# HQ 229421

## September 27, 2002

## 

## LIQ-4-01; LIQ-11; LIQ-15

RR:CR:DR 229421 IDL

CATEGORY: Deemed Liquidation Determination

Port Director of Customs

Trade Operations

610 South Canal Street

Chicago, IL 60607

Re: Protest No. 3901-00-101571; Antidumping Duties; 19 U.S.C. 1514; 19
U.S.C. 1504; 19 U.S.C. 1677(25); 19 U.S.C. 1673e(a)(2); 19 CFR
351.202(b)(5); 19 CFR 351.225(c)(1)(i)

Dear Sir or Madam:

This is in response to your correspondence concerning Usinor Steel
Corporation, Protest No. 3901-00-101571.

**FACTS:**

On May 10, 1993, Francosteel Corporation, of New York, NY, subsequently
doing business as Usinor Steel Corporation ("Usinor"), entered "FLAT RLD
PROD OF SIL ELC STEEL" from France at the port of Chicago, IL, Entry No.
009-xxxx142-9 ("Entry 142-9"), under subheading 7225.90.0000, HTSUS,
5.8% duties. On October 12, 1993, the port suspended liquidation on
Entry 142-9, pursuant to a preliminary determination by the Department
of Commerce ("Commerce") published on February 4, 1993 (discussed
below).

On April 27, 1995, after receiving additional information, a sample, and
an internal advice on the matter, the port issued a Notice of Action
concerning a change in classification of the subject merchandise to
subheading 7210.39.0000 HTSUS, explaining that the titanium content was
less than **.**05%. In accordance with the change, the port submitted to
us a copy of the CF 7501 Entry Summary and Entry Invoice, which include
handwritten annotations concerning the existence of antidumping duty
investigation number A-427-808, and antidumping duties of 29.41%. The
port has informed us that Customs officers made the annotations.

On September 15, 2000, the port liquidated Entry 142-9 with a final rate
of 29.41%, per Message No. 0189203, dated July 7, 2000. On December 12,
2000, Usinor filed protest, challenging the classification of the
subject merchandise in subheading 7210.39.00, the assessment of
antidumping duties under Case A-427-808-000, the duty rate assessed, and
the assessment of interest on antidumping duties.

On February 4, 1993, prior to entry of merchandise, Commerce had
published in the Federal Register (58 FR 7091) on Case A-427-808,
[Notice of Preliminary Determinations of Sales at Less Than Fair Value
and Postponement of Final Determinations; Certain Hot-Rolled Carbon
Steel Flat Products, Certain Cold-Rolled Carbon Steel Flat Products,
Certain Corrosion-Resistant Carbon Steel Flat Products, and Certain
Cut-to-Length Carbon Steel Plate From France]{.underline} ("Preliminary
Determination"). The Preliminary Determination ordered until further
notice, the suspension of liquidation of all entries of hot-rolled,
cold-rolled, and corrosion-resistant steel entered or withdrawn from
warehouse, for consumption on or after February 4, 1993, the date of
publication of the Preliminary Determination in the Federal Register. It
further directed Customs to require a cash deposit or posting of a bond
equal to the estimated preliminary dumping margins of 10.58%.

On July 9, 1993, Commerce published in the Federal Register *(*58 FR
37125) on Case A-427-808***,*** [Notice of Final Determinations of Sales
at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products,
Certain Cold-Rolled Carbon Steel Flat Products, Certain
Corrosion-Resistant Carbon Steel Flat Products, and Certain
Cut-to-Length Carbon Steel Plate From France Part IV]{.underline}
("Final Determination"). The Final Determination directed Customs to
continue to suspend liquidation, until further notice, of all entries of
hot-rolled, corrosion-resistant steel, and steel plate from France that
are entered, or withdrawn from warehouse, for consumption on or after
February 4, 1993, the date of publication of the Preliminary
Determination. The Final Determination also directed Customs to require
a cash deposit or posting of a bond equal to 44.40%.

