Application for Further Review of Protest No 5501-10-100101; Certain Preserved Mushrooms from the People’s Republic of China; Antidumping Order A-570-851-020

 HQ H110455 July 25, 2013 OT:RR:CTF:ER H110455 ASL Port Director U.S. Customs and Border Protection Dallas/Fort Worth International Airport 7501 Esters Blvd. Dallas, TX 77032 Attn: Ms. Joyce VerMehren, Import Specialist Re: Application for Further Review of Protest No: 5501-10-100101; Certain Preserved Mushrooms from the People’s Republic of China; Antidumping Order A-570-851-020 Dear Port Director, The purpose of this correspondence is to provide Further Review (“AFR”) of Protest Number 5501-10-100101, which we received June 15, 2010. The protesting party is International Fidelity Insurance Co. (“Fidelity”), surety for importer of record R.G. Food LLC. (“R.G. Food”). FACTS: The surety protests the liquidation of an entry of certain preserved mushrooms from the People’s Republic of China, (“PRC”) that were subject to antidumping duty order number A-570-851-020 and entered on August 28, 2003. See Certain Preserved Mushrooms From the People's Republic of China: Final Results and Final Rescission, in Part, of Antidumping Duty Administrative Review, 70 Fed. Reg. 54,361, (September 14, 2005). The entered mushrooms produced by Guangxi Yulin Oriental Food Co., Ltd. (“Guangxi”) are at issue here. On December 08, 2005, the Court of International Trade (“CIT”) issued a preliminary injunction enjoining the liquidation of these entries. See Department of Commerce (“Commerce”) Administrative Message No. 5356202 (December 22, 2005). On March 12, 2009, the CIT issued a final decision in the case denying Guangxi’s motion for judgment upon the agency record for failing to exhaust its administrative remedies. Thus, Commerce’s decision was affirmed. On July 22, 2009, Commerce issued liquidation instructions covering the mushrooms produced by Guangxi. See DOC Administrative Message No. 9203204 (July 22, 2009). CBP issued a Notice of Action on August 5, 2009, stating that the importer failed to provide a proper non-reimbursement statement. As a result, the broker submitted a reimbursement certificate it signed on behalf of R.G. Foods. CBP liquidated the entries on September 18, 2009, and assessed antidumping duties of 198.63% as instructed by Message No. 9203204 and doubled the duties for a lack of a valid non-reimbursement certificate. CBP sent a formal demand to Fidelity on December 1, 2009. On February 26, 2010, Fidelity filed Protest number 5501-10-100101 with the port. Fidelity argued that the entries liquidated by operation of law at the rate of duty, value, quantity, and amount of duty asserted by the importer at the time of entry because CBP failed to liquidate the entries within six months of notice that suspension of liquidation was lifted. Additionally, Fidelity requested that if antidumping duties are owed, that double assessment of the aforementioned duties was inappropriate as a non-reimbursement certificate was timely filed. Finally, Fidelity denies its bond liability because its bond contract does not cover payment to third-party beneficiaries, which it alleges, occurs under the Continued Dumping and Subsidy Offset Act of 2000 ("CDSOA"). ISSUES: Whether CBP liquidated the entries within the time limits prescribed in 19 U.S.C. § 1504(d). Whether Fidelity file a proper non-reimbursement certificate. Whether Fidelity incurred bond liability under CDSOA. LAW AND ANALYSIS: We note initially that the instant protest was timely filed, within ninety days from the date of mailing of notice of demand for payment against the surety’s bond. We note that Section 2103 of the Miscellaneous Trade and Technical Corrections Act of 2004 amended 19 U.S.C. § 1514 to permit 180 days in which to file a protest, but that amendment is not applicable to this protest. 19 U.S.C. § 1401 note (2006); Pub. L. No. 108-429, § 2103, 118 Stat. 2434, 2598 (2004). Section 2108 of subtitle B amended Section 1514 effective for goods entered or withdrawn from warehouse for consumption after December 18, 2004. Here, the merchandise was entered on August 28, 2003; therefore, the 90-day protest filing deadline is applicable. See 19 U.S.C. § 1514(c)(3) (2004) and 19 U.S.C. § 1401 note (2006); Pub. L. No. 108-429, § 2108, 118 Stat. 2434, 2598 (2004). Notice of demand for payment against Fidelity’s bond was made on December 1, 2009, and this protest was timely filed on February 26, 2010, within 90 days. Under 19 U.S.C. § 1514(a) "decisions of the Customs Service, including the legality of all orders and findings entering into the same, as to . . . the liquidation or reliquidation of an entry. . . shall be final … unless a protest … is filed in accordance with this section.” Generally, antidumping duty rates correctly applied by CBP are not protestable, because "Customs has a merely ministerial role in liquidating antidumping duties." Mitsubishi Electronics America, Inc. v. United States, 44 F.3d 973, 977 (Fed. Cir. 1994). However, inasmuch as Fidelity protests the liquidation, i.e., disputes