Review of 0712-00-200024; Application for Further Review, Protest No. 0712-01-100096; 19 U.S.C. 1504(d); 19 U.S.C. 1520(c)(1); “deemed liquidated”; liquidation instructions; Fujitsu General America, Inc. v. United States.

HQ W229113 July 25, 2001 LIQ-9-01:RR:CR:DR 229113 DR CATEGORY: Protest Port Director of Customs Attn: Connie Knapp 198 West Service Road Champlain, NT 12919 RE: Review of 0712-00-200024; Application for Further Review, Protest No. 0712-01-100096; 19 U.S.C. 1504(d); 19 U.S.C. 1520(c)(1); “deemed liquidated”; liquidation instructions; Fujitsu General America, Inc. v. United States. Dear Ms. Knapp: The above referenced protest and application for further review was forwarded to this office for a determination. We have considered the points raised and a decision follows. FACTS: The merchandise in issue consists of ball bearings and cylindrical roller bearings from Germany produced by FAG Kugelfischer Georg Schafer AG (“FAGKGS”) and imported into the United States by protestant FAG Bearings on October 23, 1991 and March 25, 1992. These bearings were subject to cash deposit requirements contained in antidumping order Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts thereof from the Federal Republic of Germany, Italy, and the United Kingdom, 54 Fed. Reg. 20900 (Germany), 20903 (Italy), 20910 (United Kingdom), (May 15, 1989) (the “Orders”). On July 6, 1992, Commerce initiated an annual administrative review of the Orders for entries made between May 1, 1991, and April 30, 1992. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof; Initiation of Antidumping Administrative Reviews, and Request for Revocation of Order (in Part), 57 Fed. Reg. 29700 (July 6, 1992). Liquidation of the entries was suspended pending the final determinations to be made pursuant to the administrative review. The administrative review was completed upon the publication of Final Results of Antidumping Duty Administrative Reviews and Revocation in Part of Antidumping Duty Order, etc., 58 Fed. Reg. 39729 (July 26, 1993). Soon thereafter, litigation ensued in the Court of International Trade (“CIT”) challenging various aspects of the final results, with the CIT issuing preliminary injunctions halting the liquidation of the entries pending a final resolution by the courts. On December 12, 1996, the CIT issued a decision in Federal-Mogul Corporation and the Torrington Company v. United States, 950 F. Supp. 1179, 20 CIT 1438 (December 12, 1996), in which it affirmed Commerce’s antidumping determinations and dismissed the litigation. In 1998, Commerce published Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, et al.; Amended Final Results of Antidumping Duty Administrative Reviews, advising that that there were now “final and conclusive court decisions” as related to bearings manufactured by FAGKGS and others, and stating that Commerce would instruct Customs to liquidate entries subject to the reviews. 63 Fed. Reg. 18877 (April 16, 1998). Commerce issued liquidation instructions were issued on November 14, 1999, and Customs liquidated the subject entries in accordance with those instructions on November 19, 1999. See Message 9287212. Over one year later, protestant FAG Holdings filed a petition under 19 U.S.C. 1520(c)(1), dated November 20, 2000, claiming that the April 16, 1998, notice tolled the six-month liquidation period required by statute and that “deemed” liquidation thus occurred on October 15, 1998. See Protest # 0712-00-200024, received by the port on November 21, 2000. In protestant’s judgment, Customs’ liquidations of the entries were based upon a mistake of fact, that is, Customs was not aware that the entries had “already liquidated by operation of law [under 19 U.S.C. 1504(d)]” and “[h]ad Customs been aware at the time of purported liquidation that the entries had already been deemed liquidated, it would not have liquidated the entries in the manner performed.” Based upon that argument, protestant requested that the entries be reliquidated at the rates asserted at entry, rather than at the increased antidumping duty rates in effect at the time of liquidation and contained in the liquidation instructions. The port denied that request on November 30, 2000. Ninety days later, on February 28, 2001, protestant filed a protest under 19 U.S.C. 1514(a)(7) in which it protested the denial of the §1520(c)(1) request, restating the claims made in that earlier claim. See Protest #0712-01-100096. The port denied the §1514(a)(7) protest, and forwarded this application for further review to this office for consideration. ISSUE: Were the entries “deemed liquidated” within the meaning of 19 U.S.C. 1504(d)? Was Customs’ liquidation of the entries a mistake of fact within the meaning of 19 U.S.C. 1520(c)? LAW AND ANALYSIS: First, we note that the petition under §1520(c)(1) was filed in a timely manner. Section 1520(c)(1) states (c) Reliquidation of entry or reconciliation.Notwithstanding a valid protest was not filed, the Customs Service may, in accordance with regulations prescribed by the Secretary, reliquidate an entry or reconciliation to correct - (1) a clerical error, mistake of fact, or other inadvertence, whether or not resulting from or contained in electronic transmission, not amounting to an error in the construction of a law, adverse to the importer and manifest from the record or established by documentary evidence, in any entry, liquidation, or other customs transaction, when the error, mistake, or inadvertence is brought to the attention of the Customs Service within one year after the date of liquidation or exaction … [emphasis added] Here, Customs liquidated the subject entries on November 19, 1999, and, although the petition was erroneously date-stamped as being received on November 21, 2000, protestant filed the petition on November 20, 2000, by faxing it at 12:02 p.m. to the Champlain office. Section 1504(d) of Title 19 (1988) was amended by §641(2) of Pub.L. 103-182, the North American Free Trade Agreement Implementation Act (107 Stat. 2057), enacted December 8, 1993. Section 641(2) of the NAFTA Implementation Act took effect on December 8, 