CSMS Message: 94-001176

TO : ALL ABI BROKERS.

FROM : DALE SNELL

SUBJECT : RULING: INTEREST

DATE : 11/17/94

NOTICE: THE FOLLOWING DOCUMENT IS A RULING ISSUED BY THE OFFICE
OF REGULATIONS AND RULINGS ON THE EFFECTIVE DATE OF 19 U.S.C.
1505(C), AS ADDED BY SECTION 642(A) OF THE NAFTA IMPLEMENTATION
ACT. UNDER THE AMENDED LAW, AN IMPORTER IS SUBJECT TO INTEREST
ON UNDERPAYMENTS FROM THE TIME OF MAKING ENTRY TO THE DATE OF
LIQUIDATION OR RELIQUIDATION AND THE GOVERNMENT IS REQUIRED TO
PAY INTEREST ON EXCESS DEPOSITS OF DUTIES, FEES, AND INTEREST
FROM THE DATE OF DEPOSIT TO THE DATE OF LIQUIDATION OR
RELIQUIDATION. THIS IS AN ENTIRELY NEW PROVISION. THE RULING
HOLDS THAT THE AMENDMENT APPLIES ONLY TO ENTRIES FILED ON OR
AFTER DECEMBER 8, 1993, AND NOT TO ENTRIES FILED BEFORE DECEMBER
8, 1993, AND LIQUIDATED ON OR AFTER THAT DATE.

HQ 225576

NOVEMBER 15, 1994

ENT-1-03
LIQ-1-CO:R:C:E 225576 PH

CATEGORY: LIQUIDATION

RE: INTEREST; EFFECTIVE DATE; RETROACTIVITY; NORTH AMERICAN FREE
TRADE AGREEMENT (NAFTA) IMPLEMENTATION ACT; CUSTOMS
MODERNIZATION ACT; PUBLIC LAW 103-182, TITLE VI, SECTION
642; 19 U.S.C. 1505(C)

DEAR MR. :

YOUR LETTER OF FEBRUARY 16, 1994, TO THE CHIEF COUNSEL, U.S.
CUSTOMS SERVICE, HAS BEEN REFERRED TO THIS OFFICE FOR RESPONSE.
IN YOUR LETTER YOU REQUEST A RULING ON THE EFFECTIVE DATE OF THE
AMENDMENT MADE TO 19 U.S.C. 1505(C) BY SECTION 642(A) OF PUBLIC
LAW 103-182. OUR RULING FOLLOWS.

FACTS:

THE NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA) IMPLEMENTATION
ACT (PUBLIC LAW 103-182; 107 STAT. 2057) WAS ENACTED ON DECEMBER
8, 1993. TITLE VI OF THE NAFTA IMPLEMENTATION ACT, TITLED
CUSTOMS MODERNIZATION, CONTAINS VARIOUS AMENDMENTS TO THE CUSTOMS
LAWS AND OTHER STATUTES. SECTION 642(A) OF TITLE VI OF THE NAFTA
IMPLEMENTATION ACT (107 STAT. 2205) AMENDED 19 U.S.C. 1505 BY,
AMONG OTHER THINGS, ADDING A NEW SUBSECTION (C) PROVIDING AS
FOLLOWS:

(C) INTEREST.--INTEREST ASSESSED DUE TO AN UNDERPAYMENT
OF DUTIES, FEES, OR INTEREST SHALL ACCRUE, AT A RATE
DETERMINED BY THE SECRETARY, FROM THE DATE THE IMPORTER OF
RECORD IS REQUIRED TO DEPOSIT ESTIMATED DUTIES, FEES, AND
INTEREST 19 U.S.C. 1505(A) REQUIRES THE IMPORTER OF RECORD
TO DEPOSIT ESTIMATED DUTIES AND FEES AT THE TIME OF MAKING
ENTRY OR AT SUCH LATER TIME AS THE SECRETARY MAY PRESCRIBE
BY REGULATION TO THE DATE OF LIQUIDATION OR RELIQUIDATION
OF THE APPLICABLE ENTRY OR RECONCILIATION. INTEREST ON
EXCESS MONEYS DEPOSITED SHALL ACCRUE, AT A RATE DETERMINED
BY THE SECRETARY, FROM THE DATE THE IMPORTER OF RECORD
DEPOSITS ESTIMATED DUTIES, FEES, AND INTEREST TO THE DATE OF
LIQUIDATION OR RELIQUIDATION OF THE APPLICABLE ENTRY OR
RECONCILIATION.

