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HQ 231048





March 1, 2006

LIQ-15 RR:CR:DR 231048 RDC

CATEGORY: PROTEST

Port Director
Customs and Border Protection
200 East Bay Street
Charleston, SC 29401
Att: Antoinette Peek-Williams

RE: Protest number 1601-05-100187; Akzo Fibers, Inc.; 19 U.S.C. § 1515; interest; Miscellaneous Trade and Technical Corrections Act of 2004; aramid fiber from the Netherlands; antidumping duty order, Case A-421-805, Dynacraft Industries, Inc., v. United States, (118 F. Supp. 2d 1286 (Ct. Intl. Trade 2000).

Dear Sir or Madam:

The above-referenced Protest was forwarded to this office pursuant to an application for further review (AFR) and received on 7/11/2005. The Protestant, Akzo Fibers, Inc. (Akzo), protests CBP’s failure to pay interest on antidumping duty deposits refunded per the Miscellaneous Trade and Technical Corrections Act of 2004 (2004 Trade Act) (108 P.L. 429, 118 Stat. 2434, H.R. 1047, 12/03/2004).

FACTS:

Between 6/18/1997 and 5/26/1998, Akzo made 54 entries of what it describes as “aramid fiber from the Netherlands.” One entry, number xxx-xxxxxx7-8 was selected at random as representative of the other 53 entries. The imported fiber was subject to antidumping duty order, case A-421-805, Aramid Fiber Formed of Poly-Phenylene Terephthalamide From The Netherlands (see Antidumping Duty Order and Amended Final Determination: Aramid Fiber Formed of Poly-Phenylene Terephthalamide From The Netherlands, 59 Fed. Reg. 32,678, 6/24/1994). According to the protestant, the “estimated antidumping duties were deposited in accordance with cash deposit rates that were in effect at the time of entry . . . .” CBP records indicate that antidumping duty was deposited on number xxx-xxxxxx7-8 at entry.

The protestant states that when the entries were liquidated, antidumping duty was assessed at the rate required for the estimated cash deposits rather than at the rate specified in liquidation instructions contained in Message number 1200205 issued on 7/19/2001. The rate required for the estimated cash deposits was higher than the rate specified in the liquidation instructions contained in Message number 1200205. On 10/8/1999, CBP liquidated entry number xxx-xxxxxx7-8 as it was entered, i.e., assessing this liquidation and that of the 53 other protested entries, the rate of duty at which the entries were liquidated became final per 19 U.S.C. § 1514. (See Juice Farms, Inc. v. United States, 68 F.3d 1344, 1346 (Fed. Cir. 1995) (parties bound even by erroneous, illegal liquidation not protested within 90 days).

Akzo sought relief from Congress. Section 1511 of the 2004 Trade Act (108 P.L. 429, 118 Stat. 2434, H.R. 1047, 12/03/2004) provided this relief by instructing CBP to reliquidate the specified entries “in accordance with the final decision of the International Trade Administration of the Department of Commerce, and the final results of the administrative reviews . . .” and refund any amounts owed within 90 days of the reliquidation. CBP reliquidated the specified entries and, according to Akzo, “refunded the proper amount of overpaid antidumping duties . . . “ but paid no interest on the amounts refunded. Akzo timely filed protest number 1601-05-100187 and therein protested the reliquidation of the entries without payment of interest. The port granted the protestant’s application for further review and the protest was forwarded to this office.

ISSUE:

Is the protestant entitled to interest on the antidumping duty deposits that were refunded?

LAW AND ANALYSIS:

Akzo contends that per the court’s application of 19 U.S.C. § 1505 in Orlando Food Corp., v. United States, 423 F.3d 1318 (Fed. Cir. 2005), interest is payable on the amounts refunded to by the 2004 Trade Act. Section 1505(b) (2005) provides:

The Customs Service shall . . . refund any excess moneys deposited, together with interest thereon, as determined on a liquidation or reliquidation. . . . . Refunds of excess moneys deposited, together with interest thereon, shall be paid within 30 days of liquidation or reliquidation.

In Orlando Food Corp., the Tariff Suspension and Trade Act of 2000 (Trade Act of 2000) instructed CBP to reliquidate the plaintiff’s entry to correct the classification and refund to the plaintiff the excess duty paid. (Pub. L. No. 106-476, 114 Stat. 2101, 2148). CBP reliquidated the entry as directed and refunded the duty without interest.

Eventually, Orlando Food filed suit in the Court of International Trade (CIT), contending that § 1408 of the Trade Act of 2000 invoked § 19 U.S.C. § 1505 and thus, it was owed interest on the refunded duty. Though the Court of International Trade (CIT) agreed with CBP and held that no interest was owed to Orlando Food (see 343 F. Supp. 2d 1375 (Ct. Intl. Trade 2004), on appeal the Court of Appeals for the Federal Circuit (CAFC) reversed the CIT and held that interest was payable as prescribed in § 1505 on the refunded duty.

