether the subject entries were deemed liquidated by operation of law pursuant to 19 U.S.C. 1504(d). More specifically, at what point was the suspension of liquidation lifted on the subject entries.

LAW AND ANALYSIS:

Initially, we note that this protest was timely filed pursuant to 19 U.S.C. 1514(c)(2)(A). The subject entries were liquidated on July 30, 1993 and this protest was filed on October 14, 1993. We also note that this protest is a protestable matter pursuant to 19 U.S.C. 1514(a)(5).

Liquidation of an entry constitutes the final computation by Customs of all duties (including any anti- dumping or countervailing) accruing on that entry. See generally, Ambassador Division of Florsheim Shoes v. United States, 748 F.2d 1560, 1562 (Fed. Cir. 1984). The Customs Procedural Reform and Simplification Act of 1978 provides in section 209(a), 19 U.S.C. 1504, that an entry is deemed liquidated as entered if Customs has not liquidated the entry within one year from the date of entry or withdrawal from warehouse. Customs is permitted to extend the one year period, under 19 U.S.C. 1504(b), if liquidation is suspended by statute or court order. The subject entries were suspended pursuant to 19 U.S.C. 1673 pending the results of an antidumping administrative review.

On July 29, 1983, the DOC published the final results of the administrative review for the subject entries. The protestant asserts that the suspension of liquidation for the subject entries was lifted at this time. However, these results state that the DOC shall determine and Customs shall assess dumping duties on applicable entries, and that the DOC will issue appraisement instructions to Customs. Consequently, until Customs received these instructions it was unable to liquidate the subject entries. In HQ 224778

(December 23, 1993), Customs ruled that a suspension of liquidation is not lifted until instructions are received from the DOC. This ruling is supported by various statements of the courts. The Court of International Trade (CIT) stated that Customs obligation to collect antidumping duties does not arise until the DOC has "furnished" Customs with the determination upon which assessments must be predicated. American Permac, Inc. v. United States, 10 CIT 535, 542 (1986). The CIT and the Court of Appeals for the Federal Circuit also referred to the DOC as having "notified" or "directed" Customs to proceed with liquidation. See Pagoda Trading Corp. v. United States, 9 CIT 407, 408 (1985), aff'd 5 Fed. Cir. (T) 10, 14 (1986). In this protest, liquidation instructions were not received until July 1, 1993. Therefore, the suspension of liquidation on the subject entries was not lifted until July 1, 1993.

The CIT also addressed the application of 19 U.S.C. 1504(d) in Canadian Fur Trappers Corp. v. United States (Fur Trappers), 12 CIT 612 (1988), aff'd 7 Fed. Cir. (T) 136, 139 (1989). In that case, the suspension of the entries involved was lifted after four years from the date of entry. The CIT stated that when a suspension is lifted after four years have passed, Customs has a discretionary 90 days to liquidate the entries. Fur Trappers at 618, See also Nunn Bush Shoe Co. v. United States (Nunn Bush), 784 F. Supp. 892, 894 (1992). This decision was based on the legislative history for section 1504(d) which states that "[t]his last provision is discretionary, rather than mandatory, and recognizes that there will be instances when it may be impossible to complete liquidation within 90 days because of the sheer number of entries to be liquidated after a long continued suspension." Fur Trappers at 616, See also H.R. Rep. No. 95-621, 95th Cong., 1st sess. 26 (1977). The subject entries were also suspended more than four years from the date of entry, and liquidated 29 days from the date the suspension was lifted. Thus, the subject entries were timely liquidated under the rationale of the Fur Trappers decision.

In Fur Trappers, the CIT also referred to Customs liquidating entries "pursuant to instructions" by the DOC. Fur Trappers at 613. The plaintiff in Fur Trappers highlighted that once Customs was notified liquidation could commence, liquidation commenced within 90 days. Id. at 617. In this protest, once Customs was notified liquidation commenced in 29 days. The plaintiff in Fur Trappers also alleged that the real controversy was Commerce's failure to promptly notify Customs that it should proceed with liquidation. This also appears to be the real controversy in
this protest. The CIT stated that the DOC did not offer an explanation as to why its directions to Customs were not expeditiously issued. Id. In this protest, the DOC also did not offer an explanation for the delay in issuance of its instructions to Customs. The CIT lastly stated that "it is troublesome that this provision [i.e., 1504(d)], which was intended to afford latitude to Customs in complicated liquidations, has the potential for abuse when Commerce invokes its protection to justify the agency's own lack of diligence." Id. Despite this statement, however, the CIT did not determine that the entries were deemed liquidated pursuant to section 1504(d). Therefore, we find the above facts and language from Fur Trappers instructive for determining that the subject entries were not deemed liquidated pursuant to section 1504(d).

Section 1504(d) was amended by Section 632, title VI - Customs Modernization, Public Law 103-182, the North American Free Trade Agreement (NAFTA) Implementation Act (107 Stat. 2057), enacted December 8, 1993. Section 692 states that title VI is effective on the date of enactment of the Act. Section 632(d) states that "[w]hen a suspension required by statute or court order is removed, the Customs Service shall liquidate the entry within 6 months after receiving notice of the removal from the Department of Commerce . . ." Further- more, this section provides "[a]ny entry not liquidated by the Customs Service within 6 months after receiving such notice shall be treated as having been liquidated at the rate of duty, value, quantity, and amount of duty asserted at the time of entry by the importer of record." As stated previously, the subject entries were liquidated 29 days after receiving notice from Commerce. Therefore, these entries were also timely liquidated under section 632 of the NAFTA Implementation Act.

HOLDING:

The protest is denied. The subject entries were not deemed liquidated by operation of law pursuant to 19 U.S.C. 1504(d). More specifically, the date for lifting of the liquidation suspension was the date Customs received instructions from the DOC to liquidate the subject entries.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed, with the Customs Form 19, by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty
days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division


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