SECTION 692 OF TITLE VI OF THE NAFTA IMPLEMENTATION ACT (107
STAT. 2225) PROVIDES THAT " T HIS TITLE TAKES EFFECT ON THE DATE
OF THE ENACTMENT OF THIS ACT."

YOU REQUEST A RULING ON THE ISSUE SET FORTH BELOW.

ISSUE:

DOES 19 U.S.C. 1505(C), AS AMENDED BY SECTION 642(A) OF TITLE VI
OF THE NAFTA IMPLEMENTATION ACT, APPLY TO:

(1) ENTRIES MADE BEFORE DECEMBER 8, 1993, AND LIQUIDATED ON
OR AFTER THAT DATE, AS WELL AS TO ENTRIES BOTH MADE AND
LIQUIDATED ON OR AFTER THAT DATE; OR

(2) ONLY ENTRIES BOTH MADE AND LIQUIDATED ON OR AFTER
DECEMBER 8, 1993?

LAW AND ANALYSIS:

THE GENERAL RULE WITH REGARD TO THE EFFECTIVE DATES OF STATUTES
IS " R ETROACTIVITY IS NOT FAVORED IN THE LAW AND THUS
CONGRESSIONAL ENACTMENTS AND ADMINISTRATIVE RULES WILL NOT BE
CONSTRUED TO HAVE RETROACTIVE EFFECT UNLESS THEIR LANGUAGE
REQUIRES THIS RESULT" (BOWEN V. GEORGETOWN UNIVERSITY HOSPITAL,
488 U.S. 204, 208 (1988)). HOWEVER, THE SUPREME COURT HAS
APPROVED THE RETROACTIVE APPLICATION OF STATUTES "... ON THE
PRINCIPLE THAT A COURT IS TO APPLY THE LAW IN EFFECT AT THE TIME
IT RENDERS ITS DECISION, UNLESS DOING SO WOULD RESULT IN MANIFEST
INJUSTICE OR THERE IS STATUTORY DIRECTION OR LEGISLATIVE HISTORY
TO THE CONTRARY" (BRADLEY V. SCHOOL OF CITY OF RICHMOND, 416 U.S.
696, 711 (1974)).

IN THE 1994 CASE OF LANDGRAF V. USI FILM PRODUCTS, 114 S. CT.
1493, THE SUPREME COURT RECONCILED THE ABOVE TWO CASES (I.E.,
BRADLEY AND BOWEN (SEE ALSO, KAISER ALUMINUM AND CHEMICAL CORP. V.
BONJORNO, 494 U.S. 827, 110 S. CT. 1570 (1990). THE COURT
STATED THAT "THERE IS NO TENSION BETWEEN THE HOLDINGS" IN THESE
CASES (114 S. CT. AT 1496, EMPHASIS IN ORIGINAL). THE COURT
NOTED THAT "STATUTORY RETROACTIVITY HAS LONG BEEN DISFAVORED BUT
THAT DECIDING WHEN A STATUTE OPERATES 'RETROACTIVELY' IS NOT
ALWAYS A SIMPLE OR MECHANICAL TASK" (114 S. CT. AT 1498). THE
COURT WENT ON TO STATE THAT " A STATUTE DOES NOT OPERATE
'RETROSPECTIVELY' MERELY BECAUSE IT IS APPLIED IN A CASE ARISING
FROM CONDUCT ANTEDATING THE STATUTE'S ENACTMENT" (114 S. CT. AT
1499). THE COURT NOTED THAT IT HAD LONG DECLINED TO GIVE
RETROACTIVE EFFECT TO "STATUTES BURDENING PRIVATE RIGHTS UNLESS
CONGRESS HAD MADE CLEAR ITS INTENT" (114 S. CT. AT 1499) AND THAT
" THE LARGEST CATEGORY OF CASES IN WHICH IT HAD APPLIED THE
PRESUMPTION AGAINST STATUTORY RETROACTIVITY HAS INVOLVED NEW
PROVISIONS AFFECTING CONTRACTUAL OR PROPERTY RIGHTS, MATTERS IN
WHICH PREDICTABILITY AND STABILITY ARE OF PRIME IMPORTANCE" (114
S. CT. AT 1500). THE COURT RECOGNIZED THAT " WHEN AN
INTERVENING STATUTE AUTHORIZES OR AFFECTS THE PROPRIETY OF
PROSPECTIVE RELIEF, APPLICATION OF THE NEW PROVISION IS NOT
RETROACTIVE" (114 S. CT. AT 1501). ALTHOUGH THE COURT NOTED ITS
LONG RECOGNITION OF THE RULE IN BRADLEY THAT "A COURT SHOULD
'APPLY THE LAW IN EFFECT AT THE TIME IT RENDERS ITS DECISION,'"
(114 S. CT. AT 1501), THE COURT STATED, REGARDING BRADLEY, THAT
"... WE NOW MAKE IT CLEAR THAT BRADLEY DID NOT ALTER THE WELL-
SETTLED PRESUMPTION AGAINST APPLICATION OF THE CLASS OF NEW
STATUTES THAT WOULD HAVE GENUINELY 'RETROACTIVE' EFFECT" (114 S.
CT. AT 1503). THE COURT STATED ITS RULE TO BE THAT:

