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HQ 223139

August 29, 1991

LIQ-4-02/PRO-2-02-CO:R:C:E 223139 JR


Regional Director of Customs
Commercial Operations, Pacific Region
One World Trade Center, Suite 534
Long Beach, California 90831-0700

RE: Application for further review of Protest No. 2904-91- 000038, dated March 8, 1991; Countervailing duties; entries liquidated during outstanding injunction of CIT suspending its liquidation; voidable liquidation; 19 U.S.C. 1514(a)(5).

Dear Sir:

The above-referenced protest was forwarded to our office for further review from the District Director, Portland, Oregon.


The protest involves the liquidation of an entry covering imported cast iron man-hole covers, frames and grates exported from India on May 31, 1985. On December 10, 1990, the International Trade Administration (ITA), U. S. Department of Commerce, published the final results of its 1985 administrative review of the countervailing duty order on certain Iron Metal Castings from India in the Federal Register (55 FR 50,747). On instructions from the ITA, Customs Headquarter's, Office of Trade Operations, issued an E-mail telex no. 1347113 on December 13, 1990, instructing the field offices to assess countervailing duties at the various listed percentages on all shipments of this merchandise exported on or after January 1, 1985 and on or before December 31, 1985.

On December 20, 1990, the Portland district office forwarded the entry in question for liquidation. Subsequently, but before the entry was liquidated, the U.S. importer of record filed a summons and complaint in the U.S. Court of International Trade (CIT) to contest the final results of the 1985 administrative review. The CIT issued an injunction on January 23, 1991, suspending the liquidation of the 1985 imports of iron metal castings during the pendency of the litigation. Despite the outstanding injunction, Customs liquidated the entry in this protest on February 1, 1991. The importer asserts that since the entry was improperly liquidated, the liquidation should be cancelled, and pursuant to the court order, liquidation should be suspended until resolution of the court action.


May Customs "unliquidate" an entry which has been liquidated in contravention of a court injunction suspending its liquidation?


The United States Court of Appeals for the Federal Circuit has held, without commenting on the correctness of the Customs Service's action, that Customs may not "unliquidate" a premature liquidation. See United States v. Utex International Inc., 6 Fed. Cir. (T) 166; 857 F.2d 1408 (1988).

Customs has recently followed the Utex case. In HQ 221591, dated February 13, 1990, an entry was improperly liquidated on the basis of the preliminary antidumping duty investigation and the importer timely protested. Customs held that because it could not determine the final amount of antidumping duties to be paid as the final antidumping duty order had not yet been issued, Customs could not correctly liquidate the entry; therefore, considering the options permitted under 19 U.S.C. 1514/1515, if Customs acted on the protest for further review at that time, it would have to deny the protest. However, Customs provided the protestant with the opportunity to request, in writing, that Customs withhold action on the protest until the final results of the antidumping duty order was published. Otherwise, if Customs denied the protest, the only course of action remaining for the protestant would be to bring suit in the Court of International Trade and seek equitable relief.

In this case, the protestant has timely filed a protest under 19 U.S.C. 1514 against the liquidation of the entry and exaction of countervailing duties at the 9.06 percentage rate plus interest in contravention of an outstanding court injunction. Although the liquidation of the entry was improper when a valid court order restraining liquidation was pending, Customs cannot cancel the liquidation as the protestant requests. The liquidation, although voidable, is still binding unless Customs can correctly reliquidate, which it cannot presently do. See generally United States v. A.N. Deringer, Inc., 66 CCPA 50, CAD 1220, 593 F.2d 1015 (1979). Since Customs can neither cancel the liquidation of the entry nor reliquidate the entry while the countervailing duty findings are under review in the Court of International Trade, we have no choice but to deny this protest if we act now.


Customs may not "unliquidate" an entry which has been liquidated in contravention of a court injunction suspending its liquidation (despite the timely filed protest) since the entry cannot be correctly reliquidated while the countervailing duty order is under review in the Court of International Trade.

Accordingly, you are instructed to inform the protestant that Customs is willing to withhold action on the protest, if the protestant so requests in writing, until the court renders its decision. Absent such a written request to withhold action, you are instructed to deny this protest for the above-stated reasons. Please inform the protestant of his options. You may issue a copy of this decision to the protestant.


John A. Durant, Director

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