HQ 230316 - Protest number 4601-03-102851; 19 U.S.C. § 1504; 19 U.S.C. § 1514; antidumping duty; suspension of liquidation; deemed liquidation; liquidation by operation of law; notice to surety; C.S.D. 83-20 (December 20, 1982); Hanover Insurance Co. v. United States, (23 Int'l Trade Rep. (BNA) 1495 (Ct. Intl. Trade 2001); 19 C.F.R. § 351.402(f)(2); reimbursement statement; double antidumping duty assessed. - United States International Trade Commision Rulings

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HQ 230316

May 10, 2004

LIQ-4-01; LIQ-11 RR:CR:DR
230316 RDC

CATEGORY: PROTEST

Customs and Border Protection
Port of Newark, New York
Port Director c/o Protest and Control Section
1100 Raymond Blvd.
Suite 402
Newark, N.J. 07102
Att: Susan M. Masser

RE: Protest number 4601-03-102851; 19 U.S.C. § 1504; 19 U.S.C. § 1514; antidumping duty; suspension of liquidation; deemed liquidation; liquidation by operation of law; notice to surety; C.S.D. 83-20 (December 20, 1982); Hanover Insurance Co. v. United States, (23 Int'l Trade Rep. (BNA) 1495 (Ct. Intl. Trade 2001); 19 C.F.R. § 351.402(f)(2); reimbursement statement; double antidumping duty assessed.

Dear Sir or Madam:

On January 21, 2004, the above-referenced Protest was received in this office pursuant to a request for further review. We have considered the points raised by your office and the Protestant, including those contained in the submission dated December 8, 2003, the “supplemental memorandum” dated February 26, 2004, and those raised during a teleconference on February 10, 2004. Our decision follows.

FACTS:

Washington International Insurance Company (Washington), as surety for the importer of record, Schweizerhall Inc., (Schweizerhall), protests the liquidation of entry number 943-xxxx540-6. According to the CF 7551, dated December 10, 1999, Schweizerhall entered coumarin from the People’s Republic of China on December 19, 1999. This entry was subject to antidumping case A-570-830-001 and antidumping duty in the amount of 31.02 percent of the value, $4,474.32, was deposited on entry. According to the invoice attached to the entry summary, “SPL-778/99” dated November 17, 1999, from Schweizerhall Pharma Limited to Schweizerhall, the coumarin entered was manufactured by “High Hope Int’l Group (Jiangsu Native Product I/E Corp Ltd.).”

According to CBP’s Automated Commercial System, (ACS), a “Notice of Suspension” was sent Schweizerhall and Washington on January 8, 2000, to advise that liquidation of the protested entry was suspended. On November 21, 2002, Message number 2325210 containing the Department of Commerce’s “Liquidation Instructions for Coumarin from the People's Republic of China Exported by Jiangsu Native Produce Import & Export and Exported by Netchem, Inc.” was issued to the ports. This message directed CBP to assess antidumping duty of 160.80 percent of the entered value on coumarin from the PRC sold or exported by Jiangsu Native Produce Import & Export Corporation during the period February 1, 1999 through January 31, 2000.

By CF 29, Notice of Action, dated January 17, 2003, Schweizerhall was advised that, per message number 2325210, “antidumping liability equal to 160.80 percent” of the value of the imported coumarin was being assessed against entry 943-xxxx540-6. The CF 29 also advised that the importer was required to provide “a reimbursement statement as described in 19 C.F.R. § 351.402(f)(2)” and that failure to provide the “reimbursement statement prior to liquidation” would result in the doubling of the antidumping duty assessed. Attached to the Notice was a “Reimbursement Statement” complete with the protested entry number and date of entry. According to a representative from the port, no “reimbursement statement” was provided by the importer. Per ACS, the protested entry liquidated on April 11, 2003, with additional antidumping duty of $45,695.28 and interest assessed. (We note that this amount is incorrect. According to the port the wrong entered value was used to calculate the additional antidumping duty. The entry will be re-liquidated in accordance with this decision.) A representative from the National Finance Center states that the first formal demand on the surety was mailed on July 15, 2003.

The instant Protest, 4601-03-102851 was received at the Port on September 26, 2003, and forwarded to this office for further review on January 29, 2004. On February 10, 2004, representatives of this office participated in a teleconference with counsel for Washington. Washington argues that the entry was deemed liquidated as entered per 19 U.S.C. § 1504 because CBP failed “to provide the surety and the importer with notices of extension or suspension of liquidation . . . .” The Protestant also filed a “Supplemental Memorandum in Support” of its Protest on December 8, 2003. In this submission, Washington asserts that, because the importer of record was not “actively engaged in the import business at the time the subject entry liquidated” CBP should not presume reimbursement. In its February 26, 2004, submission, the Protestant also stated that “the importer failed to respond to [the Notice of Action] because the importer was not actively engaged on business at that time and no longer maintained an office at the address listed on the Notice of Action.”