WHEN A CASE IMPLICATES A FEDERAL STATUTE ENACTED AFTER
THE EVENTS IN SUIT, THE COURT'S FIRST TASK IS TO DETERMINE
WHETHER CONGRESS HAS EXPRESSLY PRESCRIBED THE STATUTE'S
PROPER REACH. IF CONGRESS HAS DONE SO, OF COURSE, THERE IS
NO NEED TO RESORT TO JUDICIAL DEFAULT RULES. WHEN, HOWEVER,
THE STATUTE CONTAINS NO SUCH EXPRESS COMMAND, THE COURT MUST
DETERMINE WHETHER THE NEW STATUTE WOULD HAVE RETROACTIVE
EFFECT, I.E., WHETHER IT WOULD IMPAIR RIGHTS A PARTY
POSSESSED WHEN HE ACTED, INCREASE A PARTY'S LIABILITY FOR
PAST CONDUCT, OR IMPOSE NEW DUTIES WITH RESPECT TO
TRANSACTIONS ALREADY COMPLETED. IF THE STATUTE WOULD
OPERATE RETROACTIVELY, OUR TRADITIONAL PRESUMPTION TEACHES
THAT IT DOES NOT GOVERN ABSENT CLEAR CONGRESSIONAL INTENT
FAVORING SUCH A RESULT. 114 S. CT. AT 1505

IN APPLYING THE ABOVE RULES TO THE ISSUE UNDER CONSIDERATION, WE
NOTE THAT THE NAFTA IMPLEMENTATION ACT SPECIFICALLY PROVIDES THAT
THE TITLE CONTAINING THE PROVISION UNDER CONSIDERATION TAKES
EFFECT ON THE DATE OF ENACTMENT (DECEMBER 8, 1993) (SECTION 692
OF TITLE VI OF THE NAFTA IMPLEMENTATION ACT, QUOTED ABOVE).
HOWEVER, AS NOTED ABOVE (LANDGRAF, "DECIDING WHEN A STATUTE
OPERATES 'RETROACTIVELY' IS NOT ALWAYS A SIMPLE OR MECHANICAL
TASK" (114 S. CT. AT 1498); SEE ALSO SYVA, INFRA), THIS DOES NOT
RESOLVE THE PROBLEM OF HOW TO APPLY THE PROVISION TO A
TRANSACTION IN WHICH ONE EVENT WAS PRIOR TO THAT DATE AND ANOTHER
EVENT WAS AFTER THAT DATE (E.G., AS IN THE ISSUE UNDER
CONSIDERATION, WHEN ENTRY WOULD BE BEFORE DECEMBER 8, 1993, AND
LIQUIDATION OF THE ENTRY WOULD BE AFTER THAT DATE). (COMPARE THE
EFFECTIVE DATE PROVISION IN SECTION 692 OF THE NAFTA
IMPLEMENTATION ACT TO THE EFFECTIVE DATE PROVISIONS IN STATUTES
SUCH AS THE ACT OF JANUARY 12, 1983 (PUBLIC LAW 97-446; 96 STAT.
2329), WHICH, AMONG OTHER THINGS, AMENDED 19 U.S.C. 1505 TO BE
APPLICABLE "WITH RESPECT TO MERCHANDISE ENTERED ON AND AFTER THE
30TH DAY AFTER THE DATE OF THE ENACTMENT OF THE ACT" (SECTION
201(G), PUBLIC LAW 97-446; 96 STAT. 3460).)