On August 19, 1993, Commerce published in the Federal Register (58 FR
44169) on Case A-427-808, [Antidumping Duty Order and Amendments to
Final Determinations of Sales at Less Than Fair Value: Certain
Hot-Rolled Carbon Steel Flat Products, Certain Cold-Rolled Carbon Steel
Flat Products, Certain Corrosion-Resistant Carbon Steel Flat Products
and Certain Cut-to-Length Carbon Steel Plate from France]{.underline}
("Order"). The Order indicated that Commerce "will direct Customs to
assess... antidumping duties equal to the amount by which the foreign
market value of the merchandise exceeds the United States price for all
entries of corrosion-resistant steel, other than clad plate, from
France. These antidumping duties will be assessed on all unliquidated
entries of corrosion-resistant steel...from France entered, or withdrawn
from warehouse, for consumption on or after February 4, 1993, the date
on which \[Commerce\] published" its Preliminary Determination. The
Order listed the antidumping duty margin as 39.40%.

On October 8, 1993, the port issued a Notice of Action proposing the
following action: a change in classification from 7225.90.0000/5.8% to
7210.39.0000/6.5%; antidumping duties under Case A-427-808-000 at 10.58%
of entered value, with request for a cash deposit on the subject
merchandise. On October 12, 1993, the port suspended Entry 142-9, and on
October 16, 1993, it sent notice of suspension.

On April 27, 1995, the port again issued a Notice of Action, proposing
the following action: a change in classification from 7225.90.0000/5.8%
to 7210.39.0000/6.5%; antidumping duties under Case A-427-808-000 at
39.40 per cent of the appraised value. The Notice of Action made a
request for deposit of the antidumping duties and the increased tariff
rate duties.

On June 21, 1996, Commerce published in the Federal Register (61 FR
31921) on Case A-427-808, [Certain Hot-Rolled Carbon Steel Flat
Products, Certain Cold- Rolled Carbon Steel Flat Products, Certain
Corrosion-Resistant Carbon Steel Flat Products, and Certain
Cut-to-Length Carbon Steel Plate from France; Notice of Court Decision
and Continuation of Suspension of Liquidation]{.underline} ("Court
Decision"). Commerce stated in the Court Decision that Commerce "would
suspend liquidation until there was a 'conclusive' decision in the
action."

On October 1, 1996, Commerce published in the Federal Register (61 FR
51274) on Case A-427-808, [Certain Hot-Rolled Carbon Steel Flat
Products, Certain Cold-Rolled Carbon Steel Flat Products, Certain
Corrosion-Resistant Carbon Steel Flat Products, and Certain
Cut-to-Length Carbon Steel Plate From France; Notice of Final Court
Decision and Amended Final]{.underline} ("Final Decision"). The Final
Decision amended the Order of August 19, 1993, which had amended the
Final Determination of July 9, 1993. Commerce listed an "All Others"
rate for Usinor at 29.41% for "Certain Corrosion-Resistant Carbon Steel
Products. In addition, Commerce noted that it "will instruct the U.S.
Customs Service to change the appropriate cash deposit requirements in
accordance with the recalculated rate for corrosion-resistant steel
products and to proceed with liquidation of the subject merchandise
entered on or after April 6, 1993, and before August 17, 1993." The
Final Decision continued that "there is now a final and conclusive court
decision in this action."

On July 7, 2000, Commerce issued liquidation instructions, Message
No.0189203. On September 15, 2000, the port liquidated Entry 142-9. On
December 12, 2000, Usinor filed protest, challenging the classification
of the subject merchandise in subheading 7210.39.00, the assessment of
antidumping duties under Case A-427-808-000, the duty rate assessed, and
the assessment of interest on antidumping duties. Arguing that Customs
failed to change the classification to 7210.39.00 until some time after
Commerce issued the Preliminary Determination, Protestant deduces that
Customs had no legal basis to suspend Entry 142-9; that as a result, all
of the changes made on the entry by the port upon liquidation were
unlawful, because the entry was liquidated as entered on its first
anniversary by operation of law.

### 

### 

### ISSUES:

\(1\) Whether the port erred in applying Message No. 0189203 in
liquidating Entry 142-9?

\(2\) Whether the port properly suspended the subject entry, and whether
the entry deemed liquidated by operation of law pursuant to 19 U.S.C.
1504(d)?

\(3\) Whether the port may assess interest on antidumping duties?

\(4\) Whether the subject entry liquidated in accordance with the port's
changes in classification and duty rate assessment?

**LAW AND ANALYSIS:**

Initially, we note that the protest was timely filed under the statutory
and regulatory provisions for protests (see 19 U.S.C. § 1514 and 19 CFR
Part 174). The port liquidated Entry 142-9 on September 15, 2000, and
the subject protest was filed on December 12, 2000.

Issue (1)

Whether the port erred in applying Message No. 0189203 in liquidating
Entry 142-9?