the application by CBP of Commerce's liquidation instructions, this matter is protestable. See Xerox Corp. v. United States, 289 F.3d 792 (Fed. Cir. 2002). The protestant requests further review per 19 C.F.R. 174.23. CBP’s regulations provide for further review of a protest when the decision against which the protest was filed: (b) Is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts; 19 C.F.R. § 174.24(b). The protestant seeks further review per 19 C.F.R. § 174.24(b), because the “protest involves questions of law or fact that have not been ruled upon by the Commissioner of Customs or his designee or by the Customs Court." Protestant asserts that the entry liquidated by operation of law and CBP's liquidation was untimely, that it timely filed a non-reimbursement certificate, and that it is relieved of liability under its bond because antidumping duties under the CDSOA are paid to third parties. We agree that further review is warranted for the limited purpose of addressing the deemed liquidation argument the protestant raised, in that this is a novel legal issue. Fidelity contends that CBP did not liquidate the entries within six months after receiving notice of the removal of suspension of liquidation and the protested entries were deemed liquidated as entered per 19 U.S.C. § 1504 under International Trading Co. v United States, 281 F.3d 1268 (Fed. Cir. 2002). Fidelity claims that CBP received notice of the removal of suspension when the Court of International Trade (“CIT”) issued its final decision by affirming Commerce’s Final Results in Gerber Food (Yunnan) Co. Ltd. Et al v. United States, on March 12, 2009. Fidelity’s reliance on International Trading to conclude that the March 12, 2009 final decision in Gerber Food constituted notice under § 1504(d) is misplaced, because International Trading, and its progeny, relied on notice being “unambiguous and public,” and here, the court’s decision in Gerber Food does not constitute unambiguous and public notice. Section 1504(d) of Title 19 requires that CBP liquidate entries within six months after receiving "notice" that a suspension of liquidation of such entries has been removed. 19 U.S.C. § 1504(d). If CBP fails to timely liquidate the entries after receiving notice, the entries are "deemed" liquidated at the rate asserted at the time of entry. See Fujitsu Gen. Am., Inc. v. United States, 283 F.3d 1364, 1376 (Fed. Cir. 2002). "In order for a deemed liquidation to occur, (1) the suspension of liquidation that was in place must have been removed; (2) Customs must have received notice of the removal of the suspension; and (3) Customs must not liquidate the entry at issue within six months of receiving such notice." Id. CBP typically receives the relevant notice in the form of explicit liquidation instructions from Commerce. The courts, however, have recognized that other methods of notice are sufficient. The Court of Appeals for the Federal Circuit (“CAFC”) in International Trading affirmed the CIT's ruling that suspension of liquidation because of an administrative review is removed upon publication of the final results of the administrative review. See International Trading, 281 F.3d at 1271. The CAFC found that when liquidation is suspended pending an administrative review, publication of the final results in the Federal Register constitutes notice to CBP within the meaning of 19 U.S.C. § 1504(d) that the suspension is lifted and CBP must liquidate relevant entries within six months of the notice. Id. at 1275. The CAFC explained that the “date of publication provides an unambiguous and public starting point for the six-month liquidation period.” Id. Furthermore, the court noted that when the removal of suspension occurs as the result of a court action, that notice must be provided by a separate mechanism. Id. at 1276. The court in Fujitsu Gen. Am., Inc. v. United States, 283 F.3d 1364, 1379 (Fed. Cir. 2002) further addressed when notice of the removal of suspension of a court-ordered suspension occurred. In Fujitsu, the plaintiff argued that CBP received notice that a court ordered suspension of liquidation was removed when the court later issued a final decision in the case. However, the court disagreed. The court stated that in cases where litigation comes to an end and the suspension of liquidation is removed, it is important that “an unambiguous and public starting point for the six-month liquidation period” is known. Id. at 1382. The court in Fujitsu found that Commerce’s subsequent publication of the court’s ruling in the Federal Register was such an “unambiguous and public starting point” and thus, constituted notice for purpose of 19 U.S.C. § 1504(d). Id. In this case, Commerce notified CBP on December 22, 2005, in administrative message number 5356202, that the CIT had enjoined liquidation of the entries. When the case concluded on March 12, 2009, the injunction dissolved after the court decision became final, and the Final Results became final. However, Fidelity offered no evidence that CBP received notice of the lifting of