joint appendix - discover columbia law

IIIIIIIIIIIMIIIIIIIIllIIIIIIIIIIIIIMIIIIIIIIIIIIIIIIIIIIIIIIIIMIIllIIIIUSFC2006-1591-05

{EF8747C3-A86C-4B40-B28E-40FOD8C3 EAFD}

{83258} {63-070620 111801}{061207}

JOINTAPPENDIX

WEST/CRS

Volume II

(Pages 168 to 326)

2006-1591

UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRC111T

SAMUEL AARON, INC.,

Plaintiff-Appellant,

V.

UNITED STATES,

Defendant-Appellee.

U._.COU

dUN 7 _ Z,107

J_ HOR_L_

APPEAL FROM THE UNITED STATES COURT OF INTERNATIONAL TRADE

COURT NO. 03-00053, JUDGE GREGORY W. CARMAN

JOINT APPENDIX

Jerome L. Hanifin

Christopher M. Kane

Joel K. Simon

Serko Simon Gluck & Kane LI_ P

1700 Broadway

New York, New York 10019

(212) 775-0055

Attorneys for Plaintiff-Appellaat

JOINT APPENDIX

TABLE OF CONTENTS

Volume II

(Pages 168 to 326)

Document Description

Plaintiff's Exhibit 22: Headquarters Ruling Letter

961466 (April 6, 1999), Protest No:2704-98-100032

Plaintiff's Exhibit 23: Headquarters Ruling Letter

956588 (October 28, 1999), Protest No:3501-93-100383

Defendant's Revised Statement of Undisputed

Material Facts (May 11, 2006)

Defendant's Exhibit A: Declaration of Joseph A.

Disalvo (May 4, 2006)

Defendant's Exhibit B: Declaration of Lawrence

Ryan (May 5, 2006)

Defendant's Exhibit C: Declaration of John

Chmura (May 4, 2006)

Plaintiff's Response to Defendant's Revised

Statement of Undisputed Material Facts

(June 16, 2006) _ !

Plaintiff's Exhibit 24: The F_ee On-Line_

Dictionary of Computing ("FOLDOC") ,;

Definition of a "Script" i 'Ii

j_l ',

Plaintiff's Exhibit 25: The Free on:Line...

Dictionary of Computing ("FOLDO_")I.

Definition of a "Scripting Language_'l '

I [ ' ,

Plaintiff's Exhibit 26: The F_'ee Dict'iona_D ,

Definition of a ,,scripting Lb_tn'guagei' i _I

Defendant's Exhibit A: Supplemental Declaration

of Lawrence Ryan (June 27, 2006)

f

r

ii

A0168

A0179

A0190

A0196

A0200

A0207

A0210

A0217

A0219

A0221

A0223

JOINT APPENDIXTABLE OF CONTENTS

(Cont.)

Volume II

(Pages 168 to 326)

Document Description

Defendant's Exhibit B: Declaration of Edward N.

Maurer (June 29, 2006)

Stipulated Facts

August 11, 2006 Facsimile Transmission from

Jerome Hanifin to Kit Miller, Judge Carman's Law

Clerk, Customs Headquarters January 29, 1999

Memorandum to the Ports; March 2, 1999

Memorandum to the Ports; and Excerpt from

Defendant's Response to Plaintiff's First

Interrogatories, Request for Production, and

Request for Admissions Directed to Defendant

August 14, 2006 Facsimile Transmission from

Jerome Hanifin to Kit Mdler, Judge Carman's Law

Clerk, 1915 and 1992 Versions of Customs'

Bulletin Notice of Entries Liquidated (CF-4333)

Excerpt from Defendant's Memorandum in Support

of Defendant's Cross-Motion for Summary

Judgment and Opposition to Plaintiff?.

August 10, 2006 Hearing- Plaintiffs' Exhibit 1

August 10, 2006 Hearing,Transcript ,I

Defendant's Response'.to plaintiffs P_evised

Statement of Material Facts,(May 11', !2006)

CF-7501-Entry Summa_ for ' .' tEntry No. 368-0056036-3 /

' it !CF-7501 - Entry Summary for

Entry No. 368-0055752-6

qlill

i

P_

A0226

A0227

A0232

A0239

A0243

A0245

A0248

A0310

A316

A317

JOINT APPENDIXTABLE OF CONTENTS

(Cont.)

Volume II

(Pages 168 to 326)

Document Description_

CF-750l - Entry Summary for

Entry No. 368-0056014-0

CF-7501 - Entry Sumthary for

Entry No. 368-0056240-1

CF-7501 - Entry Summary for

Entry No. 368-0056247-6


Entry No 368-0056371-4


Entry No. 368-0056356-5


Entry No. 368-0056310-2


Entry No. 368-0056409-2

CF-7501 - Entry Summa_ forEntry No. 368-0056510-7

A318

A319

A320

A321

A322

A323

A324

A325

,p

't

EXHIBIT 22

HEADQUARTERS RULING LETTER 961466

(APRIL 6, 1999), PROTEST 2704-98-100032

' I

'1

0168

HEADQUARTERS RULING LETTER 961466(APRIL 6, 1999), PROTEST 2704-98-100032

0169

HQ 961466

April6,1999

CLA-2 RR:CR:GC 961466 gah

CATEGORY: Classification

TARIFF NO.: 8528.21.7000

Port DirectorU.S. Customs Service

300 S. Ferry StreetTerminal Island, CA 90731

RE: Protest 2704-98-100032

Dear Sir:

This is a decision on protest 2704-98-100032 filed by counsel on behalf ofFujitsu General America, Inc. on January 21, 1998, against your decision regarding theclassification under the Harmonized Tariff Schedule of the United States (HTSUS) ofplasma display monitors.

FACTS:

CLASSIFICATION

d

The merchandise has been described as 42 inch Color Plasma Display Monitors

(model PDS4201 U-H); capable of displaying computer_ images through connection to apersonal computer (PC). As a PC monitor, the plasma display monitors can be used todisplay automatic data processing (ADP) information in presentations to groups ofpeople. As video monitors, the units accept signals from video equipment such asvideo cassette recorders (VCRs), laser disc players and camcorders.

The monitor has a screen size of 42 inches or 105.6 cm wide on the diagonal,with a 852 x 480 pixel configuration, with a Video Graphics Arr&y (VGA) connectorwhich is compatible with VGA, SVGA and MAC PC's standards. Its pixel resolution is

852 x 480 pixels. No dot pitch is given. The monitors have a depth of 15 cm and aweight of 87 pounds, or 39.5 kg. The audio input is through L &R RCA type connectorsfor built-in stereo speakers, 2w each. It has a composite BNC connector or S-video

and is compatible with NTSC, PAL and SECAM standards for television viewing. It hasa control panel on the monitor as well as on a remote. The technology allows viewing

0170

images on the screen in a breadth of 160 degrees without seeing any image distortion.It can display images delivered from other apparatus as well, in particular, liquiddisplays and digital video discs. It can disseminate information as an indoor advertisingand bulletin board device. It is useable in multimedia conferencing and presentations.

TIMELINESS OF RELIQUIDATION AND PROTEST

As to entry 110-xxxx8703, it is undisputed that the reliquidation and protest weretimely. Entry 110-xxxx2789 was made on March 25, 1997, and liquidated on July 11,1997, with no change. According to Customs Automated Commercial System (ACS),the create date was March 24, 1997. According to a Notice of Action, CF 29, datedOctober 8, 1997 (including a date stamp), on October 8, 1997 a manual Bulletin ofEntries Liquidated (CF 4333) was posted at Terminal Island (hereinafter referred to asthe "reliquidation CF 29"). The reliquidation CF 29 indicates that the date of entry andimportation was March 24, 1997, and specifically ideritifies the subject entry number.

The file includes a copy of a CF 4333, dated by hand and date stamped october 8,1997. The CF 4333 identifies the subject entry, the importer and in the remarks columnstates "Manual; Liq Rate Advance." The date of entry is listed as March 24, 1997.

A second CF 29, dated October 8, 1997 identifies the entries and entry dates as"various," and gives notice of a rate advance having been made to .re-classify themerchandise from subheading 8471.60.4580, HTSUS, to subheading 8528.21.7000HTSUS (hereinafter referred to as the "classification CF 29"). The explanation sectionof the classification CF 29 identifies the subject entry among others, to which the noticeapplies. The explanation section also states that the 'protestant had been previouslysent a proposed Notice of Action dated July 11, 1997, to which no response wasreceived.

The file includes a copy of the July 11, 1997 CF 29 which refers to an entrywhich is not the subject of this protest, and which gives notice of a proposed rateadvance of the entered merchandise from subheading 8471.60.4580, HTSUS, tosubheading 8528.21.7000, HTSUS. The notice has a handwritten note indicating thatthe importer's response date is extended to September 9, 1997, as according to acover fax sheet sent to the importer, the initial July 1 !, 1997 CF29 was "apparently"

never received by the importer. The cover fax sheet states that the CF 29 of July 11,1997 is being sent pursuant to a conversation with the fax addressee_ The file also

contains a September 22, 1997 CF 29, and an amended September 22, 1997 CF 29,which state that rate advance action has been taken by Customs With respect to fourdifferent entries, not including the subject entry.

The ACS indicates that the date of reliquidatio_ of the subject entry was October24, 1997. In a telephone conversation of February 23, 1999 with the entry specialistthat prepared the reliquidation CF 29, a manual liquidation is done when there is lessthan two weeks time between the date the entry must be liquidated or reliquidated and

the date the liquidation or reliquidation information is submitted to the entry specialist.

0171

In those cases, the date on ACS reflects the date on which the entry would have

automatically liquidated or reliquidated based on the date the information is submittedto the entry specialist, had the liquidation or reliquidation not been performed manually.The entry specialist stated that the reliquidation CF 29 is a document that is routinely

prepared when an entry is manually liquidated or reliquidated.

The protestant takes the position that the reliquidation of the entry Occurred onOctober 24, 1997 and was untimely under 19 U.S.C. §1501, as it occurred more than90 days after the pdor, odginal, liquidation. The protest of the reliquidation and the

classification was filed on January 21, 1998.

ISSUE:

As to the classification issue, is the plasma display monitor properly classified inheading 8471 as an ADP monitor, in heading 8528 as a video monitor, or in heading8543 as electrical machines and apparatus, having individual functions, not-specified orincluded elsewhere in chapter 85?

As to the timeliness issues, was the reliquidation of entry 110-xxxx2789 timely, inaccordance with 19 U.S.C. 1501 and was the protest itself timely filed under 19 U.S.C.1514?

LAW AND ANALYSIS:

CLASSIFICATION

Classification of merchandise under the Harmonized Tariff Schedule of the

United States (HTSUS) is in accordance with the General Rules of Interpretation (GRI).GRI 1 provides that classification shall be determined according to the terms of the

headings and any relative section or chapter notes. Merchandise that cannot beclassified in accordance with GRI 1 is to be classified in accordance with subsequentGRI.

I

Section XVI, legal note 3, HTSUS, requires in pertinent part that compositemachines and other machines adapted for the purpose of performing two or morecomplementary or alternative functions are to be classified as if consisting only of thatcomponent or as being that machine which performs the principal function. The plasmamon tors are such machines, as they perform ADP and video monitor functions. Forthe principal function of the monitors, we turn to the headings under consideration.

!Heading 8471, HTSUS, covers in pertinent part units of automatic data

processing machines. Chapter 84, note 5 (B)(a-c) sets forth the technical requirements

that a unit must meet in order to fall within the scope of heading 8471. The FujitsuPlasmavision specifications indicate that it can be used in an ADP system, but noevidence is given that it is solely or pdncipally used as such. Counsel has submitted

0172

advertising literature indicating that the monitors have two uses, as monitors for ADPand monitors for video. Factors tending to support a principal use are well establishedand include channels of trade, environment of sale such as advertisements, andrecognition of use in the trade. See, e.g., HQ 960354, dated October 22, 1998•However, counsel provides no evidence of a principal use. Thus, the gas plasma

monitor fails to meet the terms of note 5(B), and classification in heading 8471 isprecluded• Further, section XVI, legal note 3 fails to resolve classification, becausethere is no defined principal function.

Chapter 84, note 5 (E) states that machines performing a specific function otherthan data processing and incorporating or working in conjunction with an ADP machineare classified in a heading appropriate to their respective functions or failing that, inresidual headings• This note contemplates that there are machines that have dualfunctions but have no principal function and can be used in both ADP and anothersetting•

Heading 8528, HTSUS, covers in pertinent part video monitors. As noted above,

the subject monitor is capable of displaying signals from any video source in any videostandard. It allows for the viewing of images on the screen in a breadth of 160 degreeswithout seeing any image distortion. Counsel claims that the monitor is used but notprincipally used as a video monitor. Principal use as a video monitor is not required forclassification as such in heading 8528.

Counsel argues that given their dual functions classification of these goods inheading 8543 must be considered, and cites rulings on flat panel displays. Customshas classified certain flat panel displays in heading 8543, which provides for electricalmachines and apparatus, having individual functions, not specified or includedelsewhere in this chapter. HQ 960634, dated June 27, 1997• In that ruling, the goodscould not function as video monitors, and hence were not included within heading 8528.

The rulings cited by counsel in support of heading 8543 are not relevant to how themerchandise at issue functions, nor the legal analysis that applies.

The goods meetlthe terms of heading 8528, are specified and inclu_led therein,and at GRI 1, are therefore properly classifiable in heading 8528 as video monitors.Given that heading 8543 is discarded for not describing the merchandise, _onsideration

of subdivisions within that heading cannot be reached.I

We note that counsel claims that the Information Technology Agreement (ITA)• I . ' J .... 1

supports consideration of heading 8543• Presldentaal Proclamation No. 70111, 62 FR35909 (1997). In pertinent part, the Harmonized Tariff Schedule was amended to• . ) o • .

implement the ITA.wlth subheading 8543•89•9200. That provision covers, inter alia, fiat• ' F _ . I .

panel displays other than,for articles of heading 8528. The language of this provisionrecognizes that flat panel displays which can display video signals, such as the instant

monitors, are included in heading 8528. The very provision in which counsel wouldhave us classify its goods was drafted in recognition of the multiple functions of flat

0173

panel displays, and that their classification depends on their technical capabilities.

We find that the subject merchandise is specifically provided for in heading 8528as a color video monitor with a flat panel screen, not incorporating video recording orreproducing apparatus, and with a video display diagonal exceeding 33.02 cm.

RELIQUIDATION AND PROTEST

The reliquidation of an entry is a protestable matter under 19 U.S.C. §1514(a)(5).Under 19 U.S.C. §1514(c)(3), a protest must be filed within 90 days after a notice of

liquidation or reliquidation. Under 19 U.S.C. §1501, Customs may reliquidate aliquidation made under 19 U.S.C. §1500, or any reliquidation made under section 1501,in any respect, '_vithin ninety days from the date on which notice of the originalliquidation is given or transmitted to the importer, his consignee or agent." (Emphasisadded). The statute provides that notice of such reliquidation shall be given ortransmitted in the manner prescribed for original liquidations under 19 U.S.C. §1500(e).The provision for notice of original liquidation requires Customs to "give or transmit,pursuant to an electronic data interchange system, notice of ... liquidation to theimporter, his consignee, or agent in such form and manner as the Secretary shall byregulation prescribe."

Therefore we must determine both for purposes of timeliness of the protest, andtimeliness of the reliquidation, the date of notice of the reliquidation.

It is well settled that the only notice of liquidation that is statutodly mandated isbulletin notice. See Goldhofer Fahrzeu.qwerk GmbH & Co. v. United States, 13 CIT 54,706 F. Supp. 692 (1989), aff'd, 885 F.2d 858 (Fed. Cir. 1989); Tropicana Products, Inc.v. United States, 13 CIT 390, 395, 713 F.Supp. 415 (1989). The bulletin notice is theonly effective notice of liquidation and the courtesy notice is predictive only. SSR v.Roble._..__s,18 C.I.T. 475, 476, 853 F. Supp. 451 (1994). The Court of Intemational Trade

has held that the importerlhas the burden to check for posted notices of Ik_uidation andto protest in a timely manner. See, Juice Farms, Inc. v. United States, 18 CIT 1037,1040 (1994) (stating that although Customs erroneously liquidated entries_ protestant

• [ .

had no relief to protest after the running of 90 day periods after the posting of the

bulletin notices of liquidation); Penrod Drillin.q Co, v. United States, 13 CIT 1005, 1009,727 F.Supp. 1463 (1989), :reh'a denied, 14 C.I.T. 281,740 F.Supp. 858 (1990), affd.925 F.2d 406 (Fed. Cir. 1991). In addition, a presumption of regularity attaches to theacts of govemment officials. See, e._.q..,Intemational Car.qo & Surety Ins. C_o.,v. Uni{edStates, 15 CIT, 544, 779 Id. Supp. 174, 177 (1991). i

The requirements for bulletin notices of liquidation are set forth in Customs

Regulations 159.9 (19 CFI_ 159.9):

(a) Bulletin notice of liquidation. Notice of liquidation of formal entries

shall be made on a bulletin notice of liquidation, Customs Form 4333.

0174

(b) Posting of bulletin notice. The bulletin notice of liquidation shall beposted for the information of importers in a conspicuous place in thecustomhouse at the port of entry (or Customs station, when the entrieslisted were filed at a Customs station outside the limits of a port of entry),or shall be lodged at some other suitable place in the customhouse insuch a manner that it can readily be located and consulted by allinterested persons, who shall be directed to that place by a notice

maintained in a conspicuous place in the customhouse stating wherenotices of liquidation of entries are to be found.

(c) Date of liquidation--(1 ) Generally. The bulletin notice of liquidationshall be dated with the date it is posted or lodged in the customhouse forthe information of importers. This posting or lodging shall be deemed thelegal evidence of liquidation. For electronic entry summaries, the date ofliquidation will be the date of posting of the bulletin notice of liquidation.Customs will endeavor to provide the filer with electronic notification ofthis date as an informal, courtesy notice of liquidation•

The regulations do not require an electronic notice. The statute on liquidationprocedure, 19 U.S.C• §1500, was amended by section 638, title VI - CustomsModernization, Pub. L. No. 103-182, the North American Free Trade AgreementImplementation (NAFTA) Act (107 Stat. 2057), enacted December 8, 1993, to allowCustoms to give notice of liquidation pursuant to an electronic data interchange system.House Report 103-361,103d Cong., 1st Sess., 137 (1993), describes that the

amended provision "authorizes Customs to give or electronically transmit notice of

liquidation in such form and manner as is prescribed by regulation." The House Report,at page 137, explains that the amendment would allow Customs to utilize electronicmeans to transmit notices of liquidation. SimUarly, the Senate Report for the NAFTAAct (S. Rep. 103-189, 103d Cong., 1st Sess., 88-89 (1993)), states that the amendmentupdates the law to 'acknowledge that information and data "may" be electronically

u ' • _ i,

transmitted, and authonzes Customs to give or transmit notice of liquidation

electronically. The legislat!ve history expresses the same intention with respect tonotice of reliquidation, for the amendment of 19 U.S.C. §1501, which was amended by

L

section 639 of the NAFTA• See House Report, at 138; Senate Report at 89. Nothing inthe legislative history indicates that notice of the liquidation' must be given by electronicdata. The statute provides" that notice of liquidation will be provided as prescribed byregulation.

The applicable regulations have not been revised since the amendment of theI

statute. We find that the existing regulation is not inconsistent with the amended• L I

statute, as it tmplements the statute by specifying how notice of liquidation is to be

given. There is no requirement that an agency must re-promulgate a pre-existingregulation that is not inconsistent with a subsequent statute, in order for the regulationto remain effective. The relationship between regulations and statutes, and annulment

0175

of regulations upon enactment of statutes is stated as follows:

Administrative rules must conform to the laws enacted by the legislature.

.,°.

A regulation, valid when promulgated, becomes invalid upon the

enactment of a statute in conflict with the regulation. However, anadministrative regulation will not be considered as having been impliedly

annulled by a subsequent act of the legislature unless the two areirreconcilable, clearly repugnant, and so inconsistent that they cannothave concurrent operation. Moreover, implied repeal of a regulation by astatute is disfavored, especially where the regulation has been approvedby the legislative regulation review committee.

If a regulation has been in existence for a substantial period of time andthe legislature has not sought to override the regulation, this fact, althoughnot determinative, provides persuasive evidence of the continued validityof the regulation.

2 Am. Jur. 2d Administrative Law §227 (1994) (emphasis added). We do not find thatthe statute is in conflict with the regulation, irreconcilable with the regulation, clearlyrepugnant or so inconsistent that the statute and regulation cannot have concurrentoperation.

In this case, according to the reliquidation CF 29, and the date of the bulletinnotice, notice of the reliquidation was given on October 8, 1997. The fact that the dateof reUquidation in ACS is October 24, 1997, does not mean that the bulletin notice wasnot posted on October 8, 1997. According to a Customs official, ACS is notautomatically updated with the date of a manual bulletin notice, and the date of thenotice is not verifiable by ACS.

In Tropicana Products, Inc. v. United States, supra, the plaintiff claimed that thedate of liquidation it had been given in a telephone conversation, should be considered

the date of liquidation. Customs asserted that the bulletin notice had been posted inaccordance with 19 CFR 159.9(b), and the court cited the presumption of regularity tothe acts of government officials and stated that the plaintiff had not met its burden of 'proof to rebut the presumption by competent evidence. 13 CIT at 393. The courtstated that:

Plaintiff has' not shown that any of its agents or representatives went to

the customhouse in Tampa, and were unable to find the bulletin notice ofliquidation for the entries in question. Plaintiff has not offered any

evidence to show that bulletin notice was not posted in the mannerprescribed by the Customs Regulations.

Id. Similarly, in this case, Customs has evidence, in the form of the October 8, 1997 CF

0176

4333, that the liquidation occurred on October 8, 1997. The protestant has failed tooffer any evidence that the bulletin notice was not posted as required. Although thedate of entry on the CF 4333, is actually the create date in the ACS entry record, asopposed to the ACS date of entry, the entry number is correct, as is the identity of theimporter. Evidence relied upon by the court in Tropicana made reference to the entrynumbers and identity of the importer included in the posted notice, and did not refer tothe date of the entry. It was stressed in Goldhofer, supra, 13 CIT at 58, that it is theplain duty of a prudent importer to monitor the customhouse bulletin in order todetermine whether or not liquidation has been made. See also, Juice Farms, Inc. v.United States., supra. In addition, although it is not relevant to the issue of whether thebulletin notice served as notice to protestant, the protestant had been on notice that arate advance was contemplated for the subject merchandise, by the CF 29's of July 11,and September 22, 1997, and the conversation with the importer on or before August20, 1997.

We conclude that the reliquidation took place on October 8, 1997 and that noticewas properly given in accordance with 19 CFR 159.9. Therefore, the reliquidation wastimely made within 90 days from the date of notice of the original liquidation.Furthermore, the protest as to the entry at issue is untimely as it was filed more than 90days after notice of reliquidation. Without a timely protest the liquidation of the entry isfinal and conclusive. Juice Farms, supra, 18 CIT at 1040. Based on the foregoing theprotest should be denied as untimely, and on the merits on the issue of the timelinessof the reliquidation.

HOLDING:

The reliquidation was timely, within 90 days from the date of notice of the odginalliquidation, and proper notice was provided to the importer. The protest as to entry 110-xxxx2789 is untimely as it was filed more than 90 days after notice of reliquidation.

The gas plasma display monitors are classifiable in subheading 8528.21.7000,which provides for video monitors, color, with a fiat panel screen, other, other, and

carries a 5 percent ad valorem duty rate.