Message No. 0189203, dated July 7, 2000 instructed Customs to assess an
antidumping duty liability of 29.41% "for all shipments of certain
corrosion-resistant carbon steel flat products from France, produced by
all firms, entered or withdrawn from warehouse for consumption during
the period July 9, 1993 through July 31, 1999. Since Entry 142-9 was
made on May 10, 1993, prior to the coverage period, Message No. 0189203
did not apply.

Therefore, the port erred in applying Message No. 0189203.

Issue (2)

Whether the port properly suspended the subject entry, and whether the
entry deemed liquidated by operation of law pursuant to 19 U.S.C.
1504(d)?

Protestant contends that the merchandise is properly classifiable under
7225.90.0000 HTSUS; that the Order failed to address merchandise
classified under 7225.90.0000; that Customs failed to change the
classification to 7210.39.00 until some time after Commerce issued the
Preliminary Determination; and that Customs, therefore, had no legal
basis to suspend Entry 142-9. As a result, Protestant argues that,
pursuant to 19 U.S.C 1504(a), Entry 142-9 was deemed liquidated by
operation of law on May 10, 1994, one year after its entry.

#### 19 U.S.C. 1504. Limitation on liquidation

\(a\) Liquidation

...\[A\]n entry of merchandise not liquidated within one year from:

(1) the date of entry of such merchandise;

> ...

shall be deemed liquidated at the rate of duty, value, quantity, and
amount of duties asserted at the time of entry by the importer of
record.... 19 U.S.C. 1504(a)

However, on February 4, 1993, Commerce issued the Preliminary
Determination, ordering Customs to suspend, until further notice,
liquidation of *all entries of corrosion-resistant* *steel* *from
France* entered or withdrawn from warehouse, for consumption on or after
February 4, 1993. Contrary to Usinor's contention, the courts have held
that a reference to an HTSUS number is not dispositive about the scope
of an antidumping or countervailing-duty order. [Novosteel, S.A. v.
United States]{.underline}, 284 F.3d 1261 (Fed. Cir. 2002); [Smith
Corona Corp. v. United States]{.underline}, 915 F.2d 683, 687 (Fed.Cir.
1990). The CIT has held that \"the inclusion of various HTSUS headings
in a petition ordinarily should not be interpreted to exclude
merchandise... classified under an HTSUS heading not listed in the
petition. [Wirth Ltd. v. United States]{.underline}, 5 F.Supp. 2d 968,
977-978 (C.I.T. 1998), *aff\'d*, 185 F.3d 882 (Fed. Cir. 1999). "A
tariff classification by the Customs Service does not govern an
antidumping determination regarding class or kind... A product\'s tariff
classification is merely of peripheral interest to suggest the general
nature of a good. [Tak Fat Trading Co., et al. v. United States, et
al.]{.underline}, Slip Op. 2000-161 (December 12, 2000).

Thus, when Usinor entered the subject merchandise on May 10, 1993, the
port was required to suspend liquidation on the entry pursuant to the
Preliminary Determination.

On July 9, 1993, Commerce issued the Final Determination, which directed
Customs to continue to suspend liquidation, until further notice, of all
entries of corrosion-resistant steel from France that are entered, or
withdrawn from warehouse, for consumption on or after February 4, 1993,
the date of publication of the Preliminary Determination. The port
suspended Entry 142-9 on October 12, 1993. The directions contained in
the Final Determination to continue to suspend liquidation remove any
doubt as to whether Commerce had lifted the suspension prior to the
entry of the subject merchandise.

The protestant describes the article as a galvanized steel coil. The
Customs laboratory report describes the article covered by Entry
009-xxxx142-9 as galvanized steel coils zinc coated. The laboratory
sample was described as an unalloyed galvanized steel sheet containing
.045 percent titanium by weight. The entry invoice describes the article
as a galvanized coil.