SINCE CONGRESS HAS NOT "EXPRESSLY PRESCRIBED THE STATUTE'S PROPER
REACH" IN REGARD TO THE APPLICABILITY OF THE AMENDMENTS TO
SECTION 1505 EFFECTED BY SECTION 642 OF THE NAFTA IMPLEMENTATION
ACT TO THE SITUATION UNDER CONSIDERATION, WE MUST USE NORMAL
RULES OF STATUTORY CONSTRUCTION. AS THE COURT STATED IN
LANDGRAF, WHAT MUST BE DETERMINED IS WHETHER THE PROVISION WOULD
HAVE RETROACTIVE EFFECT, "I.E., WHETHER IT WOULD IMPAIR RIGHTS A
PARTY POSSESSED WHEN HE ACTED, INCREASE A PARTY'S LIABILITY FOR
PAST CONDUCT, OR IMPOSE NEW DUTIES WITH RESPECT TO TRANSACTIONS
COMPLETED."

THE AMENDMENT TO 19 U.S.C. 1505(C) EFFECTED BY SECTION 642(A) OF
TITLE VI OF THE NAFTA IMPLEMENTATION ACT AND UNDER CONSIDERATION
IN THIS RULING IS QUOTED IN THE FACTS PORTION OF THIS RULING.
ACCORDING TO THE HOUSE AND SENATE REPORTS ON THE NAFTA
IMPLEMENTATION ACT, SECTION 642 PROVIDES THAT "... UNDERPAYMENT
OR OVERPAYMENT OF DUTIES AND FEES DETERMINED AT LIQUIDATION OR
RELIQUIDATION SHALL BE EITHER PAID BY THE IMPORTER OR REFUNDED BY
THE GOVERNMENT WITH INTEREST, AS APPROPRIATE." THE REASON FOR
THIS CHANGE IS STATED TO BB?COLLECTION AND REFUND OF DUTIES AND TAXES,
TOGETHER WITH
INTEREST, BY TREATING COLLECTIONS AND REFUNDS EQUALLY" (HOUSE
REPORT 103-361, PART 1, 103D CONG., 1ST SESS., P. 140; SEE ALSO
SENATE REPORT 103-189, 103D CONG., 1ST SESS., PP. 90, 91). BOTH
OF THESE REPORTS PROVIDE THAT TITLE VI OF THE NAFTA
IMPLEMENTATION ACT SHALL TAKE EFFECT ON THE DATE OF ENACTMENT
(ID., P. 163, AND P. 105, RESPECTIVELY).

