CSMS Message: 98-000561

TO : ALL ABI BROKERS.

FROM : LYNN RODRIGUEZ

SUBJECT : ENT- MOD ACT LIQUIDATION INSTR

DATE : 07/08/1998

TO : ALL TRADE COMPLIANCE PROCESS OWNERS
FROM : DIRECTOR
TRADE COMPLIANCE
PASS TO: ENTRY SPECIALISTS, ENTRY OFFICERS, NATIONAL AND FIELD
IMPORT SPECIALISTS, AND OTHER INTERESTED PARTIES
SUBJECT: MOD ACT LIQUIDATION INSTRUCTIONS (REVISED)
BACKGROUND:
HEADQUARTERS BULLETIN BOARD MESSAGE NUMBER 4063021, ENTITLED "
LIQUIDATION INSTRUCTIONS UNDER THE MOD ACT," DATED MARCH 8, 1994,
PROVIDED INSTRUCTIONS TO FIELD OFFICES FOR THE COLLECTION AND
PAYMENT OF INTEREST, AT THE TIME OF LIQUIDATION OR RELIQUIDATION
OF CONSUMPTION (IMPORT) ENTRY SUMMARIES, FOR UNDERPAYMENTS AND
OVERPAYMENTS OF DUTIES AND FEES. FIELD OFFICES WERE INSTRUCTED
TO FOLLOW THE LIQUIDATION GUIDELINES PROVIDED, AND TO REFUND OR
BILL INTEREST IN ACCORDANCE WITH THE MOD ACT ON LIQUIDATIONS OR
RELIQUIDATIONS INVOLVING THOSE ENTRY SUMMARIES WITH A DATE OF
ENTRY ON OR AFTER DECEMBER 8, 1993.
ON JULY 2, 1997, THE U.S. COURT OF APPEALS FOR THE FEDERAL
CIRCUIT RENDERED ITS DECISION IN THE TRAVENOL LABORATORIES, INC.,
COURT CASE, RELATING TO THE MOD ACT RULE THAT INTEREST SHOULD BE
BILLED OR REFUNDED ON UNDER-DEPOSITS AND OVER-DEPOSITS, AS
DETERMINED BY LIQUIDATION OR RELIQUIDATION, FROM THE DATE OF
DEPOSIT OR THE DATE OF PAYMENT TO THE DATE OF LIQUIDATION OR
RELIQUIDATION. THE COURT OF APPEALS HELD THAT THE MOD ACT RULE
APPLIES TO ENTRIES LIQUIDATED OR RELIQUIDATED ON OR AFTER
DECEMBER 8, 1993, REGARDLESS OF THE DATE OF ENTRY. AS A RESULT,
THE ENTRY DATE IS NO LONGER A FACTOR FOR DETERMINING THE
APPLICABILITY OF THE MOD ACT INTEREST PROVISIONS.
ACTION:
THE FOLLOWING SCENARIOS REFER TO THE APPLICATION OF MOD ACT
INTEREST UNDER 19 U.S.C. 1505(C) FOR IMPORT ENTRY SUMMARIES, AND
DO NOT APPLY TO DRAWBACK ENTRIES OR THE CALCULATION OF INTEREST
ON OVERPAYMENTS AND UNDERPAYMENTS OF AMOUNTS DEPOSITED FOR
ANTIDUMPING OR COUNTERVAILING DUTIES (19 U.S.C. 1677(G)).
1. COURT ORDERS
1 ENTRY SUMMARIES SUBJECT TO CURRENT COURT ORDERS FOR REFUNDS
OF DUTIES (AS OPPOSED TO REFUNDS OF INTEREST ONLY, SEE SCENARIO
4, BELOW) WILL BE RELIQUIDATED ACCORDING TO THE INSTRUCTIONS
PROVIDED IN THE COURT JUDGMENT. IF THESE INSTRUCTIONS REQUIRE
THE REFUND OF "INTEREST PROVIDED BY LAW", THE INTEREST WILL BE
CALCULATED FROM THE DATE OF DEPOSIT OF THE DISPUTED DUTIES AND
