American International Chemical, Inc. v. United StatesAmerican International Chemical, Inc. v. United States
OPINION
Plaintiff American International Chemical, Inc. challenges the reliquidations by the United States Customs Service (“Customs”)
1
of four consumption entries of potassium permanganate from Spain made in 1986. Upon reliquidation of each of the four entries, Customs assessed antidump-ing duties, and interest thereon, at the rate of 5.53 percent
ad valorem,
the rate found by the United States Department of Commerce (“Commerce”) to apply to those entries in a remand determination affirmed by this Court.
See Industrial Quimica Del Nalon, S.A. v. United States,
Plaintiff moves for summary judgment with respect to the four reliquidations, seeking the refund, with interest, of the antidumping duties and interest collected. Plaintiff argues that the four entries liquidated by opеration of law, free of anti-dumping duties, pursuant to a 1993 amendment to 19 U.S.C. § 1504(d) (2000). Under this provision, an entry is deemed to liquidate by operation of law, at the duty rate asserted by the importer at the time of entry, if Customs fails to liquidate the entry within six months of receiving notice of removal of suspension of liquidation. Plaintiff contends that Customs received such notice electronically, via an e-mail message, on February 2, 2000. Plaintiff had asserted antidumping duties at the rate of zero at the time the entries were made and, as a result, tendered no cash deposits to cover any estimated anti-dumping duties that later could have been found to be owing. A zero antidumрing duty deposit rate applied to the four en
Defendant United States, in a cross-motion for summary judgment, maintains that the 1993 amendment to 19 U.S.C. § 1504(d) does not apply to the four subject entries because the removal of suspension of liquidation occurred prior to the effective date of that amendment, which was December 8, 1993. Defendant argues in the alternative that even if § 1504(d) were construed to have been in effect, liquidation by operation of law would not have ocсurred because Customs did not receive notice of the removal of suspension, as contemplated by the amended § 1504(d), until December 26, 2000, and effected, in March and April of 2001, the original liquidations of each of the four entries, assessing antidumping duties of 16.16 percent ad valorem. Defendant contends that the e-mail message authored by Commerce and received by Customs on February 2, 2000 does not constitute a notice sufficient to trigger application of § 1504(d) and urges the court to dismiss this action, allowing the reliquidations, and the attendant assessment of antidumping duties at 5.53 percent ad valorem, to stand.
Plaintiff initiated this action to contest the denial by Customs of its administrative protests challenging the four reliquida-tions. The court exercises jurisdiction pursuant to 28 U.S.C. § 1581(a) (2000). The court finds that no genuine issue of material fact exists and concludes that the subject entries liquidated by operation of law pursuant to 19 U.S.C. § 1504(d), free of antidumping duties. Accordingly, plaintiff is entitled to a refund of the antidump-ing duties and interest thereon that it previously paid, with interest as provided for by law.
I. Background
Commerce published an order assessing antidumping duties on potassium permanganate from Spain at the rate of 5.49 percent on January 19, 1984. See Anti-dumping Duty Order on Potassium Permanganate From Spain, 49 Fed.Reg. 2,277 (Jan. 19, 1984) (“Antidumping Duty Order"). The Antidumping Duty Order covered all consumption entries of the subject merchandise made on or after August 9, 1983, the date on which Commerce published its preliminary anti-dumping determination and instructed Customs to suspend liquidation on all entries of potassium permanganate from Spain. See id.; see also Preliminary Determination of Sales at Less Than Fair Value for Potassium Permanganate From Spain, 48 Fed.Reg. 36,177 (Aug. 9, 1983).