ISSUES:

1. Did CBP fail to provide the surety with notice of the suspension of liquidation causing the protested entry to liquidate by operation of law as entered one year from entry per 19 U.S.C. § 1504?

2. Is the Protestant relieved of liability from the assessment of double the amount of antidumping duty because “the importer of record was not actively engaged in business at the time the subject entry liquidated”?

LAW AND ANALYSIS:

We note initially that the instant Protest was timely filed per 19 U.S.C. § 1514, i.e., within 90 days from the date of mailing to the surety of notice of demand for payment. Under 19 U.S.C. § 1514(a) “decisions of the Customs Service, including the legality of all orders and findings entering into the same, as to . . . the liquidation or reliquidation of an entry . . . are final unless a protest of that decision is filed (19 U.S.C. § 1514(a)). 19 U.S.C. § 1514(c)(3)(B), states in pertinent part:

A protest by a surety which has an unsatisfied legal claim under its bond may be filed within 90 days from the date of mailing of notice of demand for payment against its bond. If another party has not filed a timely protest, the surety's protest shall certify that it is not being filed collusively to extend another authorized person's time to protest as specified in this subsection.

The demand for payment of the additional antidumping duty and interest assessed against the protested entry and against Washington’s bond was mailed July 15, 2003. The instant Protest was filed on September 26, 2003. Further, the certification required by § 1514(c)(3)(B) was made on page two of the pages attached to the Protest. Per § 1514(a)(5), the matter protested, the liquidation of the subject entry, is subject to protest.

1. Did CBP fail to provide the surety with notice of the suspension of liquidation causing the protested entry to liquidate by operation of law as entered one year from entry per 19 U.S.C. § 1504?

Generally, antidumping duty rates correctly applied by Customs are not protestable, (Fujitsu Ten Corp. v. United States, 957 F. Supp. 245; Ct. Intl. Trade 1997)) because “Customs has a merely ministerial role in liquidating antidumping duties” (Mitsubishi Electronics America, Inc. v. United States, 44 F.3d 973, 977 (Fed. Cir. 1994)). Customs “may not independently modify, directly or indirectly the determinations, [the Department of Commerce’s] underlying facts, or their enforcement” (Royal Business Machines Inc. v. United States, 507 F. Supp. 1007, 1014 n.18 (Ct. Int'l Trade 1980), aff'd, 69 C.C.P.A. 61, 669 F.2d 692 (CCPA 1982)). However, the doubling of the antidumping duty at liquidation is a CBP decision. Further, inasmuch as Washington protests the liquidation, i.e., disputes the application by Customs of Commerce’s liquidation instructions, this matter is protestable. (See Xerox Corp. v. United States, 289 F.3d 792 (Fed. Cir. 2002)).

Liquidation of an entry is limited by 19 U.S.C. § 1504(a) which provides, in relevant part, that

Unless an entry is extended under subsection (b) or suspended as required by statute or court order, except as provided in section 751(a)(3) [19 USCS § 1675(a)(3), judicial review of Administrative Review], an entry of merchandise not liquidated within one year from: (1) the date of entry of such merchandise; . . . shall be deemed liquidated at the rate of duty, value, quantity, and amount of duties asserted at the time of entry by the importer of record.

(19 U.S.C. § 1504 (a)). The protested entry was made December 19, 1999, and liquidation was suspended per 19 U.S.C. § 1675(a) (see Notice of initiation of antidumping and countervailing duty administrative reviews pertaining to coumarin from the People’s Republic of China, antidumping case A-570-830, for the period February 1, 1999, to January 31, 2000, (65 Fed. Reg. 16,875, March 30, 2000).

Section 1504(c) requires that:

If the liquidation of any entry is suspended, the Secretary shall by regulation require that notice of the suspension be provided, in such manner as the Secretary considers appropriate, to the importer of record and to any authorized agent and surety of such importer of record.

(19 U.S.C. § 1504(c)). The applicable Regulation at 19 C.F.R. § 159.12 provides:

If the liquidation of an entry is suspended as required by statute or court order, as provided in paragraph (a)(2) of this section, the port director promptly shall notify the importer or the consignee and his agent and surety on Customs Form 4333-A, appropriately modified, of the suspension.