The protest should be denied. In accordance with Section 3A(11 )(b) of Customs

Directive 099 3550-065, dated August 4,, 1993, Subject: Revised Protest Directive, youare to mail this decision, together with the Customs Form 19, to the protestant no laterthan 60 days from the date of this letter. Any reliquidation of the entry or entries inaccordance with the decision must be accomplished prior to mailing the decision.

iI

Sixty days from the date of the decision, the Office of Regulations and Rulingswill make the decision available to Customs personnel, and to the public on theCustoms Home Page on the World Wide Web at www.customs.ustreas.gov, by meansof the Freedom of Information Act, and other methods of public distribution.

01 Z?

Sincerely,

John Durant, Director

Commercial Rulings Division

0178

EXHIBIT 23


(OCTOBER 28, 1999), PROTEST NUMBER3501-93-100383

I

t

0179


(OCTOBER 28, 1999), PROTEST NUMBER3501-93-100383

0180

HQ 956588

October 28, 1999

CLA-2 RR:CR:TE 959588 RH

CATEGORY: Classification

TARIFF NO.: 6402.19.9030; 6402.19.1020; 9902.64.02

Mr. William Knoblauzh

Area Director

U.S. Customs Service

330 Second Avenue South

Suite 560

Minneapolis, MN 44401

RE: Protest Number 3501-93-100383; footwear; roller skates

Dear Mr. Knoblauzh:

This is in reply to a memorandum from your port dated June .15, 1994, regarding the Application

for Further Review of Protest (AFR) 3501-93-100383. Meyer Customs Brokers filed the AFR

covering 19 entries, on behalf of Rollerblade, Inc., against the classification of four styles of in-

line skate boot shells with removable textile liners. The law firm of Powell, Goldstein, Frazer &

Murphy filed a Memorandum of Fact and Law in Support of Protest.

Initially, we note that the lead protest (number 3501-93-100425) for the merchandise in question

is referenced as Headquarters Ruling Letter (HQ) 958590, which we mailed to you at the sametime we mailed this letter.

FACTS:

The merchandise under protest consists of four models of pol3_arethane shells used solely in the

manufacture of in-line roller skates. The shells consist of a molded polyurethane upper and a

removable, padded textile and/or removable vinyl liner. The boot flames have plastic uppers and

bottoms and extend above the wearers ankles. They are designed to be worn with textile booties

whach are exposed through holes in the plastic boot frames arid above the top of the shaft. The

first model is the Special Make Up (SMU). It has a black p!astic shell with 12 eyelets and one

plastic rachet-and-buclde type strap. It also has a black liner with a purple plastic tongue. The

Mondoblade has a black plastic shell with 16 eyelets and no closure strap, and a white liner with

0181

-2-

a white plastic tongue. The Aeroblade consists of a metallic-looking gray plastic shell with no

eyelets and three purple rachet-and-buckle type straps and a dark gray liner. The last model,

- Coolblade, also has a metallic-looking gray plastic shell with no eyelets and three rather-and-

buckle type straps which are green, red and yellow. It also has a dark gray liner.

Customs liquidated all of the entries between May 28, 1993 and August 6, 1993, under

subheading 6402.19.9030 of the Harmonized TariffSehedule of the United States Annotated

(HTSUSA), which provides, in part, for sports footwear with outer soles and uppers of robber or

plastics, not having uppers of which over 90 percent of the external surface area is rubber or

plastics. Thereafter, the protestant timely filed this action on August 17, 1993.

Based on a case pending before the Court of International Trade (CIT) at the time the instant

protest was filed, Rollerblade Inc. v. United States, Docket Number 91-12-00981, 112 F.3d 481

(CIT 1997), Customs suspended action on the protest pending the court=s decision. Initially, the

protestant=s primary argunaent was that the merchandise was classifiable as Aroller skates and

parts and accessories thereo_ under subheading 9506.70.2000, HTSUS, and not Afootwear_= of

any kind. In Rollerblade, the court addressed whether the footwear provisions under the Tariff

Schedule of the United States (TSUS) and the HTSUSA were broad enough to encompass roller

skate boots imported without wheels. For purposes of this ruling, we will only discuss the

court=s decision as it pertains to the HTSUSA.

In Rollerblade, the merchandise consisted of rigid, molded plastic (polyurethane) boots which

included a removable, padded vinyl liner. The bottom of each boot was molded to accommodate

the permanent attachment of wheel frames and wheels. The court rejected plaintiff-appelle_-s

claim that the boots were classifiable as roller skates and parts thereof in subheading 9506.70.20,

HTSUSA, determining that Afootwear_= under the HTSUSA encompasses shoes of the type used

for attachment to skates, while the Aroller skate parts_ provision covers plates, blades andwheels.

In light of the recent court decision, the protestant abandoned its claim that the skate boots are

classifiable in chapter 95, HTSUSA, and now raises the following grounds on which the pending

protests can be approved:

1. All but one of the entries were made BEFORE December 31, 1992, and therefore

qualify for duty-free entry under heading 9902.64.02, which suspended the duty on

Askating boots used in the manufacture of in-line roller skates__ (provided for under

subheading 6402.19.10) through December 31, 1992.1

2. All of the entries covered by p_otest 3501-93-100383 were unlawfully reliquidated by

Customs Service well beyond 90 clays after the original liquidations.

1 Customs records reflect that four entries were made after December 31, 1992.

0182

-3-

3. Minneapolis Customs now concedes that most of the models have external surface

areas of more than 90 percent rubber or plastics.

A member of my staffmet with counsel on August 25, 1994, and again on September 18, 1998,

to discuss the issues in this case. At the last meeting we afforded counsel an opportunity to

submit additional information to support the AFR, which we received on April 1, 1999.

ISSUES:

1. Do the boot frames/shells qualify for duty-free entry under subheading 9902.64.02?

2. Were the entries covered by protest 3501-93-100425 Aunlawfully reliquidated_=?

3. Is the external surface area of the uppers of the imported polyurethane shells more than 90

percent rubber or plastics?

LAW AND ANALYSIS.

Classification of goods under the HTSUSA is governed by the General Rules of Interpretation

(GILls). GRI 1 provides that classification shall be determined according to the terms of the

headings and any relative section or chapter notes, taken in their appropriate order.

Customs liquidated the four styles in this protest under subheading 6402.19.9030, of the 1993

HTSUSA, which provides, in part, for other footwear with outer soles and uppers of rubber or

plastics.

Counsel argues the skate boots at issue are classifiable in subheading 6402.19.1020, HTSUSA,

as other sports footwear having uppers of which over 90 percent of the external surface area is

rubber or plastics.

Note 3(a), Chapter 64, states that the terms Arubbe_ and Aplastics_ include Awoven fabrics or

other textile products with an external layer of rubber or plastics being visible to the naked eye.

Note 4(a), Chapter 64, reads:

The material of the upper shall be taken to be the constituent material having the greatest

external surface area, no account being taken of accessories or reinforcements such as

ankle patches, edging, ornamentation, buckles, tabs, eyelet stays or similar attaehments._I

0183

-4-

The record contains a Ctlstoms laboratory report for five of the samples which reflect the

following findings •

Model Name Rubber or Plastics, By Area

SMU 96 %

Mondoblade 91%

Aero-Blade 87%

Cool-Blade 89%

Based on these laboratory analyses,we agree with the protestant that the SMU and Mondoblade

have an external surface area of the upper (ESAU) which is over 90 percent rubber or plastics

and that those models of skate boots are classifiable in subheading 6402.19.1020, as claimed.

The Aeroblade and Coolblade models do not have eyelet stays• Counsel states that those models

have liners that protrude above the cuff of the shell and portions of the liner that are visible

through ventilation apertures. Since the liner is covered with a vinyl material, counsel argues

that it must be included in calculating the percentage of the external surface area of the uppers

consisting of rubber or plastics.

Finally, counsel contends that the exposed portion of the tongue must also be included in

calculating the percentage of the external surface area of the uppers consisting of rubber or

plastics. On the Aeroblade and Coolblade models, counsel claims that the tongue is actually a

continuous part of the plastic molded shell and cannot be distinguished between the tongue

portion of the polyurathane shells from the remainder of the upper.

In order to assist importers in better understanding classification requirements for footwear,

Customs published AFootwear Definitions= in T.D. 93-88, 27 Cust. B. & Dec. No. 46, on

October 25, 1995. The definitions serve merely as guidelines and are not to be construed as

Customs rulings. The definition of AExternal Su_face-__ reads:

] • °

1. The Aexternal surface-___ of the upper m, m general, the outside surface of what

you see covering the foot (and leg, if applicable) when the shoe is worn.

A. It does not include:

1. Accessones and remforcementslsuch as ankle patches, edging, ornamentataon,(i.e., tassels, pompons, or braids), 1Suckles, tabs, eyelet stays, slide fasteners, or

similar attachments. Other examples mclude the leather pieces sewn on the top of• ]

the lower part of the upper m basketball shoes, and Afilled-m__ embroidery.

which'faces'the2. The upper=s lining, foot.

3. The sock lining that the foot rests on.

0184

-5-

4. The tongue.

B. It does include:

1. Small holes in materials. The holes count as if they were filled with the

material which surround them.

4. Underlays, which are the outer side of lining that can be seen through large

holes in the uppers. Any hole bigger than a collar button is surely Alarge-__~; one

smaller than a pin head is surely not Alarge__~; In between, it depends on the

materials, shape spacing etc.

In Headquarters Ruling Letter (HQ) 955541, dated May 18, 1994, Customs addressed the

classification ofa man=s basketball shoe with a removable liner• Although the shoe did not

qualify for classification in subheading 6402.91.40, because it had a foxing-like band, the ruling

is relevant in that we stated that:

When the Aframe_ and the liner are imported together, the external surface area of the

upper of the complete shoe include all of the textile areas where the textile liner is the

only material covering the foot• Again, the piastre oval, which we consider to be the

partial equivalent of a tongue is not counted as ESAU or as accessories or reinforcements.

In HQ 955705, dated March 1, 1994, Customs classified a man=s high top, lace-up athletic shoe

Afrarne-z-_-with a unit-molded plastic sole and a plastic upper i.naported with removable textile

bootie-like liners with applied textile soles in stlbheading 6402.91.70, because the textile portion

comprised at least 10 percent of the external surface area ofth. e upper. The external surface area

included a narrow, textile topline trim on the sh'ge , and textile where the bootie shows above the

topline and the tongue, and where it shows throiagh the three cutouts in the lateral side of the

upper, ti

It is Customs position that the tongue or' flap of'footwear which extends upward from the top line

of the shoe and is visible and tactile is iricluded in the calculation'of the exterior surface of the

upper. T.D. 84-59, 18 Cust. B. & Dec. 166 (January 11, 1984) '. Ithas consistently been Customs• • • ' I ,, • '.. .

pomtlon that the exterior surface area of Se upper is whatever is wmble and tactile on the surface

excepting such things as buttons, strips and other loosely attached appurtenances. In those cases

0185

-6-

where the tongue was held not to be part of the exterior surface area of the upper, it was on a

plane lower than a portion of the upper and was partially or wholly covered by laces and eyelet

facings or strays. Id.

In this case, we agree with counsel that the portions of the liner which are exposed through the

holes in the boot frame and above the shaft and the exposed portion of the tongue which extends

upward from the top line and is visible and tactile are included in the ESAU. With this in mind,

a Customs laboratory examined both the Aeroblade and Coolblade models and determined that

the textile portions accounted for more than 10 percent of the ESAU.

Customs reviewed the laboratory reports and methodology used to determine the ESAU and

concluded that Customs methodology and test results were Aacceptable._- The report reads, in

pertinent part as follows:

The subject footwear is constructed chiefly of a hard molded plastic exterior with a textile

lIner. The difficulty in the analysis of this type of footwear is that the molded plastic

cannot be made to lie flat in two pieces for analysis, which is the conventional way to

prepare the sample in order to calculate the ESAU according to the U.S. Customs

Laboratory Method for Footwear. According to your cover memorandum, the

protestant---s counsel has suggested that the Customs laboratory measurement was

Ainaccurate due to improper methodology,_ and a copy of the methodology used by the

protestant=s private testing service was submitted for our review. The methodology

involves the use of a AConTact Paper technique_ = for determining ESAU.

It is well settled that the methods of weighing, measuring, and testing merchandise used by

Customs officers and the results obtained are presumed to be correct. United States v. Gage

Bros, 1 Ct. Cust. Appls. 439, T.D. 31503; United States v. Lozano, Son & Co., 6 Ct. Cust.

Appls. 281, T.D. 35506; Draper & Co., Inc. v. United States, 28 Cust. Ct. 136, C.D. 1400.

However, this presumption may be rebutted by showing that such methods or results are

erroneous. Sears, Roebuck & Co. v. United States, 3 Ct. Cust. Appls. 447, T.D. 33035; Gertzen

& Co. v. United States, 12 Ct. Cust. Appls. 499, T.D. 40697; Pastene & Co., Inc. v. United

States, 34 Cnst. Ct. 52, C.D. 1677.

In Universal Electronics, 'Inc. v. United States, 113 F. 3d 488 (Fed Cir. 1997), which reiteratesI ] •

the holding in Goodman Manufacturing L.P.v. United States, 69 F..3d 505 (Fed Cir. 1995) that

the presumption of correctness carrie . .

s no force as to questions of law, the court stated that the presumption of correctness is:

i

[A] procedural device that is d_signed to alloc_ite, between _e two litigants to a lawsuit

the burden of producing'evidence in sufficient quantity. Specifically, the importer must

produce evidence (burden of production portion of the burden of proof) that deaaaonslxates

by a preponderance (the burden of persuasion portion of the burden of proof) that

0186

-7-

Customs classification decision is incorrect. The presumption of correctness certainly

carries force on any factual components of a classification decision such as whether the

subject imports fall within the scope of the tariff provision, because facts must be proven

via evidence. (Emphasis in original).

Even if we assume, arguendo, that the independent laboratory reports rebut the presumption of

correctness of the Customs laboratory reports, the protestant did not prove by a preponderance of

the evidence that the methods used by Customs or the results obtained in its reports were

erroneous. The protestant failed to reference any errors made by the Customs laboratory or to

prove that the methods used or results obtained by the independent laboratory were more reliable

or accurate. Accordingly, the Aeroblade and Coolblade models are classifiable under subheading

6402.19.9030, HTSUSA.

Next, we will address counsel=s claim that the boots qualify for duty-free entry under subheading

9902.64.02, HTSUSA. At the time of entry in 1992, that provision covered ASkating boots for

use in the manufacture of in-line roller skates (provided for in subheading 6402.19.10). Articles

qualifying for that provision were duty free.

The court in Rollerblade was sympathetic to the importer=s situation, noting that the imposition

of tariffs on the in-line roller skate boots while not imposing tariffs on the finished in-line roller

skates puts companies like Rollerblade who import the boots and assemble the outfits in the

United States at a competitive disadvantage referred to as tariff inversion. Thus, the court noted

that the Committee approved a temporary suspension of the duty on boots without skates

attached, provided the boots are actually used in the manufacture of miler skates and are entered

within the effective dates of the temporary suspension. Accordingly, the SMU and Mondoblade

models which are classifiable in subheading 6402.19.1020, HTSUSA, are eligible for duty-free

treatment under subheading 9902.64.02, HTSUSA.

Finally, counsel claims that some of the entries in question were Aunlawfully reliquidated._

Section 501 of the Tariff Act of 1930, as amended, 19 U.S.C. 1501, and action 173.3 of the

customs Regulations, 19 CFR 173.3, authorize the port director to reliquidate entries voluntarily

within 90 days from the date on which notice of the original liquidation was given to the

importer, his consignee, or agent. The purpose of voluntary reliquidation is to enable Customs to

correct errors in the appraisement, classification, liquidation, 6r reliquidafion of the merchandise

within the specified time period. Prior to the enactment of this provision, some of these issues

could only be resolved in court. H.R. Rep. No. 91-267, 91st Cong., 2nd Sess., reprinted in 1970

U.S. Code Cong. & Admin. News 3188, 3212. More than one voluntary reliquidation is

permitted under this section. However, no adjustments may be made more than 90 days after

notice of the original hquidation.

0187

-8-

In addition to claiming that the liquidated classification by Customs Minneapolis is incon'ect, the

protestant claim that legal notification of the liquidation was not given. Upon review of the

record, we find that all but four of the subject entries were red-lined, manually reliquidated, and

posted within 90 days fi'om the date of the original liquidation, as set forth under 19 CFR

173.3(a).

According to 19 CFR 159.9(b), the legal notice of liquidation (including reliquidation) for entries

is the posting by Customs of the ABulletin Notice of Entries Liquidated_=_= (bulletin notice) in a

conspicuous place in the customhouse at the port of entry. The bulletin notice of liquidation on

Customs Form (CF) 4333 is the only required notice. See 19 CFR 159.9(a). The courts have

stated that A[n]otice of liquidation is intended to apprise importers of any action which may

affect their interest, and to afford them opportunity to secure administrative and judicial review._

Goldhofer Fahreugwerk GmbH & Co. v. United States, 13 CIT 54;, 706 F. Supp. 892, aff--d 885

F. ed 858, reh=g denied, suggestion for reh=g declined, cert. Denied 110 S. Ct. 1946 (1989). See

also Tropicana Products, Inc. v. United States, 713 F. Supp. 415, 419 (1989).

Applied here, the reliquidation that was posted at the customhouse was the only legal notice of

reliquidation. The follow-up notice that appeared in ACS did not amount to notice of a

subsequent reliquidation. Due to limitations in the computer system, ACS does not reflect the

date of the reliquidation that was posted in the bulletin notice. The Aliquidation date_ in ACS is

simply the billing date.

It is the practice and policy of the Minneapolis Port to post all bulletin notices in accordance with

19 CFR 159.9(b). Government officials are entitled to a presumption that their duties are

performed in the manner required by law. Star Sales & Distributing Corp. v. United States, 10

CIT 709, 710, 663 F. Supp. 1127, 1129 (1986). However, it is not only presumed that Customs

Minneapolis posted a bulletin notice of reliquidation for 15 of the subject entries within the 90-

day period mandated by the statute, but a search of Customs records confirms that these entries

were liquidated within the 90-day period.

The file reflects that with the exception of four entries, 15 entries were timely red-lined,

manually liquidated and posted on the ABulletin Notice of Entries liquidated_- in the

Minneapolis Port within the 90-day period. This posting is deemed the legal evidence of

liquidation. Thus, Customs obligation was met once it posted the required offline liquidation

bulletin notice. The courts have states that A[importers bear the burden of exam'ming all notices

posted in customshouse to determine whether its goods have been liquidated...= Penrod

Drilling Co. v. United States, 727 F. Supp. 1463, reh=g dismissed, motion to set aside dismissed,

740 F. Supp. 858 (1989). It is also well-settled law that the importer of record has the obligation

to check the bulletin of notice of liquidations posted in the customhouse at the port of entry to

determine the date of liquidation and to preserve the right to protest. See Tropicana Products,Inc. v. United States.

0188

-9-

HOLDING:

The four entries which were not red-lined will be allowed by Customs. The protest should be

denied in full as to the remaining 15 entries. Customs denial of the request for reliquidation of

the 15 entries that were red-lined, manually liquidated, and posted in tlhe bulletin notice,

pursuant to 19 CFR 173.3(a), was not erroneous.

The protest should be GRANTED for the SMU and Mondoblade. They are classifiable in

subheading 6402.19.1020, HTSUSA, and are eligible for duty-flee treatment under subheading

9902.64.02, HTSUSA, if entered before December 31, 1992. If entered after December 31,

1992, they remain classifiable under subheading 6402.19.1020, HTSUSA, which provides, in

part, for other footwear having uppers of which over 90 percent of the external surface area is

robber or plastics.

The protest should be DENIED for the Aeroblade and Coolblade models. They are classifiable

in subheading 6402.19.9030, HTSUSA, which provides, in part, for other footwear with outer

soles and uppers of rubber or plastics. They are dutiable at the general column one rate at 20

percent ad valorem.

In accordance with section 3A(11)(b) of Customs Directive Number 099 3550-065, dated August

4, 1993, Subject: Revised Protest Directive, this decision should be attached to the Customs

Form 19, Notice of Actiort, and furnished to the protestant no later than 60 days from the date of

this letter. Any reliquidation of the entry in accordance with the decision must be accomplished

prior to mailing of the decision. Sixty days from the date of the decision (o n that date) the

Office of Regulations and Rulings will take steps to make the decision available to Customs

personnel via the Customs Ruling Module in ACS and to the public via the Diskette Subscription

Service, Freedom of Information Act, and other public access channels.

Sincerely,

John DuranL Director

Commercial Rulings Division

0189

UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: HOb/. GREGORY W. CARMAN, JUDGE

SAMUEL AARON, INC.,

Plaintiff, :

UNITED STATES,

Defendant. :

CourtNo. 03-00053

DEFENDANT'S REVISED STATEMENT OF UNDISPUTED MATERIAL FACTS

Rule 56Cn), Rules of the United States Court of International Trade, requires that motions

for summary judgment include a separate statement of material facts as to wMch it is contended

that there exists no genuine issue to be tried. In this case, there are no material facts as to which

there exists a genuine issue to be tried and the issues are amenable to resolution through

dispositive motions. The additional pertinent undisputed facts of this case are as follows:

1. Samuel Aaron states that this Court has jurisdiction of this action pursuant to 28

U.S.C.§ 1581 (a); but, the Government denies that the Court has jurisdiction and avers that the

protest was filed more than 90 days aider reliquidation of the subject entries on February 8, 1999,

and therefore, that the Court does not have jurisdiction oyer this action. (HQ 228645 (February

1, 2002)).

2. Plaintiff is the importer of record of Re merehandlse that is the subject matter of

q ° q ' e_ 'this action, and whose protest was demed. (Admitte ., , _.7 ,, P

I

0190

3. The plaintifffiled a protest on July 29, 1999, contesting the U.S. Customs

Service's ("Customs") reliquidation of its entries, but the Government denies that the protest was

f'tled timely. (HQ 228645).

4. The protest was denied on August 23, 2002. (Admitted).

5. With the exception of Entry no. 368-0055737-3, all liquidated duties, charges, or

exactions were paid on the entries identified on the summons prior to filing of the summons.

(Admitted).

6.

7.

This action was commenced within 180 days of August 23, 2002. (Admitted).

The imported merchandise involved in this action was entered through the port of

New York on or after July I, 1998 through October 22, 1998. (Admitted).

8. The merchandise at issue eousists of jewelry, and/or parts thereof, of precious

metal, imported from Thailand. (Admitted).

9. On November 13, 1998, Customs liquidated certain of the entries at issue

assessing duty on the subject merchandise at a _ee rate of duty pursuant to the Generalized

System of Preferences ("GSP")program. On December 11, 1998, Customs liquidated the

balance of the entries at issue, also assessing duty on the remaining subject merchandise at a flee

rate of duty pursuant to GSP. I

10. Upon liquidation of these entries, Customs refunded estimated duties that had

been deposited on the subject memhandise at entry, plus'interest. (Admitted).

, L , '

| • • • i , jo ,

Aaron had essenUally adrmtted this statement, but for.clarity the Government has here added] • L I I.

the fact that duties are actually assessed on merehandtse, not on entries, and that a flee rate ofduty was assessed on the subject merchandise. ', ; I I

0191

II. Customs subsequentlyconcludedthattheliquidationsoftheenlxieswhich took

place on November 13 and December 11, 1998, were erroneous, in that the merchandise was not

eligible for duty-fi'ee treatment under the GSP program. CHQ228645; Declaration of Lawrence

Ryan ("Ryan Decl.") at _ 4-11).

12. On February 8, 1999, i.e., within 90 days of the original Liquidation dates,

Customs at the Port of New York reliquidated the subject entries and posted a bulletin notice

thereof. (HQ 228645; Declaration of Joseph A. DiSalvo ("DiSalvo Deel?') at ¶¶ 4-6 (Exhibit A

to the Government's Memorandum of this date); Ryan Decl. at ¶¶ 4-12 (with attachment)

(Exhibit B to the Government's Memorandum of this date); Declaration of John Chmura at ¶¶ 2-

4) (Exhibit C to the Government's Memorandum of this date).