In Akzo’s case, the 2004 Trade Act uses much the same language to direct CBP to reliquidate the protested entries as the Trade Act of 2000 in Orlando Food. However, the duties refunded in Orlando Food were not estimated antidumping duties as were the duties refunded to Akzo by the 2004 Trade Act. In Dynacraft Industries, Inc., v. United States, (118 F. Supp. 2d 1286 (Ct. Intl. Trade 2000)) the court explicitly rejected the plaintiff’s argument that it was entitled to interest per § 1505(b) on refunds of estimated antidumping duty deposited. In that case, Dynacraft made cash deposits of estimated antidumping duty based on a published Notice of Preliminary Determination of Sales at Less Than Fair Value: Bicycles From the People's Republic of China. Subsequently it was determined that imports of bicycles from China did not injure or threaten injury to the U.S. bicycle industry. Consequently, no antidumping duties were due on Dynacraft's imports of bicycles from China.

Customs refunded Dynacraft’s cash deposits of estimated antidumping duty but refused to pay interest on these refunds. In Dynacraft Industries, Inc., v. United States, Dynacraft sought to characterize the cash deposits of estimated antidumping duty as “excess moneys deposited” within the meaning of § 1505(b) (Id. at 1291). The CIT held that based on the antidumping statutory regime, 19 U.S.C. § 1677g alone provided for interest on refunds of cash deposits of antidumping duty and then only when deposited after the relevant antidumping duty order is published (id.). Dynacraft was denied interest under § 1677g because it had made the cash deposits before the relevant order in its case.

Section 1677g provides in pertinent part:

Interest shall be payable on overpayments and underpayments of amounts deposited on merchandise entered, or withdrawn from warehouse, for consumption on and after-- . . . the date of publication of a countervailing or antidumping duty order under this title . . . .

(19 U.S.C. § 1677g(a)(1) (2005)). The Dynacraft court stated:
if cash is deposited as estimated antidumping duties pursuant to § 1673e(a)(3), section 1673f(b) explicitly provides for recovery of interest pursuant to 19 U.S.C. § 1677g (1994) on the post-order deposits.

(Dynacraft 118 F. Supp. 2d 1286, 1290) (citations and footnotes omitted). The first statute the Dynacraft court cited, § 1673e(a)(3), states in part:

Within 7 days after being notified by the Commission of an affirmative determination under section 735(b) [19 USCS § 1673d(b)], the administering authority shall publish an antidumping duty order which . . . requires the deposit of estimated antidumping duties pending liquidation of entries of merchandise at the same time as estimated normal customs duties on that merchandise are deposited.

(19 U.S.C. § 1673e(a)(3); see 19 C.F.R. § 141.101 for time of deposit of estimated duties).

The second statute that the Dynacraft court said “explicitly provides for recovery of interest pursuant to 19 U.S.C. § 1677g” was § 1673f. Section 1673f provides that:

If the amount of an estimated antidumping duty deposited under section 736(a)(3) [19 USCS § 1673e(a)(3)] is different from the amount of the antidumping duty determined under an antidumping duty order published under section 736 [19 USCS § 1673e], then the difference for entries of merchandise entered, or withdrawn from warehouse, for consumption after notice of the affirmative determination of the Commission under section 735(b) [19 USCS § 1673d(b)] is published shall be-- . . . refunded, to the extent that the deposit under section 736(a)(3) [19 USCS § 1673e(a)(3)] is higher than the duty determined under the order, together with interest as provided by section 778 [19 USCS § 1677g].

(19 U.S.C. § 1673f(b)). Accordingly, when read together, § 1673e(a)(3) and § 1673f(b) provide that when estimated antidumping duties are required to be deposited and are deposited after the publication of an antidumping order, then if deposits of estimated antidumping duties are refunded, interest is to be paid on the amounts refunded per § 1677g.

In Akzo’s case, the antidumping duty order was published on 6/24/1994 (59 Fed. Reg. 32,678). The amount of estimated antidumping duty deposited per § 1673e(a)(3) with the protested entries was more than the amount of antidumping duty determined under 19 USCS § 1673e. Thus, when the refund of estimated antidumping duty was made to Akzo, it should have been made with interest per § 1677g.

HOLDING:

The protestant is entitled to interest on the antidumping duty deposits that were refunded pursuant to (19 U.S.C. § 1677g(a)(1).

The Protest should be Granted in full. The protested entries should be reliquidated and interest at the applicable rate on amounts already refunded should be paid to the protestant.

In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), you are to mail this decision, together with the CBP Form 19, 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 make the decision available to CBP personnel, and to the public on the CBP 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 Harmon, Director

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