FEES TO THE DATE OF RELIQUIDATION. THE SUMMONS DATE WILL NO
LONGER BE TAKEN INTO CONSIDERATION FOR INTEREST CALCULATIONS.
FIELD OFFICES WITH QUESTIONS CONCERNING ADDITIONAL ACTION TO
BE TAKEN, IF ANY, CONCERNING ANY ENTRY SUMMARY RELIQUIDATED ON OR
AFTER DECEMBER 8, 1993, AND BEFORE THE DATE OF THESE
INSTRUCTIONS, PURSUANT TO AN "INTEREST AS PROVIDED BY LAW"
JUDGMENT, SHOULD ADDRESS THEIR CONCERNS TO THE OFFICE OF FIELD
OPERATIONS, TRADE COMPLIANCE. THESE SITUATIONS WILL BE EVALUATED
ON A CASE-BY-CASE BASIS.
2. OVERPAYMENTS AND UNDERPAYMENTS, CHANGE LIQUIDATIONS AND
RELIQUIDATIONS OF IMPORT ENTRY SUMMARIES (OTHER THAN
PROTESTS)
ALL CHANGE LIQUIDATIONS (19 U.S.C. 1500) OR RELIQUIDATIONS
(19 U.S.C. 1501) INVOLVING OVERPAYMENTS OR UNDERPAYMENTS OF
DUTIES AND FEES WILL BE SUBJECT TO INTEREST UNDER 19 U.S.C.
1505(C), AS DEFINED BY THE MOD ACT, REGARDLESS OF THE DATE OF
ENTRY.
3. TIMELY PROTESTS: RELIQUIDATIONS OF IMPORT ENTRY SUMMARIES
INVOLVING OVERPAYMENTS AND UNDERPAYMENTS OF DUTIES AND FEES
RELIQUIDATIONS OF PROTESTED ENTRY SUMMARIES ON ALLOWED, OR
ALLOWED-IN-PART PROTESTS INVOLVING OVERPAYMENTS OR
UNDERPAYMENTS OF DUTIES AND FEES WILL BE SUBJECT TO INTEREST
UNDER 19 U.S.C. 1505(C), AS DEFINED BY THE MOD ACT,
REGARDLESS OF THE DATE OF ENTRY.
AS TO PROTESTS THAT HAD BEEN DENIED OR DENIED-IN-PART AND
WERE SUBSEQUENTLY SUMMONSED TO COURT AND ARE TO BE
RELIQUIDATED PURSUANT TO A COURT ORDER, APPLY THE
INSTRUCTIONS IN SCENARIO ONE.
4. TIMELY PROTESTS: REQUESTS FOR PAYMENT OF INTEREST ONLY (MOD
ACT INTEREST, 19 U.S.C. 1505(C))
PER REGULATION (19 CFR 159.1) AND COURT DETERMINATION, THE
CALCULATION OF INTEREST DUE IS NOT CONSIDERED TO BE A
LIQUIDATION OR RELIQUIDATION DECISION, SINCE "LIQUIDATION" REFERS
ONLY TO THE ASCERTAINMENT OF DUTIES. HOWEVER, CUSTOMS DOES
GENERALLY MAKE A DECISION WHETHER TO PAY INTEREST, AND
COMPUTES THE AMOUNT OF INTEREST, IF ANY, AT THE TIME OF A
LIQUIDATION OR RELIQUIDATION. CUSTOMS UNDERPAYMENT OR
RETENTION OF, THAT IS, FAILURE TO PAY PART OR ALL OF THE
INTEREST AN IMPORTER OR SURETY BELIEVES IT SHOULD RECEIVE IS
1 A PROTESTABLE DECISION UNDER 19 U.S.C. 1514. THE DECISION
BECOMES KNOWN TO THE RECIPIENT UPON ISSUANCE OF THE REFUND
WITH OR WITHOUT ALL OR PART OF THE INTEREST. ABSENT
INFORMATION TO THE CONTRARY, THE DATE OF THE DECISION
WHETHER AND IN WHAT AMOUNT TO PAY OR BILL INTEREST IS