(19 C.F.R. § 159.12(c)). According to ACS, a “Notice of Suspension” was sent to Schweizerhall and Washington on January 8, 2000, to advise that liquidation of the protested entry was suspended. In C.S.D. 83-20 (17 Cust. B. & Dec. 754, December 20, 1982) the third holding stated “[w]here Customs[’] computer indicated a notice of extension has been sent to the surety, Customs routine office practice of mailing such notices of extension within a week after such notices are generated is sufficient evidence of mailing the notice, even though a surety claims it did not receive such notice.” (C.S.D. 83-20 originally contained three holdings; however, the first two holdings were reversed by a Headquarters Ruling letter dated March 24, 1983, leaving only the remaining third holding valid. See 17 Cust. Bull. No. 19 at 8 (May 11, 1983)).

In Hanover Insurance Co. v. United States, (23 Int'l Trade Rep. (BNA) 1495 (Ct. Intl. Trade 2001)) the plaintiff was a surety that contended it was not liable for additional antidumping duty assessed on an entry because it did not receive notice that the liquidation of that entry had been suspended. Customs contended it had provided the surety with notice. Both sides moved for summary judgment. In Hanover the Court of International Trade, (CIT) stated:

In cases turning on the alleged giving of notice and lack of receipt thereof, there is a presumption that letters or other communications, properly addressed, stamped, and deposited in the mail, are received by the addressee in due course. . . . That presumption is rebuttable by proof of non-receipt. . . . Where a notice is required to be given by Customs officials, the burden of going forward with the evidence initially falls upon the plaintiff because the notice is deemed to have been given by virtue of the presumption of regularity which attaches to official acts. However, the burden of proof then is on the Government because it is the Government's statutory responsibility to provide the notice. The proofs offered by a plaintiff at this point are directed toward negating the presumed deliver by way of evidence of non-receipt, non-issuance, or non-delivery of the notice. When the plaintiff has met this initial requirement, the burden of going forward shifts to the Government to establish that notice was given. . . . Intra-Mar Shipping Corp. v. United States, 66 Cust. Ct. 3, 5-6, Cust. Dec. 4160 (1971) (citations omitted). See also Int'l Cargo & Sur. Ins. Co. v. United States, 15 C.I.T. 541, 544, 779 F. Supp. 174, 177 (1991); F.W. Myers & Co., Inc. v. United States, 6 C.I.T. 215, 215-16, 574 F. Supp. 1064, 1065 (1983).

(Id.) Thus, where CBP is required to give notice, as in 19 U.S.C. § 1504(c)), there arises a rebuttable presumption that notice was provided. It is then incumbent upon the one asserting it did not receive the notice to rebut this presumption with proof that notice was not provided. If such proof is offered, CBP must then provide evidence that notice was given.

The CIT described Hanover’s evidence supporting that it did not receive any notice of suspension of liquidation in this way:
the plaintiff ha[d] submitted affidavits from the Hanover employees and broker responsible for handling suspension notices received from Customs. The sum and substance of each affiant is that he or she has no recollection of ever receiving or reviewing a Notice of Suspension of Liquidation . . . .

(Id.) The Hanover Court stated that the Customs’ evidence supporting that it had provided the surety with notice of the suspension was
a computer printout from the Customs extension/suspension history file, accompanied by written attempts under oath by two Service employees to explain standard operating procedures for printing, mailing, and recording notices of suspension of the kind at issue herein.

(Id.) Ultimately, the CIT in Hanover held that whether notice of the suspension of liquidation was received was ultimately a question of fact to be decided by the trier of fact at trial. (In Hanover a trial was conducted subsequently on the factual issue of whether or not the plaintiff surety had received notification of the extension of liquidation. See Hanover Insurance Co. v. United States, 24 Int'l Trade Rep. (BNA) 1756 (Ct. Intl. Trade 2002)).

In the instant case, Washington states that it “never received any such notice of suspension of liquidation” of the protested entry and thus, the entry was deemed liquidated at the rate and amount of duties asserted at the time of entry under 19 U.S.C. § 1504. According to ACS, a “Notice of Suspension” was sent Schweizerhall and Washington on January 8, 2000, to advise that liquidation of the protested entry was suspended. Per the reasoning in Hanover Insurance, because CBP is required by § 1504(c) to provide notice of the suspension of liquidation to Washington as the surety for the importer, and CBP’s computer system shows that notice was sent to Washington, there is a rebuttable presumption that CBP provided Washington with notice of the suspension of liquidation. (See also A.N. Deringer, Inc. V. United States, 18 Int'l Trade Rep. (BNA) 2105 Ct. Intl. Trade 1996) wherein plaintiff broker asserted it did not receive notice of extension, the CIT held, “the onus upon the government is to establish proper mailing of the requisite notices; it then falls to the plaintiff to establish non-receipt.) Therefore, the burden to prove non-receipt of the notice is then on Washington. However, Washington provides no evidence that it did not receive the notice. Mere assertions made by counsel are not evidence. (See Bar Bea Truck Leasing Co., Inc. V. United States, 5 CIT 124, 126 (1983).