The scope of Case A-427-808 with respect to corrosion-resistant carbon
steel flat products from France set forth in the antidumping duty order
(58 FR 44169) describes the covered products as follows:

> The corrosion-resistant products subject to \[Commerce's\] antidumping
> order include flat-rolled carbon steel products, or rectangular shape,
> either clad, plated, or coated with corrosion-resistant metals such as
> zinc, aluminum, or zinc-, aluminum-, nickel- or iron-based alloys,
> whether or not corrugated or painted, varnished or coated with
> plastics or other nonmetallic substances in addition to the metallic
> coating, in coils (whether or not in successively superimposed layers)
> and of a width of 0.5 inch or greater, or in straight lengths which,
> if of a thickness less than 4.75 millimeters, are of a width of 0.5
> inch or greater and which measures at least 10 times the thickness or
> if of a thickness or 4.75 millimeters or more are of a width which
> exceeds 150 millimeters and measures at least twice the thickness, as
> currently classifiable in the HTS under item numbers 7210.31.0000,
> 7210.39.0000, 7210.41.0000, 7210.49.0030, 7210.49.0090, 7210.60.0000,
> 7210.70.6030, 7210.70.6060, 7210.70.6090, 7210.90.1000, 7210.90.6000,
> 7210.90.9000, 7212.21.0000, 7212.29.0000, 7212.30.1030, 7212.30.1090,
> 7212.30.3000, 7212.30.5000, 7212.40.1000, 7212.40.5000, 7212.50.0000,
> 7212.60.0000, 7215.90.1000, 7215.90.5000, 7217.12.1000, 7217.13.1000,
> 7217.19.1000, 7217.19.5000, 7217.22.5000, 7217.23.5000, 7217.29.1000,
> 7217.29.5000, 7217.32.5000, 7217.33.5000, 7217.39.1000, and
> 7217.39.5000.
>
> Included in the order are corrosion-resistant flat-rolled products of
> nonrectangular cross-section where such cross-section is achieved
> subsequent to the rolling process (i.e., products which have been
> "worked after rolling")-for example, products which have been bevelled
> or rounded at the edges.

The Order excluded articles described as follows:

Excluded from these investigations are flat-rolled steel products either
plated or coated with tin, lead, chromium, chromium oxides, both tin and
lead (\"terne plate\"), or both chromium and chromium oxides (\"tin-free
steel\"), whether or not painted, varnished or coated with plastics or
other nonmetallic substances in addition to the metallic coating. Also
excluded from these investigations are clad products in straight lengths
of 0.1875 inch or more in composite thickness and of a width which
exceeds 150 millimeters and measures at least twice the thickness. Also
excluded from these investigations are certain clad stainless
flat-rolled products, which are three-layered corrosion-resistant carbon
steel flat-rolled products less than 4.75 millimeters in composite
thickness that consist of a carbon steel flat-rolled product clad on
both sides with stainless steel in a 20%-60%-20% ratio.

The protestant argues that the steel was alloy steel with a zinc coating
rather than carbon steel with a zinc coating and, therefore, outside the
scope of the dumping order. There is a dispute as to the composition of
the steel. Under U.S. Note 1(f), Chapter 72, HTSUS, a steel, pertinent
to this situation, not meeting the definition of stainless steel that
contains 0.05% or more of titanium is an alloy steel for classification
purposes. There is a dispute as to titanium content. The Customs
laboratory found the steel to be unalloyed steel because it found the
titanium content to be 0.045%. The mill reports and a separate
commercial laboratory report indicate the titanium content to be 0.051%.

As the protestant pointed out in its internal advice request, the
tolerance in dispute is .005% and that even slight errors in calibration
could cause erroneous results. The protestant also challenged the
validity of the methodology used by the Customs laboratory.

However, even if the protestant is correct that the steel is alloy steel
for classification purposes, that determination does not determine
whether such a steel is excluded from the Commerce Order. The protestant
was notified by the Notice of Action dated October 8, 1993, that Customs
believed the steel to be within the Order. The protestant had the
ability to request a scope ruling under 19 CFR 351.225 from Commerce and
failed to do so. Unlike the situation in [Xerox Corp v. United
States]{.underline}, 289 F.3d 792 (Fed. Cir. 2002), here there is
dispute in the evidence on whether the steel contains 0.05% or more of
titanium. Further, whether a decision on tariff classification (that the
steel is an alloy steel for classification purposes because it passed
the threshold of 0.005%) results in an entry being deemed as outside the
scope of the Commerce Order is a decision for Commerce and not the
Customs Service.

Therefore, it appears that the port properly suspended Entry 142-9 on
October 12, 1993.

On August 19, 1993, Commerce had issued the Order, listing the
antidumping duty margin for Usinor at 39.40%. Although the Order did not
include merchandise classifiable under subheading 7225.90.0000, the
listing of tariff classifications is advisory only, as discussed above.
See also 19 U.S.C. 1677(25); 19 U.S.C. 1673e(a)(2); 19 CFR
351.202(b)(5); 19 CFR 351.225(c)(1)(i).

