CAFC Upholds Two CIT Decisions on "Deemed Liquidation" and Sufficient Notice to Customs that AD Suspension of Liquidation is Lifted
Entry "deemed liquidated" as Customs did not act w/in six months of Federal Register notice of final results of AD administrative review. In International Trading Co. v. U.S., the CAFC affirmed the CIT's decision that Customs did not liquidate a March 1994 entry of shop towels from Bangladesh within the six month statutorily allotted time pursuant to 19 USC 1504(d). As a result, the CAFC concurred with the CIT that the entry was deemed liquidated at the rate and amount of duty deposited by the importer.
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According to the CAFC, the shop towels were subject to an antidumping (AD) duty order that required an AD cash deposit rate of 2.72%. However, as a result of an AD duty administrative review for the period of March 1, 1994 - February 28, 1995, the AD cash deposit rate for these towels was changed to 27.31%.
The CAFC states that the final results of this AD duty administrative review were published in the Federal Register on October 30, 1996 and the ITA's liquidation instructions were emailed to Customs on July 1, 1997. On September 26, 1997, Customs liquidated the entry of towels at the 27.31% AD duty rate which resulted in $17,779.92 in additional AD duties. International Trading Co. filed suit seeking a refund of these additional duties because it believed Customs had failed to liquidate the entry within the allotted six-month period provided for in 19 USC 1504(d).
Among other things, Customs argued that the six month period for liquidating the March 1994 entry did not begin until July 1, 1997 when the ITA emailed liquidation instructions to Customs. However, both the CAFC and CIT found that the Federal Register notice constituted notice to Customs of removal of suspension of liquidation. The CAFC states that as a result, the entries were deemed liquidated at the AD cash deposit rate of 2.72% pursuant to 19 USC 1504(d) on April 30, 1997, six months after the Federal Register publication of the final results of the AD duty administrative review. (CAFC Court No. 04-1259, dated 06/16/05, available at http://www.fedcir.gov/opinions/04-1259.pdf)
Entry "deemed liquidated" as Customs did not act w/in 6 months of email providing sufficient notice that suspension of liquidation was removed. In NEC Solutions (America), Inc. v. U.S., the CAFC also upheld a CIT decision that for certain AD duty administrative review periods, Customs failed to liquidate entries of television sets manufactured in Japan within six months of receiving an email regarding these AD administrative reviews from the ITA. The CAFC states that the email should have been read by Customs as providing notification that any suspension of liquidation on the NEC entries had been removed. (The email message had stated, in part, that records indicate that there should be no unliquidated NEC entries, and if any Customs import office is suspending liquidation of such entries, Customs headquarters should be informed, etc.)
As a result of Customs' failure to liquidate within six months of this email, the CAFC upheld the CIT's ruling that the entries should have been deemed liquidated at the rate asserted at entry pursuant to 19 USC 1504(d). Accordingly, NEC is entitled to a refund of any additional duties imposed.
(In the "background" section of this decision, the CAFC notes that the ITA had failed to publish a Federal Register notice within 10 days of the removal of a court-ordered suspension of liquidation, as required by 19 USC 1516a(e), for these NEC entries. Approximately one year later, the ITA sent the above-described email to Customs. However, the ITA's failure to publish the required Federal Register notice does not appear to be a factor in the CAFC's decision.)
See subject email message, Adm: 00-0661, dated 06/23/2000, available at http://www.brokerpower.com/cgi-bin/adminsearch/admmsg.view.pl?article=2000/2000-0661.ADM. (CAFC Court No. 04-1085, -1109, dated 06/10/05, available at http://www.fedcir.gov/opinions/04-1085.pdf)