13. The bulletin notice indicated that the action taken was reliquidation with an

"increase" in duties. (Aaron denies in part, admits in part).

14. This bulletin notice of Liquidatiun was placed in a notebook or binder maintained

in the same room used by the Port of New York for making its bulletin notices of Liquidation or

reLiqttidatiou available to the pubfic. (Admitted).

15. The bulletin notices of liquidation for the vast majority (well over 99%) ofenMes

at the port of New York consist of paper printouts generated by Customs' Automated

Commercial System ("ACS") in a process that is performed once a week; the printouts are

placed in notebooks or binders that are "posted," i.e., that are made available for public

inspection, on the date indicated in the notice, in the morn used for this purpose. (Admitted).i I

i '16. Since the February 8, 1999, bulletih notice was not generated by this weekly ACS

process, Customs distinguishes this type of notice by method of preparation, but not with respect

)

0192

to legal import, by calling it an "off-line" bulletin notice of liquidation. (DiSalvo Deel. at ¶¶ 2-6;

Chmura Deel.at_ 2-4).

17. The "off-line" bulletin notice of liquidation at issue contained the words

"RELIQUIDATION-INCREASE" applicable to each entry. (Aaron admits that the document

posted on February 8, 1999, included the quoted words with respect to the entries listed thereon).

18. Bulletin notices of liquidation, whether generated off-line or not, do not contain

any explanation or indication as to the amount of any change in duties or the reason for the

change. (See copy of three pages of the Feb_ary 8_ offiine bulletin notice, and three pages from

the April 30, 1999, (regular) bulletin notice, at Aaron's Briet_ Exhibit 9; also, see plaintiff's

response to ¶ 18, which response (irrespective of the parties' dispute over the validity of the "off-

line bulletin") does not deny this statement).

19. The amount of increased duties due on the entries was ascertained because it was

equal to the same amount of duties which had (i) originally been deposited by Samuel Aaron

itself with respect to the subject merchandise in each entry, and (ii) then been refunded

(erroneously) to Samuel Aaron upon the November 13 and December 11, 1998 liquidations;

thus, the dollar and cents mnount of the increase in duties already resided in the ACS record for

each entry. (HQ 228645; Disalvo Deel. at_ 4-6; Ryan Deel. at ¶¶ 4-12 (with attachment);

Chmura Deel. at ¶¶ 2-4).

20. Through a memorandum directed to "Importers, Brokers and Other Interested

Parties" dated March 2, 1999, Customs alerted the importing public that refunds had been

erroneously issued with respect to jewelry from Thailand between July I and October 20, 1998.

The memorandmn states that importers "wi'll be billed for the appropriate Customs duties and

interest." (Admitted).

0193

21. Customs did not issue bills to Samuel Aaron on account of the February 8, 1999,

off-line reliquidations until April 30, 1999. (DiSalvo Decl. at ¶¶ 2-6).

22, The ninety (90)-day mliquidafion period for ¢mtries liquidated on November 13,

1999, ended on February I 1, 1999. (Admitted).

23. The ninety (90)-day reliquidation period for entries liquidated on December 11,

1998, ended on March 11, 1999. (Admitted).

24. On April 30, 1999, Customs issued bills with respect to the en_es at issue, using

the Automated Commercial System; the bills reflected the duties due on the enh'ies pursuant to

the February 8, 1999, reliquldatious, without the GSP benefits. (HQ 228645; DiSaivo Decl. at

2-6; Ryan Decl. at ¶¶ 4-12 (with attachment)).

25. As a result of the limitations in the Automated Commercial System, the

generation of the bills on April 30, 1999, on account of the February 8, 1999, reliquidatious,

resulted in the inclusion oft.he subject entries in the ACS-generated printout which became the

bulletin notice of liquidation dated April 30, 1999. (HQ 228645; DiSalvo Decl. at ¶¶ 4-5).

26. Ordinarily, in this situation, Customs' port personnel will manually line through

("red-line") the listing of the affected entries on the ACS-generated printout and annotato by

hand that the entries were mfiquldated on an earlier. (HQ 228645).

27. The actual bulletin notice of liquidation that wasiposted at the Customhouse on

April 30, 1999, was deslroyed on September I l, 2001. (Admi_d).__ I

• • • ) i I

28. Accordingly, it Is unknown wbetherSamuel Aaron's entries had been "red-lined"

and annotated by hand to _udicate that the enh'ies had been reliqi_dated on February 8, 1999.

(HQ 228645).

0194

29. To the extent Liquidation Extract reports for Samuel Aaron with respect to the

entries at issue show original liquidation dates of November 13 or December 11, 1998, and a

relicluidation date of April 30, 1999, avers that the Liquidation Extract is not the official bulletin

notice of liquidation and at best provides unofrleial, courtesy notice.

Respectfully submitted,

PETER D. KEISLER

Assistant Attorney Ganeml

By:

/s/

BARBARA S. WILLIAMS

Attorney in ChargeInternational Trade Field Office

Is/

JACK S. ROCK.AFELLOW

Civil Division, Dept. of Justice

Commercial Litigation Branch26 Federal Plaza- Suite 346

N_v York, NY 10278

Attorneys for Defendant

Tel. (212) 264-0482 or 0874Dated: New York, New York

May 11, 2006

Of Counsel:EDWARD N. MAURER.

Office of Assistant Chief Counsd

International Trade LitigationU.S. Customs and Border Protection

26 Federal Plaza- Suite 258

New York, NY" 10278

0195

EXHIBIT A

DECLARATION OF JOSEPH A. DISALVO

(May 4, 2006)

EXHIBIT A

0196


BEFORE: HONORABLE GREGORY W. CARMAN, JUDGE

SAMUEL AARON, INC.,

Plaintiff,

v.

THE UNITED STATES,

Defendant

Court No. 03-00053

DECLARATION OF JOSEPH A. DISALVO

JOSEPH A. DISALVO declares and says

i. I am a Supervisory Liquidator employed by the

Department of Homeland Security, Bureau of Customs and Border

Protection ("Customs") and am the Head of the Protest Section at

the John F. Kennedy International Airport Area. I have been

employed by Customs since 1973. I served in a similar capacity,

as the Head of the Protest and Control Section at the

Customhouse at 6 World Trade Center, New York, New York, from

1986 until the building was destroyed on September ii, 2001.

2. In the course of my work, I have become familiar with

Customs' Automated Commercial System ("ACS"), which is Customs'

automated entry tracking, controlling, and processing system.

ACS provides an electronic record of information concerning the

entry and liquidation process. Among other functions, ACS is

used to create bills that may be issued with respect to an

entry, usually in connection with a liquidation or

reliquidation. Ports generate reports from ACS which become the

typical "bulletin notice of liquidation." The ACS-generated

bulletin notices of liquidation that were posted at 6 World

Trade Center were combined reports for the JFK Airport Area, the

New York Seaport, and the Newark Area.

0197

3. The usual "online" process for liquidation is

performed in weekly batches. All entries input during a week

(_Week i') will liquidate, with the generation of bills or

refunds if the liquidation changes the as-entered duties, on the

Friday two weeks after the end of the input week, that is on

Friday of _Week 3. = This process is called the liquidation

cycle, and the cycle takes this amount of time because of the

number of processes and verifications that are involved. At the

time an entry is going to be input into ACS for liquidation,

there must be at least 14 to 21 days left before the deadline to

liquidate the entry; otherwise, as a result of the length of the

liquidation cycle, the ACS-generated liquidation and bulletin

notice thereof would not be timely.

4. When the time remaining to liquidate or reliquidate an

entry before the expiration of an applicable statutory period is

insufficient to permit processing the liquidation through ACS,

Customs will liquidate the entry _off-line" before the deadline.

Customs has performed off-line liquidations since the time ACS

was implemented in the 1984-1985 time period, and, I believe,

before that time, under earlier processing systems.

5. When Customs liquidates or reliquidates an entry

"offline" the process of manually preparing and posting a

bulletin notice does not in itself create any record in ACS, nor

does it generate a bill or refund. To ensure the creation of a

record in ACS associated with the entry and the issuance of a

bill or refund, Customs must input the data relating to the

offline liquidation, and, in effect, generate the same kind of

ACS record as would have been created had the entry been

liquidated "online." The only difference is that because this

inputting first occurs around or after the date that the offline

bulletin is posted, ACS's liquidation cycle will make it appear

that the liquidation occurred on a date sometime after the date

that Customs actually posted the offline bulletin notice of

liquidation. Thus, due to the limitations imposed by ACS, the

generation of bills on April 30, 1999 on account of the offline

reliquidations at issue that were po_ted on February 8, 1999,

resulted in the inclusion of the subject entries in the ACS-

generated printout which became the bulletin notice of

liquidation dated April 30, 1999.

0198

6. My recollection of what Mr. Ryan and I were trying to

convey by the phrase "offline liquidation log" (if we even used

that phrase) in the meeting in 2001 that Plaintiff describes, is

the same as stated by Mr. Ryan in his declaration.

7. I declare under penalty of perjury that the foregoing

is true and correct to the best of my knowledge, information,

and belief.

Executed on May _, 2006

JOSEPH A. DIS_VO

0199

EXHIBIT B

DECLARATION OF LAWRENCE RYAN

(May 5, 2006)

(With attachment concerning erroneous GSP refunds)

EXHIBIT B

0200

MAY 05 2006 16:22 FR US CUSTOMS IFK 718 553 0811 TO 1212264132G P.02/05



SAMUEL AARON, INC. r

Plaintiff,

V.

THE UNITED STATESr

Defendant

Court No. 03-00053

DECLARATION OF LAWRENCE R.ZAN

LAWRENCE RYAN declares and says

I. I am a Supervisory Liquidator employed by the


P=ot_ction ("Customs") and a_nthe Chief of "Branch E" at

Customs' John F. Kennedy Airport Area Port. I have been

employed by Customs since 1970. I held the corresponding

position at the Customhouse at 6 World Trade Center, New York,

New York, from 1988 until the building was destroyed on

September Ii, 2001. At the World Trade Center, the Branch was

called the Residual Liquidation and Protest Branch.

2. The Residual Liquidation Section within my Branch at

the World Trade Center was responsible for inputting into the

Customs' Automated Commercial System ("ACS" i) ,the inform_ti0n

necessary to generate a liquidation for a change (increase or

refund). The Section was also responsible/for ensuring the

accuracy of the bulletin no£ices of liquidation that are

generated from ACS. The Residual Liquidation Section was also

responsible for preparing and ensuring the 'accuracy of so-called

offline bulletin notices.

3. The Declaration of Joseph DiSa!vo !explains the

circumstances under which an off-line bulletin notice may be

appropriate. Those circumstances were met in the matter

involving the importations of jewelry from Thailand.

0201

MAY 85 2086 16:22 FR US CUSTOI_; J-F1< 718 553 8811 TO 12122641326 P.03/05

4. AS background, the authorization for duty-free

treatment of certain goods'under the Generalized System of

Preferences ("GSP") had expired at the end of June 1998.

Customs was required to collect the regular customs duties on

affected merchandise imported starting July I. In anticipation

that GSP would ultimately be renewed retroactive to July ist,

Customs set up a procedure that essentially flagged claims for

GSP, so Customs could liquidate the entries with the benefit of

duty-free treatment under GSP in the event Congress renewed the

program. Congress did renew the program, and in November and

December 1998, Customs liquidated many entries nationwide with

refunds.

5. Customs was able to utilize a _script" to accomplish

this large number of liquidations for refunds in a short period

of time. The "script" was a program which mimicked the steps

that Customs Liquidators around the country would have performed

to input into ACS the duty rate for liquidation (0%) for the

applicable lines of merchandise in these entries. Through a

series of analytical steps involving ACS, the applicable duties,

refund amount, and interest would be determined or computed.

Many of the entries, including all the entries in this case,

were "paperless"; in other words, the importer submitted the

invoice and Entry Summary (Customs _orm 7501) information

electronically. As a result, Customs did not have in its

possession any paper documents relating to the paperlessentries.

6. Around the end of January 1999 we received a

memorandum from the Director of Trade Agreements at Headquarters

dated January 29, 1999. I no longer have the memorandum or the

llst of entries it stated was attached, but I b_lieve the

attached document is a copy of that memorandum. The memorandum

provided adequate instruction to identify the entries and to

advise us of the change to be made. It stated that

Refunds were erroneously issued for goods imported

from Thailand classifiable under HTSUS numbers

7113.11.20 and 7113.19.50 en£ered during the

period the GSP was lapsed, July I, 1998 - october

20, 1998. No refunds should have been issued for

goods from Thailand classifiable under the HTSUS

numbers noted above ....

0202

I_IY 85 21_t6 16:23 FR US CUSTOI'IS JI=K '718 55"3 8811 TO :1.212264132-6 P.84/_5

7. In other words, this memorandum provided the rationale

for the change and ascertained for us the correct amount of

duties, whether or not someone in Customs actually worked with a

calculator to figure the dollar and cents amount on an entry or

even whether a liquidator keystroked the appropriate information

into ACS for ACS to compute the dollars and cents amount for an

entry. The memorandum stated that the refunds for affected

tariff subheadings were erroneous. That is, whatever refund had

been issued relating to the merchandise classified under

Subheadings 7113.11.20 and 7113.19.50 had to be reversed. No

change in entered value'was contemplated; no change in

classification (other than GSP eligibility) was contemplated.

Thus, the only change was that the appllcable duty rate was

reverting from 0% as liquidated back to the entered rate and

amount of duties at 16.3% ad val. under Subheading 7115.11.20 or

at 5.7% ad val. under Subheading 7113.19.50. The increased

duties due upon reliquidation equaled the entered amount of

duties for the merchandise under the affected subheadings.

Since ACS retains the entered duty information, the actual

dollar and cents amount of the increase in duties that was going

to be billed after the offline notices of liquidation were

posted already resided in the ACS record for each entry.

8. Thus, although the rellquidations were not entered

into ACS prior to the posting of the off-line bulletin, Customs

had ascertained the duties on each entry prior to posting the

off-line bulletin notice of liquidation. As was the case when

the entries were initially liquidated, Customs had no paper

copies of Samuel Aaron's entry documents.

9. To ensure the creation of a record in ACS associated

with each entry and the issuance of a bill, Customs had to

input the data relating to the offline liquidation, and, in

effect, generate the same kind of.ACe record as would have been

created had the entry been liquidated "online." In New York,

we decided that there were enough entries of Jewelry from

Thailand subject to this error and reliquidated off-llne - in

excess of 1,000 entries - that it would be efficient and would

help ensure accuracy to "script" the billing through ACS of the

duty increases for these entries. I participated in writing and

testing the _serlpt" that mimicked the keystrokes that the

liquidators would have performed to accomplish this task.

I0. The script was finally ready, and we ran it during the

week of April 12, 1999, resulting in the bills being issued on

0203

85 2086 16:44 FR US CUSTOMSJ-FK 718 553 0811 TO $2122641326 P.82/B2

April 30, 1999. The scripting process also placed an electronic

note in the ACS record for each entry explaining that Customs

was re-collecting duty on certain'merchandise from Thailand that

had not been eligible for GSP, pursuant to the January 29, 1999,

memorandum. This served the goal of providing a record of the

basis'for Customs' action.

Ii. What we were doing in reliquidating the entries off-

llne was the ordinary way Customs handles liquidations or

reliquidations when there is not enough time remaining under our

statutory authority to process the action through ACS. Off-line

liquidations are not uncommon, but they are not very _requent,

either. I would estimate that at the World Trade Center we

would have entries that had to be liquidated or reliqu_dated

off-line approximately once a week, but usually it is only one

or a few entries at any one time. The unique aspect here was

the relatively large number of entries that were being

reliquidated according to a single formula, allowing us [o

develop a script to automate some of the work of the

liquidators.

12. Plaintiff describes a meeting in 2001 attended by Mr.

DiSalvo and myself from Customs and Mr. Simon and Mr. Kane

representing plaintiff. Plaintiff quotes us as describing the

binder in which the off-line liquidations were maintained as an

_offline liquidation log." We might have used that phrase, I

don't recall. However, if we did use that phrase, we were

trying to convey that the off-line bulletin notices were kept in

their own notebook, not that they were different in nature or

legal significance from the ACS-generated notices. The offline

bulletins are official notices of liquidation. An ACS-generated

bulletin notice of liquida£1on may likewise be described as

being maintained in a "log."


is true and correct to'the best of my knowledge, information,

and belief.

Exited on May /,_ 2006

Attachment

0204

TO

FROM :

Port Director

Director, Trade Agreements

br.

SUBJECT: Erroneous Generalized System of Preferences (GSP)

Refunds

Refunds were erroneously issued for goods imported from Thailandclassifiable under HTSUS numbers 7113.11.20 and 7113.19.50

entered during the period the GSF was lapsed, July 1,1998 -

October 20, 1998. No refunds should have been issued for goods

from Thailand classifiable under the HTSUS nu_ers noted above

because they were not eligible for GSP duty-free treatment as of

July i, 1998. Pursuant to the Omnibus Budget Bill of 1998, the

Bill which provided for the renewal of the GSP program, only

those goods that were eligible for GSP duty-free treatment as of

July I, 1998, were entitled to a refund. Goods imported fromThailand classifiable under HTSUS numbers 7113.11.20 and

7113.19.50 did not become eligible for GSP duty-free treatment

until July 15, 1998, pursuant to the Office of the United States

Trade Representative's Federal Register notice of June 30, 1998.

In light of the above it is necessary to have the appropriate

personnel within your port review the attached listing of ABI

entry summaries filed in your port location consisting ofmerchandise entered under HTSUS numbers 7113.11.20 and 7113.19.50

from Thailand between July 15, 1998 and October 20, 1998. Where

it is appropriate the entry is to be reliquidated and a bill

issued to the importer for Customs duties and interest paid inerror.

Please ensure that the appropriate personnel attend to the

attached listing immediately. Time is of the essence in this

matter. Pursuant to 19 USC §1501, Customs only has a window of

ninety days from the date on which notice of the original

liquidation was given or transmitted to the importer, his

consignee or agent in which Customs under its own initiative may

reliquidate a liquidation or reliquidation. Unfortunetly, in

some instances, we have less than half the legally alotted time

permitted by law remaining to reliquidate the entries contained

in the attached listing and bill the importer for the duties and

interest paid in error.

NOTE: No action is to be taken by field personnel in instances

where the entry date noted for a particular entry number that

appears on the attached listing is prior to July 15, 1998.

O2O5

Thank you for your assistance and cooperation in this matter.

Should you or your staff have any questions regarding this

memoramdum, please contact John Pierce, Trade Agreements, at

(202) 927-1249.

AttachmentJoyce Meztger

0206

EXHIBIT C

DECLARATION OF JOHN CHMURA

(May 4, 2006)

EXHIBIT C

0207


BEFORE: HONORABLE GREGORY W. CARMAN, dODGE

)SAMUEL AARON, INC., )

)Plaintiff, )

)v. )

)THE UNITED STATES, )

)Defendant )

)

Court No. 03-00053

DECLARATION OF JOHN CHMURA

JOHN CHM_ declares and says

i. I am a Supervisory Entry Specialist employed by the


Protection ("Customs") and am the Head of the Records Section at

Customs' Newark, New Jersey, Area Port. I have been employed by

Customs since 1997. I was an Archives Specialist in the Records

Section at the Customhouse at 6 World Trade Center, New York,

New York, from 1997 until the building was destroyed on

September Ii, 2001. Prior to my employment by Customs, I was an

Archives Specialist with the National Archives and Records

Administration.

2. The Records Section at 6 World Trade Center had

responsibility for posting all buliletin notices of liquidation,

including both the weekly notices _generated from the Automated

Commercial System ("ACS") and the [so-called "off-line" bulletin

notices. Under the directio n of ithe, Head of the Records

Section, I was one of a group of sleveral persons who had

responsibility for this function as part of my regular duties.

3. The Records sect±oh woul receive the documents to beI

posted as bulletin notices fromlth_ Residual Liquidation and

Protest Branch. To maintain the bhlletin notices in an orderly

and secure manner, the notices were placed in binders or similar

types of secure fastenings and appropriately labeled. Each

weekly bulletin notice generated from ACS was placed in its own

0208

binder. The off-line bulletin notices might constitute one or

several sheets on any one date and were secured together for a

year's period in a single binder.

4. The bulletin notices were then "posted" on or by the

date shown on the notices by placing them in plain view in a

room at the customhouse where they were available to the public

for inspection.



and belief.

Executed on May ___ , 2006

/

0209


BEFORE: HONORABLE GREGORY W. CARMAN, JUDGE....................................................................... X

SAMUEL AARON INC.,

Plaintiff, :

V. "

UNITED STATES :

Defendant. :

........................................................................ X

Court No.03-00053

PLAINTIFF'S RESPONSE TO

DEFENDANT'S REVISED STATEMENT

OF UNDISPUTED MATERIAL FACTS

Pursuant to Rule 56, Rules of the United States Court of International Trade, PlainfiffSamuel

Aaron, Inc. responds to Defendant's Revised Statement of Undisputed Material Facts dated My 11,2006, in bold below:

1 Samuel Aaron states that this Court has jurisdiction of this action pursuant to 28

U.S.C.§ 1581 (a); but, the Government denies that the Court has jurisdiction and avers that the protest

was filed more than 90 days after reliquidation of the subject entries on February 8, 1999, and

therefore, that the Court does not have jurisdiction over thin action. (HQ 228645 (February I,

2002)).

Plaintiff reasserts jurisdiction under 28 U.S.C. §1581(a), as a protest was filed

July 29, 1999 which was within 90 days of the only legal but voidable reliquidation of

the entries in issue on April 30, 1999.

2. Plaintiff is the importer of record of the merchandise that is the subject matter of thisaction, and whose protest was denied. (Admitted).

Plaintiff admits.

h

3. The plaintiff filed a protest on July 29, 1999, contesting the' U.S. Customs Service's

("Customs") reliquidation o f its entries, but the Government denies that the protest was filed timely.(HQ 228645).

i4

Plaintiff admits the t'fling of the protest, but denies that the filing was untimely.

4. The protest was denied on August 23, 2002. (Admitted).

0210

Plaintiff admits.

5. With the exception of Entry no. 368-0055737-3, all liquidated duties, charges, or

exactions were paid on the entries identified on the summons prior to filing of the summons.

(Admitted).

Plaintiff admits.

6. This action was commenced within 180 days of August 23, 2002. (Admitted).

Plaintiff admits.

7 The imported merchandise involved in this action was entered through the port of

New York on or after July 1, 1998 through October 22, 1998. (Admitted).

Plaintiff admits.

8. The merchandise at issue conststs of jewelry, and/or parts thereof, of precious metal,

imported from Thailand. (Admitted).

Plaintiff admits, but avers that other merchandise was included on at least one

entry among those entries at issue.

9. On November 13, 1998, Customs liquidated certain of the entries at issue assessing

duty on the subject merchandme at a free rate of duty pursuant to the Generalized System of

Preferences ("GSP") program. On December 11, 1998, Customs liquidated the balance of the

entries at issue, also assessing duty on the remaining subject merchandise at a free rate of duty

pursuant to GSP.

Plaintiff admits, but avers that other GSP-qualified merchandise was included

among the entries in issue.

10. Upon hquidation of these entries, Customs refunded estimated duties that had been

deposited on the subject merchandise at entry, plus interest. (Admitted).

Plaintiff admits.

11. Customs subsequently concluded that the'li'quidations of the entries which took place

on November 13 and December 11, 1998, were erroneous,_ m that the merchandme was not ehglble

for duty-free treatment under the GSP program. (HQ _28645; Declaration' of Lawrence Ryan

("Ryan Decl.") at _ 4-11). , '

Plaintiff admits that Customs concluded that the November 13 and December

0211

11, 1998 liquidations were erroneous, but denies that they were in fact and law

erroneous.