THE PROVISION UNDER CONSIDERATION ADDED TO 19 U.S.C. 1505 BY
SECTION 642(A) OF TITLE VI OF THE NAFTA IMPLEMENTATION ACT IS A
NEW PROVISION, PROVIDING FOR INTEREST DURING THE PERIOD BETWEEN
THE DATE THAT THE IMPORTER IS REQUIRED TO DEPOSIT ESTIMATED
DUTIES, FEES, AND INTEREST AND THE DATE OF LIQUIDATION OR
RELIQUIDATION. BEFORE THIS AMENDMENT, THERE WAS NO PROVISION FOR
INTEREST IN THIS PERIOD. UNDER FORMER 19 U.S.C. 1505(C),
INTEREST WAS PROVIDED FOR ON DUTIES DETERMINED TO BE DUE
(UNDERPAYMENTS) UPON LIQUIDATION OR RELIQUIDATION FROM THE 15TH
DAY AFTER THE DATE OF LIQUIDATION OR RELIQUIDATION. UNDER FORMER
19 U.S.C. 1520(D) (REPEALED BY SECTION 642(B) OF TITLE VI OF THE
NAFTA IMPLEMENTATION ACT), IF AN ENTRY WAS RELIQUIDATED AS A
RESULT OF A PROTEST FILED UNDER 19 U.S.C. 1514 OR AN APPLB?GOVERNMENT
WAS NOT REQUIRED TO PAY INTEREST ON EXCESS ESTIMATED
DUTIES (KALAN, INC., V. UNITED STATES, 944 F. 2D 847 (FED. CIR.
1991))). THESE LATTER PROVISIONS (I.E., 19 U.S.C. 1505(C) AND
1520(D) ARE NOW CONTAINED IN 19 U.S.C. 1505(B) AND (D), WITH SOME
MODIFICATIONS. THE CHANGES UNDER CONSIDERATION EFFECTED BY
SECTION 642 OF THE NAFTA IMPLEMENTATION ACT MAY BE SUMMARIZED AS
FOLLOWS:

BEFORE

ENTRY TO LIQUIDATION: NO PROVISION FOR INTEREST FOR UNDERPAYMENTS BY
IMPORTER. SINCE OLD 1520(D) PROVIDED FOR INTEREST ON INCREASED OR
ADDITIONAL DUTIES RESULTING FROM RELIQUIDATION (AND NOT EXCESS DEPOSITS,
SEE KALAN, SUPRA), DATE OF PAYMENT WOULD BE AFTER RELIQUIDATION. THUS,
THERE WAS NO PROVISION FOR INTEREST PAYABLE BY THE GOVERNMENT DURING THIS
PERIOD.

POST-LIQUIDATION: IMPORTER SUBJECT TO INTEREST ON UNDERPAYMENTS FROM THE
15TH DAY AFTER LIQUIDATION OR RELIQUIDATION (OLD 1505(C)) AND GOVERNMENT
REQUIRED TO PAY INTEREST ON EXCESS INCREASED OR ADDITIONAL DUTIES (NOT
EXCESS DEPOSITS) FROM THE DATE OF PAYMENT TO THE DATE OF REFUND OR FILING
OF SUMMONS (OLD 1520(D)).

AFTER

ENTRY TO LIQUIDATION: IMPORTER SUBJECT TO INTEREST ON UNDERPAYMENTS FROM
THE TIME OF MAKING ENTRY TO THE DATE OF LIQUIDATION OR RELIQUIDATION
AND GOVERNMENT REQUIRED TO PAY INTEREST ON EXCESS DEPOSITS OF
DUTIES, FEES, AND INTEREST FROM THE DATE OF DEPOSIT TO THE DATE OF
LIQUIDATION OR RELIQUIDATION (NEW 1505(C)).

POST-LIQUIDATION: IMPORTER SUBJECT TO INTEREST ON UNDERPAYMENTS FROM THE
DATE OF LIQUIDATION OR RELIQUIDATION (NEW 1505(D)) AND GOVERNMENT
REQUIRED TO REFUND EXCESS MONEYS DEPOSITED, TOGETHER WITH INTEREST
THEREON, WITHIN 30 DAYS OF LIQUIDATION OR RELIQUIDATION (NEW 1505(B)).

THUS, THIS COMPARISON MAKES CLEAR THAT THE PROVISION UNDER
CONSIDERATION IN THIS MATTER (19 U.S.C. 1505(C)) IS A WHOLLY NEW
PROVISION, PROVIDING FOR INTEREST IN A PERIOD IN WHICH INTEREST
WAS NOT PREVIOUSLY PROVIDED FOR (I.E., BETWEEN THE DATE OF ENTRY
AND THE DATE OF LIQUIDATION OR RELIQUIDATION). A NEW TRANSACTION
IS ESTABLISHED AS THE "TRIGGERING" DATE FOR INTEREST IN THE NEW
PERIOD (I.E., THE DATE OF ENTRY OR DEPOSIT INSTEAD OF THE DATE OF
LIQUIDATION OR RELIQUIDATION, OR DEPOSIT AFTER RELIQUIDATION).

