CIT Finds Reliquidation of Deemed Liquidated Entries Permissible, But Declines Ruling on Time Limits

Great American argued CBP’s reliquidation of its 2006 entry of wooden bedroom furniture from China was improper because the relevant entry had already deemed liquidated at the 6.65 percent antidumping duty cash deposit rate in effect at time of entry. The relevant administrative review had ended in August 2008 with a much higher 216.01 percent rate for the exporter of the merchandise, but CBP took no action to liquidate the entry at the higher rate before the ensuing six-month period for liquidation expired in February 2009. It wasn’t until December 2009 that CBP sent notice to the importer that deemed liquidation had occurred 10 months earlier. CBP reliquidated the entry at the higher rate in January 2010, assessing over $60,000 in additional duties.

At issue in the case is CBP’s recent interpretation of the law on reliquidation, 19 USC 1501, which provides that, “liquidation made in accordance with section 1500 or 1504 … or any reliquidation thereof made in accordance with this section may be reliquidated in any respect by the Customs Service … within ninety days from the date on which notice of the original liquidation is given or transmitted to the importer.” CBP has recently issued several controversial rulings where it held it could reliquidate entries that had already deemed liquidated, sometimes years after the fact (see 14061818 and 14080712). At least one other case is currently being considered by the court, filed by Consolidated Fibers, whose lawyer has said CBP’s interpretation means there’s “no statute of limitations on any customs entry because CBP can reliquidate entries without limitation” (see 14092328).

Looking first to whether CBP can reliquidate any entries that have deemed liquidated, CIT ruled Section 1501 is clear in allowing reliquidation of entries liquidated under 19 USC 1504, the deemed liquidation statute. It backed the holding with precedent from the U.S. Court of Appeals for the Federal Circuit, which ruled in 2006 that “deemed liquidations are subject to reliquidation by Customs.”

Turning then to the issue of whether CBP’s reliquidation occurred too late, CIT found the question unanswerable given the information it currently has. Though Great American argued the time limit expired 90 days of the date deemed liquidation occurred in February 2009, the court pointed out that the law explicitly says that the 90-day period runs not from the date of deemed liquidation itself, but rather from the date notice of the deemed liquidation is given to the importer.

However, under CBP’s regulations in 19 CFR 159, that bulletin notice of liquidation must be given “within a reasonable period.” Based on the facts in Great American’s motion to dismiss, CIT ruled that it “cannot conclude … that Customs unreasonably delayed posting the bulletin notice in this case.” The 10 month period between deemed liquidation and the notice in this case “may, in fact, be an abnormally or prejudicially long period to wait for the posting of a bulletin notice, or it may be a typical and appropriate timeframe between a deemed liquidation and posting of the bulletin notice,” said CIT.

(United States v. Great Am. Ins. Co. of N.Y., CIT # 15-00047, Slip Op. 15-129, dated 11/16/15, Judge Barnett)

(Attorneys: Monica Triana for plaintiff U.S. government; Barry Boren for defendant Great American Insurance Company of New York)