HQ 224566

August 3, 1993

PRO-2-02/LIQ-9-02/BON-2-CO:R:C:E 224566 SLR

CATEGORY: Protest/Liquidation

Regional Commissioner of Customs

New York Region

ATTN: Head, Protest and Control Section

6 World Trade Center, Room 762

New York, New York 10048-0945

RE: Application for Further Review of Protest 1001-91-000220;

Notice of Redelivery; Timeliness; False Designation of

Country of Origin; 15 U.S.C. 1124/1125; Executive Order

12725 of August 9, 1990; United States v. Utex

International, Inc.

Dear Sir:

The above-referenced protest was forwarded to this office

for further review. We have considered the points raised and

our decision follows.

FACTS:

The importer made 5 entries of ladies wearing apparel,

marked with Kuwait as the country of origin. One of the entries

was dated April 10, 1990, while the others were dated April 12,

1990\. The April 10, 1990 entry was originally liquidated

\"no change\" on July 27, 1990, as were the April 12, 1990 entries

on August 3, 1990. On September 21, 1990, Customs voluntarily

reliquidated under 19 U.S.C. 1501 all 5 entries on the basis

of a Headquarter\'s telex (discussed below). Subsequently, on

October 23, 1990, Customs issued Notices of Redelivery (CF 4647)

against all 5 entries, stating in the \"Remarks\" section of the

form: \"Merchandise has been determined to bear a false

designation of Country of Origin, marked Kuwait, in violation

of 15 U.S.C. 1124/1125 and is therefore ordered redelivered.\"

Notices of Liquidated Damages were issued against the

importer on December 21, 1990, for failure to redeliver the

wearing apparel covered by the 5 entries. The importer filed

the instant protest against the untimeliness of the Notices of

Redelivery on January 10, 1991, and requested further review.

The importer does not challenge the substantive issue of false

designation of country of origin but instead challenges the

legality of the issuance of the Notices of Redelivery.

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As indicated in the file, the action on the liquidated

damages case has been suspended pending resolution of this

protest. It is our understanding that the merchandise cannot be

redelivered because by the time the protestant received the

Notices of Redelivery, more than 6 months after entry, the

merchandise had been delivered to its customers.

The protestant alleges that the Notices of Redelivery are

unlawful because \"the entries . . . liquidated on July 27, August

3 and September 21, 1990 . . . have not been reliquidated and the

period for reliquidation fixed under 19 U.S.C. 1501 has expired.

Thus, the origin of the subject matter was final prior to the

issuance of the Notices of Redelivery. The notices of redelivery

were, therefore, untimely. United States v. Utex International,

Inc., 857 F.2d 1408 (Fed. Cir. 1988); C.S.D. 89-100, 23 Cust Blt.

& Dec. No. 24 at 16 (October 25, 1989).\" \[We note that the

above-quoted language reveals protestant\'s misunderstanding of

the correct liquidation/reliquidation dates for the 5 entries.\]

The Area Director takes the position that the protest should

be denied because the entries were, in fact, reliquidated within

the time frame of 19 U.S.C. 1501 in accordance with the

instructions issued by a Headquarters\' telex from the Director,

Office of Trade Operations, regarding Executive Order 12725 of

August 9, 1990, entitled \"Blocking Kuwaiti Government Property

and Prohibiting Transactions with Kuwait.\"

Telex VBT-90-I-04, dated August 21, 1990, instructed the

field offices, on the basis of the executive order, to detain or

seize textile shipments claimed to be manufactured in Kuwait

which bear false designations of origin, depending on the

manufacturer. The certain listed manufacturers, one of which was

the manufacturer on the subject 5 entries, were found not to have

the capability to produce textiles or apparel in commercial

quantities based upon actual plant visits by U.S. Customs. The

telex said that it applied to shipments \"where the merchandise

has been released and the entry is not finally liquidated. If

the entry was liquidated, reliquidate (if not final) under 19

U.S.C. 1501 and issue a demand for redelivery.\"

ISSUE:

Whether the Notices of Redelivery were untimely.

LAW AND ANALYSIS:

We note that the decision to issue a Notice of Redelivery

is protestable under 19 U.S.C. 1514(a)(4) and that the protest

and the application for further review was timely filed on

January 10, 1991, within ninety-days of the issuance of the

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Notices of Redelivery on October 23, 1990. See 19 U.S.C. 1514

and 19 CFR Part 174. The protestant did not request immediate

action under 19 CFR 174.21(b).

Customs may demand the return of inadmissible goods that

have been released from Customs custody, however, such a demand

must be made before liquidation becomes final. Section

141.113(b) of the Customs Regulations (19 CFR 141.113(b))

provides:

If at any time after entry the district director

finds that any merchandise contained in an

importation is not entitled to admission into the

commerce of the United States for any reason not

enumerated in paragraph (a) of this section

\[relating to marking of certain merchandise\],

he shall promptly demand the return to Customs

custody of any such merchandise which has been

released. (Emphasis added.)