12. On February 8, 1999, i.e., within 90 days of the original liquidation dates, Customs at

the Port of New York reliquidated the subject entries and posted a bulletin notice thereof. (HQ

228645; Declaration of Joseph A. DiSalvo ("DiSalvo Decl.") at ¶9 4-6 (Exhibit A to the

Government's Memorandum of this date); Ryan Decl. at ¶9 4-12 (with attachment) (Exhibit B to the

Government's Memorandum of this date); Declaration of John Chmura at 9¶ 2-4) (Extubit C to the

Government's Memorandum of this date).

Plaintiff denies that what took place on February 8, 1999 amounted to a

reliquidation. The placing of a notation in the "off-line" log had no legal impact as it

was neither on the official bulletin notice of liquidation Customs Form 4333, nor was it

the result of a calculation to determine the amount of duties owing on the goods on theentries at issue.

13. The bulletin notice indicated that the action taken was reliquidation with an

"increase" in duties. (Aaron denies in part, admits in part).

The "off-line" log, which was a journal maintained separately from the official

bulletin notice of liquidation (Chmura Declaration at 9 3) contained a notation relating

apparently to an intended reliquidation of certain entries, but was not made in the

official bulletin notice of liquidation Customs Form 4333, nor had Customs determined

by calculation the amount of duties accruing on rellquidation until the week of April

12, 1999 (Ryan Declaration at 99 9-10).

14. This bulletin notice of liquidation was placed in a notebook or binder maintained in

the same room used by the Port of New York for making its bulletin notices of liquidation or

reliquidataon available to the public. (Admitted).

Plaintiff admits that the "off-line" log was maintained in the same room used by

the Port of New York for making its bulletin notices of liquidation or reliquidation

available to the public. Plaintiff denies that the notations placed in the "off-line" log,

which by its very nature was not the official bulletin notice of liquidation, amounted to

the bulletin notice of liquidation required by law and regulation.

15. The bulletin notices of liquidation for the vast majority (well over 99%) of entries at

the port of New York consist of paper printouts generated by Customs' Automated Commercial

System ("ACS") in a process that is performed once a week; the printouts are placed in notebooks orbinders that are "posted," i.e., that are made available for public inspection, on the date indicated in

the notice, in the room used for this purpose. (Admitted).

Plaintiff has 'no reason to believe that more than 99% of

liquidations/reliquidatlons are not properly and correctly posted in the official bulletin

0212

notice of liquidation Customs Form 4333, but avers that the entries in issue in this

proceeding were not officially posted in the official bulletin notice of liquidation

Customs Form 4333 until April 30, 1999.

16. Since the February 8, 1999, bulletin notice was not generated by this weekly ACS

process, Customs distinguishes this type of notice by method of preparation, but not with respect to

legal import, by calling it an "off-line" bulletin notice of liquidation. (DiSalvo Decl. at ¶7 2-6;

Chmura Decl. at ¶7 2-4).

Plaintiff denies that the notations to the "off-line" log dated February 8, 1999

were anything more than the reflection of an intention to do some future act, i.e. to

reliquidate certain entries, but without actually completing the reliquidation process as

required by law and regulation until the requisite calculations were performed the

week of April 12, 1999, and the official bulletin notice of liquidation, Customs Form

4333, was posted on April 30, 1999.

17. The "off-line" bulletin notice of liquidation at issue contained the words

"RELIQUIDATION-INCREASE" applicable to each entry. (Aaron admits that the document postedon February 8, 1999, included the quoted words with respect to the entries listed thereon).

Plaintiff admits that the notations made in the"off-line"log on Febrnaryg, 1999

contained the words "RELIQUIDATION/INCREASE associated with the entries at

issue. Plaintiff denies any legal significance to the "off-line" notations made in the"off-

line" log, as they did not meet the legal requirements to constitute official bulletin

notice of liquidation, Customs Form 4333.

18. Bulletin notices of liquidation, whether generated off-line or not, do not contain any

explanation or mdication as to the amount of any change in duties or the reason for the change. (See

copy of three pages of the February 8Ih offline bulletin notice, and three pages from the April 30,

1999, (regular) bulletin notice, at Aaron's Brief, Exhibit 9; also, see plaintiff's response to 7 18,

which response (irrespective of the parties' dispute over the validity of the "off-line bulletin") doesnot deny this statement).

Plaintiff denies notations in an "off-line" log have any legal significance with

respect to liquidation or reliquidation of entries.

19. The amount of increased duties due on the entries was ascertained because it was

equal to the same amount of duties which had (i) originally been deposited by Samuel Aaron itself

with respect to the subject merchandise in each entry, and (h) then been refunded (erroneously) to

Samuel Aaaxm upon the November 13 and December 11, 1998 hquid,ations; thus, the dollar and centsamount of the increase in duties already resided in the ACS record for each entry. (HQ 228645;

DiSalvo Decl. at _ 4-6; Ryan Decl. at _l 4-12 (with attaclunent); Clunura Decl. at 77 2-4).

Plaintiff denies that the determination of the actu al amount of duties due on the

0213

entries in issue could be made without examination of the individual entries, either

manually or electronically, and a "computation or ascertainment" of duties due

thereby being performed. Customs chose to perform the examination of the individual

entries and the resulting "computation or ascertainment" of the duties due

electronically by use of a "script" in ACS, which took place the week of April 12, 1999

(Ryan Declaration at ¶¶ 9-10).

20. Through a memorandum directed to "Importers, Brokers and Other Interested

Parties" dated March 2, 1999, Customs alerted the importing public that refunds had been

erroneously issued with respect to jewelry from Thailand between July 1 and October 20, 1998. The

memorandum states that importers "will be billed for the appropriate Customs duties and interest."

(Admitted).

On information and belief, Plaintiff had no actual knowledge of the

memorandum dated March 2, 1999. Nor does Plaintiff have actual knowledge to what

extent the March 2, 1999 memorandum was disseminated to the public. TheMarch 2,

1999 memorandum has no legal significance.

21. Customs did not issue bills to Samuel Aaron on account of the February 8, 1999, off-

line reliquidatious until April 30, 1999. (DiSalvo Decl. at ¶¶ 2-6).

Plaintiff denies that the notations made on the "off-line" log satisfied the

requirements for reliquidation. Reliquidation of the entries in issue was only completed

on April 30, 1999 with the posting of the official bulletin notice Customs Form 4333,

based on the "computation or ascertainment" of duty due when the "script" was run in

ACS the week of April 12, 1999. Bills were apparently issued simultaneously with the

posting of the official bulletin notice of liquidation on April 30, 1999.

22. The ninety (90)-day reliquidafion period for entries liquidated on November 13, 1999,ended on February 11, 1999. (Admitted).

Plaintiff agrees.

23. The ninety (90)-day reliquidation period for enlries liquidated on December I 1, 1998,

ended on March 11, 1999. (Admitted).

Plaintiff agrees.

24. On April 30, 1999, Customs issued bills with respect to the entries at issue, using the

Automated Commercial System; the bills reflected the duties due on the entries pursuant to the

February 8, 1999, reliquidations, without the GSP benefits. (HQ 228645; DiSalvo Decl. at ¶¶ 2-6;Ryan Decl. at ¶¶ 4-12 (with attachment)).

Plaintiff denies that reliquidations of the subject entries took place on February

0214

8, 1999. Plaintiffadds that on April 30, 1999 Customs posted the official bulletin notice

of liquidation affected by computations that took place the week of April 12, 1999 when

Customs ran the "script" in ACS. (Ryan Declaration at ¶¶ 9-10).

25. As a result of the limitations in the Automated Commercial System, the generation of

the bills on April 30, 1999, on account of the February 8, 1999, reliquidations, resulted in the

inclusion of the subject entries in the ACS-generated printout which became the bulletin notice of

liquidation dated April 30, 1999. (HQ 228645; DiSalvo Decl. at ¶¶ 4-5).

Plaintiff denies that reliquidations of the entries at issue occurred on February

8, 1999. Plaintiff agrees that the entries at issue were reliquidated on April 30, 1999

when they were posted on the official bulletin notice of liquidation, Customs Form4333, of that date.

26. Ordinarily, in this situation, Customs' port personnel will manually line through

("red-line") the listing of the affected entries on the ACS-generated printout and annotate by hand

that the entries were reliquidated on an earlier. (HQ 228645).

Plaintiff has no independent basis to form a response to this statement.

27. The actual bulletin notice of liquidation that was posted at the Customhouse on April

30, 1999, was destroyed on September 11, 2001. (Adrmtted).

Knowing that Plaintiff's counsel had its own office and original records

destroyed on September 11, 2001 at the World Trade Center, Plaintiff admits that any

original records maintained at the Customshouse at 6 World Trade Center would likely

have been destroyed.

28. Accordingly, it is unknown whether Samuel Aaron's entries had been "red-lined" and

annotated by hand to indicate that the entries had been reliquidated on February 8, 1999. (HQ228645).

Plaintiff's entries were no___ttredlined on the April 30, 1999 official bulletin notice

of liquidation, Customs Form 4333. Plaintiff's counsel had seen no red-lining in the

original official bulletin notice of liquidation Customs Form 4333 and HQ 228645 notes

that other counsel reviewed the official bulletin notice of liquidation records and found

no such red-line or other annotation for entries of a similarly situated importer.

Furthermore, Protest Decision 1001-99-103769 (the actual Customs decision challenged

in this action) states "this office failed to strihe (redline) these entry summaries from

the April 30, 1999 Bulletin Notice of Liquidation, therefore, these entry summaries

were erroneously posted as rellquidated. Excerpts from the April 30, 1999 official

bulletin notice of liquidation, Customs Form 4333, contained in the "Customs Protest

and Summons Information Report- Customs Form 6445A" associated with Protest No.

1001-99-103656 and with HQ 228645, show no evidence of redlining or other notation.

0215

Plaintiff's Exhibit 9. In addition, "Customs Protest and Summons Information Report

- Customs Form 6445A" page 2 "Background Information" states "due to oversight,

the field neglected to red-line the resulting bulletin (copy of posted bulletin attached).

This action, therefore, resulted in a second reliquidation." Plaintiff's Exhibit 9.

29. To the extent Liquidation Extract reports for Samuel Aaron with respect to the entries

at issue show original liquidation dates of November 13 or December I 1, 1998, and a reliquidation

date of April 30, 1999, avers that the Liquidation Extract is not the official bulletin notice of

liquidation and at best provides unofficial, courtesy notice.

Plaintiff denies that the Liquidation Extract Reports are anything but a

reflection of the official bulletin notice of liquidation now unavailable due to the

devastation of September 11, 2001, and are a statement against interest of Customs'

own treatment of the entries in issue, notwithstanding the posture taken by Defendantin this case.

Respectfully submitted,Serko & Simon LLP

Attorneys for Samuel Aaron Inc.

1700 Broadway31st Floor


(212) 775-0055

s/Christopher M. Kane

Christopher M. KaneJerome L. Hanifin

Dated: June 16, 2006

New York, New York

0216

EXHIBIT 24

FOLDOC Definition of a "Script"

0217

Is_0t _-_1"oolc_otoot_t_okl_1

script

<lan_mmge> A pmgram written in a scripting language, but see Ousterhout's dichotomy.

(1999-02-22)

Try this search on Wikipedia, OneLook, Google

Nearby terms: scribble (( Scribe (( SCRIPT (( script _>Scriptics _ scripting language >>scrog

0218

EXHIBIT 25

FOLDOC Definition of a "Scripting Language"

0219

I_o_oo'_n0-_,_hI"°reel_°t_IF'b_°kI_°1

scripting language

<language> (Or "glue language") A loose term for any language that is weakly typed or untyped

and has little or no provision for complex data structures. A program in a scripting language (a

"script") is often interpreted (but see Ousterhout's dichotomy).

Scripts typically interact either with other programs (often as glue) or with a set of functions

provided by the interpreter, as with the file system functions provided in a UNIX shell and with

Tcrs GUI functions. Prototypical scripting languages axe AppleScript, C Shell, MSDOS batchfiles, and Tel.

(2001-03-06)

Try this search on Wildpedla, OneLook, Google

Nearby termS: SCRIPT t< script <tScriptics _<scripting language >>scrog >>SCROLL >>scroll

II

t

0220

EXHIBIT 26

The Free Dictionary Defmition of a "Script"

0221

"Frrn_ttxJ3o 4._4 _20 pe,'f, le ,,_ _d

x

scripting language(redh'_cted from Script (computer Dro_nmminP.))

o

aiL_ioo., Idlct,un,,r I,h¢C,on.r Is / t_"''_'°_dl

Also found in Wildpedia, Hutchinson

!1

Wikipedia

encyclopedia

0 02 see.

t............... j

A high-level progranmaing, or command, language that is interpreted (translated on the fly)

rather than compiled ahead of time. A scripting, or script, language may be a general-purpose

progratrml.ing language or it may be limited to specific functions used to augment the running of

an applicataon or system program. JavaScript is widely used on Web pages for general

calculations as well as drop-down menus and other fancy menu and graphics actions. It enables

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please fill in and re-submit."

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limited-purpose scripting languages. DOS batch files and Windows scripts are also examples.

Micmsoft's Visual Basic for Applications (VBA) is a scripting language. VBA is a subset of

Visual Basic that is used to automate Microsoft Office applications. Perl, Tel and Python are

very comprehensive programming languages that are often called scripting languages. See

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0222

EXHIBIT A



)

SAMUEL AARON, INC., )

)

Plaintiff, )

)

v. )

)

THE UNITED STATES, )

)

Defendant )

)

Court No. 03-00053

SUPPLEMENTAL DECLARATION OF LAWRENCE RYAN

LAWRENCE RYAN declares and says

I. In my earlier declaration, I indicated that I have

been employed by Customs since 1970. I have been involved in

the processing of entries for liquidation and reliquidation

since approximately late 1974. To the best of my recollection,

already by 1974, Customs was using a mainframe computer to

automate some of the steps leading to liquidation of entries and

to the generation of bulletin notices thereof. As a result,

there was, even then, a "liquidatlon cycle," a processlng period

of between two and three weeks between (a) the time liquidation

information was input and (b) the time an entry was liquidated

and a bulletin notice thereof was posted.

2. Also, as best I can recall, since liquidation required

processing time, a procedure already existed in 1974 to

reliquidate an entry "off-line" if necessary, and to post an

"off-line" bulletin notlce, in order to complete a reliquidation

within a statutory time period. _ (At that time, time constraints

applied to reliquidations; the requirement to liquidate an entry

within an initial time period was not imposed until several

years later.)

3. Off-line bulletin notices thus have been posted at New

York going back well over 30 yea±s. Brokers, importers,

counsel, sureties, and other interested parties have had the

same access to off-line bulletin notices as they have had to the

0223

"regular" bulletin notices. Customs has made no secret of this

procedure, and it is my belief that the existence of off-line

liquidations and bulletin notices of off-line liquidations is

widely recognized in the trade community.

4. I am attaching a copy of the current "Customs Form

4333" form. This form was last revised in 1992, and it is

little changed from the form used as far back as 1915. The

bulletin notices (regular and offline) are not actually printed

on the Customs Form 4333 form itself. However, the bulletin

notices have the same or similar title and all the data elements

provided for on the Customs Form 4333 form.



and belief.

Executed on June 27 , 2006

Is�

LAWRENCE RYAN

Attachment:

Customs Form 4333 (041092 version)

Customs Form 4333 (1915 version

0224

EXHIBIT B



SAMUEL AARON, INC.,

Plaintiff,

V.

THE UNITED STATES,

Defendant

Court No. 03-00053

DECLARATION OF EDWARD N. MAURER

EDWARD N. MAURER declares and says

I. I am employed by the Department of Homeland Security,

Bureau of Customs and Border Protection ("Customs"), as the

Deputy Assistant Chief Counsel, International Trade Litigation.

I have been employed by Customs as an attorney in the Office of

the Assistant Chief Counsel, International Trade Litigation,

since 1979 and have been the Deputy in this office since 1996.

I am the attorney assigned with primary responsibility in this

office for the captioned case.

2. In the course of my work, I have become familiar with

Customs' Automated Commercial System ("ACS"), which is Customs'

automated entry tracking, controlling, and processing system.

Among other functions, ACS tracks the payment or refund of

duties and interest on entries of merchandise into the United

States, and provides an electronic record of information

concerning the entry and liquidation process.

3. I have reviewed the ACS records relating to the 67

entries covered by the summons in the captioned case. The

records reflect that except for Entry No. 368-0056036-3, when

Customs issued bills on April 30, 1999, the amount of regular

customs duties billed was the '_ame as the amount that had been

refunded previously at liquidation. In other words, at

liquidation and reliquidation, the only changes in the regular

customs duties in each entry were the changes due to the

O225

eligibility or not, of the merchandise for duty-free treatment

under the Generalized System of Preferences ("GSP"). Each bill,

in effect, was the mirror image of the prior refund with respect

to regular customs duties.

4. With respect to Entry No. 368-0056036-3, the regular

customs duties included in the April 30, 1999, bill was 47 cents

less than the amount that had been refunded at liquidation. At

liquidation, Customs had refunded not only the duties paid on

the subject jewelry from Thailand, but also 47 cents based upon

allowance of duty-free treatment under GSP for certain other

merchandise imported under this entry that was not subject to

the Thailand jewelry issue. Customs correctly did not include

this 47 cents in the bill. While the bill was not the mirror

image of the refund for this entry, nevertheless, the ACS record

for this entry includes the amount of regular customs duties

deposited relating to merchandise classified under Subheading

7113.19.50 ($11,798.77), which exactly equals the amount of the

regular customs duties billed on April 30, 1999.



and belief.

Executed on June 29 , 2006

Is�

EDWARD N. MAURER

0226


BEFORE: HONORABLE GREGORY W. CARMAN, JUDGE.......................................................................... X

SAMUEL AARON INC.,

Plaintiff,

Court No.03-00053

UNITED STATES

Defendant.

......................................................................... X

STIPULATED FACTS

Pursuant to Rule 56, Rules of the United States Court of International Trade, Plaintiff

Samuel Aaron, Inc. and Defendant agree as to the following facts:

1. June 30, 1998- Generalized System of Preferences ("GSP") expired.

2. June 30, 1998" Federal Register Notice (63 Fed. Reg. 35632) from Office of

United States Trade Representative Restoration of GSP for certain articles including jewelry

from Thailand effective 15 days from date of this notice.

3. July 15, 1998. Restoration of GSP for certain articles including jewelry fromThailand becomes effective.

4. August 10 - October 22, 1998' Date of entry of 66 subject entries, all of which

are "paperless" entries The entries at issue in this case are:

Entry Number Entry Date Original Liquidation Date

368-0055736-9 8/10/98 11/13/98

368-0055752-6 8/11/98 11/13/98

368-0055775-7 8/12/98 1 I/13/98

368-0055804=5 8/14/98 11/13/98

368-0055813-6 8/16/98 11/13/98

368-0055814-4 8/16/98 I 1/13/98

368-0055819-3 8/17/98 11/13/98

368-0055834-2 8/19/98 11/13/98

368-0055858-1 8/20/98 11/13/98

368-0055881-3 8/24/98 11/13/98

0227

368-0055883-9

368-0055900-1

368-0055913-4

368-0055949-8

368-0055951-4

368-0055952-2

368-0055976-I

368-0055981-1

368-0055990-2

368-0055991-0

368-0056014-0

368-0056018-1

368-0056036-3

368-0056056-1

368-0056074-4

368-0056078-5

368-0056080-1

368-0056116-3

368-0056117-1

368-0056130-4

368-0056144-5

368-0056167-6

368-0056168-4

368-0056193-2

368-0056204-7

368-0056211-2

368-0056212-0

368-0056224-5

368-0056229-4

368-0056237-7

368-0056240-1

368-0056247-6

368-0056248-4

368-0056288-0

368-0056307-8

368-0056308-6

368-0056310-2

368-0056331-8

368-0056355-7

368-0056356-5

8/24/98

8/26/98

8/27/98

8/30/98

8/31/98

8/31/98

9/2/98

9/2/98

9/3/98

9/3/98

9/7/98

9/8/98

9/8/98

9/10/98

9/13/98

9/13/98

9/13/98

9/15/98

9/I 5/98

9/17/98

9/18/98

9/20/98

9/20/98

9/22/98

9/23/98

9/24/98

9/24/98

9/25/98

9/25/98

9/27/98

9/27/98

9/27/98

9/28/98

9/30/98

10/2/98

10/2/98

10/2/98

10/4/98

10/6/98

10/6/98

11/13/98

11/13/98

11/13/98

11/13/98

11/13/98

12/11/98

I 1/13/98

11/13/98

11/13/98

11/13/98

11/13/98

11/13/98

12/11/98

I 1/13/98

11/13/98

12/I 1/98

11/13/98

12/I 1/98

11/13/98

I 1/13/98

11/13/98

11/13/98

11/13/98

12/11/98

11/13/98

11/13/98

11/13/98

11/13/98

11/13/98

11/13/98

11/13/98

12/11/98

11/13/98

11/13/98

l 1/13/98

11/13/98

11/13/98

11/13/98

11/13/98

11/13/98

0228

368-0056366-4 10/7/98 11/13/98

368-0056371-4 10/7/98 11/13/98

368-0056382-1 10/8/98 12/11/98

368-0056405-0 10/9/98 11/13/98

368-0056409-2 10/9/98 11/13/98

368-0056431-6 10/11/98 11/13/98

368-0056433-2 10/I 1/98 I 1/13/98

368-0056435-7 10/12/98 11/13/98

368-0056451-4 10/13/98 12/11/98

368-0056491-0 10/15/98 12/11/98

368-0056510-7 10/16/98 12/11/98

368-0056528-9 10/18/98 12/11/98

368-0056548-7 10/20/98 12/I 1/98

368-0056557-8 10/20/98 12/11/98

368-0056559-4 10/21/98 12/11/98

368-0056573-5 10/22/98 12/11/98

5. October 21, 1998: (P L. 105-277) (Omnibus Budget Bill of 1998). Congress

passes legislation providing for one-year renewal of GSP to any entry "of an article to which

duty-free treatment .. would have applied if such entry had been made on July 1, 1998 "

6. November 13, 1998: U S. Customs and Border Protection ("Customs")

liquidated certain of the entries at issue (see above) at a free rate of duty pursuant to GSP.

7. December 11, 1998. Customs liqmdated the balance of the entries at issue (see

above) at a free rate of duty pursuant to GSP.

8. January 29, 1999: Memorandum of this date issued from Customs' Director of

Trade Agreements to Port Director concerning erroneous refunds issued for goods entered during

period GSP was lapsed.

9. February 8, 1999: Customs placed a document in a notebook or binder in the

room used by Customs at the Port of New York for making its bulletin notices of liquidation or

reliquidation available to the public. (Plaintiff alleges that the document was not a legally valid

bulletin notice of liquidation for the entries at issue and that there is no evidence how the binder

was labeled; defendant alleges that the document was an "offiine" bulletin notice of liquidation,

was placed in an appropriately labeled binder, and was a legally valid bulletin notice of

liquidation for the entries at issue.)

I0. February 11, 1999: The ninety (90)-day reliquidation period for entries

liquidated on November 13, 1998, ends

0229

11 March 2, 1999: Date of Memorandum dtrected to "Importers, Brokers and Other

Interested Parties," indicating that refunds had been erroneously issued with respect to jewelry

from Thailand entered between July 1 and October 20, 1998. The memorandum states that

importers "will be billed for the appropriate Customs duties and interest." (Defendant states that

this memorandum was disseminated to the importing public; Plaintiff, however, states that it had

no actual knowledge of the memorandum or of to what extent the memorandum was

disseminated to the public).