YOU CONTEND THAT THE PROVISION SHOULD APPLY TO MERCHANDISE
ENTERED BEFORE DECEMBER 8, 1993, IF THE ENTRY IS LIQUIDATED AFTER
DECEMBER 8, 1993. IF WE SO HELD, AN IMPORTER WHO UNDER-PAID
DUTIES ON A PRE-DECEMBER 8, 1993, ENTRYWOULD BE SUBJECT TO
INTEREST ON THE UNDERPAYMENT OF DUTIES FROM THE DATE OF ENTRY
(E.G., AN IMPORTER OF MERCHANDISE THE LIQUIDATION OF WHICH HAD
BEEN EXTENDED FOR THE FULL FOUR YEARS AUTHORIZED (19 U.S.C. 1504)
WOULD BE SUBJECT TO INTEREST FOR THE FOUR-YEAR PERIOD FROM
ENTRY). CONVERSELY, THE GOVERNMENT WOULD BE REQUIRED TO PAY
INTEREST ON EXCESS DEPOSITS FROM THE DATE OF DEPOSIT (IN THE
ABOVE EXAMPLE, IF THE DATE OF DEPOSIT WAS THE DATE OF ENTRY, FOR
THE FOUR-YEAR PERIOD FROM ENTRY).

CLEARLY, THE PROPOSED INTERPRETATION WOULD RESULT IN THE
PROVISION HAVING "RETROACTIVE EFFECT" UNDER LANDGRAF. THAT IS,
THE PROPOSED INTERPRETATION WOULD "INCREASE A PARTY'S LIABILITY
FOR PAST CONDUCT" (I.E., AN IMPORTER WOULD BE LIABLE FOR INTEREST
ON PAST UNDERPAYMENTS OF DUTIES FOR PAST ENTRIES AND THE
GOVERNMENT WOULD BE LIABLE FOR INTEREST ON PAST OVERPAYMENTS OF
DUTIES FOR PAST ENTRIES, EVEN THOUGH THE LIABILITY FOR THAT
INTEREST COULD NOT HAVE BEEN CONTEMPLATED AT THE TIME OF THE
CONDUCT, THE DATE OF ENTRY). THE PROPOSED INTERPRETATION WOULD
BE IN THE CATEGORY OF CASES WHICH THE COURT IN LANDGRAF DESCRIBED
AS " THE LARGEST CATEGORY OF CASES WHERE THE PRESUMPTION WAS
APPLIED AGAINST STATUTORY RETROACTIVITY NAMELY THOSE
INVOLVING NEW PROVISIONS AFFECTING CONTRACTUAL OR PROPERTY
RIGHTS, MATTERS IN WHICH PREDICTABILITY AND STABILITY ARE OF
PRIME IMPORTANCE" (114 S. CT AT 1500). IN REGARD TO THIS LAST
POINT, WE NOTE THAT THE CONGRESS AND COURTS HAVE RECOGNIZED THE
IMPORTANCE OF CERTAINTY (INCLUDING THE NEED FOR PRIVATE PARTIES
TO BE ABLE TO CONTROL THEIR LIABILITIES) IN THE "CUSTOMS PROCESS"
(SENATE REPORT 778, 95TH CONG., 2D SESS., P. 31 (REPRINTED IN
1978 U.S.C.C.A.N. 2211, 2242-2243); AMBASSADOR DIVISION OF
FLORSHEIM SHOE V. UNITED STATES, 3 FED. CIR. (T) 28, 30-31, 748
F. 2D 1560 (1984)).

SINCE THE PROVISION WOULD HAVE RETROACTIVE EFFECT UNDER THE
INTERPRETATION YOU PROPOSE, THE COURT IN LANDGRAF STATES THAT THE
"TRADITIONAL PRESUMPTION TEACHES THAT IT I.E., THE STATUTORY
PROVISION DOES NOT GOVERN ABSENT CLEAR CONGRESSIONAL INTENT
FAVORING SUCH A RESULT." THERE IS NO "CLEAR CONGRESSIONAL
INTENT" FAVORING THE RETROACTIVE OPERATION OF THE PROVISION UNDER
CONSIDERATION. INSTEAD, THE STATUTE CLEARLY PROVIDES THAT TITLE
VI, INCLUDING THE PROVISION UNDER CONSIDERATION, IS TO TAKE
EFFECT ON THE DATE OF ENACTMENT (SECTION 692, NAFTA
IMPLEMENTATION ACT) AND THE LEGISLATIVE HISTORY CONCURS (HOUSE
REPORT 103-361, PART 1, 103D CONG., 1ST SESS., P. 163, AND SENATE
REPORT 103-189, 103D CONG., 1ST SESS., P. 105).