PRESUMED TO BE THE SAME AS THE DATE OF THE LIQUIDATION OR
RELIQUIDATION ACTION USING THE ACS LIQUIDATION MODULE.
WHERE AN ENTRY SUMMARY WAS LIQUIDATED OR RELIQUIDATED FOR A
REFUND OF DUTIES WITH NO INTEREST OR ONLY A PORTION OF THE
INTEREST WHICH SHOULD HAVE BEEN PAID (WHETHER BY CUSTOMS ACTION
OR PURSUANT TO AN "INTEREST AS PROVIDED BY LAW" COURT ORDER), AND
A TIMELY PROTEST OF THE INTEREST DECISION HAS BEEN FILED,
CLAIMING INTEREST ONLY (OR UNDER 19 U.S.C. 1501, A BILL FOR
INTEREST ONLY WILL BE ISSUED), THE ENTRY SUMMARY WILL NOT BE
RELIQUIDATED OR RE-RELIQUIDATED. HOWEVER, FOR THE PURPOSE OF
CONVENIENCE TO EFFECTUATE PAYMENT, THE
MECHANISM OF LIQUIDATION OR RELIQUIDATION (I.E., ACS
LIQUIDATION MODULE) WILL BE UTILIZED TO CALCULATE AND PAY OR BILL
INTEREST THAT IS APPLICABLE UNDER 19 U.S.C. 1505(C).
FIELD OFFICES THAT HAVE OR RECEIVE PROTESTS INVOLVING
REQUESTS FOR PAYMENT OF INTEREST ONLY (19 U.S.C. 1505(C)) SHOULD
ALLOW THESE PROTESTS, IF THE PROTESTS ARE DETERMINED TO BE
TIMELY.
THE DATE OF LIQUIDATION OR RELIQUIDATION (WHICH, ABSENT
INFORMATION TO THE CONTRARY, IS PRESUMED TO COINCIDE WITH WHEN
THE DECISION INVOLVING INTEREST IS MANIFESTED BY
ISSUANCE OF THE REFUND, WITH OR WITHOUT INTEREST) WILL BE
UTILIZED TO DETERMINE WHETHER THE PROTEST REQUESTING A PAYMENT OF
INTEREST WHICH WAS NOT PAID, OR DISPUTING THE AMOUNT OF INTEREST
THAT WAS PAID, IS TIMELY.
5. UNTIMELY PROTESTS: REQUESTS FOR PAYMENTS OF INTEREST ONLY
THE DATE OF LIQUIDATION OR RELIQUIDATION WILL BE UTILIZED TO
DETERMINE WHETHER THE PROTEST REQUESTING A PAYMENT OF
INTEREST IS TIMELY, SINCE, IN THE ABSENCE OF INFORMATION TO THE
CONTRARY, THE DATE OF THE DECISION TO PAY INTEREST IS PRESUMED TO
BE THE SAME AS THE DATE OF THE LIQUIDATION OR RELIQUIDATION
ACTION USING THE ACS LIQUIDATION MODULE.
FIELD OFFICES WILL DENY ALL UNTIMELY PROTESTS INVOLVING
REQUESTS FOR PAYMENTS OF INTEREST. HOWEVER, IF AN UNTIMELY
PROTEST FOR A PAYMENT OF INTEREST IS RECEIVED, AND THE APPLICABLE
RELIQUIDATIONS ARE THE SUBJECT OF A COURT ORDER, PLEASE REFER
THESE CASES TO THE OFFICE OF FIELD OPERATIONS, TRADE COMPLIANCE,
AS THE COURT ORDER MAY BE CONTROLLING. THESE SITUATIONS WILL BE
EVALUATED ON A CASE-BY-CASE BASIS.
QUESTIONS REGARDING THIS NOTICE CAN BE DIRECTED TO LYNN
RODRIGUEZ, ENTRY AND DRAWBACK, AT (202) 927-1962.
1
/S/
PHILIP METZGER