12 March 11, 1999 The ninety (90)-day reliquidation period for entries liquidated

on December 11, 1998, ends.

13 April 12, 1999: During week of April 12, 1999, Customs ran a computer script

on the entries at issue in its Automated Commercial System ("ACS")

14. April 30, 1999. Date of ACS generated bulletin notice of liquidation thatincluded the entries at issue. On this date, Customs put the bulletin notice of liquidation in a

binder that was marked to indicate that it contained April 30, 1999 bulletin notices of liquidation.

The binder was placed by Customs in the room used by the Port of New York for making its

bulletin notices of liquidation or reliquidation available to the public. No red-line or other

notation was made on the April 30, 1999 bulletin notice of liquidation for the enlries at issue to

indicate that (re)liquidation had been made on another date. (Defendant alleges that Customs'

action on April 30, 1999 did not constitute a reliquidation of the entries because they had already

been reliquldated on 2/8/1999; plaintiff alleges that there was no valid earlier reliquidation on

February 8, 1999 and that Customs' 4/30/1999 action was an untimely rehquidation )

15. April 30, 1999 ACS-generated bills to plaintiff for increased duties for theentries at Issue

16 July 29, 1999: The plaintiff filed the subject protest on July 29, 1999

17. August 23, 2002: The protest was denied on August 23, 2002.

0230

18.

23,2002.

February 10, 2003: Action commenced this date, i.e., within 180 days of August

Respectfully submitted,

Attorneys for Samuel Aaron Inc.Serko Simon Gluck & Kane LLP

1700 Broadway31 st Floor


(212) 775-0055

s/Jerome L. Hamf'm

Christopher M. KaneJerome L. Hanifin

By:

PETER D. KEISLER

Assistant Attorney General

/s/

BARBARA S. WlLIAMS


Dated: August 3, 2006

New York, New York

/s/

JACK S. ROCKAFELLOW

Attorney for Defendant

Civil Division, Dept of Justice

Commercial Litigation Branch26 Federal Plaza - Suite 346

New York, NY 10278

(212) 264-0482 or 0874

0231

TEL.212-775-0055

FAX: 212-83S-9103

DATE: 8/11/2006

SERKO SIMON GLUCK & KANE LLPCUSTOMS & INTERNATIONAL TRADE LAW

1700 BROADWAY

31 'T FLOORNEW YORK, N. Y. 10019

E-MAIL: serko-slrnon@customs-law.¢om

INTERNET: www.customs-law.com

FACSIMILE TRANSMISSION COVER SHEET

The information contained in this facsimile message is attorney pri-

vileged and confidential information intended only for the use of the

individual or entity named below. If the reader of this message is not

the intended recipient, you are hereby notified that any dissemination,

distribution or copy of this communication is strictly prohibited. If

you have received this communication in error, please immediately

notify us by telephone and destroy the original message. Thank you.

PLEASE DELIVER TO: Kit Miller

FAX#: exs2)26¢.-2g "7_.0 1-1

FROM: Jerome Hanifln

MESSAGE: Per your request, please find copies of Customs Headquarters'

January 29, 1999 memo to the Ports. A copy of this memo was

attached as Exhibit 3 to our Summary Judgment Memorandum. This

memo is also an attachment to the rwst Larry Ryan Declaration

attached to Defendant's Cress-Motion Memorandum. Mr. Ryan, in

his responses to our Request for Production when this document was

produced, indicated that this was the only copy Customs could find,

that it came from Import Specialist John Pierce's archives at

Headquarters, and that, despite the notation on the upper right, "it is

believed that the memorandum was actually issued on January 29,

1999." I have included a copy of the Request for Production response.

The March 2, 1999, memorandum was produced pursuant to the same

Request for Production. It does not seem to have been attached to any

of the parties moving papers.

If you need anything else, please let me know.

TRANSMITTING: __ pages, including cover page.

If you need any page(s) re-sent, please call 212-775-0055. If not, we shall assume that you

have received all pages satisfactorily. Thank you.

0232

TO : Port Director

FROM : Director, Trade Agreements

SUBJECT: Erroneous Generalized System of Preferences (GSP)

Refunds

Refunds were erroneously issued for goods imported from Thailand

classifiable under HT_US numbers 7113.11.20 and 7113.19.50

entered during the period the GSP was lapsed, July 1,1998 -

October 20, 1998. No refunds should have been issued for goods

from Thailand classifiable under the HTSUS numbers noted above

because they were not eligible for GSP duty-free treatment as of

July I, 1998. Pursuant to the Omnibus Budget Bill of 1998, the

Bill which provided for the renewal of the GSP program, only

those goods that were eligible for GSP duty-free treatment as of

July i, 1998, were entitled to a refund. Goods imported from

Thailand classifiable under HTSUS numbers 7113.11.20 and

7113.19.50 did not become eligible for GSP duty-free treatment

until July 15, 1998, pursuant to the Office of the United States

Trade Representative's Federal Reqister notice of June 30, 1998.

In light of the above it is necessary to have the appropriate

personnel within your port review the attached listing of ABI

entry summaries filed in your port location consisting ofmerchandise entered under HTSUS numbers 7113.11.20 and 7113.19.50

from Thailand between July 15, 1998 and October 20, 1998. Where

it is appropriate the entry is to be reliquidated and a bill

issued to the importer for Customs duties and interest paid in

error.

Please ensure that the appropriate personnel attend to the

attached listing immediately. Time is of the essence in this

matter. Pursuant to 19 USC §1501, Customs only has a window of

ninety days from the date on which notice of the original

liquidation was given or transmitted to the importer, his

consignee or agent in which Customs under its own initiative may

reliquidate a liquidation or reliquidation. Unfortunetly, in

some instances, we have less than half the legally alotted time

permitted by law remaining to reliquidate the entries contained

in the attached listing and bill the importer for the duties and

interest paid in error.

NOTE: No action is to be taken by field personnel in instances

where the entry date noted for a particular entry number that

appears on the attached listing is prior to July 15, 1998.

0238

Thank you for your assistance and cooperation in this matter.

Should you or your staff have any questions regarding this

memoramdum, please contact John Pierce, Trade Agreements, at

(202) 927-1249.

Attachment

Joyce Meztger

0234

9061071

March 2, 1999

FO:OB:TA JAP

CATEGORY: GSP

TO : Importers, Brokers and Other Interested Parties

FROM : Director, Trade Agreements

SUBJECT : Erroneous Generalized System of Preferences (GSP)Refunds

Refunds were erroneously issued for goods classified and entered

from Thailand under HTSUS numbers 7113.11.20 and 7113.19.50

during the period that GSP lapsed, July i, 1998 - October 20,

1998.

The Omnibus Budget Bill of 1998 renewed GSP and stipulated that

U.S. Customs would "only issue retroactive refunds for goods to

which duty-free treatment under the program would have applied on

or before July i, 1998. In accordance with the Office of the

United States Trade Representative's (USTR) £ederal Reaister

notice of Tuesday, June 30, 1998, Vol. 63, No. 125, page 35632,

duty-free treatment under GSP did not apply to the goods noted

above until July 15, 1998.

Importers of goods classified under HTSUS numbers 7113.11.20 and

7113.19.50 from Thailand, entered during the period GSP had

lapsed and received a retroactive refund, will be billed for the

appropriate Customs duties and interest.

Questions regarding this notice should be directed John Pierce,

Trade Agreements, at (202) 927-1249.

i

0235


BEFORE: HON. GREGORY W. CARMAN, JUDGE

SAMUEL AARON, INC.,

Plaintiff,

V.

UNITED STATES,

Def_ud_L :

ORSGUNAL

Court No. 03-00053

DEFENDANT'S RESPONSE TO PLAINTIFF'S FIRST

INTERROGATORIES, REQUEST FOR PRODUCTION, AND

REQUEST FOR ADMISSIONS DIRECTED TO DEFENDANT

Pursuant to Rules 33 and 34, Rules of the United States Court of International Trade,

defendant United States hereby responds to Plahttiff's First Interrogatories, Request for

Production, and Request for Admission Dh'ected to Defendant, dated October 8, 2004, as

follows:

I. Request for Admissions (Revised Oct. 29, 2004)

Request for Admission No. 1:

1. The exact amount of duty due in dollars and cents for each of the entries listed on

Schedule A was not calculated at the same time U.S. Customs and Border Protection ("CBP")

personnel at the Ports of New York, Newark, or JFK Airport performed the "off-line

liquidations" ofthuse entries on or before February 8, 1999.

USA's Response:

Denies for lack of information or knowledge su_eient to form a belief as to the troth of

whefller any personnel employed by the U.S. Customs and Border Protection ("Customs" or

,

"CBP") actually calculated the duty due on anY of the entries in dollars and cents, on or beforeI

February 8, 1999. Defendant has made reasonable inquiry but the information lmown or readily

0236

LISA RESPONSE TO PLAINTIFF'S DISCOVERY, JANUARY 14, 2005, COURT NO. 03-00053, CONTINUED:

Page 33 of 36 pages.

(e.g., computer, typewritten, hand written) for liquidations and rellquidafions conducted at those

Ports in 19997

USA's Response:

26. Same as 25.

HI. Request for Production

Request No. 1.

1. Produce any and all instructions or communication_s provided by CBP Headquarters to the

ports that detailed how to treat entries of jewelry from Thailand made between July 1, 1998

through October 21, 1998..

USA's Response:

1. DOC. #6. Draft of a Memorandum to Port Director from Director, Trade

Agreements (a handwritten notation states that this is a draft from John Pieree's archives, and that

the archiye indicates a date of February 12, 1999; however, it is believed that the memorandum -_

was actually issued January 29, 1999.)

DOC. #7. Memorandum to "Importers, Brokers and Other interested Parties"

from Director, Trade Agreements, dated March 2, 1999, reference number 9061071.

Request No. 2,

2. Produce every CBP document, ificluding egrrespondenee , letters, notes, memoranda,

facsimiles, E-mails, voice mail recordings, an_or other records made or created by any party by

electronic or other means, regarding "off-line fiquidation."

USA's Response:

2. Defendant objects to this request Ias overly broad and unduly burdensome. To thei

extent it seeks documents f_om other than Headquarters or Newark, New York, or JFK Airport,

0237

_ " _-- ' .............. _ RUG--11--2006 _ TIHE 16:20

NDDE= _ _[SSION STPRT=RUC.,--1116:18 8,,_=AUUv-ll16:20

FILE HO._248

HO. GleN. _ NO. STATIOH_ liD. _ ]XIR_TION

081 OK 2 _,_2017 006,*00600:01:35

-_OgfiINDH

- _ - 212 B3,99183-

Tb'_,,212-776-0085FAX:212-B3S-9103

DATE: 8/11/2006

SERKO SIMON GLUCK & KANE LLPCUSTOMS& INTERNATIONALTRACELAW

1700 BROADWAY31aTFLOOR

NEW YORK, N. Y. 10019

_-MAIL:_erko-tlmea®¢ultom_-tsw.aomIHTERNET; www,oustoml-law.oom

FACSIMILE TRANSMISSION COVER 8H]gET

The information contained in this f_csimile message is attocuey psi-vileged and eonfidenlL_l information intended ouly for the use of theIndividual or entity named below. If the reader of this message is notthe inteuded recipient 9you are hereby notified that any dissemination,distribution or COl_ of this communication Is strictly prohibited. Ifyou have received this ¢ommnnientfon in error, please Immediatelynotify us by telephone and destroy the original me__a_. Thank yell

PLEASE DELIVER TO: IFKyM'dler

JeromeHaultin

MESSAGE: Per your request_ please find copies of Cllstoms Headquarters'January 29_ 1999 memo to the Paris. A COl_ of rids mere wasntmched as Exhlb|t 3 to oar Summary Judgment Memaraadun_ Thismemo h also an nttoclunant to the tint Larry, P._an Declarationattached to Defendant's Cruss-Motian Memorandum. Mr. Ryan, inhis responses to our Request for Production when this document wasproduced, indicated that this was the only copy Customs could find,that it came from Import 8t_m/l_ John Pieree'e archives atHeadquarters, and that, despite the notation on the upper right, "it isbelieved that the memorand-m was actually issued on ianuar7 29,1999." I lmve Ineinded a copy orflta Request for Production response.The March 2, L_9_ memorandum was produced pursuant In the sameRequest for Production. It daes nat seem to have been attached to anyof the parties may;rig papers.

If you need anything else, please let mo know.

TRAlqSbIITIIlqG: __ pages, including cover page.

I1"you need any page(s) re-sent, plmse call 212-775-0055. If not, we shall assume that youhave received all pages satisfactorily. Thank you.

0238

TEL.212-775-0055

FAX: 212-839-9103

1SERKO SIMON GLUCK & KANE LLP

CUSTOMS & INTERNATIONAL TRADE LAW

1700 BROADWAY

31 sT FLOOR


E-MAIL: [email protected]

|NTERNET: www.customs-law.com

DATE: 8114/2006

FACSIMILE TRANSMISSION COVER SHEET

The information contained in this facsimile message is attorney pri-

vileged and confidential information intended only for the use of the

individual or entity named below. If the reader of this message is not

the intended recipient, you are hereby notified that any dissemination,

distribution or copy of this communication is strictly prohibited. If

you have received this communication in error, please immediately

notify us by telephone and destroy the original message. Thank you.

PLEASE DELIVER TO:

FAX#:

FROM:

Kit Miller

(212) 264-2017

Jerome Hanifm

MESSAGE: Per your request.

1915 version on top and 1992 version on bottom.

TRANSMITTING: _ pages, including cover page.

If you need any page(s) re-sent, please call 212-775-0055. If not, we shaft assume that you

have received all pages satisfactorily. Thank you.

SIGNATURE:

0239

_Y D_,

C, D.,_._ lO-Zg,

!

UNITED STAT_S OUBTOMS SERVICE

BULLETIN N01"IO_ OF ENTRIES LIQUIDATF_.D

Entries Liquid_ed on

£NI'R'fNO. DATE OF ENTILv

i '!ig

(I

Collection Diet, No .....

. Pm¢--_.___',._

Zlv_oP,.l_

0240

andso Stampede.=:.

_ .

UNITED STATES CUSTOMS SERVICE

ENTRI_.5 OLIIDAT]:_" SO STAMPED (Incma._, Om::mase, Na Cl'r_g_)C 1 .g- 1

AND NU_ER

pz'_r to 7-12-74 ar_ _,L.._;,,

i

DAT_ O F [_NTFW IMPORTER OR CLAIMANTm

#"

y_ .am_L_a._..U_._ r_eUqu._led._ount,a protestmaybem_t_n so daysor1he

PORT

REMUS

Customs Form 4333 (041092)

0241-

...... _. _- __ DAlE _F-.r-14-EB86 _ TIME 89:46

MODE - _ II_HSMISSIOH S'l'fR'T"f:tL_-"14 89:45 I_ID=FLr_x-14 89:46

FILE NO. -252

SIN liD. COMM. RI]BR NO. STRTION _ NO. PRI3ES _ll]H

_1 OK a ES4E_17 _ 88:e8:40

-SE]_OgS 1FiON

- _ - 212 839 9183-

TeL,Z12-776-00S5

FAX:21Z43g.8103

SERKO SIMON GLUCK & KANE LLP

CUSTOMS & INTERNATIONAL TRADE LAW

1700 EROAOWAY3"} :IT FLOOR


E-MAIU serko-elm on_cuatoms-law.cnm|NTERNET; www,oustoms-law.¢om

DATE: _14_006

FACSIMILE TRANSMISSION COVER 8HEET

The Information contained in this facsimile message is -tinroey pri-vileged and eontldenfial information intended only for the use of theindividual or entity named below. If the reader of this message Is notthe i-teaded recipient, you are hereby notified that any dhsemlaatlan,distribution or copy of this communication is sirictly prelflblted. Ifyou have received thb ¢ommunieatlun in error, pleaGe immediatelynotify us by telephone and destroy the or_ message. Thank you.

PLEASE DELIVER TO:

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FROM."

Kit Afllle r

(212) 264-2o17

Jerome Hmflfin

MESSAGE: Per your request.1915 version on top and 1992 version on bottom.

TRANSMITTING: _ pages, including cover page.

If you need ony page(s) re-sent, please call 21_-7"/5-005S. If not, we shall assume that you

have received all pages satisfactorily. Thank ,yen,

SIGNATURE:

0242



SAMUEL AARON, INC.,

"%/

UNITED STATES,

Plaintiff,

Defendant. :

Court No. 03-00053

MEMORANDUM IN SUPPORT OF DEFENDANT'SCROSS-MOTION FOR SUMMARY JUD(_MENT AND OPPOSITION TO

PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

PETER D. [CEISLER

Assistant Attorney General

By: BARBARA S. WILLIAMS

Attomey in ChargeInternational Trade Field Office

Of Counsel:EDWARD N. MAURER

Office of Assistant Chief Counsel

Iummational Trade LitigationU.S. Customs and Border Protection

26 Federal Plaza- Suite 258

New York, NY 10278

JACK S.ROCKAFELLOW

Civil Division, Dept. of JusticeCommercial Litigation Branch26 Federal Plaza- Suite 345

New York, NY 10278

Attorneys for DefendantTel. (212) 264-0482 or 0874

0243



SAMUEL AARON, INC.,

Plaintiff,

V.

UNITED STATES,

Defendant. :

CourtNo. 03-00053

MEMORANDUM IN SUPPORT OF DEFENDANT'S

CROSS-MOTION FOR SUMMARY JUDGMENT AND OPPOSITION TO

PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

INTRODUCTION

Defendant United States ("Government") submits this memorandum in opposition to the

motion for surmuaryjudgrnent filed by plaintiff Samuel Aaron, Inc. ("Aaron"), and in support of

the Government's cross-motion for summary.judgment. Surmuaryjudgment in favor of the

Government should be granted because it is essential to the proper and orderly administration of

the Harmonized Tariff Schedule of the United States ("HTSUS") that the U.S. Customs and

Border Protection ("Customs") not be hamstrung in its ability to aceolnplish reliquidations using

its offline bulletin notice procedure for those situations that simply do not fit squarely into the

normal method of performing liquidations using Customs' Automated Commercial System

("ACS"). Congress could not have intended!anything less, particularly where Customs' time toI

i

accomplish a reliquidation has nearly expired and an ACS-genemted notice cannot be given.

• . t i _

Giving effect to Aaron's claims m this ease, would, as a pmctieai matter, prevent Customs f_omI

being able to reliquidate entries within the lit i4-21 days before the end of the 90 day period1L

provided by Congress in 19 U.S.C. § 1501. '

0244

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PORT CODE 1001

EIqTKY ENTRY ENTRY

TYPE NUMBER DATE

BULLETIN NOTICE of LIQUIDATi

[MPOR'TER

Va,ed"FEB0 8 1999IMPORTER REMARKS *

NUMBER

01 H67 / 11205293 101398

Ol H67 / 11205301 101398

Ol H67 / 11205319 101398

01 H67 / 11206754 101498

01 H67 / 11206762 101498

Ol H67 / 11208081 101998

01 H67 / 11208099 101998

01 H67 / 11209105 102098

01 362 / 17748189 100598

01 617 / 04144205 082698

01 617 / 04145756 092298

01 617 / 04145814 092298

01 661 / 00631267 071598

01 661 / 00_32398 080398

Ol 661 / 00635706 100598

01 661 / 00_36621 102698

01 T77 / 07656858 082398

01 T77 / 07656858 082398

01 T77 / 07656858 082398

01 T77 / 07657989 082698

Ol 368 / 00564936 101598

01 AR6 / 92087273 072398

Ol AR6 / 92088958 082198

Ol AR6 / 92089246 082798

Ol AR6 / 92089261 082798

01 AR6 / 92089279 082798

01 AR6 / 92089469 082898

01 AR6 / 92089972 090798

01 AR6 / 92099509 091098

Ol Ai_6 / 92090806 091798

01 AR6 / 92090897 091898

01 AR6 / 92091226 092598

01 _6 / 92091507 100298

01 AR6 / 92092380 101998

Ol N44 / 10220344 082898

Ol T77 / 07640357 070598

Ol T77 / 07640407 070598

Ol T77 / 07640407 070598

Ol T77 / 07642361 071298

Ol T77 / 07642700 071298

01 T77 / 07643484 071598

Ol T77 / 07643492 071598

Ol T77 / 07643500 071598

Ol T77 / 07643518 071598

Ol T77 / 07643526 071598

01 T77 / 07643864 071698

Ol T77 / 07643872 071698

Ol T77 / 07643872 • 071698

01 T77 / 07643872 071698

71 T77 / 07643880 071698

ODI-FAMOR INC. 13-194933700


JACMEL JEWELRY INC 13-291432500


JACMEL JEWELRY INC 13-291432500




FORTUNOFF FINE JEWELRY & 13-263503100

CRAIG DRAKE MFG., INC. 23-171477000

CRAIG DRAKE MFG., INC. 23-171477000

CRAIG DRAKE MEG., INC. 23-171477000

MILTON FRIEDMAN 111-44-3835

HRAUNSTEIN 13-176269200

BRAUNSTEIN 13-176269200

BKAUNSTEIN 13-176269200

M FABRIKANT & SONS 13-189401300

M FABRIKA_T & SONS 13-189401300


M FABRIK_T & SONS 13-189401300

S_UEL _ON INC 13-330394700

BENNY KHORSANDI/DSA-B.K.I 094-68-8147

BPdBA TRADING COMPANY INC 13-380567400

MAGNUM CREATION INC. 13-319479900

VICO IMPORTS LTD 13-367749000

BENNY KHORSANOI/DBA-B.K.I 094-68-8147

HEERA MOTI, INC. 13-348063500

MAGNUM CREATION INC. 13-319479900

PRIOFE GEM CORPORATION 13-289179500


HILLCREST CUSTOMS BROKERA 11-308626100

BENNY KHORSANDI/DBA-B.K.I 094-68-8147



STS JEWELS INC. 13-389576100

STAR DIAMOND TRADING CO. 13-357929600


M _ABRIKANT & SONS 13-189401300

OVERTON & COMPANY AIR SVS 13-343623700

STAR DIAMOND TRADING CO. 13-357929600

COSMOPOLITAN GEM CORP. 13-309538000

ASSIL GEM CORP. 13-299589500

LEER GEM LTD 13-277237900

BEHNAM JEWELRY CORP. 13-339480900

LEER GEM LTD 13-277237900

COSMOPOLITAN GEM CORP. 13-309538000


M FABRIKANT f SONS 13-189401300


ASSIL GEM CORP. 13-299589500

NOTE : REMARKS for all entry summaries listed on this BULLETIN NOTICE of LIQUIDATION

States"RELIQUIDATION - INCREASE"

0245

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PORT CODE 1001

ENTRY ENTRY ENTRY

TYPE NUlv_ER DATE

BULLETIN NOTICE of LIQUIDATR.,,_

IMPORTER

Dated:

IMPORTER

NUMBER

FEB 0 8 1999REMARKS *

Ol 821 / 01723128 100698

Ol 821 / 01723136 100698

Ol B21 / 01723706 100998

Ol 821 / 01724159 101298

01 821 / 01724332 101398

Ol 821 / 01724753 101498

01 821 / 01725115 101598

01 821 / 01725735 101898

Ol 851 / 47108097 082698

01 875 / 20983989 070798

Ol 875 / 20989663 090198

Ol 875 / 20993400 100598

Ol 885 / 07301021 091198

01 WgO / 00971908 102298

OTC INTERNATIONAL, LTD. 13-291020700



E.S.C. INC 13-364510000

HELENS ANDREWS INC 22-308865800


E.S.C. INC 13-364510000

INTL BULLION METAL BKRS U

STAMFORD COIN GALLERIES I

FORTUNOFF FINE JEWELRY &



BROFFS, INC..

