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HQ 222575

October 30, 1990

LIQ-4-01-CO:R:C:E 222575 CB


Regional Commissioner
U.S. Customs Service
Suite 500
5850 San Felipe Street
Houston, TX 77057-3012

RE: Application for further review of Protest No. 5301-7-000493 and 5301-7-000494 under 19 U.S.C. 1504(d)

Dear Sir:

The above-referenced protests were forwarded to this office for further review. We have considered the points raised and our decision follows.


It is the protestant's position that the subject entries were deemed liquidated as entered, without imposition of antidumping duties, 90 days after the International Trade Administration (ITA) issued instructions to the Customs Service to lift the suspension of liquidation and assess antidumping duties.

According to protestant, the subject merchandise was entered on June 23, 1983, and estimated tariff duties were posted. Protestant claims that no antidumping duty deposits were required because entry was made prior to the preliminary antidumping duty determination. An affirmative preliminary antidumping duty determination was issued regarding the importation of potassium permanganate, from the People's Republic of China, by the ITA on August 9, 1983. Liquidation of all entries of the subject merchandise was suspended.

The ITA issued its final antidumping determination on December 29, 1983. The ITA modified the suspension of liquidation order, pursuant to 19 U.S.C. 1673d(c)(4)(B), to apply to unliquidated entries of merchandise entered, or withdrawn from warehouse, 90 days before the date of the preliminary determination, or May 8, 1983. Accordingly, the subject entries were ordered suspended. As a result of 19 CFR 353.53 (1983 ed.),

Commerce no longer conducted automatic administrative reviews. Instead, reviews must be requested. The Department of Commerce did not receive a request for a review of the subject merchandise. The ITA issued instructions lifting the suspension of liquidation on November 27, 1985. Commerce issued Instructions No. 85/397 indicating that the applicable rate of duty for the subject entries during the period from May 1, 1983 to December 31, 1983 was 42.54 percent ad valorem. It appears that Customs issued appropriate liquidation instructions to all field offices on December 3, 1985.

The subject entries were liquidated on August 21, 1987. The file indicates that the extension of liquidation was not lifted until June of 1987 because a reimbursement statement had not been furnished by the importer as required under 19 CFR 353.26. It is the protestant's position that the liquidations were untimely and are, therefore, deemed liquidated as entered by operation of law pursuant to 19 U.S.C. 1504. Since the question of whether proper notices under 19 U.S.C. 1504 were issued is not disputed, it is assumed such notices were issued properly.


1) Whether there was a deemed liquidation by operation of law?

2) If not, whether interest can be charged on the antidumping duties assessed?


Issue #1

Liquidation of an entry of merchandise constitutes the final computation by Customs of all duties accruing on that entry. See generally, Ambassador Division of Florsheim Shoes v. United States, 748 F.2d 1560, 1562 (Fed. Cir. 1984). As provided for in section 504, Tariff Act of 1930, as amended (19 U.S.C. 1504 (1988)), if Customs fails to liquidate an entry within one year from the date of entry or final withdrawal from warehouse, that entry is deemed liquidated at the rate of duty, value, quantity and amount of duties asserted at the time of entry by the importer, his consignee, or agent. Customs is permitted to extend the one year period, under 19 U.S.C. 1504(b), if additional information is needed to classify the goods, liquidation is suspended by statute or court order, or if the importer, consignee, or his agent requests an extension. Customs must provide the importer with notice of the extension. Any
entry not liquidated at the expiration of four years from the date of entry or withdrawal from warehouse is deemed liquidated at the rate of duty, value, quantity, and amount of duty asserted at the time of entry by the importer, unless liquidation was to be suspended beyond the first year.

Protestant's deemed liquidation argument relies on the holding in Pagoda Trading Corp. v. United States, 804 F.2d 665 (Fed. Cir. 1986). Protestant's reliance is misplaced. In Pagoda the Circuit Court agreed with the Court of International Trade in concluding that "there was no evidence that any authorized official had granted an extension, and that there was no basis for extension such as a lack of information available to Customs...." (emphasis added) However, the subject protest can be distinguished from Pagoda. In the instant case, liquidation of the subject entries was extended until such time as the required reimbursement certificate was filed by the importer. The Customs Service administration of antidumping duties is governed by 19 CFR Part 353. Part 353.26 provides that, prior to the liquidation of an entry, the importer shall file a certificate stating whether it has entered into a reimbursement of antidumping duties agreement with the manufacturer, producer, seller, or exporter. The certificate is used in calculating the United States price. Therefore, there was a basis for extension of liquidation. Customs lacked information it required to proceed with liquidation of the entries and properly extended the time for liquidation. In any event, the holding in Pagoda applies only when suspension of liquidation is lifted before expiration of the one year limitation set forth in 1504(a). In the instant case, suspension went beyond the one year period and proper notices were issued.

Protestant also argues that the entries were deemed liquidated, pursuant to 19 U.S.C. 1504(d), when Customs failed to liquidate the entries within 90 days of the lifting of the suspension. Customs is not required to liquidate an entry within 90 days once a suspension has been lifted. In Canadian Fur Trappers Corp., et al., v. United States, 691 F. Supp. 364 (CIT 1988), the Court of International Trade held that the 90 day time frame set forth in 19 U.S.C. 1504(d) is discretionary rather than mandatory. This holding was affirmed by the Circuit Court on appeal. See Canadian Fur Trappers Corp., and Meldisco, a Division of Melville Corp., v. United States, Appeal No. 89-1060, 89-1061, and 89-1062, 23 Cus. Bul. & Dec. 39 (Fed. Cir. 1989). The Circuit Court held that the lack of consequential language in 1504(d) means that Congress intended this section to be only directory. Therefore, following the Canadian Fur Trappers holding, Customs failure to liquidate the subject entries within 90 days of the lifting of the suspension does not result in a deemed liquidation.

Issue #2

There is also the question of whether protestant is liable for interest on the antidumping duties assessed. Section 778 of the Trade Agreements Act of 1979 (19 U.S.C. 1677g (1979)) (the 1979 Act) provided that interest was payable on amounts deposited on merchandise entered, or withdrawn from warehouse, for consumption on and after the date on which notice of an affirmative determination by the Commission is published. The 1979 Act sets the interest rate at 8 percent per annum, or if higher, the rate in effect under section 6621 of title 26 on the date on which the rate or amount of the duty is finally determined. The interest was simple interest and was to be determined at the rate in effect on the date of the final determination.

The 1979 Act was amended by 621 of the Trade and Tariff Act of 1984 (the 1984 amendment) to provide that interest shall be payable on 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. The 1984 amendment provides that interest was generally payable at the rate in effect under 26 U.S.C. 6621. Section 6622 of title 26 provides that interest calculated under 6621 must be compounded. Thus, this amendment provided that interest be compounded and payable at the IRS rate for any period of time during which the entries were suspended. Pursuant to this method, the interest payable varies in accordance with the interest set forth under 6621 for the periods of suspension. This amendment became effective on October 30, 1984.

In 1986, Congress clarified the effective date of the 1984 amendment by indicating that the 1984 amendment should apply to all entries unliquidated on or after November 4, 1984. Note (b)(4) to 19 U.S.C. 1671 (Supp. 1988). Therefore, the subject entries should be liquidated in accordance with the 1984 amendment because they were still unliquidated at the time of the 1986 clarification.


The subject entries were properly liquidated within the time period allowed at the rate of 42.54 percent ad valorem and are subject to the interest provisions set forth in the 1984 Amendment.

This protest should be DENIED.


John Durant, Director

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