suspension on March 12, 2009, as a court decision does not constitute notice. Because there was no Federal Register notice in this case as in Fujitsu, CBP first received notice of the dissolution of the injunction on July 22, 2009, when Commerce issued liquidation instructions in administrative message number 9203204. Following the CIT's reasoning in Fujitsu, message number 9203204 from Commerce to CBP, issued July 22, 2009, is the earliest “unambiguous and public” communication which could constitute notice to CBP that the court-ordered injunction issued December 22, 2005, dissolved with regard to the protested entries. As the court held in Fujitsu, publication of the court’s decision in the Federal Register constituted notice because it was “an unambiguous and public starting point for the six-month liquidation period” to begin. See Fujitsu, 283 F.3d at 1382. The simple act of the litigation coming to an end does not constitute notice for purpose of 19 U.S.C. § 1504(d). See Fujitsu, 283 F.3d at 1382; and International Trading, 281 F.3d at 1276. Since there was no publication in the Federal Register of the court’s decision and Fidelity failed to provide evidence that CBP received notice on March 12, 2009, notice occurred on July 22, 2009. This was when Commerce issued message number 9203204 to CBP, which stated unambiguously and publicly, “these instructions constitute notice of the lifting of suspension…” and for “all shipments of certain preserved mushrooms from the People’s Republic of China Exported by…Guangxi…assess an antidumping liability of 198.63 percent of the entered value.” Since this date reflects the earliest unambiguous and public notice to CBP, in accordance with Fujitsu, this represents an “unambiguous and public starting point for the six-month liquidation period” to begin, and thus constitutes notice for purpose of 19 U.S.C. § 1504(d). Id. Finally, because CBP received notice of lifting of the suspension of liquidation on July 22, 2009, and liquidated the protested entry on September 18, 2009, it was timely liquidated. Therefore, the protested entry is not deemed liquidated as entered. Fidelity also argues that the doubling of the antidumping duties was improper because a non-reimbursement certificate was timely filed. However, its timeliness is irrelevant as CBP found that the certificate was invalid, not untimely. Commerce's regulations state that, "[t]he importer must file prior to liquidation a certificate in the following form with the appropriate District Director of Customs . . . ." 19 C.F.R. § 351.402(f)(2). In Headquarters Ruling Letter H055437, we stated that Commerce does not interpret its regulations to allow a customhouse broker to sign the reimbursement certificate. See H055437 (Oct. 26, 2009), citing CBP Publication Guidance for Certificates of Reimbursement, dated November 29, 2005, and available at http://www.cbp.gov/linkhandler/cgov/trade/priority_trade/add_cvd/program_ guidelines/guidance_for_cert.ctt/guidance_for_cert.pdf (explaining that only an “authorized officer of the company” may sign the certificate and not the broker). Here, the certificate was signed by the customs broker, not the importer. As CBP noted originally, the antidumping duties were doubled because a valid certificate was not filed because it was signed by a broker, not because it certificate was untimely filed. Although Fidelity acknowledges this point in its protest, it did not address this fact in its protest. Lastly, Fidelity argues that because the antidumping duties collected were distributed per the CDSOA and the surety bond contract does not cover payment to third parties, it is not liable under the bond. This contention has been addressed in ruling letters and in the courts. For example, in H070919, October 14, 2009, CBP stated that: [t]he existence of the CDSOA did not change the importer's obligation to pay the duties it owes, nor did it change the surety's liability for those duties. The CDSOA did not alter the contract between the importer and the surety: it did not expose the surety to any greater risk, it did not increase the surety's contractual liability, nor did it alter the payment structure of the bond. See Bierce v. Waterhouse, 219 U.S. 230, 337 (1911); Washington Int'l Ins. Co. v. United States, 138 F. Supp. 2d 1314, 1331 (Ct. Int'l Trade 2001); Restatement (Third) of Suretyship and Guaranty §§ 37, 41. The CDSOA did not create "third party beneficiaries" to the bond. See Cemex, S.A. v. United States, 384 F.3d 1314, 1322 (Fed. Cir. 2004). Accordingly, the payments under the CDSOA have no effect on Fidelity's obligation under its bond. HOLDING The surety, Fidelity, is not absolved of liability for the antidumping duties due under the bond that it issued and the antidumping duties were properly calculated. The Protest should be DENIED in full. No later than 60 days from the date of this letter, the Office of Regulations and Rulings will make the decision available to CPB personnel, and to the public on the CPB Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division