THAI SILP JEWELRY

13-291986100

06-093976000

13-263503100 -- _

13-263503100

13-263503100

25-091577200

9847Ol-OO8 7

i

NOTE : RE_ukRKS for all entry summaries listed on thlsBULLETIN NOTICE of LIQUIDATIONStates "RELIQUIDATION - INCREASE".

8246

'POKTCODE

ENTRYTYPE

ENTRY

NUMBER

ENTRY

BULLETIN NOTICE of LIQUIDAT

IMPORTER

Dated:

IMPORTER

NUMBER

FEB0 8 1999REMARKS *

01 110 / 07002370 102698

01 110 / 07002370 102698

01 113 / 13156397 072098

01 113 / 13156405 072098

01 113 / 13165133 071598

01 113 / 13405224 082598

01 113 / 13416585 090998

01 113 / 13563550 090998

Ol 113 / 13578954 092198

01 113 / 13593011 100598

01 113 / 13593011 100598

01 113 / 13596576 100698

01 368 / 00557369 081098

01 368 / 00557526 081198

01 368 / 00561445 091898

01 368 / 0056_880 093098

01 368 / 00563565 100698

Ol 368 / 00564092 100998

01 368 / 00565594 102198

Ol 368 / 00566386 102698

01 548 / 00804483 092898

Ol 557 / 01159042 100798

Ol 609 / 02666399 101498

06 821 / 01713046 080798

Ol 821 / 01713848 081098

Ol 821 / 01715876 082698

01 821 / 01723250 100698

Ol 875 / 20989853 090398

Ol 875 / 20990299 090898

Ol 875 I 20992865 092998

Ol 875 / 20993467 100598

01 875 / 20993608 100698

Ol 875 / 20996445 102298

01 885 / 0?304629 102198

01 916 / 04749613 072398

SEARS ROEBUCK & CO 36-175068000

SEARS ROEBUCK & CO 36-175068000

FEDERATED PRODUCT DEVELOP 13-3324058FP

FEDERATED PRODUCT DEVELOP 13-3324058FP

FEDERATED PRODUCT DEVELOP 13-3324058£P

B.M. PEARL CO., INC. 13-326018300

FEDERATED MERCHANDISING 13-3324058FE





PRANDA NORTH _ERICA 05-046293100

SAMUEL AARON INC

SAMUEL AARON rNC

S_UEL AARON INC

SAMUEL AARON _NC

SAMUEL AARON INC

SAMUEL AARON INC

SAMUEL AARON INC

SAMUEL AARON INC

13-330394700

13-330394700

13-330394700

13-330394700

13-330394700 I

13-330394700

13-330394700 _4_13-330394700

SUPEX TRADING CORP 11-330288800

ADLERS 72-011460000

WORLDWIDE GOLD & SILVER E 13-386724300

H. STERN JEWELERS, INC. 13-199709300


BANGKOK CRAFT CORP. 13-287058400








BROFFS, INC.

RDC BRANDS INC.

13-263503100

13-263503100

13-263503100

13-263503100

13-263503100

13-263503100

25-09157720086-807004300

NOTE " REMARKS for all entry summanes hsted on this BULLETIN NOTICE oF LIQUIDATIONStates "RELIQUIDATION - INCREASE"

0247

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........................................... X

SAMUEL AARON, INC. ,

VS.

03-00053

Plaintiff,

Court #

UNITED STATES,

Defendant.

........................................... X

United States Court of

International Trade

New York, New York

August i0, 2006

i0:00 o'clock a.m.

BEFORE:

HONORABLE GREGORY W. CARMAN

0248

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APPEARANCES:

SERKO, SIMON, GLOCK & KANE, LLP

Attorneys for Plaintiff

1700 Broadway


BY: JEROME L. HANIFIN, ESQ.

CHRISTOPHER M. KANE, ESQ.

U.S. DEPARTMENT OF JUSTICE

CIVIL DIVISION

26 Federal Plaza


BY: JACK S. ROCKAFELLOW, ESQ.

0249

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PLAINTIFF'S

NO.

EXHIBITS

DESCRIPTION

Document

Affidavlt

PAGE

22

0250

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THE CLERK: All rise

Thls Court is now in session, the

Honorable Gregory W. Carman presiding, Court

No. 03-00053, Samuel Aaron versus United

States.

Is counsel for the Plaintiff

ready?

MR. HANIFIN: Yes.

JUDGE CARMAN: Is counsel for the

Defendant ready?

MR. ROCKAFELLOW: Yes.

JUDGE CARMAN: Are we ready to

proceed?

MR. ROCKAFELLOW: Yes, your

Honor.

Your Honor, 3ust for the record,

I want to note that Mr. Edward Maurer, from

the U.S. Customs, is with us today.

JUDGE CARMAN: Welcome to the

proceeding.

Will you please note co-counsel.

MR. HANIFIN: For the record,

Jerome Hanlfin, for the Zlaintiff, Samuel

Aaron, Incorporated.

With me today is Christopher

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Kane.

JUDGE CARMAN:

MR. HANIFIN:

JUDGE CARMAN:

MR. HANIFIN:

Mr. Kane is?

Right there.

He is a lawyer?

Yes.

And Joel Simon.

JUDGE CARMAN: Thank you.

Please proceed.

MR. HANIFIN: Yes, your Honor.

Good morning, your Honor.

May it please the Court, when I

flrst read the brlef of the Government, I was

klnd of stunned by the fact that they're

asking you to ignore the statute, and ratify

somethlng that they do, because they simply

can't comply with the ninety-day deadllne.

I thought this was a rather

startling way to begln an argument. They are

baslcally asklng you to ignore the statute.

JUDGE CARMAN:

you talking about?

MR. HANIFIN:

Which statute are

19 USC 1500, which

governs liquldations, which requires --

liquldation is a process, your Honor, and the

process is that flrst you identlfy the entry

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that you are going to llquldate. Then you

calculate the duty due, or the refund, or the

fact that there w111 be no change in the

duty.

And then you post a bulletln

notlce based on the identificatlon of the

entrles, and the calculation of the dutles.

Those two things are predlcates,

before you can post a bulletin notlce.

A bulletin notlce cannot exist

wlthout an identlfication of entrfes, and a

calculatlon of dutles, and they dld not do

that here.

Your Honor, as to identifying the

dutles, while we were reviewing our Exhlbit

No. 9, whlch is a document that Customs

created and submltted, the Port of New York

created and submitted to Headquarters for the

protest decislon that underlles thelr

declsion in our case.

It includes copies of a couple of

pages from the off llne supposed bulletin

notice.

I have copies of those, if your

Honor would llke to look at them.

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JUDGE CARMAN: Yes.

Is there any opposition to that?

MR. ROCKAFELLOW: It was an

Exhlbit No. 9 of the Plalntiff's original

moving papers.

JUDGE CARMAN: All right.

Just for the record, I will mark

this as Exhlbit 1 for the Plaintiff.

(Document marked Plaintiff's

Exhiblt I.)

MR. HANIFIN: If you will look at

the document --

JUDGE CARMAN:

to mark it.

MR. HANIFIN:

JUDGE CARMAN:

JUDGE CARMAN:

MR. HANIFIN:

Give us a mlnute

Sure.

Mark it Exhlbit I.

Proceed.

I have extra

copies, if anyone needs one.

JUDGE CARMAN: Please proceed.


If you will look at this

document, we believe thls was included in the

package of documents they sent '_to

,J 1

Headquarters, because J.t conta3.ns entries

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from the company that filed that protest,

which we've been able to identlfy as

Fortunoff flne jewelry.

It also contains a couple of

Samuel Aaron entrles that are at issue in

this case.

I draw your attention on the

flrst page, there is an entry for a company

named Browns Braunstein. I have an asterisk

next to it.

JUDGE CARMAN: Yes.

MR. HANIFIN: You will note the

entry date is 10/26/98.

Also, if you will go to the third

page, you wlll see a number of Samuel Aaron

entries also hlghlighted, and the last two in

the middle of the page have asterlsks next to

them.

Again, you wlll note the entry

dates, 10/21/98 and 10/26.

Your Honor, the January 29th memo

issued by Headquarters, and the statute

underlying it, which reactivated GSP, set the

cutoff date of October 20th. So anything

entered after October 20th is ellgible for

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GSP.

They attempted to reliquldate

entries contrary to thelr own instructions.

Th_s is evidence that when they

were dolng that identlflcatlon of the entries

that's requlred by liquldatlon, they dld it

in a very slipshod manner. They were just

trying to catch everything they could. They

had no time in their mind to complete what

they needed to do.

In addltlon -- it gets even

worse, your Honor, because for entry No. --

if you can excuse me for ]ust a second --

the 10/21 entry, they actually, I believe --

JUDGE CARMAN: Where are you, on

page 3?

MR. HANIFIN: Yes, your Honor,

I'm going to be looking at those two entries.

JUDGE CARMAN: And which two

entries?

MR. HANIFIN: Here we go.

Okay. The 10/21 entry, they

posted on this purported bulletinnotice of

llquldatlon, and they actually -- we would

argue that they dldn't calculate the duty

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until they ran the script the week of October

12th.

And then they actually posted

bulletln notlce based on that identification,

and that calculatlon.

JUDGE CARMAN: Well, an regard to

the calculation, it seems clear they have to

calculate. The questlon is, do they have to

put them on notice necessarily.

MR. HANIFIN: No, your Honor,

they don't have to put the exact amount on

the notlce, on the bulletin notice of

llquldatlon.

JUDGE CARMAN:

MR. HANIFIN:

Okay.

There is case law

that says that the increases, decreases, are

okay.

JUDGE CARMAN:

amount would be helpful.

MR. HANIFIN:

What they do have to do --

It sounds like the

It would probably

helpful if they posted the actual amount,be

but that's not what --

JUDGE CARMAN:

we're talklng about today.

That'snot what

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MR. HANIFIN: Right. We're not

contestlng the fact that they put increase,

decrease, no change on the bulletin notlce of

liquidatlon.

They have to do the calculations

flrst, because it's required by statute.

JUDGE CARMAN: Right.

MR. HANIFIN: You can't have a

llquidatlon, you can't post a notice until

you finlsh with liquidation.

JUDGE CARMAN: Right.

MR. HANIFIN: They didn't do this

until April 12th, when they ran the script.

They dld not --

JUDGE CARMAN: We don't know when

they did it? Do we really know?

MR. HANIFIN: In their

declaration, I believe in the Larry Ryan

declaration, they state that they ran the

script the week of April 12th.

JUDGE CARMAN: They didn't say

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when they ran the calculation, did they?

MR. HANIFIN: No, your Honor.

JUDGE CARM/_N:_ I thlnk they said

they knew.

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problem.

the moment.

MR. HANIFIN: They said they

knew, but, in fact, I don't thlnk they did.

JUDGE CARMAN: That's another

We don't know the answer to that at

MR. HANIFIN: Well, your Honor --

JUDGE CARMAN: Presumably, I'm

golng to glve you the benefit of the doubt.

I'm guessing that it was calculated.

The problem we have here is we

don't know the earnings specifically.

What happened on the liquidatlon

date on February 8th?

In fact, what took place on

February 9th is not really a proper

l±quidatlon.

MR. HANIFIN: Your Honor, I would

like to make a couple of polnts with regard

to your questions.

JUDGE CARMAN: Okay. I don't

want to interrupt your argument, but this is

the first exhibit I have a questlon about.

MR. HANIFIN:

JUDGE CARMAN:

MR. HANIFIN:

I understand.

Okay.

Absolutely.

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I would beg to differ with your

Honor as to whether or not they calculated

it.

They said that they knew what it

was, because it was in the system already.

They dldn't say that they did

anything to determine what each individual

entry, what was golng to be due back, or

anything of that nature.

In fact, your Honor, for one of

our entrles, there was a second llne item, a

mold, that was allowed to have GSP on it.

So thelr statement -- they

liquldate entries, not llne items. So they

had to flgure out the whole entry --

JUDGE CARMAN: My question Is in

summary judgment, is that a question of fact

that I have to take into account?

Do I need an evidentiary hearing

to determine whether they calculated it or

not?

MR. HANIFIN: I don't think you

need an evldentiary hearing, your Honor. It

seems clear to me, they clearly stated that

they did nothing, they lust knew what it was,

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because there was a record in ACS.

JUDGE CARMAN: Is there anyplace

in the record where they said they did that

calculation?

MR. HANIFIN: They never say,

they never come rlght out and say they did

not calculate, your Honor.

What they do say is that we

knew -- the calculation that we did is the

fact that we gave you the refund before, and

we are simply going to take that back.

But that wasn't true for at least

one entry, because on that entry there was a

llne item that they were going to take back,

and there was a line item that they weren't

going to take back.

Now, Plaintiff trles to dlsmiss

this as, you know, oh, well, that's only one

entry. I think the difference was

forty-seven cents, or something tO that

effect.

But it proves the polnt, your

They have to calculate it'before they

post the notice, and they didn't do r that

here.

Honor.

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JUDGE CARMAN:

understand your point.

MR. HANIFIN:

I think I

Now, for what

there?

JUDGE CARMAN:

upset about that?

MR. HANIFIN:

happened on February 8th, that's central.

What was it that they put up

It was not a Customs Form 4333.

Why should I be

Your Honor,

liquldation is the llnchpin of judiclal

revlew of Customs actions.

Customs itself has set up

speclflc regulatlons about how they are going

to liquidate things.

They have standard operating

procedures at the Port of New York.

JUDGE CARMAN: Well, first of

all, what does the regulatlon say that they

have to put it on this form?

MR. HANIFIN: Every single --

JUDGE CARMAN: Is that 159.97

MR. HANIFIN: It's throughout

Part 159. I

I thlnk in every single I instancei

where they say "bulletln notice of

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liquidation," they have a comma after it, and

say, "Customs Form 4333."

And they're standard operatlng

procedures. The same thlng, it always says

on Customs Form 4333.

JUDGE CARMAN: Which standard

operating procedure is that?

MR. HANIFIN: These were

Exhibits, I believe, 6 and 7 to our brief,

your Honor. It's the standard operating

procedures for the Port of New York.

We had asked --

JUDGE CARMAN: Talk to me about

standard operating procedures. How do they

work? Do they interpret the regulations?

MR. HANIFIN: It would seem they

interpret the regulatlons, your Honor, but a

key point in all of this is that these off

llne liquidations, or at least the procedures

that they use to do thls, is sanctioned

nowhere in the statute, the regulations, any

Customs dlrectlve. It just pops up in

passlng in the standard operating procedures.

There is no legal basis for

authorlzing them to do what they have done.

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JUDGE CARMAN: Well, my question

to you is, is there a legal basis for putting

it under 4333?


I would argue that it's required,

because the regulatlons speclfically state on

bulletin notice of liquidation, Customs Form

4333.

JUDGE CARMAN: It seems to me the

standard operating procedure states when it

is necessary to post on off line bulletin, CF

4333 w111 be used. It's on an off line

bulletin.

I gather the standard operating

procedures were subsequent to the CFR.


The CFR is largely unchanged for many years.

JUDGE CARMAN:

this 4333 form go?

MR. HANIFIN:

And how long does

We have case law --

well, actually, your Honor, I believe the

Defendant, in its reply brlef, in its

attachment to Larry Ryan'sl supplemental

declaration, provlded the Court with a copy

of the current Customs Form 4333, which I

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believe was promulgated in 1992, and a copy

of one from 1915.

JUDGE CARMAN:

recollectlon, it was 1956.

a while.

To my

It's been around

MR. HANIFIN:

JUDGE CARMAN:

MR. HANIFIN:

Yes, your Honor.

Okay. Proceed.

Okay, your Honor.

I want to go back to what I was

saying about the entrles that were on the

list in contradiction to the instructions

that they received from Headquarters, your

Honor, because for the second entry, it's

even more bizarre, what they did.

JUDGE CARMAN: You have to be

more specific.

MR. HANIFIN: Yes, your Honor,

I'm going to be very specific right now.

On page 3, entry No. 36800566386,

which is the second Samuel Aaron entry, with

an asterisk on it, on the thlrd page.

JUDGE CARMAN: Yes.

MR. HANIFIN: The entry date is

10/26/98.

JUDGE CARMAN: I 'm with you.

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MR. HANIFIN: Despite the fact

that it llsted that on here, your Honor,

there is script in the week of April 12th,

dld not pick it up for some reason, they

never billed it, they never calculated any

duty after the fact,

in fact, with thls,

put it on here.

Now,

they didn't do anything,

you know, after they had

arguably, from the

Government's polnt of vlew, this is a

rellquidation, and dutles would be due, and

there would be consequences flowing from

that. But they dldn't even treat it as such

in their subsequent actions. They never

billed for it.

Your Honor, I would like to

provlde the Court with an affidavit from

Maria Mulieri. She works for General Customs

Brokers, which is the brokerage that handled

these entries. She actually handled these

entries back in 1998.

JUDGE CARMAN: The entries that

you're referring to?

MR. HANIFIN: Yes, all of the

entrles at issue here.

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She makes two points in her

affidavit, your Honor.

The first polnt is that she knows

nothing of off line bulletin notices of

liquidations, and she has been in the

industry for twenty-eight years.

The second point, your Honor, is

she verifies the accuracy of the two ACS

printouts that are attached -- actually, one

of them is not attached, but should be, and I

apologlze for that.

I would like to enter this into

evidence, your Honor, the polnt belng if you

look at the ACS entry, and Mr. Maurer had

flled a declaration with a reply brief,

saylng that he had reviewed ACS entrles from

the entries at issue.

Thls is part of what constltutes

the entry file, because these were paperless-

entries, and only resides on the Customs

computer system.

And this document shows for the

entry we are discussing, the last three

dlglts are 3, 6, 8, or 3, 8 6, excuse me.

They dldn't reliquldate it. It

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shows only a llquldatlon date of 12/11/98.

It does not show that anything happened on

either February 8th or Aprll 30th, despite

the fact that it's on here.

JUDGE CARMAN: "On here" meaning

what?

MR. HANIFIN: Listed on their

February 8th proposed, supposed, bulletin

notlce of liquldation, and despite the fact

that it was entered after the date where GSP

was reinstated.

So the point I'm trylng to make

of thls, your Honor --

JUDGE CARMAN:

introduce an affidavlt.

MR. HANIFIN:

you the affldavlt.

JUDGE CARMAN:

copy to your opponent?

MR. HANIFIN:

JUDGE CARMAN:

be Plaintiff's Exhiblt 2.

Exhibit 2.)

You wanted to

Yes, let me glve

Did you give a

Yes.

Okay. Thls will

(Document marked Plaintiff's

JUDGE CARMAN: Any objectlon to

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it going into evidence?

Any ob]ection, Mr. Rockefeller.

MR. HANIFIN: Your Honor, I

apologize --

JUDGE CARMAN: Any ob3ection, Mr.

Rockefeller?

MR. ROCKAFELLOW: We do object to

these affidavits, your Honor.

This was not presented in the

Plalntiff's case in chief in their pleadlngs.

We also object to the relevancy of it.

Plalntlff Aaron has repeatedly

told us and agreed that the merits of whether

or not the GSP and the reliquidatlon, that

that's not at issue. The only issue is

whether there was a valid reliquidatlon

notice on February 8th.

So based on relevancy, and also

surprise, we just got these faxes last night,

we would ob]ect to these affldavits.

We have no way of cross-examinlng

these people.

As to the statements about it,i

they may not, in fact, after speaking with

someone from Customs this morning, they agree

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that these people may not know these

documents by quote, "off llne bulletin of

liquldatlon." They may not know -- have that

term in their mlnd.

But our people from Customs

believe that these people understand that

these types of notices, the off line, or the

bulletin notices of liquidations, are not

handled on llne, that those aren't posted.

But we have no way of checking,

or asking these people about that.

JUDGE CARMAN: Let me just take a

look at it.

I'll reserve decision in regard

to your objection.

MR. HANIFIN: Your Honor, I'd

like to address his comments, briefly, if I

may.

JUDGE CARMAN: Sure.

MR. HANIFIN: These affidavits

were obtained for two reasons.

In the reply brief, the

Government submitted two declarations wlth

documentation that we never had a chance to

respond to, including statements about

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everybody knows about off line liquidations

zn the industry.

And that's the response to that.

In addition, your Honor, we also

created these in response to the work that we

did in preparing to answer questions that

were given us. We were specifically asked

what was on the off line bulletin notlce of

liquidatlon of February 8th.

And when we went and looked at

them, we found it's riddled wzth errors.

It's not ]ust the two entrles, it's every one

we put an asterisk nearby that was done, in

almost every case, there are clearly two or

three companies, so there is no question

about what zs gozng on.

And they vlolate the znstructlons

that they got from Headquarters as to what

they were supposed to do.

JUDGE CARMAN: Well, that may

very well be. But your questzon for me zs,

it seems to me, at this point, zs whether or

not there was a valzd reliquzdation on

February 8th.

Isn't that what the question zs

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before me?

MR. HANIFIN: It's one of the

questions that needs to be answered, your

Honor, whether there was llquidation or not.

JUDGE CARMAN: We don't have a

stzpulation with regard to this. lhnd it's

part of the record.

I appreclate, by the way, the

cooperation by both counsel.

I notice on February 8th the

Customs placed a record, a document, in a

notebook or binder in a room used by Customs

at the Port of New York for maklng its

bulletin notices of liquldation, or

reliquldation, available to the public.

I'd llke to zero on that February

8th event, if I posslbly can, this morning.

Was that a proper event that took

place? Were there mistakes in it? Was that

a proper reliquldation?

MR. HANIFIN: No, your Honor, it

was not a proper reliquidatlon.

JUDGE CARMAN:

MR. HANIFIN:

the entries correctly.

Why?

It did not identify

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More importantly, they did not

calculate the duty before they posted it, and

your Honor, it was not on Customs Form 4333,

which is required by their own regulations,

and their operatlng procedures.

And finally, your Honor, we can

look to whether thlS was a valld posted

bulletln notice, an the sense that it was a

small book in a room with shelves and shelves

of labeled computer printout data, bulletln

notices of liquidation.

Now, I know you expressed a

concern about the Frederick case, your Honor,

that we had recently, and I would like to

address that dlrectly, because I think at is

relevant to thls an the sense that, yes, the

fact that they don't have a sign-up does not

meet the requirements of 159.9, for

consp±cuous placement.

But I don't think anybody can

honestly say, your Honor, that a small

book -- and that's what they call it, one

little binder or folder, put over in the

corner, in a room wlth thousands and

thousands of entries, hundreds, 365 books, at

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least, a year -- that that is conspicuous.

That somehow the trade must know about it.

Your Honor, if you accept that

affidavit, it's clear that she did not know

about it, and quite frankly, I have another

affldavit from a broker who has been in the

business for flfty-five years, and he knows

nothlng of off line bulletin notices of

liquidation.

It is not conspicuous. It's

obscure, it's stuck in a corner, nobody knows

it's there.

You have absolutely -- if you

were --

JUDGE CARMAN: Because it was off

llne, you maintain that's part of what makes

It illegal?

MR. HANIFIN: The fact, the way

that they dld it, and the way that they

posted it, yes, your Honor.

You know what, your Honor --

JUDGE CARMAN:

procedure 111egal?

MR. HANIFIN:

yes.

Is the off llne

The way they do it,

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JUDGE CARMAN: Can they do an off

line procedure?

MR. HANIFIN: There may be ways

that they can structure an off line procedure

that would be legally valid. This is not one

of them, your Honor.

JUDGE CARMAN: Okay. It would be

consistent with the regulatlons and the

statutes that they have right now?

MR. HANIFIN: It's possible that

they can do that.

This is not what happened here.

For instance, your Honor, if they

had taken those pages and stapled them to the

regular bulletln notlce of llquldation for

that date, so it's in the same place, it's

labeled on the same date, we would have a

very different case. We would be in a much

more difflcult positlon. There is no

question, it's in the book, you'd flnd it.