Since the suspension of liquidation of the entry was required by statute, i.e., § 1675(a), liquidation of the protested was properly suspended. Moreover, because Washington has not provided any evidence that it did not receive the notice, it has not successfully rebutted the presumption that CBP provided it with notice of the suspension of liquidation, and the entry was not deemed liquidated as entered under 19 U.S.C. § 1504.

2. Is the Protestant relieved of liability from the assessment of double the amount of antidumping duty because “the importer of record was not actively engaged in business at the time the subject entry liquidated”?

Section 351.402(f)(2) of the Commerce Department Regulations (19 C.F.R. § 351.402(f)(2) requires the importer to file a Reimbursement Certificate prior to liquidation. The Reimbursement Certificate described in 19 C.F.R. § 351.402(f), when filed by the importer, is a certification that it has not been reimbursed for all or part of the antidumping duties assessed. Commerce Regulation 351.402(f)(3) provides that the Secretary of Commerce may presume from an importer's failure to file the Reimbursement Certificate, that payment or reimbursement of the antidumping duties occurred, and thus the Secretary is required to deduct the amount of payment or reimbursement from the United States price. This deduction amounts to a doubling of the antidumping duty assessed (19 C.F.R. § 351.402(f)(3)). The DOC liquidation instructions contained in message number 2325210 also advised that, if the importer did not return a completed Reimbursement Certificate prior to liquidation certifying that it was not being reimbursed for antidumping duties, antidumping duty at double the applicable rate should be assessed at liquidation.

In HRL 225163 (September 15, 1994) we stated that per a Department of Commerce letter to Customs dated June 5, 1991, "[i]f the importer goes out of business before the deadline for filing the certificate has passed [prior to liquidation], Customs should not presume that reimbursement has occurred [and] if the importer goes out of business after the deadline for filing the certificate has passed [after liquidation], Customs should presume that reimbursement occurred." In HRL HQ 225163 we also held that, the “[P]rotestant ha[d] not presented any evidence to substantiate its claim that the importer went out of business prior to liquidation of the entry. In the absence of such evidence, [CBP] cannot accept [the P]rotestant’s assertion.” In addition, in the ruling letter cited by the Protestant, HRL 226825, we held that since the protestant did not present any evidence to substantiate its claim that the importer went out of business prior to liquidation of the entry, “Customs cannot accept protestant's assertion” and the protest was denied. (See also HRL 228840 (August 21, 2000)).

According to the port, a Reimbursement Certificate was attached to the Notice of Action that was sent to the importer but was not returned. The Protestant contends that since the importer of record, Schweizerhall, “was not actively engaged in business at the time the subject entry liquidated” per HRL 226285 (October 10, 1997) CBP cannot presume reimbursement and CBP may not presume reimbursement of and assess double the amount of antidumping duty upon liquidation. The contention by Washington that Schweizerhall was not actively engaged in business by the time the entry liquidated is not substantiated by any evidence. As stated above, assertions by counsel are not evidence per Bar Bea Truck Leasing Co., Inc. V. United States, 5 CIT 124, 126 (1983). Therefore, the Protestant is not relieved of liability for the antidumping duty at double the rate applicable to the entry because it did not provide evidence that the importer had gone out of business prior to the liquidation of the entry.

The antidumping duty rate applicable to the protested entry, 160.8 percent of the entered value, should have been doubled upon liquidation of the entry because of the application of the presumption that the importer had been reimbursed for the antidumping duty. Therefore, antidumping duty of 321.6 percent of the value, or $46,387.58, (321.6 percent of $14,424) should be assessed against the entry. The total amount of antidumping duty, $46,387.58, less the amount deposited, $4,474.32, or $41,913.26, plus interest should be billed to the Protestant.

HOLDING:

1. The Protestant failed to rebut the presumption that CBP provided the surety with notice of the suspension of liquidation and the entry did not liquidate by operation of law per 19 U.S.C. § 1504.

2. The Protestant is not relieved of liability for double the amount of antidumping duty because no evidence was provided that the importer of record, Schweizerhall, went out of business before the entry liquidated.

The Protest should be DENIED in full. Consistent with the decision set forth above, you are hereby directed to deny the subject protest. 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 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 this 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.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director

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