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HQ 229773




May 21, 2003

RR:CR:DR 229773 IDL

CATEGORY: DEEMED LIQUIDATION DETERMINATION

Service Port Director
Attn: Jerry Jensen, Asst. Port Director
1000 Second Avenue
Seattle, WA 98104

RE: Protest No. 3001-02-100342; Antidumping Duties; 19 U.S.C. 1514; 19 U.S.C. 1516a(e); 19 U.S.C. 1504(d); 19 U.S.C. 1677g

Dear Mr. Jensen:

This is in response to your correspondence dated December 2, 2002, concerning D&L Supply Co., Protest No. 3001-02-100342.

FACTS:

Protestant, D&L Supply Co. (“D&L”), made seven entries of “Cast Iron Articles, Nonmalleable” under subheading 7325.10.0050, HTSUS during the period of May 5, 1990 through January 2, 1991. The merchandise was manufactured by Guangdong Metals & Minerals Import & Export Corporation (“Guangdong”), of People’s Republic of China. Customs suspended liquidation of the seven entries until November 15, 2002, when all seven were liquidated. On December 2, 2002, D&L filed Protest No. 3001-02-100342.

On May 9, 1986, the Department of Commerce (“Commerce”) published in the Federal Register (51 FR 17222) on Case A-570-502, Antidumping Duty Order: Iron Construction Castings from the People’s Republic of China (“the PRC”) (“Order”). During the period of May 5, 1990 through January 2, 1991, when D&L entered the merchandise, a cash deposit of 11.66% was required, pursuant to the Order.

On February 27, 1992, Commerce published in the Federal Register (57 FR 6709) on Case A-570-502, Certain Iron Construction Castings From the People’s Republic of China; Preliminary Results of Antidumping Duty Administrative Review (“Preliminary Results”), covering the period of May 1, 1990 through April 30, 1991. As a result of the review, Commerce had “preliminarily determined to assess antidumping duties based on the best information available [“BIA”]”. The preliminary results listed antidumping duty liability at 45.92% for “all exports of certain iron construction castings from the PRC”.

On June 8, 1992, Commerce published in the Federal Register (57 FR 24245) on Case A-570-502, Certain Iron Construction Castings from the PRC; Final Results of Antidumping Duty Administrative Review (“Final Results”). The Final Results listed the antidumping duty liability for Guangdong at 92.74%, and provided the following:

[T]he following deposit requirements will be effective upon publication of this notice of final results of administrative review for all shipments of certain iron construction castings from the PRC entered, or withdrawn from warehouse, for consumption on or after the publication date,the cash deposit rates for the reviewed companieswill be [92.74%].

On July 16, 1992, Message No. 2198111 on Case A-570-502, Preliminary Injunction on Certain Iron Construction Castings from the People’s Republic of China (Exp. by Guangdong or Imported by D&L Supply Co.), ordered a suspension of liquidation on the subject entries until further notice, effective July 15, 1992, in response to an injunction by the C.I.T.

In D&L Supply Co. v. United States, 841 F. Supp. 1312, 1314 (C.I.T. 1993), Guangdong and D&L appealed the Final Results, arguing that Commerce erred in using the 1989-1990 rate for Guangdong as a BIA rate for the 1990-1991 entries, because at the time of the Final Results, that rate was subject to judicial review. By the time the CIT issued its first decision on the 1990-1991 Final Results, the 92.74% rate for Guangdong in the 1989-1990 review had been amended in Sigma Corp. v. United States, 841 F. Supp. 1275 (C.I.T. 1993). Because litigation in the 1990-1991 review was not yet final, the CIT also ordered Commerce to reevaluate whether its choice of BIA for Guangdong continued to be appropriate. On remand, Commerce determined that, because the 92.74% rate was valid when it was originally selected as BIA for the 1990-1991 review, it was appropriate to continue to rely upon that rate. The CIT upheld that determination. D&L Supply Co. v. United States, 888 F. Supp. 1191 (CIT 1995).

On May 8, 1997, however, the CAFC reversed that decision, holding that Commerce must revise its BIA selection for the 1990-1991 review in favor of a rate which had not been invalidated at the time the BIA redetermination was issued. D&L Supply Co. v. United States, 113 F.3d 1220 (Fed. Cir. 1997).