But no, they don't put it in the

book with all the other bulletln notlces of

liquidation, although they clearly could find

a way to do that. They stick it _over in some

little folder on the side, that you would

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have absolutely no reason to know exists.

If I went in there to look, I'd

look at the book.

Why would I know that there is

some book on the slde with extra stuff

handwritten or typed in?

Your Honor, it doesn't meet the

requirements of the regulation.

And I would thlnk Frederick and

all the other cases on it, that there was

good reason for those declsions, as you well

know. You could flnd those things, because

you knew to ask where are the bulletin

notlces of liquidation.

If you don't even know to ask

where the off llne bulletln notices of

liquldation are, there ±s no reason to

belleve that Customs Informatlon Office, or

anybody else, is going to tell you about

them.

JUDGE CARMAN: If they gave you

all the information on the Form 4333, but

just simply didn't identlfy it, why should

that be a big issue?

MR. HANIFIN: Could you --

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JUDGE CARMAN: It looks to me as

if they are saying substantively, the

Government is, saying substantively, they

gave you all the informatlon you flnd in the

Form 4333, what they provided, but it's not

on Form 4333.

What's the blg difference? Why

should I be concerned about that?

MR. HANIFIN: The biggest

difference, your Honor, is that -- and to be

completely honest about the sltuation --

JUDGE CARMAN: I hope you are.


The computer printouts are not

important on the Customs Form.

JUDGE CARMAN: It gives you the

same information, don't they?

MR. HANIFIN: They do, but the

key difference, your Honor, is they actually

say CF 4333 on it. This does not.

JUDGE CARMAN: The notice they

gave was not on Form CF 4333?

MR. HANIFIN: Yes; .your Honor.

It dldn't even purport to be that.iI

JUDGE CARMAN: Why should that be

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so slgnlficant?

MR. HANIFIN: It's significant

because the regulations specifically require

bulletin notlce beyond Customs Form 4333.

And if I were going to look for

something, and I looked in the regulations,

what do I have to look for?

Bulletin notlce on Customs Form

4333, I'm going to look for Customs Form

4333, your Honor.

JUDGE CARMAN: Even though

substantively you have all the material

there, you would st111 be looklng for that

4333?

MR. HANIFIN: I would argue that

many importers would, your Honor, yes.

JUDGE CARMAN: Okay.

MR. KANE: Your Honor, may I just

say something to counsel?

JUDGE CARMAN: Sure.

Just for the record, ]ust state

your name.

MR. KANE: Christopher Kane.

In the regulations, there is a

dlstlnctlon, and also a practice, between

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Customs Form 4333 and the Customs Form 4333A,

the courtesy notice.

Customs and the courts have

recognized that the officlal bulletin notice

of liquidation is on Customs Form 4333, and

failure to receive a courtesy notlce on 4333A

is not a requlslte to have notice of

llquldatlon.

Well, the regulation says that

the Customs Servlce will endeavor to issue a

courtesy notice.

And I think that speaks to

whether the 4333 form is an essential

document, or merely one of many documents

that might be considered valid notices of

liquidation.

JUDGE CARMAN:

MR. HANIFIN:

Thank you.

Your Honor, I

believe I would like to 3ust briefly touch on

two more points that are encompassed here.

JUDGE CARMAN:

three mlnutes.

MR. HANIFIN:

I'll give you

Okay. Thank you.

You had asked if thls was in the

I'

regular course of business.

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Customs has told us in their

Interrogatory responses that we had

propounded to them that the Court did 1.5 to

two million entries a year at that time.

And declarations of Mr. Ryan

indlcate, and Mr. Camura, indicate that these

things happen maybe once a week, maybe every

other week, and there were one or two entries

on them.

If you do the math, your Honor,

you're talking hundreds or thousands of a

percent of the entrles that come into the

port as belng done by th_s process.

JUDGE CARMAN: And by doing it In

that fashion, are they dolng It as a matter

of course under thls Form 4333, or are they

]ust ignoring it?

MR. HANIFIN: They're ignorlng it

when they do it off llne.

When they do the .5 mlllion, they

do it on a computer-generated printout whlch

has "CF 4333" prlnted on it. ,

The off llne liquidation is not

done in the regular course of buslness, very

rare occurrences relative to the volume of

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entries that they process. They do note

indlcate that it's Customs 4333, based on the

evldence that we have.

JUDGE CARMAN: They could do it,

they have to wrlte out the Form 4333, rlght,

the actual form, or would they have to get a

printed up form from Customs, and they could

wrlte it on it?

I guess they ]ust didn't do it.

MR. HANIFIN: They didn't do it.

They don't identify it as a Customs Form

4333. Maybe they could have. I don't know

why they didn't.

JUDGE CARMAN: WIll thls kind of

procedure actually be determined by Customs

and usage problems?

They've been doing it for twenty

years.

I presume you people in the

business would know that. It's the way it's

has been used over the years.

MR. HANIFIN: Your Honor, I would

beg to differ, because of the affidavlt we

gave you before, and if you'll accept it, ther

broker has been in business for over fifty

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years, they know nothing of these off line

bulletln notices.

The only statement that the

Government makes is a passing statement by

Larry Ryan, completely unsupported in his

declaratlon, that he thinks the industry has

to know about it.

JUDGE CARMAN: Is there any

authority for the use of this off line

bulletln procedure?

MR. HANIFIN: No, your Honor,

absolutely not. It's not sanctioned by

statute, it's not sanctloned by regulatlon,

there is no Customs dlrective about this.

The only thing that talks about

it Is that's an offlclal document that we

have been able to find in terms of

authorizing or talklng about how you do it,

are the standard operating procedures from

New York, but they don't clte any support for

belng able to do it. They 3ust say if you've

got to do this, thls is how you do it.

JUDGE CARMAN: Well, it seems to

me the Customs people are the very

slgnificant authority in interpreting their

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own regulatlons, and implementing their

procedures.

Do I have to defer to them in any

shape or form for thls?

MR. HANIFIN: I don't think you

have to defer to them when the language and

the regulatlons that they promulgated are

clear, your Honor, and these regulatlons are

very clear.

Llquldation is the computation or

ascertalnment of dutles due on entry. They

dldn't do that.

They need to post on Customs Form

4333. The regulations -- I don't

understand -- your Honor, if they are taklng

the posltlon that just because we sald

nothlng about it, means we can do it.

Well, they said nothing about a

lot of thlngs. Does that mean they can do

anything they want?

It's klnd of a ridiculous

argument.

it, we can do it.

authority to do it.

Just because we didn't talk about

That glves us the

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That's their posltion.

Liquidation is a very amportant

process in the importatlon of goods into the

Unated States. It's the lanchpin for

importers to be able to challenge Customs

decasions.

It is a very laid out, metaculous

process, that even they, themselves, in the

regulations, said this is how you're going to

do It.

And those regulations say nothlng

of belng able to do thls kind of process.

In fact, I would argue, if you

read the statute and regulations, the way

they did this, what they do is an direct

violataon of at. They don't calculate before

they post.

They post, and we'll fix it

later.

JUDGE CARM3%N: Well, how do you

know that they dadn't calculate it?

MR. HANIFIN: I know they dldn't

calculate, your Honor, because they have

repeatedly stated in thelr movlng papers, and

in thelr declarations, that they -- when the

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questlon arises, "What kind of calculation

did you do," they speak of knowlng that, "It

was the amount residlng in ACS that we

already gave you.

anything."

We dldn't calculate

I don't have the language

directly in front of me, your Honor.

JUDGE CARMAN: When you get a

chance, will you take a look at it and tell

me what it says.

MR. HANIFIN:

Honor.

polnt?

JUDGE CARMAN:

Absolutely, your

What is your other

MR. HANIFIN: Baslcally, it was

the fact that the importers don't know, your

Honor.

So I belleve at this point I'm

going to reserve whatever tlme I have left,

and I'd be happy to answer any other

questions you may have.

JUDGE CARMAN:

candor.

I appreciate your

And I'm going to give you twob

minutes to rebut what the Government offers.

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At this time,

Rockafellow.

MR. HANIFIN:

Thank you.

MR. ROCKAFELLOW:

I'Ii hear from Mr.

Yes, your Honor.

Your Honor, I

assume that you primarily are interested in

asking me questions. If you like, however, I

will just restate what our case is.

JUDGE CARMAN: Well, I don't

thlnk it's necessary to do that, Mr.

Rockafellow.

First of all, good mornlng.

MR. ROCKAFELLOW: Good morning,

your Honor.

JUDGE CARMAN: You've heard the

tenor of the quest±ons I've asked of the

opposing counsel.

It seems to me that the

regulations, the CFR, seems to be pretty

significant for 4333, going back to 1915,

somethlng like that.

You make a very compelling

argument to me ±n your reply brief,

indicating that it's really subsequent to the

informatlon, anyway.

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On the other hand, the shoe is on

the other foot, so to speak. I think the

Government -- part of the regulations, part

of their SOP.

Why aren't you dolng that?

What's the signif±cance of that

form? It's been around for a long, long

tlme. Apparently Customs has ±gnored it. Do

I have to be concerned about that?

MR. ROCKAFELLOW: I don't thlnk

they ignored it, your Honor. And so,

therefore, I w111 say that you don't have to

be concerned about that.

Because if you look at those two

examples that were attached to the

declaratlon in our last reply brief, those

two examples of Form 4333 --

JUDGE CARMAN: Yes.

MR. ROCKAFELLOW: -- you w111 see

that even the current so called on line

bulletin notices of liquidation don't look

anywhere like that form. They're on computer

paper. They look entirely different than the

actual physical image of those forms that are

attached to the Larry Ryan declaration.

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And again, there is no

requirement under the law that we are aware

of, that those words, or the abbreviations,

CFO or Customs Form 4333, have to be printed

on the form.

In fact, both bulletin notices

have the words "bulletln notice of

liquidation," and that's the substance.

They have those words at the very

top of the form, both the so-called off line

one, and the on llne have those words. ;hnd

they have all the information requlred by the

Form 4333.

So we think -- and agaln, there

is no law that says that we have to have

those initials CF 4333, at the bottom or the

top of the form.

JUDGE CARMAN: Do you think you

could make it to say "bulletin notlce of

liquidation"?

MR. HANIFIN: We thlnk that

that's a fair interpretation of Customs, of

its own regulations.

JUDGE CARMAN:

MR. HANIFIN:

Okay.

We also believe

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that, in answer to questlons that you posed,

and what you sent to the Government a few

days earlier, the requirements for

reliquidation, or liquldatlon, whether on

line or off line, are the same.

-And you have to have a posting,

and a legal evldence of that, according to

Customs regulations. The legal evidence of

the posting of the bulletin notice of

llquidatlon is the postlng itself in the

custom house. And that was done here.

And there is no question

everybody agrees that that was done.

The other thing that's required

is that you post it with the information

that's on the Form 4333, and that was done

here.

So whether it's on line or off

line, we have the same information being

presented to the importing community in the

custom house, and that is the legal evidence

of llquidation or reliqu_da£ion in thls case.!

JUDGE CARMAN:! Off line is simplyi

writlng it out, rather t_anldoing it on aq

computer printout?

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MR. ROCKAFELLOW: Well, if you

look at the example that Plalntlff's counsel

showed you this morning, your Honor, it is

done on a form whlch would be done on a

computer, or a typewriter, if you look at the

three pages, or four pages, that he gave you

thls morning.

It's obviously not handwritten,

it's been typed up, and it's on a systematic

form, presumably, it's been done through a

computer, 3ust not done on like a computer

pr±ntout that we see for the on line

liquidations.

JUDGE CARMAN: Okay.

MR. ROCKAFELLOW: So that's the

substance of it.

What we have here is all the

hallmarks of it was posted.

There is not 365 of these books,

your Honor, by the way. Hopefully, I'm

correcting Plaintiff's statement here.

It would be approximately one

every week that would be in the custom house,

as far as the regular ones. And then --

JUDGE CARMAN: If I came in as an

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importer, how would I flnd the book?

MR. ROCKAFELLOW: I think, again,

we would argue that both these affidavits

fall short, because we have not had the

ablllty to question these people about them.

But both affidavits say, "I've

never heard of anything called an off llne

bulletln notification," in quotes.

But nelther of them really go

into saylng what they know in terms of the

process by whlch Customs reliquidates in an

emergency, rel±quldates entrles by postlng,

not in the regular way, but postlng in a

bulletin in the Custom house.

None of these cllents dlSCUSS

that.

Or I think you would see that

there is another book there that takes all of

these off line bulletin notlces of

liquidation, and they're there.

JUDGE CARMAN: Is there one room

that you go to?

MR. ROCKAFELLOW: The same room.

JUDGE CARMAN: The same room?


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JUDGE CARMAN: And what is the

room called, any special name?

MR. ROCKAFELLOW: If you're golng

there every week, your Honor, you're bound to

see that they have a separate book, and look

and check through that book.

I don't know the name of the

room, your Honor.

JUDGE CARMAN: But I gather it's

a room deslgnated to go look at the varlous

bulletlns.

MR. ROCKAFELLOW: And the notices

of liquidation, correct.

JUDGE CARMAN: And talk to me

about calculations for a minute.

The Plaintiff seems to say the

Government dldn't calculate, as they are

required to do under the terms of the

statute. Did they calculate? Do I know they

calculated? What did they do?

MR. ROCKAFELLOW: We agree that

the calculatlon is done in a sense when it

was understood that they had to make this

change, they knew what the ramount of the

change was at that time. It was simply the

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reversal of what the GSP refund had been

before, and that's a known amount.

There isn't anythlng that really

has to be recalculated about it, it 3ust

takes a reversal.

And everybody would have

understand, and a reasonable inquiry on

February 8, 1999, or shortly thereafter, a

reasonable inquiry by the importer would have

brought out exactly what that was, what the_

duties owed were, due to thls GSP reversal.

I can go through it, if you would

llke, your Honor, for some of your other

questions.

JUDGE CARMAN: Well, I think

you've gotten to what I need to say.

Unless you have something

further, thank you.

MR. ROCKAFELLOW: Thank you.

MR. HANIFIN: Your Honor, you

asked me to identify for the record where

they talk about what counsel just talked

about in terms of the calculation.

JUDGE CARMAN: Sure.

MR. HANIFIN: In Larry Ryan's

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initial first affidavlt, in the cross motion,

Paragraph 7, in other words, this memorandum_

referring to the January 29th memorandum,

glvlng instructions from Headquarters to

reliquldate certaln GSP entries only up to

October 20, 1998, provlded the ratlonale for

the change, and ascertained for us the

correct amount of duties.

Whether or not someone in Customs

actually worked with a calculator to figure

the dollars and cents amount on an entry, or

even whether a llquidator keystroked the

approprlate informatlon in the ACS, for ACS

to compute the dollars and cents amount for

an entry.

Your Honor, they dldn't do it.

They're saylng that they knew

what they were going to get back. They took

no action to actually calculate it.

And at least one entry that

proves the point, they weren't getting back

what they gave Samuel Aaron on the entry.

They were only getting back part of it,

because part of the entry still qualifled for

GPS. They liquidate entries, not line items.

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They dldn't calculate it until

they ran the script in April,

Aprll 12th.

the week of

By the way, your Honor, and

counsel just sald that if an inqulry had been

made based on the book, if you had happened

to find it, shortly thereafter, you would

have found out what happened.

That's not true, unless you

consider two months from Aprll 8th untll the

week of April 12th to be shortly thereafter.

The entry filed for these

paperless entries resides in the ACS computer

system.

There was nothlng in ACS for

these entries that said anything about

February 8th, about a rellquidation, about

any klnd of actlon, about duties owed, untll

that scrlpt was run the week of April 12th.

When that scrlpt was run, it

calculated the duties owed, and created the

b111s, and also put a notation in that entry

file about what happened.

If you went to the desk on March

Ist, and asked the clerk, "What's up with

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these entries," he would go to the ACS, look

at it, and say, "I have no idea. There's

nothing in here."

Nothing happened until April

12th. And Apr±l 12th was far beyond the

ninety-day llmlt.

And speaking of the ninety-day

llmlt, your Honor, counsel couched this as an

emergency. What does Customs do in an

emergency?

Well, your Honor, Congress

speclflcally gave Customs nlnety days to

reliquidate. That's the deadllne. That's

what they have to meet.

It's not an emergency if you're

running out of tlme. It's simply the fact

that you have a statutory deadline, and you

have to meet it.

And emergency doesn't justify --

JUDGE CARMAN: No extension?

MR. HANIFIN: NO. In fact that's

a very good polnt. You can extend

liquidation. The statutory and regulatory

authorities extend liquidations for up to

four years.

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Congress has not seen fit to

extend the nlnety-day deadllne.

I mean, that's written In stone.

You've got to meet it.

The fact that you're running out

of tlme, the fact that you structured your

computer program so that It won't do anything

in the last two weeks of those ninety days,

is not the importer's problem, and is not a

justification for vlolatlng the statute.

They had ninety days to do this.

They were running out of time. They took a

sllpshod method, that didn't meet the

requirements of the statute, the regulations,

to try and meet the requirements, because

they knew they couldn't do it wlthin the

ninety days.

They put something up that was

not based on correct identiflcation of the

entries or calculation, and then they took

care of it after the fact.

Two months later, when they ran

the script to fix things -- and I would also

polnt out, your Honor, in terms of standard

operatlng procedures, whether this was

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regular course of business, you had also

asked about the bulletin notice of

liquidation, and we have copies of those,

because they are also in Exhibit 9, your

Honor.

JUDGE CARMAN:

MR. HANIFIN:

Yes.

If you will notice,

none of these entries are red lines. Samuel

Aaron's entrles are not on this, Fortunoff

protesting, and the underlying rullng

decision --

JUDGE CARMAN: How does that

apply to the February 8th liquldation?

MR. HANIFIN: It's an indication

that they dldn't even follow thelr own

procedures for how they're supposed to an off

llne liquidation, your Honor.

It's an indlcation that this

whole process is nothlng but an attempt to

subvert the statute and the ninety-day

deadline, because they don't have time to do

in their computer what they need to do.

And really, that's the bottom

line.

And they shouldn't be allowed to

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do that.

JUDGE CARMAN: Anything further?

MR. HANIFIN: No, your Honor.

If you can glve me just a second?

JUDGE CARMAN: Sure.

MR. HANIFIN: I would just like

to reiterate, your Honor, that if you look

agaln at the April 30th bulletin notice

that's an exhiblt, Exhibit 9, you w111 notice

in the upper left-hand corner, the first llne

says "ACS LGO 12."

The second line says "Customs

Form 4333." They managed to put it here.

If they are doing these off line

bulletln notices on a regular basls, you

would think they would have created some kind

of a form. They managed to have a regular

Customs 4333 Form.

Why dldn't they simply use that,

your Honor? That's still a valid form.

Why did they do what they did?

They just typed it up on a word processor, or

a typewriter.

They had a valid form that I

would argue is required, and they chose not

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to use lt.

Honor.

I don't know why.

And that would it be it, your

JUDGE CARMAN:

MR. HANIFIN:

JUDGE CARMAN:

Thank you.

Thank you.

Mr. Rockafellow,

let me ask you one other question, if I can.

Should I take it as standard

operatlng procedure as an implementation of

the CFR?


JUDGE CARMAN: Is it an

interpretation of the CFR?

MR. ROCKAFELLOW: It's an

interpretatlon along with -- in other words,

you have to interpret the SOP itself.

Customs does that. But the SOP is an

interpretation of the CFR.

JUDGE CARMAN: Yes.

MR. ROCKAFELLOW: I just want to

say another thing about the ACS system, your

Honor, Customs ACS system.

It would have on February 8,

1999, it would have shown to a Customs

officer, not to someone else on the outside,

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but to a Customs officer, it would have shown

it was flagged, with a notation that there

was a GSP reversal.

And furthermore, any inquiry of

Customs at that polnt in tlme would have led

to the January 29th notice, January 29, 1999,

notice, which formed the basis for the

February 8, 1999, reliquidatlon notice.

In other words, that January 29th

notice -- one minute.

JUDGE CARMAN: Sure.

MR. ROCKAFELLOW: My mistake,

your Honor.

The ACS, at that point in time,

on February 8th, would not have had that note

in the system avallable to the Customs

officer. Not until approxlmately April 12th

or April 14th of 1999 would that note be

inputted into the ACS system.

However, an Inquiry on February

8, 1999, would have led to the January 29,

1999, notice to Customs, port officials.

JUDGE CARMAN: About the

reversal?

MR. HANIFIN: About the reversal

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of the GSP.

again?

1999.

JUDGE CARMAN: Give me the date

MR. ROCKAFELLOW: January 29,

There was a notation added to the

ACS system in April, Aprll 12th or April 14th

of 1999.

JUDGE CARMAN: That would have

been past the nlnety days.

MR. ROCKAFELLOW: That would have

been past the nlnety days, that notation in

ACS.

But as far as a protestor, or a

potential protestor, wanting to find out what

the basls of the increase in duties was, if

they inquired, they would have been dlrected

right to the January 29th notlce.

JUDGE CARMAN: In looking at thls

standard operating procedure, I notice in the

second to the last paragraph, "Where it is

necessary to post an off line bulletin, CF

4333 will be used. The form will be dated

with the date of postlng, and wxli create --

will contain certaln importers ....

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And I guess it's your position

that you don't have to identify the form CF

4333.

MR. ROCKAFELLOW: Not under these

circumstances, sir.

I don't see any requirement that

says you actually have to that word, "Customs

Form 4333." But it's evldent that you have

to have all the information.

JUDGE CARMAN: But presumably, if

it says off-line bulletin 4333 will be used,

it's a form to be used.

MR. ROCKAFELLOW: But again, even

the forms that are used today, your Honor, I

would point out look nothing like the old CF

4333, either of those that are in the

exhibits of Larry Ryan in the second

affidavit.

JUDGE CARMAN:

notation of April 12th say?

the computation?

MR. ROCKAFELLOW:

looking for that ourselves,

JUDGE CARMAN:

MR. ROCKAFELLOW:

What dld the

Was it part of

P

We were justi

your _Honor.

Good.i

i

If you could

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walt one second.

JUDGE CARMAN: Sure.

MR. ROCKAFELLOW: I would refer

the Court to two items in response to your

question.

Plaintlff's counsel has helpfully

provided a reminder, a refresher to me, and

it comes from the Headquarters ruling that

is, I believe, one of the first exhlbits in

Plaintiff's initlal pleading, initial motion.

And that Headquarters ruling on

page 3 has the text of the note that was

entered in the ACS system.

It says, "Recollection of

retroactive GSP. Certain tle line

merchandise not eligible as of 7/1/98. CHQ

memo FO:OB:TAJAP," dated January 29, 1999.

That's the memo that I was

referring to, your Honor, referring to, your

Honor, several minutes ago.

Also, we would refer the Court to

Larry Ryan's first affldavit, signed on May

5, 2006, at Paragraph i0.

He descrlbes that script, when

the script was entered into the ACS system,

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so that the billlng could be done.

That's when that llttle notation

was entered into the ACS system.

JUDGE CARMAN: The computation

took place at the tlme of the script?

MR. ROCKAFELLOW: The computation

did not, no.

Just that note took place at the

time of the script, but the computation

itself, agaln, is ]ust effective with the

January 29, 1999, memo, where it 3ust sald

that there was golng to be a reversal of what

was 3ust refunded to the importer.

JUDGE CARMAN: What would have

dlrected the importer to the January 29,

1999, not±ce if there was no indication on

the ACS that the entry had changed?

MR. ROCKAFELLOW: The bulletin

notice of liquidation, or reliquldation of

February 8, 1999, your Honor, that is what

puts the importer on notlce that there has

been an increase. And at that point, he or

she, it, has the obligation to inquire of

Customs what it was about.

At that point, they would have

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been told about the January 29th notice, and

the reversal of dut±es.

They would have been able to

calculate the amount just llke that, if they

want to know how much they were going to owe.

