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HQ 228624

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November 9, 2001
LIQ-1-DRA-1-RR:CR:DR
228624 IOR

Port Director
U.S. Customs Service
423 canal St.
New Orleans LA 70130

Attn: Glenn Seale

Drawback Unit

RE: Protest Application for Further Review No. 2002-97-101988; accelerated drawback; drawback; refunded repayment; interest; Hartog Foods International, Inc. v. United States

Dear Madam:

The above-referenced protest was forwarded to this office for further review. A meeting was requested on behalf of the protestant, but that request was revoked.

FACTS:

This protest is of the failure to pay interest on accelerated drawback refunded to the protestant, upon the reliquidation of 17 drawback entries. Your office denied drawback on 17 entries filed by the protestant, on which accelerated drawback had been paid. Bills were issued to the protestant for the amounts of the accelerated drawback. The protestant paid the amounts billed, and subsequently protested the denial of drawback in Protest 2002-97-100268. The protest was granted and the entries were reliquidated on October 31, 1997, and refunds of the accelerated drawback were made to the protestant by checks dated November 5, 1997. The refunds did not include any interest. This protest was filed on December 8, 1997.

The protestant takes the position that the refunds of the drawback repayment should have included interest under 19 U.S.C. §1505.

ISSUE:

Is interest owed on the repayment of refunded accelerated drawback?

LAW AND ANALYSIS:

We note that the protest is timely filed and raises an issue protestable under 19 U.S.C. §1514(a)(5).

This issue has been previously addressed by this office in an internal advice decision, HQ 228268, dated September 18, 2000. A copy of HQ 228268 is enclosed. Specifically with respect to the refund of reclaimed drawback (i.e. upon reliquidation Customs refunds an amount previously believed to be an overpayment of drawback and reclaimed from the drawback claimant), on the basis of an analysis of 19 U.S.C. §1505, we concluded that there are no statutory or regulatory provisions by which Customs may pay interest upon the refund of reclaimed drawback.

The position stated in HQ 228268, is consistent with the holding of the Court of International Trade, in Hartog Foods International, Inc. v. United States, No. 00-171, slip op., 138 F.Supp. 2d 1309 (Ct. Int’l Trade Dec. 28, 2000). In Hartog Foods International, the court found that with respect to interest on drawback, it could not “fit the drawback pattern into the statute as written” and 19 U.S.C. §1505 (c) does not apply to ordinary drawback claims. An appeal of the decision is pending in the Court of Appeals, Federal Circuit.

HOLDING:

There are no statutory or regulatory provisions by which Customs may pay interest upon the refund of reclaimed drawback.

The 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,


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