On July 8, 1997, in accordance with the CAFC decision, the CIT issued an order remanding the final results of the 1990-1991 review to Commerce for selection of new BIA rates for Guangdong and the PRC-wide entity.

On October 8, 1997, Commerce released its Final Results of Redetermination Pursuant to Court Remand, D&L Supply Co. v. United States (“Remand Results”) to the C.I.T. Commerce listed a 25.52% antidumping duty rate for Guangdong and the PRC-wide entity, which reflected the overall average of the margins alleged in the petition, as BIA for the 1990-1991 review period. The C.I.T. affirmed Commerce’s Remand Results in D&L Supply Co. v. United States, 6 F.Supp. 2d 914 (C.I.T. 1998), and rejected the theory that publication of a different investigation rate “invalidates” petition rates. D&L appealed that judgment.

On September 10, 1999, the CAFC affirmed the C.I.T.’s 1998 decision. Guangdong Metals & Minerals Import and Export Corp. v. United States, 217 F.3d 851 (Fed. Cir. 1999).

On September 9, 2002, Commerce published in the Federal Register (67 FR 57213) on Case A-570-502, Certain Iron Construction Castings from the People’s Republic of China; Amended Final Results of Antidumping Duty Administrative Review in Accordance with Court Decision (“Amended Final Results”). The Amended Final Results subjected Guangdong to 25.52% liability, and ordered Customs to “assess antidumping duty rates on all entries of subject merchandise in accordance with these amended final results.”

On September 20, 2002, Commerce instructed Customs to liquidate the subject entries, and assess 25.52% antidumping duty liability. That instruction was sent to Customs field offices via Message No. 2263206.

On November 15, 2002, Customs liquidated the subject entries as instructed by Commerce.

On December 2, 2002, D&L filed Protest No. 3001-02-100342. D&L contends that the subject entries liquidated by operation of law at the cash deposit rate of 11.66%, in effect at the time of entry.

ISSUES:

(1) Whether the liquidation by Customs of the subject entries on November 15, 2002 was barred by a prior liquidation by operation of law under 19 U.S.C. 1504(d)?

(2) Whether Protestant is liable on interest for underpayments on the subject entries?

LAW AND ANALYSIS:

Initially, we note that the protest was timely filed under the statutory and regulatory provisions for protests (see 19 U.S.C. § 1514 and 19 CFR Part 174). The entries were liquidated on November 15, 2002, and the protest was filed on December 2, 2002.

Further, we note that the issue in the instant case is protestable under 19 U.S.C. 1514, because Customs implementation of Commerce’s instructions for assessing antidumping duties is protested, not the antidumping determination itself. In order to protest a decision under 1514, that decision must be made by Customs. See 1514(a); see also Xerox Corp. v. United States, 289 F.3d 792 (Fed. Cir. 2002), reversing Xerox, 118 F.Supp. 2d 1353, Ct. Int’l Trade (October 19, 2000); Nichimen America, Inc. v. United States, 938 F.2d 1286 (1991 Fed. Cir.); HQ 224650 (November 25, 1994).

In contrast, the Court of International Trade held that a protestant may not challenge facts relating to determinations by Commerce in a 1514 protest action. See ABC International Traders v. United States, CIT Slip. Op. 95-97 (May 23, 1995); HQ 224623.

Issue (1)

Whether the liquidation by Customs of the subject entries on November 15, 2002 was barred by a prior liquidation by operation of law under 19 U.S.C. 1504(d)?

D&L argues that Customs received notice to lift suspension of liquidation with the CAFC decision in Guangdong Metals & Minerals Import and Export Corp. v. United States, 217 F.3d 851 (Fed. Cir. 1999), and that Customs was required to liquidate within 90 days of that decision. Customs failure to liquidate within that time period, it contends, resulted in a liquidation by operation of law under 1504(d).

However, 19 U.S.C. 1516a(e) provides the following:

Liquidation in accordance with final decision If the cause of action is sustained in whole or in part by a decision of the United States Court of International Trade or of the United States Court of Appeals for the Federal Circuit--

(2) entries, the liquidation of which was enjoined,
shall be liquidated in accordance with the final court decision in the action. Such notice of the court decision shall be published within ten days from the date of the issuance of the court decision. 19 U.S.C. 1516a(e).