In February 1984, Commerce, at the request of Asturquímica, S.A. (renamed “Industrial Química del Nalón”), the single known Spanish producer of potassium permanganate engaged in exporting the subject merchandise to the United States, waived the cash deposits of estimated anti-dumping duties for potassium permanganate entered for consumption on оr before April 17, 1984. See
Allowance of Security in Lieu of Estimated Duty Pending Early Determination of Antidumping Duty on Potassium Permanganate From Spain,
49 Fed.Reg. 6,956, 6,957 (Feb. 24, 1984). Commerce waived the cash deposit requirement, pursuant to section 736(c) of the Tariff Act of 1930, 19 U.S.C. § 1673e(c), upon making the determination to conduct an expedited administrative review of the
Antidumping Duty Order
for shipments of the subject merchandise manufactured by Asturquímica. Because Commerce found no dumping margin to exist for Spanish potassium permanganate manufactured by Asturquímica and en
The next administrative review of the Antidumping Duty Order, initiated in February 1987 upon request of a domestic interested party, covered consumption entries of potassium permanganate from Spain entered from the period beginning on January 1, 1986 and ending on December 31, 1986 (“period of review”). See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 52 Fed.Reg. 5,479 (Feb. 23, 1987). The four consumption entries at issue in this action occurred within that period of review, American International Chemical having made one entry at the port of New Orleans on May 5, 1986 and three entries at the port of Houston on June 5, July 22, and October 16, 1986. Following the administrative review, Commerce determined the final antidumping duty margin to be 16.16 percent. See Final Results of Antidump-ing Duty Administrative Review for Potassium Permanganate From Spain, 53 Fed.Reg. 21,504, 21,506 (June 8, 1988) (“Final Results”).
Industrial Química del Nalon filed an action in this Court challenging the 16.16 percent antidumping duty margin rate, pursuant to which this Court ordered an injunction suspending liquidation of the 1986 entries of potassium permanganate from Spain.
See Industrial Quimica Del Nalon, S.A. v. United States,
On February 2, 2000, nearly seven years after this Court affirmed the remand determination establishing an antidumping duty margin of 5.53 percent, Commerce sent Customs an e-mail message addressing entries of potassium permanganate from Spain dating back to early 1984. It is on this e-mail message that plaintiff relies in its argument that Customs received notice of the removal of the suspension of liquidation more than six months prior to the original liquidations by Customs of the four entries, which would not occur until 2001. The February 2, 2000 email message from Commerce to Customs stated, inter alia, the following:
1. Records at the Department of Commerce indicate that there should be no unliquidated entries of potassium permanganate from Spain ... held by Customs for antidumping purposes during the period 01/19/1984 through 12/31/1999.
2. If any Customs import office is suspending liquidation of entries of [potassium permanganate from Spain] ... for antidumping purposes for the period 01/19/1984 through 12/31/1999, Customs officers should, within 20 days of receipt of this message, report [them to Customs Headquarters]....
Def.’s Opp’n to Pl.’s Mot. For Summ. J. & Cross-Mot. For Summ. J. (“Def.’s Opp’n”) Attach. 1 at 4b (original font style of all caps altered). The e-mail message included language stating that “[t]here are no restrictions on the release of this information.” Id. Customs posted the notice on the publicly-aecessible Customs Electronic Bulletin Board on February 3, 2000. On December 26, 2000, Commerce issued liquidation instructions erroneously directing Customs to “assess an antidumping liability of 16.16 percent of the entered value” for all the subject entries. Id. Attach. 3 at 6b. Apparently in response to the erroneous instructions from Commerce, Customs, in March and April of 2001, liquidated the four entries at issue in this ease at the antidumping duty rate of 16.16 percent plus interest. See Compl. ¶ 16. Plaintiff protested all four liquidations, challenging the antidumping duty assessments. Customs denied the protests, and plaintiff contested the protest denials by filing two cases in this Court (Court Nos. 02-00149 and 02-00167) prior to bringing this action.
On September 10, 2001, Commerce published in the Federal Register a notice of amended final results of the administrative review, which stated that the subject entries of potassium permanganate from Spain would be assessed аntidumping duties at the rate of 5.53 percent, pursuant to the remand determination affirmed by this Court on May 17, 1993. See Notice of Amended Final Results of Antidumping Duty Administrative Review Pursuant to Final Court Decision for Potassium Permanganate From Spain, 66 Fed.Reg. 47,002 (Sept. 10, 2001). Customs reliquidat-ed, at 5.53 percent antidumping duty, the Houston entries on January 25, 2002 and the single New Orleans entry on February 1, 2002. Plaintiff had paid to Customs antidumping duties at the rate of 5.53 percent, and assessed interest, on each of the four entries, in preparation for contesting in this Court the denial by Customs of the protests of the original liquidations.