On June 21, 1996, Commerce published the Court Decision, which stated
that Commerce "would suspend liquidation until there was a 'conclusive'
decision in the action." On October 1, 1996, Commerce published the
Final Decision, which lifted suspension and listed antidumping duty
liability at 29.41%. On September 15, 2000, the port liquidated Entry
142-9.

Interpreting 19 U.S.C. 1504(d) in [International Trading Co. v. United
States]{.underline}, 110 F. Supp. 2d 977; Slip Op. 00-83 (July 14,
2000); Slip Op. 00-1577 (Fed. Cir.) March 1, 2002, *aff'd,* the CIT held
that suspension on liquidation for the subject entries was removed
following the publication of notice of final results in the Federal
Register, and was sufficient notice under section 1504(d) (1993) for the
6-month liquidation period to run.

#### 19 U.S.C. 1504. Limitation on liquidation

...

\(d\) Removal of suspension

> ...\[W\]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.... 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).

On October 12, 1993, the port properly suspended liquidation on the
entry, as discussed above. On June 21, 1996, Commerce published the
Court Decision, indicating that liquidation would remain suspended
pending a conclusive decision in the action.

On October 1, 1996, Commerce published the Final Decision, determining
conclusively that Usinor was subject to antidumping duty liability at
29.41%, and that Customs shall "proceed with liquidation of the subject
merchandise entered on or after April 6, 1993, and before August 17,
1993."

On September 15, 2000, Customs liquidated Entry 142-9. However, under
the court's interpretation of 19 U.S.C. 1504(d) in [International
Trading]{.underline}, Customs was required to liquidate the subject
entries within 6 months after Commerce published the Final Decision
(i.e., not later than April 1, 1997).

However, Customs failed to liquidate the subject entry within 6 months
of the Final Decision issued by Commerce.

As noted earlier, the entry documents include handwritten annotations
concerning the existence of antidumping duty issues. However, since
Customs officers (and not Usinor) made the annotations, there is no
evidence that Usinor asserted antidumping duty liability at the time of
entry.

In [Rheem Metalurgica S/A v. United States]{.underline}, 951 F. Supp.
241, 20 C.I.T. at 1450 (1996), the court held that 19 U.S.C. 1504(d)
"clearly states that entries liquidated by operation of law are
liquidated at 'the rate of duty, value, quantity, and amount of duty
asserted at the time of entry by the importer.'" Id. At 250, 20 C.I.T.
at 1462. "The meaning of 'asserted' in 1504(d)...means that which is
claimed and indicated by the importer, his consignee or agent on the
entry summary or warehouse withdrawal." Id. At 249, citing Customs
Regulations, Relating to the Entry of Merchandise, Liquidation of
Entries, Warehousing Periods, and Marking of Bulk Containers of
Alcoholic Beverages, Amended, 44 Fed. Reg. 46,794, 46,809 (August 9,
1979).

Therefore, Entry 142-9 deem liquidated by operation of law, and Usinor
is now liable for 0.00% antidumping duty liability.

Issue (3)

Whether the port may assess interest on antidumping duties?

Since the liquidation by Customs of the subject entries on September 15,
2000 was barred by a prior liquidation by operation of law, Usinor is
subject to 0.00% antidumping duty liability, rendering the issue of
interest moot.

Issue (4)

Whether the subject entry liquidated in accordance with the port's
changes in classification and duty rate assessment?

Usinor challenges the classification and duty rate assessed on the basis
of the deemed liquidation. As discussed in Issue (2), above, Entry 142-9
deem liquidated by operation of law on April 1, 1997. Thus, Entry 142-9
deem liquidated at the rate of duty Usinor asserted (5.8%) at the time
of entry.

Therefore, the subject entry did not liquidate in accordance with the
port's changes in classification and duty rate assessment.

**HOLDING:**

Accordingly, the protest should be ­GRANTED for the reasons set forth
above. In accordance with Section 3A(11)(b) of Customs Directive 099
3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you
are to mail this decision, together with the Customs Form 19, to the
Protestant no later than 60 days from the date of this letter. Any
reliquidation of the entry or entries in accordance with the decision
must be accomplished prior to mailing 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.ustreas.gov](http://www.customs.ustreas.gov/), by means of
the Freedom of Information Act, and other methods of public
distribution.

Sincerely,

> Myles B. Harmon
>
> Acting Director,
>
> Commercial Rulings Division