Section 141.113(f) of the Customs Regulations (19 CFR 141.113(f))

states the time limitation for demands for the return of

merchandise:

A demand of the return of merchandise to

Customs custody shall not be made after the

liquidation of the entry covering such

merchandise has become final.

Additionally, there are only two periods during which a

redelivery notice may be issued and enforced by a Customs bond

under the Customs Regulations. Section 113.62 of the Customs

Regulations contains the basic importation and entry bond

conditions, namely, 19 CFR 113.62(d) provides:

It is understood that any demand for redelivery

will be made no longer than 30 days after the date

that the merchandise was released or 30 days after

the end of the conditional release period

(whichever is later).

We have interpreted these provisions in ruling HQ 088880

dated March 19, 1992. See also HQ 223538 dated October 1, 1992.

In HQ 088880, we held that a notice of redelivery must be

\"promptly\" issued, that is, it must be issued either: (1) no

later than 30 days after the date the merchandise is released if

there is no occurrence establishing a conditional release period;

or (2) if there is an occurrence establishing a conditional

release period (e.g., see 19 CFR 12.80(e)(2), 19 CFR 134.3, and

19 CFR 151.11), no later than 30 days after the end of that

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period \[e.g., if information or a sample is requested, within 30

days from the date of receipt by Customs of the information or

sample\] (see Customs Service Decision (C.S.D.) 86-21). A notice

of redelivery may never be issued after liquidation becomes final

(United States v. Utex International Inc., 6 Fed. Cir. (T) 166

(1988)).

Contrary to the assertion of the protestant, at the time

when Customs issued the Notices of Redelivery for the 5 entries

in October 1990, these entries had not \"finally\" liquidated

because the 90-day period from the original liquidations on

July 27, 1990, and August 3, 1990, had not expired. Although we

reject protestant\'s argument that the liquidations were final

prior to the issuance of the Notices of Redelivery, we find that

the Notices of Redelivery were nevertheless untimely issued in

this case. The notices were issued more than 30 days after the

release of the merchandise from Customs custody, that is,

approximately 6 months for the April 1990 entries, and Customs

had taken no action within 30 days of the entries to establish a

different conditional release period for any of these entries

(e.g., a Request for Information (CF 28)). With respect to

enforcement of the bond provisions, we find that the notices were

not \"promptly\" issued in accordance with the time limitations of

19 CFR 113.62(d) and 19 CFR 141.113(b) and, therefore, the

protest against the Notices of Redelivery must be granted.

Further, the Assistant Commissioner, Office of Commercial

Operations, had issued instructions in 1989 to comply with the

appellate decision in Utex, supra. Entries that were liquidated,

but were within the reliquidation period of 19 U.S.C. 1501

(90 days from the original liquidation) were to be reliquidated

under that statute and a notice to redeliver the inadmissible

merchandise was to be issued. Because the liquidation or

reliquidation is the final Customs action on an entry, the notice

to redeliver had to be before or at the time that the liquidation

notice was posted. Issuing a notice to redeliver after the

posting a \"no change\" liquidation bulletin notice would be an

inconsistent act. See U.S. v. American Motorists Ins. Co., 10

CIT 19 (1986) and New Zealand Lamb Co. v. United States, Slip Op.

92-218 (CIT December 8, 1992), Vol. 27 Cust. B. & Dec., No. 1,

page 3 (January 6, 1993).

Finally, Executive Order 12725 of August 9, 1990 (55 F.R.

33091\) was to take effect on the date of issue. The only

retroactive provision in the order dealt with property of Kuwaiti

origin exported from Kuwait after August 6, 1990. Inasmuch as

the gravamen of the demand for redelivery is that the merchandise

was not made in Kuwait it is unclear how an order establishing an

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embargo against Kuwaiti goods would apply to this merchandise.

In any event, by its terms it cannot apply to importations made

5 months before it was issued.

With regard to the pending liquidated damages case for the

importer\'s failure to redeliver the merchandise under 19 CFR

141.113(g), there appears to be no basis for it since the Notices

of Redelivery must be cancelled. It is our recommendation,

however, that a violation under 19 U.S.C. 1592 be considered on

the importer\'s declaration of a false statement as to the origin

of the goods on the entry documentation.

HOLDING:

In this case, the four Notices of Redelivery were untimely

since they were issued more than 30 days after release of the

merchandise and no conditional release period was established.

You are directed to allow the protest under consideration.

A copy of this decision should be attached to Customs Form 19,

Notice of Action, and sent to the protestant.

Sincerely,

John Durant, Director

Commercial Rulings Division