American International Chemical timely protested the four reliquidations in February 2002, claiming that the entries had liquidated by operation of law at the rate of duty asserted at the time of entry, i.e., at a zero rate of antidumping duty. After Customs denied the protests on June 17, 2002 (pertaining to the New Orleans entry) and September 17, 2002 (pertaining to the three Houston entries), plaintiff commenced this action to contest the denial of its protests.
II. Standard of Review
The court reviews
de novo
the denial of an administrative protest under 19 U.S.C. § 1515 (2000).
See
28 U.S.C. § 2640(a)(1) (2000). Because this case presents no genuine issue as to any material fact, it is appropriately resolved through an award of summary judgment. Summary judgment is appropriate if the submissions of the parties show “that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” USCIT Rule 56(c);
Celotex Corp. v. Catrett,
In arguing that the four entries at issue liquidated by operation of law at the antidumping duty rate asserted by the importer at the time of entry, i.e., a rate of zero, plaintiff relies primarily on 19 U.S.C. § 1504(d) as amended in 1993 but advances two alternative arguments based on 19 U.S.C. § 1504(b)(2) (1988). Plaintiffs primary argument is that liquidation by operation of 19 U.S.C. § 1504(d) occurred when Customs failed to liquidate the four entries within the six-month period beginning on February 2, 2000, the date on which it received the e-mail message in which Commerce informed Customs that “[r]ecords at the Department of Commerce indicate that there should be no unliquidated entries of potassium permanganate from Spain ... held by Customs for anti-dumping purposes during the period 01/19/1984 through 12/31/1999.” 2
Plaintiffs argument that liquidation by operation of law occurred under 19 U.S.C. § 1504(d) raises two issues. The first issue is whether, as defendant United States contends, applying that statutory provision to this case would be a retroactive application contrary to the holding of the Court of Appeals for the Federal Circuit in
American Permac, Inc. v. United States,
A. Applicability of 19 U.S.C. § 1504(d) as Amended by the Customs Modernization Act
Section 504(d) of the Tariff Act of 1930,19 U.S.C. § 1504(d), was amended by Title VI of the North American Free Trade Agreement Implementation Act (commonly referred to as the “Customs Modernization Act”) to establish the provision at issue in this case. See Pub.L. No. 103-182, 107 Stat. 2057, 2204, § 641(2)(d) (1993). The amendment made to § 1504(d) by the Customs Modernization Act had an effective date of December 8, 1993, the date of enactment. See Customs Modernization Act, Pub.L. No. 103-182, 107 Stat. 2204, § 291. Since the enactment of the Customs Modernization Act on December 8, 1993, 19 U.S.C § 1504(d) has not been amended in a way that is material to this litigation. The provision at issue reads in relevant part as follows:
[W]hen a suspension required by statute or court order is removed, the Customs Service shall liquidate the entry ... within 6 months after receiving notice of the removal from the Department of Commerce, other agency, or a court with jurisdiction over the entry. Any entry... not liquidated by the Customs Service within 6 months after receiving such notice shall be treated as having been liquidated at the rate of duty, value, quantity, and amount of duty asserted at the time of entry by the importer of record.
19 U.S.C. § 1504(d) (2000).
3
Liquidation of the four entries at issue in this action was suspended by this Cоurt in
Industrial Quimica Del Nalon,
Defendant contends that the holding of the Court of Appeals fоr the Federal Circuit in
American Permac,
The issue confronting the Court of Appeals in
American Permac
was whether § 1504(d) as amended in 1993 applied to effect liquidations of three entries by operation of law even though a series of events involving those entries occurred prior to the December 8, 1993 effective date of that provision.