The CAFC reached a decision in Guangdong Metals, 217 F.3d 851, on September 10, 1999. On September 9, 2002, Commerce published the Amended Final Results, giving notice of the CAFC decision. On September 20, 2002, Commerce issued liquidation instructions to Customs. On November 15, 2002, Customs liquidated the subject entries.

The CAFC has held that suspension of liquidation is removed under section 1516a(e) when the time for petitioning the Supreme Court for a writ of certiorari expires, after “all possible appeals are exhausted”. Fujitsu General America, Inc. v United States, 283 F.3d 1364 (March 20, 2002). Thus, suspension of liquidation was removed on December 9, 1999 (i.e., 90 days after the CAFC decision). However, section 1516a(e) also requires that Commerce publish notice of court decision within ten days of finality. Commerce failed to publish notice of the final court decision until publication of the Amended Final Results on September 9, 2002.

The CAFC has held that “deemed liquidation under section 1504(d) can occur only if Customs fails to liquidate entries within six months of having received notice of the removal of a suspension of liquidation”. In addition, there is no language in section 1516a(e) that attaches a consequence to a failure by Commerce to meet the ten-day publication requirement, let alone the consequence of deemed liquidation under section 1504(d). See Canadian Fur Trappers Corp. v. United States, 884 F.2d 563, 566 (Fed. Cir. 1989).

Therefore, applying the holding in Fujitsu General to the instant case, (1) suspension of liquidation was removed on December 9, 1999 (90 days after the CAFC decision); (2) Customs first received notice from Commerce of the removal of suspension upon publication of the Amended Final Results on September 9, 2002; (3) Customs was then required to liquidate the subject entries within 6 months of such date. Clearly, Customs liquidated the subject entries within the required time frame.

Generally, antidumping duty rates correctly applied by Customs are not protestable. Fujitsu Ten Corp. v. United States, Ct. Int’l Trade, Slip Op. 97-11 (January 29, 1997). Although an importer may protest Customs’ failure to follow a Commerce instruction under 19 U.S.C. 1514 (American Hi-Fi International, Inc. v. United States, 19 C.I.T. 1340 (1995)), the role of Customs in the antidumping process is “simply to follow Commerce’s instructions in collecting deposits of estimated duties and in assessing antidumping dutiesat the time of liquidation.” (emphasis added) HQ 225382; see also, Mitsubishi Electronics America, Inc. v. United States, 44 F. 3d 973 (Fed. Cir. 1994); Nichimen America, Inc. v. United States, 938 F. 2d 1286 (1991).

Therefore, the liquidation by Customs of the subject entries on November 15, 2002 was not barred by a prior liquidation by operation of law under 19 U.S.C. 1504(d).

Issue (2)
Whether Protestant is liable on interest for underpayments on the subject entries?

Under 19 U.S.C.1677g, interest on overpayments and underpayments is payable only on entries made on or after the date of the antidumping order.

Interest on certain overpayments and underpayments

(a) General Rule

Interest shall be payable on overpayments and underpayments of amounts deposited on merchandise enteredfor consumption on and after-
the date of publication of a[n]antidumping duty order under this subtitle. 19 U.S.C. 1677g.

Interest for money is defined as the compensation for use or forbearance or detention of money. Black’s Law Dictionary, Fourth Ed. (1957). As noted by the court in Timken v. U.S., 865 F. Supp. 881, 18 C.I.T. 942 (1994), there is no obligation to make a cash deposit prior to an antidumping duty order, and consequently, no obligation to pay interest. The dumping order, based on the final determinations of Commerce and the International Trade Commission, sets the right of the government to the use of the money as estimated duty deposits and, as a consequence, triggers the interest provision of 19 U.S.C. 1677g.

When Commerce requires importers to make antidumping duty deposits in its preliminary determination, such deposits function, merely, as collateral, and are not considered estimated duties. Therefore, a preliminary determination does not trigger any interest liability. An antidumping order, however, does trigger an importer’s obligation to deposit estimated duties and to pay interest on any underpayments. 19 U.S.C. 1677g. HQ 228611 (July 31, 2001).

Since, the subject entries occurred during the period of May 5, 1990 through January 2, 1991, subsequent to the date of publication of the Order (May 9, 1986), clearly, interest for underpayments is payable in this instance from dates of entry to the date of satisfaction of debt.

HOLDING:

Accordingly, the protest should be DENIED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.

Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon
Director, Commercial Rulings

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