1993, the date of enactment of the Act. Since liquidation of the merchandise occurred after the date of the NAFTA Implementation Act, the amendment applies in this instance. See Travenol Laboratories v. U.S., 118 F.3d 749 (Fed. Cir. 1997), rehearing denied, and suggestion for rehearing in blanc declined, 1997 U.S. App. Lexis 31641 (October 23, 1997). Therefore, under 19 U.S.C. 1504(d), … when 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, other agency, or a court with jurisdiction over the entry. Any 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. Protestant argues that the entries at issue were deemed liquidated on October 16, 1998, six months after Commerce published its notice of the finality of the CIT’s decision in Federal-Mogul. In support of its argument, Protestant relies on Fujitsu General America, Inc. v. United States, 110 F. Supp. 2d 1061, 2000 CIT LEXIS 103, CIT Slip Op. 00-98 (August 15, 2000), which held that Commerce’s publication in the Federal Register of a conclusive court decision in an action challenging Commerce’s final antidumping determinations constitutes sufficient notice to Customs that the court-ordered suspension of liquidation is removed. However, Fujitsu is being appealed, and we note that numerous administrative Headquarters decisions have been issued which stand for the proposition that the date for removing the liquidation suspension is the date that Customs receives instructions from Commerce to liquidate the subject entries. See, e.g., HQ 225783 (January 16, 1996); HQ 226285 (October 10, 1997); HQ 227793 (November 4, 1998); HQ 227562 (March 3, 1999); HQ 224778 (December 23, 1993); HQ 225107 (September 20, 1994). Various statements of the courts have also supported those rulings. The CIT has held that Customs’ obligation to collect antidumping duties does not arise until Commerce has “furnished” Customs with the determination upon which assessments must be predicated. See American Permac, Inc. v. United States, 10 CIT 535, 542, 642 F. Supp. 1187, 1193-4 (1986); see also Rheem Metallurgical S/A v. United States, 951 F. Supp. 241, 20 CIT 1450 (1996). The CIT and the Court of Appeals for the Federal Circuit also referred to Commerce 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). And the CIT has held in International Trading Co. v. United States, 110 F. Supp. 2d 977, CIT Slip Op. 2000-83 (2000) (app’l pending), that the six-month liquidation period of §1504(d) begins to run only when Customs receives actual notice of the removal of suspension. Even though the CIT decided in that case that such notice need only be “simple notice,” e.g., the direct communication of the relevant fact (removal of suspension) to Customs via publicly accessible means, it still stands for the proposition that mere publication of the notice of final results, without more, only removes the suspension and does not toll the six-month period. Here, was no notice was sent to Customs from Commerce until Commerce issued liquidation instructions for the subject entries on October 14, 1999, and Customs then liquidated the entries on November 19, 1999, well within the six-month period set by 19 U.S.C. 1504(d). Therefore, the liquidations were not deemed liquidated as asserted by Protestant, and this protest should be denied with regard to the argument that the liquidations by Customs were time-barred. **** Protestant also requests that Customs reliquidate the subject entries on the basis of “mistake of fact” by Customs, pursuant to 19 U.S.C. 1520(c)(1), which states Notwithstanding a valid protest was not filed, the Customs Service may, in accordance with regulations prescribed by the Secretary, reliquidate an entry or reconciliation to correct - (1) a clerical error, mistake of fact, or other inadvertence, whether or not resulting from or contained in electronic transmission, not amounting to an error in the construction of a law, adverse to the importer and manifest from the record or established by documentary evidence, in any entry, liquidation, or other customs transaction, when the error, mistake, or inadvertence is brought to the attention of the Customs Service within one year after the date of liquidation or exaction … Therefore, the essential question is did the liquidations, if improper, occur as a result of a mistake in the construction of the law or as a result of a mistake of fact. “In the latter case the reliquidation mechanism of 19 U.S.C. 1520(c) would be available and the liquidations could be challenged under that provision.” SCA International, Inc., v. United States, 14 C.I.T. 59, CIT Slip Op. 90-11 (Feb. 7, 1990) (citing Hambro Automotive Corp. v. United States, 66 CCPA 113, 603 F.2d 850 (1979)). In SCA International, the court addressed a situation where Customs acted on a belief that a notice of suspension of liquidation based upon the operation of the unfair trade laws was sufficient to effect an extension of the time of liquidation, for purposes of seeking more information. The court held that Customs’ legal position that liquidation is not deemed to occur when a suspension notice is outstanding, even when a suspension terminates, was an error in the construction of the law. Here, Commerce published the notice of the lifting of the liquidation suspension in the Federal Register, but Customs interprets 19 U.S.C. 1504(d) to mean that liquidation cannot occur until Commerce sends liquidation instructions to Customs, and Customs based the liquidations here upon that position. If the liquidations are found to be in error, such a finding would be based upon an error by Customs in the construction of the law, which renders the mechanism of 19 U.S.C. 1520(c) unavailable to protestant. Therefore, this protest should be denied because the refusal to reliquidate under 19 U.S.C. 1520(c)(1) was proper. HOLDING: This 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, this decision should be mailed 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 make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act and other methods of public distribution. Sincerely, John Durant, Director Commercial Rulings Division