See id.
at 1381. Those events included the removal of suspension of liquidation, notice to Customs by Commerce of thе removal of suspension (which had occurred in October 1989) and the running of the entire six-month period specified in § 1504(d).
See id.
The Court of Appeals held that application of the 1993 amendment to § 1504(d) on those facts would constitute an impermissible retroactive application of the statute.
See id.
Had § 1504(d) as amended in 1993 been held to apply in
American Permac,
even the end result of the procedure Congress established in the amended §
1504(d)
— i.e., the liquidations by operation of law of the
In discussing its holding in
American Permac,
the Court of Appeals, quoting
Travenol Laboratories, Inc. v. United States,
observed that “ ‘the United States Supreme Court has stated, retroactivity in general is not favored in the law and, accordingly, legislation will be construed to operate only prospectively unless Congress has clearly expressed a contrary intention.’ ”
American Permac,
The court recognizes that the Court of Appeals, in analyzing the narrow issue decided in
American Permac,
stated that “[t]he ‘triggering event’ for the running of the 6-month time period under [§ 1504(d) as amended in 1993] ... is the lifting of the suspension on liquidation.”
Id.
This statement, however, must be read in context and in a manner not to conflict with the express language of the statute, under which the receipt by Customs of notice of the removal of suspension, not the removal itself, is the triggering event for the running of the six-month time period. In
American Permac,
the issue before the Court of Appeаls was not what event triggers the running of the six-month period provided for in § 1504(d). Rather, the Court of Appeals was confronted with, and decided, the issue whether application of the 1993 amendment to § 1504(d) on the facts pertaining to the entries at issue in that case would cause “an impermissible retroactive effect because it attaches new legal consequences to events completed before the statute was enacted.”
American Permac,
The facts pertaining to the four entries made by American International Chemical differ fundamentally from those pertaining to the entries at issue in
American Permac.
In the case at bar, all of the events that determine the respective rights of the parties under § 1504(d) as amended in 1993 occurred after the effective date of the 1993 amеndment. Those events in-
B. The February 2, 2000 E-Mail Message Commerce Sent to Customs Constitutes Proper Notice Pursuant to 19 U.S.C. § 1504(d)
In discussing liquidation by operation of law pursuant to 19 U.S.C. § 1504(d), the Court of Appeals in
Fujitsu General America, Inc. v. United States
concluded that “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) CusT toms must not liquidate the entry at issue within six months of receiving such notice.”
Following the administrative review of the
Antidumping Duty Order,
during which review liquidation of the entries subject to the review was suspended by statute, the Court in
Industrial Quimica Del Nalon,
The court now turns to the issue of when Customs received notice of the removal of the suspension of liquidation by Commerce for purposes of 19 U.S.C. § 1504(d). Plaintiff maintains that Customs received notice of the removal of the suspension of liquidation via the February 2, 2000 e-mail message from Commerce. The electronic communication from Commerce to Customs stated that “[rjecords at the Department of Commerce indicate that there should be no unliquidated entries of potassium permanganate from Spain ... held by Customs for antidumping purposes during the period 01/19/1984 through 12/31/1999.” Def.’s Opp’n Attach. 1 at 4b. This communication was forwarded to the various port directors of Customs, including those in New Orleans and Houston, on February 3, 2000. Def.’s Opp’n at 3.
Defendant contends that the February 2, 2000 e-mail message did not provide notice sufficient under 19 U.S.C. § 1504(d) because the message “did not state that suspension of liquidation was removed for any entry made during the 16 year period. Moreover, the e-mail message did not state that judicial review was completed.”
Id.
at 12-13. Defendant also argues that the e-mail message does not constitute proper notice under § 1504(d) because it “did not inform Customs of the amount of antidumping duty to be assessed against the entries, which is a necessary part of a notice of removal of suspension.”