FURTHERMORE, IN THOSE INSTANCES IN THE NAFTA IMPLEMENTATION ACT
IN WHICH RETROACTIVITY WAS INTENDED, THE STATUTE AND THE
LEGISLATIVE HISTORY SPECIFICALLY SO PROVIDE (SEE SECTION 632(B),
NAFTA IMPLEMENTATION ACT; 107 STAT. 2197, 2198; SEE ALSO HOUSE
REPORT 103-361, SUPRA, P. 132, AND SENATE REPORT 103-189, SUPRA,
PP. 84-85). WE NOTE ALSO THAT EFFECTIVE DATES ARE SPECIFICALLY
PROVIDED FOR IN SECTIONS 622(B), NAFTA IMPLEMENTATION ACT (107
STAT. 2186, 2187), AND 683, NAFTA IMPLEMENTATION ACT (107 STAT.
2218). A MAXIM OF STATUTORY CONSTRUCTION IS EXPRESSIO UNIUS EST
EXCLUSIO ALTERIUS (THE EXPRESSION OF ONE THING IS THE EXCLUSION
OF ANOTHER). UNDER THIS MAXIM IF A STATUTE "... ASSUMES TO
SPECIFY THE EFFECTS OF A CERTAIN PROVISION, OTHER ... EFFECTS ARE
EXCLUDED" (BLACK'S LAW DICTIONARY, 6TH ED. (1990), P. 581; SEE
ALSO, E.G., UNITED STATES V. AZEEM, 946 F. 2D 13, 17 (2ND CIR.
1991), "IN GENERAL, CONGRESSIONAL CONSIDERATION OF AN ISSUE IN
ONE CONTEXT, BUT NOT ANOTHER, IN THE SAME OR SIMILAR STATUTES
IMPLIES THAT CONGRESS INTENDS TO INCLUDE THAT ISSUE ONLY WHERE IT
HAS SO INDICATED").

ALSO IN REGARD TO THE INTENT OF THE NAFTA IMPLEMENTATION ACT IN
REGARD TO THE ISSUE UNDER CONSIDERATION, WE NOTE THAT BOTH
CONGRESSIONAL REPORTS ON THE ACT INCLUDE A CONGRESSIONAL BUDGET
OFFICE COST ESTIMATE ON THE LEGISLATION (HOUSE REPORT 103-361,
SUPRA, PP. 163-170; SENATE REPORT 103-189, SUPRA, PP. 139-146).
ACCORDING TO THIS COST ESTIMATE, " T ITLE VI ... WOULD REQUIRE
PAYMENT OF INTEREST ON MERCHANDISE REVALUATIONS AFTER ENTERING AN
ITEM THROUGH U.S. CUSTOMS, INCREASING RECEIPTS BY $4 MILLION EACH
YEAR." THE TABLE ILLUSTRATING THIS CHANGE REFLECTS NO CHANGE IN
THIS AMOUNT FOR EACH FISCAL YEAR BEGINNING IN 1994 THROUGH 1998.
THUS, THERE IS NO INDICATION THAT IT WAS ANTICIPATED THAT THE
PROVISION WAS TO APPLY RETROACTIVELY (I.E., IF THAT WERE THE
CASE, RECEIPTS FOR THE FIRST YEARS AFTER ENACTMENT OF THE ACT
WOULD BE HIGHER, REFLECTING PAYMENT OF INTEREST FOR PAST ENTRIES,
AS WELL AS CURRENT ENTRIES).