Id.
at 13. The e-mail message, defendant maintains, “was part of a larger project undertaken by Commerce to have Customs identify entries [Customs] was holding in
Whether Commerce’s e-mail was a means of seeking information from Customs on entries Customs was “holding in suspension” is of no consequence because the event that results in application of § 1504(d) is the receipt by Customs of notice of the removal of suspension of liquidation. Section 1504(d) does not specifically address the issue of what constitutes adequate notice. The рrovision sets forth the requirement that Customs liquidate entries within six months after the receipt of notice of the removal of suspension of liquidation and specifies the legal consequences of Customs’ failure to do so.
See
19 U.S.C. § 1504(d) (2000). The Court of Appeals recently stated that in order “[t]o be sufficient for purposes of § 1504(d), the ‘notice’ must be ‘unambiguous’ that the suspension of liquidation has been lifted, but does not need to include specific liquidation instructions from Commerce to Customs.”
NEC Solutions (Am.), Inc. v. United States,
While not explicitly requiring publication of notice of the removal of suspension of liquidation, the Court of Appeals has also discussed publication as a hallmark of proper notice under § 1504(d). For example, the Court of Appeals in
International Trading Co. v. United States
stated that “the date of publication [of the statutory lifting of suspension] provides an unambiguous and public starting pointing for the six-month liquidation period” provided for in § 1504(d).
1. The February 2, 2000 E-Mail Message Commerce Sent to Customs Was Unambiguous
Unambiguous notice is such notice “that a reasonable Customs official, with knowledge in these matters, would have read” and would have understood as signifying that Commerce or a court had removed the suspension of liquidation on the subject merchandise.
NEC Solutions (Am.) Inc. v. United States,
27 CIT -,
The pertinent statement contained in the February 2, 2000 e-mail message from Commerce to Customs reads as follows: “Records at the Department of Commerce indicate that there should be no unliquidat-ed entries of potassium permanganate from Spain ... held by Customs for anti-dumping purposes during the period 01/19/1984 through 12/31/1999.”
Def.’s Opp’n
Attach. 1 at 4b. This statement cannot be read in any manner consistent with the possibility that suspension of liquidation of the subject entries had
not
been removed. A “reasonable Customs official, with knowledge in these matters” could not interpret that statement to mean that liquidation continued to be suspended.
See NEC Solutions,
27 CIT at -,
In
NEC Solutions,
the Court of Appeals held that an e-mail message similar to the February 2, 2000 e-mail, which was authored by Commerce and sent to Customs, provided Customs with unambiguous notice of the removal of suspension of liquidation as contemplated by § 1504(d). The e-mail message in that case read as follows: “Records at the Department of Commerce indicate
that there should be no unliquidated entries of television receivers monochrome and color, from Japan ...
held by Customs for antidumping purposes during the period 03/10/1971 through 02/28/1999....”
NEC Solutions,
at 1342 (emphasis in original). In its analysis, the Court of Appeals discussed additional language of the e-mail message providing for an “exception” for certain entries of televisions produced by another manufacturer that continued to be enjoined from liquidation by court order.
See id.,
at 1342, 1345. The Court of Appeals agreed with the reasoning of the lower court that “[t]o anyone reasonably familiar with customs law, the juxtaposition of the mandate ‘there should be no unliquidated entries’ with the exception for certain goods for which a Commerce liquidation order ‘continues to be enjoined’ could only mean that there are no remaining suspensions, court-ordered or otherwise, on subject entries, except for those identified.”
NEC Solutions,
27 CIT at --,
The Court of Appeals found that “as a whole,” the e-mail message at issue in
NEC Solutions
conveyed the type of notice to Customs contemplated in § 1504(d), “that there was nothing preventing the entries of [the plaintiff] from being liquidated .... ”
NEC Solutions,
at 1345. The Court of Appeals specified that “[t]he first
2. The February 2, 2000 E-Mail Message Commerce Sent to Customs Was Made Public on February 3, 2000
Although neither statute nor case law requires it, the courts have stated that notice from Commerce to Customs regarding the lifting of suspension of liquidation should be made public. The Court in
NEC
Solutions, for example, found that where messages are posted to the Customs Electronic Bulletin Board, they are in a location which expressly “allows disclosure to the public [and,] therefore, there is no question that Commerce was aware that both Customs and the public (ie., the parties) would have access to” the notices posted on the Customs Electronic Bulletin Board.
NEC Solutions,
27 CIT at --,
The third prong of the test set forth by the Court of Appeals in Fujitsu General America for determining whether a deemed liquidation has occurred by operation of § 1504(d) is met where Customs fails to liquidate an entry during the six-month period that begins upon the receipt by Customs of notice of the removal of suspension of liquidation. Customs received adequate notice of the removal of suspension of liquidation from Commerce on February 2, 2000 but did not liquidate the subjеct entries until March 23 and April 13, 2001. Because Customs did not liquidate the subject entries within six months of receiving statutorily-sufficient notice of the removal of suspension of liquidation, the entries liquidated by operation of law in accordance with 19 U.S.C. § 1504(d) as amended in 1993 at the anti-dumping duty rate asserted by plaintiff at the time of entry, which rate was zero.
IV. Conclusion
For the foregoing reasons, the court concludes that suspension of liquidation was removed on July 17, 1993, the day on which an appeal of the judgment of this Court concerning the subject entries became time barred, and that the February 2, 2000 e-mail message from Commerce to Customs provided unambiguous notice to Customs of the removal of suspension of liquidation for purposes of 19 U.S.C. § 1504(d). Because Customs did not liquidate the four entries of potassium permanganate from Spain at issue in this
Notes
. All relevant documents concerning the entries in this action originally were filed with the United States Customs Service. The United States Customs Service now is renamed the Bureau of Customs and Border Protection. See Homeland Security Act of 2002, Pub.L. No. 107-296, § 1502, 116 Stat. 2135 (2002); Reorganization Plan for the Department of Homeland Security, H.R. Doc. No. 108-32 (2003).
. Because the court agrees with plaintiff that liquidation of the four entries by operation of law occurred pursuant to § 1504(d) as amended in 1993, it does not reach plaintiff's alternative arguments under § 1504(b)(2) (1988). The court notes, however, that both alternative arguments are incorrect. The first argument relies on a contention that the entries liquidated 90 days following the removal of suspension of liquidation, by operation of § 1504(b)(2). Relying on the same provision, the second argument contends that the entries liquidated, at most, four years following the removal of suspension of liquidation. Section 1504(b)(2), however, does not effect a liquidation by operation of law where a suspension of liquidation extending beyond the four-year period for extension of liquidation, as provided for therein, is subsequently removed.
See, e.g., Canadian Fur Trappers Corp. v. United States,
. Following enactment of the Customs Modernization Act, 19 U.S.C. § 1504(d) was subsequently amended on December 8, 1994 by striking “When a suspension” and inserting “Except as provided in section 1675(a)(3) of this title, when a suspension”. Uruguay Round Agreements Act, Pub.L. No. 103-465, 108 Stat. 4809, 4864, § 220(c)(2) (1994); 19 U.S.C. § 1504(d) (1994). The 1994 amendment applied to reviews initiated, pursuant to 19 U.S.C. § 1675, after the enactment of the Uruguay Round Agreements Act on January 1, 1995. Because the underlying administrative review was initiated prior to January 1, 1995, the 1994 amendment does not apply to the four entries subject in this action. The provision was further amended on October 11, 1996 by inserting ", unless liquidation is extended under subsection (b) of this section,” after "shall liquidate the entry” and "(other than an entry with respect to which liquidation has been extended under subsection (b) of this section)” after "Any entry”. Miscellaneous Trade and Technical Corrections Act of 1996, Pub.L. No. 104-295, 110 Stat. 3514, 3516, § 3(a) (1996); 19 U.S.C. § 1504(d) (Supp.V.1999). Although the 1996 amendment was provided by Congress to apply retroactively with an effective date of December 8, 1993, the modifications it made to 19 U.S.C. § 1504(d) do not alter the court's conclusion in this case because extension of liquidation under § 1504(b) did not occur.