THUS, NOT ONLY IS THERE NO "CLEAR CONGRESSIONAL INTENT" FAVORING
THE RETROACTIVE OPERATION OF THE PROVISION UNDER CONSIDERATION,
THE AVAILABLE LEGISLATIVE HISTORY SUPPORTS AN INTERPRETATION THAT
THE RETROACTIVE EFFECT OF THE PROVISION WAS NOT INTENDED. THEREFORE,
BASED ON THE REASONING SET FORTH IN THIS, RULING WE CONCLUDE THAT THE
AMENDMENT TO 19 U.S.C. 1505(C) EFFECTED BY SECTION 642(A) OF TITLE VI OF
THE NAFTA IMPLEMENTATION ACT DOES NOT APPLY TO ENTRIES BEFORE THE DATE OF
ENACTMENT, EVEN IF THE ENTRIES ARE LIQUIDATED OR RELIQUIDATED ON OR AFTER
THE DATE OF ENACTMENT. THE PROVISION APPLIES TO ENTRIES ON OR AFTER THE
DATE OF ENACTMENT (I.E., BECAUSE THAT IS THE DATE THAT ESTIMATED DUTIES
AND FEES ARE REQUIRED TO BE DEPOSITED).

THIS POSITION IS NOT INCONSISTENT WITH THE DECISION IN SYVA CO.
V. UNITED STATES, 12 CIT 199, 681 F. SUPP. 885 (1988), IN WHICH
THE COURT HELD THAT THE 1984 AMENDMENT OF 19 U.S.C. 1505
REQUIRING INTEREST TO BE PAID FROM THE 15TH DAY AFTER THE DATE OF
LIQUIDATION OR RELIQUIDATION WAS APPLICABLE TO MERCHANDISE
ENTERED BEFORE THE EFFECTIVE DATE OF THE LAW BUT LIQUIDATED AFTER
THAT DATE. IN SYVA THE COURT DETERMINED THAT THERE WAS NO
"RETROACTIVITY ISSUE" BECAUSE THE CLEAR INTENT WAS FOR THE
AMENDMENT TO APPLY "WHERE DUTIES WERE ALREADY ASSESSED" AND
BECAUSE "THE OPERATIVE EVENT TRIGGERING THE TIME FOR ASSESSMENT
OF INTEREST I.E., LIQUIDATION OCCURRED AFTER THE STATUTE WAS
ENACTED" (12 CIT AT 204). IN THE CASE OF THE AMENDMENT TO 19
U.S.C. 1505(C) BY SECTION 642(A) OF THE NAFTA IMPLEMENTATION ACT,
THERE IS NO SUCH "CLEAR INTENT" (AS STATED ABOVE, THE AVAILABLE
LEGISLATIVE HISTORY SUPPORTS AN INTERPRETATION THAT RETROACTIVITY
FOR THE PROVISION WAS NOT INTENDED) AND THE "OPERATIVE EVENT
TRIGGERING THE TIME FOR ASSESSMENT OF INTEREST" IS THE DATE OF
ENTRY (I.E., THE DATE THAT ESTIMATED DUTIES AND FEES ARE REQUIRED
TO BE DEPOSITED), NOT THE DATE OF LIQUIDATION OR RELIQUIDATION.

THIS POSITION IS CONSISTENT WITH THE "WELL-SETTLED PRESUMPTION"
AGAINST RETROACTIVITY, DESCRIBED ABOVE (FOR AN EXAMPLE OF A CASE
IN WHICH THAT PRESUMPTION WAS APPLIED TO A CASE INVOLVING
INTEREST, SEE KAISER ALUMINUM CHEMICAL CORP., SUPRA; FOR AN
EXAMPLE OF A CASE IN WHICH THAT PRESUMPTION WAS APPLIED REGARDING
CUSTOMS LAWS, SEE UNITED STATES V. BURR, 159 U.S. 78, 15 S. CT.
1002 (1895)).

HOLDING:

TITLE 19, U.S.C. SECTION 1505(C), AS AMENDED BY SECTION 642(A) OF
TITLE VI OF THE NAFTA IMPLEMENTATION ACT, APPLIES ONLY TO ENTRIES
FILED ON OR AFTER DECEMBER 8, 1993, AND NOT TO ENTRIES FILED
BEFORE DECEMBER 8, 1993, AND LIQUIDATED ON OR AFTER THAT DATE.

SINCERELY,

JOHN DURANT, DIRECTOR
COMMERCIAL RULINGS DIVISION