JUDGE CARMAN: Are you finished?

MR. ROCKAFELLOW: I wanted to

make that one point about the ACS, and what

the importer could have inqulred about, your

Honor.

So that's all that we have for

this moment.

JUDGE CARMAN: Is there anything

further that you want to offer?

MR. KANE: Your Honor, one point,

one final point.

In Mr. Hanifin's remarks earller,

he said there was one entry that was a

crucial entry in conslderation of what was

taking place on February 8th.

In fact, there was another entry

that's on that list of the entries supposedly

I

affected by the insltructions of January 29th,

the entry of Samuel Aaron dated october 26th.

We have inquired ourselves

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through the broker, whose affldavit we have

offered into evldence, and been told, and

glven a copy, actually, of an ABI printout

screen, showlng that that entry was

liquidated on December II, 1998, and was not

affected by this February 8th supposed action

that was supposed to have taken place.

And also, I point out --

JUDGE CARMAN: Which entry was

that?

MR. KANE: That was the entry,

the last Samuel Aaron entry on that list.

MR. ROCKAFELLOW: But, your

Honor, this is not an entry that's not one of

the subject entries.

26th.

entry.

MR. HANIFIN:

MR. ROCKAFELLOW:

MR. KANE:

It is.

Not the October

No, lt'S not a subject

I raise this issue to undermine

the credibllity of the form, the liquidation

form.

There are entrles on there, but

not following the instructions of January

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2O

21

22

23

24

25

29th.

JUDGE CARMAN: We've got a valid

reliquldation, the ninety-day period that

we're concerned about.

MR. KANE: Well, that was an

entry on that list that was supposed to be

reliquidated on February 8th. We would

expect It to show up on thls April 30th

bulletin notice of llquidation, and it

doesn't.

JUDGE CARMAN: Okay. I

understand.

Thank you very much.

I want to thank the respectlve

counsel for your presentations.

We're off the record.

(Recess had.)

JUDGE CARMAN: It was a pleasure

working with both of you.

Thank you very much.

We stand adjourned.

THE CLERK: The Court now stands

ad3ourned.

(Time noted: 12:00 o'clock p.m.)

61

0808

5

6

7

8

9

I0

II

12

13

14

15

16

17

18

19

20

21

22

23

24

25

CERTIFICATE

STATE OF NEW YORK

COUNTY OF ROCKLAND

ss:

I, STEVEN KLEIN, a Shorthand

Reporter and Notary Public within and for the

State of New York, do hereby certify:

That the within is a true and

accurate transcript of the testlmony taken on the

10th day of August, 2006.

I further certlfy that I am not

related to any of the parties to the proceeding

by blood or marriage, and that I am in no way

interested in the outcome of this matter.

IN WITNESS WHEREOF, I have hereunto

set my hand this day of

2006.

STEVEN KLEIN

62

0309

UNITED STATES COUP, T OF [NTEP._NATIONAL TRADE

BEFORE: HON. GR/_GORY W. CAR_, JUDGE

SAMUEL AARON, INC.,

UNITED STATES,

Defendant. :

CounNo. 03-00053

DEFENDANT'S RESI'ONSE TO

PLAINTIFF'S REVISED STATFEdENT OF MATERIAL FACTS

PursuanttoRule 56 oftheRulesoftheUnitedSmt_ CourtoflntmmafionalTrad%

d_fendant United States ("Government") ms-ponds to Plaintij.Ts Rm,/sed Statement of Mat_ial

Facts, dated January 31,2006, as follows:'-

P-1. This court has jurisdiction of rids action pursuant to 28 U.S.C. § 158 l(a).

USA-1. De,des.

P-2. Plaintiff is the hnporter of record of the merchandise that is the subject matter of this

actiofl, and whose protest was den_ed.

USA-2. Admits.

P-3. Plaintiff filed a timely protest on July 29, 1999, contesting the U.S. Customs Service's

("Customs") rellquidation of its entries. Exhibit 1.

"""USA-3. Denies.CHRL 228645 _eBruary 1,2002)).

: For the cenvenience of the Court, cach'iofplaintiff's statements ar_ included, foUow¢d by ourresponse, e.r,.____P-1 marks plaintiff's first statement, and US-I mazks defendant's response.

03]M0%,) a_-

P--4. The protestwas deniedon August 23,2002.Id.

USA-4. Admits.

I).__° With theexceptionofEntryno.368-0055737-3,allliquidatedduties,charges,or

exactionswere paidon theentriesidentifiedon thesummons priortofilingofthesummons. Exhibit9.

USA-5. Admits.

P-6. Thisactionwas commenced within180 daysofAugnst23,2002.

USA-6. Admits.

P-7. The importedmerchandiseinvolvedinthis_tionwas enteredthroughthe portofNew

York on orafterJulyI,1998 throughOctober22,1998. ExhibitI.

USA-7. Admits.

P-8. The merchandise at issue consists of jewelry, and/or parts thereof, of precious metal,

imported from Thailand.Id

USA-8. Achnits.

P-9. On November 13. 1998, Customs liquidated certain of the enh-ies at issue duty-free

pursuant to the Generalized System of Preferences ("GSP") pro_Tam. On December 11,1998, Customs liquidated tim balance of entries at issue, also duty-flee pursuant to the

GSP program. Exhibits 8 and 9.

USA-9. Admits. (See also) Defendant's Revised Stt_temenl of Undisputed Material Facts,

supra at ¶ 9).

P-10. Upon liquidation of these enla'ies, Customs refunded estimated duties that had been

deposited on the subject merehkudise at entry, plus interest. Exlu'bits 8 and 9.

USA-10. Admits.

0311

P-11. Customs subsequently concluded that the liquidations of the entries that took place onNovembar 13 and December 1I,1998,were erroneous,inthatthemerchandisewas not

eligibleforduty-fleetreatmentunder theGSP program. Exhibit9.

USA-If. Admits.

P-12. At some timeafterDecember II,1998,thePo_ ofNew York postedan "off-linebulletin

notice ofliquidation" of the entries at issue. Id.

USA-12. Admits,butaversfurtherthatthepostingwas on Feb.8,1999,thedatestamped

ontheofflinebulletinnotices.(Chmura Decl:at¶ 4).

po13. The so-called"off-line bulletinnoticeofliquidation"allegedly imposed dutieson the' entries. Id.

USA-13. Denies.Aversthatbulletinnoticesdo notinthemselvesimposeduties.They are a

noticeofliquidation,orhere,reliquidation.The reliquidationiswhat imposestheduty.Avers

further that the reUquidafions resulted in increased duties for each entry.

P-14. This so-called "off-line bulletin notice of liquidation" was done in a handwritten

notebook, separate and distinct from the documents that the Port of New Yorkmaintained as its official bulletin notice of liquidation. Exhibits 4 and 5.

USA-14. Denies any inference that the offline bulletin notice is not an official buiIetin notice of

liquidation. Denies that the offline bulletin notice is "done" in a "handwritten notebook". The

offline bulletin notices are placed in a binder in the same room where all bulletin notices m-e

maintained. (Clmaura Decl.).

P-IS. The handwritten "off-line bulletin notice ofliquidatinn" at issue had the notation

"RELIQUIDATION-INCREASE" on the page with no further explanation or indicationas to the amount of the increase or the reason for the increase. Exhibits 5 and 9.

USA-15. Denies that the offline bulletin notice at issue was handwritten It was apparently

3312

typed or printed from a spreadsheet or similar program. Othervdse admits. (See exce_ from

the February 8, 1999, offiine bulletin notice of liquidation (pertaining to other en_es), at

Aaron's Exhibit 9).

P-16. The bulletin notices of liquidation for the vast majority (well over 90%) of entries at thePort of New York consist of paper printouts gen_-at_d by Customs' Automated

Commemial System ("ACS") in a process that is performed once a week; the printouts

were placed in notebooks or binders that am "posted," i.e., that am made available for

public inspection, on the date indicated in the notice, in the morn used for this purpose.

USA-16. Admits, but avers that the figure is probably well over 99%, not just over 90%.

1'-17. No calculation of the amount of additional duties due on the entries at issue was made at

the time of the "off-line bulletin notice of liquidation" said by defendant to have takenplace on February 8, 1999. Exhibits 8 and 9.

USA-17. Denies. (Ryan Decl. at ¶¶ 6-8).

P=18. No calculation oft.he amount of additional duties due on the entries at issue was made by

the defendant on the entries at issue from February 9, 1999 through-April 29, 1999.E×hibits 8 mad 9.

USA-18. Denies. (Ryan Decl. at ¶¶ 6-10).

P-L0. Entry No. 36g-0056036-3 dated September 8, 1998, in addition to including potentiallyGSP-eligible jewelry, and/or parts theren_ ofpreclous metal at issue in flais action,

included rubber molds classified in subheading 4016.99.6050, HTSUS, dutiable at 3.1%ad valorem. See Enlry No. 368-0056036-3.

USA-19. A&uits.

P-20. The ninety(90)-dayreliquidationperiodforentriesliquidatedon November 13,1999

endedon FebruaryII,1999. 19 U. S.C.§ 1501.

USA-20. Admits.

313

P-21. The ninety (90)-day rcliquidation period for entries hquidated on December 1I, 1998ended on Mamb 11, 1999. 19U. S.C. § 1501.

USA-21. Admits.

P-22. On April 30, 1999, the Port of New York reliquidamd the entries at issue using the

Automated Commercial System ("ACS"), by computing the duties due on the en_eswithout GSP benefits. Exhibit 8.

USA-22.. De._es that Customs reliquidated the entries on April 30, 1999. Avers that

Customs generated bills through ACS, dated April 30, 1999, reflecting the rcliquidation action

previously takan on February 8, 1999. (DiSalvo Decl. at¶ 5, R.yan Decl. at ¶¶ 6-11).

P-23. On April30,1999,Customs issuedbillswithrespecttotheentriesatissue,usingACS. Id.

USA-23. Admits.

P-24. Customs postedACS-generat_ bulletinnoticesofhquidafionfortheentriesatissue

showing April 30, 1999 as the liquidatinn date. l&

USA-24. Admits that Customs posted an ACS-generatcd bulletin notice on April 30, 1999.

Denies that the bulleting notice constituted a bulletin notice of liquidation of the subject entries,

since the.only a_fion taken on that date with rcspe_t to those crib-its was the issuance of bills

through ACS. The subject entries had reliquidated on February 8, 1999. (Chmum Decl. at ¶ 4;

D_Salvo Decl. at 9¶ 45).

P-25. The April30,1999 bulletinnoticesof llquidationgeneratedby ACS didnothave a

manuallygeneratedred-linethroughthelistingoftheentriesatissue.Exht'bitsI and 9.

USA-25. Admitsthattheextantcopiesdo nothaveredlinesthroughthe listingoftheenh-iesat

issue.Deniesforlackofinformationwhether,when posted,thebulletinnoticehad beenmarked

withr_dlinesthroughtheentriesatissue.

314

P-26. The actualbulletinnoticesofliquidationthatwere postedatthePortofNew York

Customhouse on April30,1999,were deslzoyedon Septembex 11,2001.

USA-26. Admits.

P-27. LiquidationExtractreportsforSamuel Aaron coveringthedatesatissueshow original

liquidationdatesofNovember 13 orDecember II,1998 and areliquidationdateforall

oftheentriesatissueofApril30, 1999.Exhibit8.

USA-27. Admits thattheExtractreportssoshow,butaversthatthisinformation,derivedfrom

the ACS data, like the ACS data, is erroneous as to the date of the mliquidafion. Avgrs that in

any event, the Liquidation Extract is not the official bull_Jn notice of liquidation and at best

providesunofficial, courtesynotice.

RespectRfllysubmitted,

PETER D. KEISLER

AssistantAttorneyGeneral

By:

/s/

BARBARA S. WILLIAMS


Dated: New York, New York

May 11, 2006

/s/

JACK S. ROCKA_ELLOW

Civil Division, Dept ofJustice

Commercial LitigationBranch26 Federal Plaza- Suite 346

New York, NY 10278

Attorneys for Defendant

Tel. (212) 264-0482 or 0874

Of Counsel:EDWARD N. MAURER

Office of Assistant Chief Counsel

I.utgmational Trade LitigationU.S. Customs and Border Protection26 Fedexal Plaza- Suite 258

New York,NY 10278

0315

/ Page # I o+ i --------_

BROKERS BOX NO. : 230

GEMM CUSTOMS BROKERS, INC

!75-01ROCKAWAY BLVD.

JAMAICA NY 11434

g UltimBte _nalgnee Hint Ind A¢lOetaa

En_ No

: 005&036-3

09-08-98

8nnd NO

891

_CL _lgnee No

13-3303947

SAMUEL AARON, INC.

31-00 47TH AVENUE

LON6 ISLAND CITY, NY. 11101

NY

(_ O L ol AW8 Na

- 020 2849-8960

Im_r tino Ca.m,

LH / FLT _ 4L_

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4701

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40!6.99. 605

bier chart _ _ se

D i AM,n_, HON

7!02.39.001

_.erch andl se

OTH PREC HE7113. 19. 500

M__rch_nd i_e _ro_essi n,

5LOCK 39 Sb _ARY :

MPF 499

"TOTAl- :

T ]TAL ENTERI

C_l¢l|ra#on of Imp_ot oI Ra¢ofl_

•.-][

¢.'02

003

I MO_I Ot Tflm0p_tallon

40

FOrth _ at LJ_Ing

baOQN 04tl

09-06-98

31 (A) G_:: WPOnl

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IT NA'T RUBB

2

Processing

IND,WRKD,N2

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ART OF JE

2

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434.8_

VALbE

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wll c_ltlJnsd g_tsu_int l• • _'¢nt $0 _ _o_ ¢t_lL, l_l _ _ J _ or

I IIIIO _41C141g41l_sl 1_III 4UGI_I_OI_gl II_ _11 tOCUfllr_ilg$ _41gll|fl (lJll_ fq|ly dJN_lO_le |O I,+'4 _@:_1 Of ffJy_1_ l_;_ lind b4Uef lhl tm_ prJ<:ml. _alc_ml. quslqtlt.ll_ mDlttlL W|_OIIClU_ l_ll. _m_mk_at_,s

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ll_l_Oprlall4 CultlOmll offlgllr 411_y Infotral|lo+1 lh_,wll_ I dlffl;'•rll _114 _If tlC|l

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I _N4itmo_mt a( ii_ncy, to qln(Of_l _ttl_r II_lp.grtt _lqU_r•ml,tS _ln¢_ to canlc! K_r•tll 5_(1_111_1_1 ._l_m•l_l on tm0o._a You+ +llllponle Ii mindllo_

PART 2-CAS'HIER

(_ Entmg Typ_ C.+_411 I_ Enlty _mmlr_ OlllO

}1 A61/A i 249

_o,co= 09-22-98I001

_ond Ty_e C-_le 8¢a_ertlmP_ pl1_ Na

S Ol. 40870

(_) Im0o,_., o_ R*cor0 N_m. *ha _,ddt*_ [_ Impaner No.

3-3-303947

SAMUEL AARON, IhC.31-00 47TH AVEN_dE

LOMG ISLAND Ci-FY, N'f. 11101

TH 0b'-05-98

(_ Co_nl_ of O_Igl_ 1_I Mll_ng O_c_n1_nt•

i11 Mlnuill:tlMet LO _ Rllflmlncl NO

THNOBMER 1684h

E149/BRIt_a"S INC. CONTR

33 _) _I'IGSEnt_KIVLIuI

C RIIIIII{WlShlO

NOT RELqTE:

15

,iS

2069S6

C500

34 _ T_U_.A+RJIII

) L_.C Rsle

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colI_2 C_.I$

,3 "_/O 03

•1. 09

+-, 09

1 !7'?_ 77

g3_. 69

TOTALS

(.l_J

3.1%

0.21_

c F_ c

O. 21_

5. ,-_/

0. _ 1,

1"207 "="

_' U.S CUSTOMS USE '_'A+ _ Co44 AIC_rI•6_00_ly

C Jl,sclrtlinl¢l 181 _) TU t: I

0 ; ..... m.dmn,, N 0,.., :t .l}

',a, sc,,o_n,_ Total _) Totae . .• 1225 +_

3:. "-.....@,+,,,..p,.o,-h_: +uU . "..._25 _L,'_:.,_ .. N.:. 1N

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!

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316

11101

SAMUEL AARON • INC.31-00 47TH AVENUE

LONG ISLAND CITY, NY.

4. 8or_ NO

891

bN I MY SUMMARY

Enlry No. Entry I _o!

J • 24b'

, _,*ryo,t, _) J'_ c_d, " I " 0_-24-99

08--11--9_ 4701 I ' "t Bonn Type_e / I Broklrltmpotl_ RI* No,

8 I 01. 40210

Cangt Ii11 o

NY

SIIll

@ ,m++..,o,,.go,+..... 0.0o....t

SP_tUEL AARON, INC.31--00 47TH AVENUE

LONG 1SLAN_ CITY, NY. 11101

ExpQ_Ino C_m iryTH

COUnl_ of Origin lg Mlaling _um_tlTH

_T mo _ LTo.t,

2_ U.5 P9_10_ Unll_ng

=?+=o+....+.,o. +>

4;'O1 @ _"_d_'{ 1-98

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_A _ CI_ NO M_nllll( Oly T ,_U _JL _Ita _ Ralltlc_ID

NOT RELATE

HAWB_ 91943!)

001 OTH PREC M_r ART OF aE_ NSPF

7113.19.50< _ 2 _----_-P_IOC50

Merchandls_ Processing Fee

(_ t,R+C l_Jlta _flilrlV_i No

_..4_t_

5.7% 1300 17

0.21Z 47 90

BLOCK 39 SU _MARY :

MF_- 499 47.90

TO!AL : 49.90

:ONSTRUCT

/

_]tAL ENIEREJ VALUE

{_1¢11_1110_ OI lm_lr O_ _l¢OtCl (13_nlt i_ pu#¢_l$1_ _ AUInO_IZI_ J_lfll

I d_ira l_It I lm _11

Imp<_tM el t_cot_ l_ thll the a_lual __-_.._.j '

culto_ _,+=w_ II IS lhown l_o_e _ thltlof

I inrUnl_ _eC_rl lh&t _ N¢tUmdl_l

_la 141 IOl_h in the UW_¢I all true m ina _ I_ in _ _ W_I I=I _ k__ b_== of m_ _dlOge in= beg_

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hi imounl ol t_n_, _ a_f_ Olhlr |ginc7 tl_ultemenl_ I_ Io ¢OD_ I_utlli I¢ltlsllc_l_o_miuon on _1_1 _o_ ruponla il mln_atory

$22,810!

_"U S. CUSTOMS USE +

0 A_CINIt;II_ Othl_

TOTALS

@ o_ 1300

=" 4-7

to,it 1348

ATTY" IN FACT

17

O0

90

07

317

F:6 .'.ERSBOX 10.=.i'4J'lCUB FC;I"iS_{',:OKEI_,=_ II'iC

5-01 _:L]:_.=_L_WA'r £_Vb..

JAI_ICA _Y 11454l UIIli_n_III GonM|nea Nmml ind Adollll

E_NTRY SUMMARY

Entr_ "t_* Co01

005.__014 -0

4 Enl_ Dill _ _0M _Q

09-u 7-9g, I,_u i

6 BOnd NO 7 Bond TTp_ Codl

B91 e

10 Oonm_ngo NO

13-_03947

SA,_,UEL AARON, INC.

31-00 47TH A'JENLE

LO_IG ISLAND CITY+ NY. 1110!

___llll

3 _l_$umma 011o8. 8roke_llmDmll_ Fill NO

u t. 40Era)9

Imporl0¢ Of _co_ Nlma lnd A_dre_

31-O0 _,73"H AVE_,'L_

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SF. i FLT # 102

;_. U S Port ol Umlildlng _ Impod _ll

/01 (_-07-9B

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CHG_

° Rill ¢14_ni II11)

O,J lA

HAWB# 9204_

OTH PREC ME

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P_r. ch_nd_s_

BL_C_ _9 SIJ

ME

T_] IAL :

r A,_T C._ JE;_ NSF'F

) i0

Pr_c_s_ ng Fee

"!MARY :

_99

{_l¢ll_llIon Of Iml)orler of Rl_'_r_ {Ownlrr Or Purchlllrl (_- AuthO_'IIlO Ag_ll

[ dlCflrll Ihld I _ Ihl

Importw Of rlCon= and Ihll ;hi IClUll OWn_ Or purchaser ,r--')L..ji] mm=_, i_rch ......... _nml Ill OR _I'_IgOfl I thtPlOf (;r+-L_f_.=_i purloins I= u lltG_rll i I=O_llI kaltl_e_ dloflrl thai the _rc_lndlsI

23m. 8!

g_.81

NOT RELA rE:

ii27b/

C9_5

AOA;CVO Rife

1 _LC _e_u NO

TOTALS

I II_ _Jl:_ thai ml Ilalemen_l in Ihl documenll _rreb_ fll_d _J_y dlIC¢_sl Io Ir_ b_l Of my '

Ir_ rl_!_lltfll end Irl _ In4 ¢¢;rnl_. end thai l_1 o; I1_1¢11 p,o_ld to the II_lir • themir¢_lll Illhl;' (/'ll 0( II fIdl._lKI r.,Oil ITI h,d_lC_Q=l_. I win I_Idtlllly I_r_sh to _ I

I_pptoprlltl ¢uIl_ml Ofrlr.ar In_, thlormillon I_o_g I _ffl;lnl IlJl_l Of IICLI

_.+a.. lquJrld by _&_ - "-_ o_....i.. *.* ._ ._ Tlll $ Inl_raTil(_ II .,_,_,G_ ID Ifl:;ure I_ll

rl_l IIm_l ell i_lonc I Io _for_ olh_ I_;I,_¢y flqul_minl_, I_ IO calllct i¢_._lIll illtiIIl_l_lP_lll_'mllll_ on _llI _Io,_l ;t_p_i Ill ml_iI¢:r I

.-"L t::, 7_?

÷us.cus_o.s use+A. Uq C_ B Asclnxln_ Duly

C AIIClI'III_d 'rlx_) Taz (J

o_r,lr 2_0 A$clflofnld Olnor

/qE A ....... a Tol•l _ Tolll

/ I ,.S'._ -.. ?C

EN_<IC_3_A AIr. _ IN FACT

72

81

_2

U')

b3

PART 4-MULTIPLE USE Customs Form 7501 (03_41 _

_eceived Time 5.Sep.20.18 !

318

/ C_EPAm'M_:NTgF THETREASURX - ENTRY SUMMARY'_._/ UNITED_ :IITAT'E_ CIJEFOMS SERVICE _ _ , ... _'_.

BROKERS BO_( NO. : 230 4 _t_ o,I, _ _, c_'_-

GEMM CUSTOMS BROKERS, INC ! 09--27-9.8 1001____175--01 ROCKAWAY BLVD. e ,o_dNo _ ,o._Ty,._.,]_HAT_A NY ] 1#34 891 8

_L Enlry 9_mms_ Osm

24910-09-98

, pAPERLESS EN_TRY

8 Brokerllmponer Fllo NO

01. 41281

l _ht_ml11_ _onu|_lll Xlmll Ind A_rllll

SAMUEL AARON, INC.31-00 47TH AVENUE

LONG ISLAND CITY, NY. 11101

10 _.ofl$1gnel NO

13-3303947Impafler O| Ri_or: NimQ I_ _Io3I

13-3303947



NY_olm

B L Or AWB NO

020 7760-9770

mlport [no Carrie"

LH I FLT @ 8160

U S PON Of Unlading

4701

20 MO¢II ol Tfln:porUIIlon

4O

2d Foreign I_rl o( _,i_Ing

;mFOrl Dltl

09-27-98"

D_=c_tplmn o; Merc_mI

B, AOA CYO Cm:l NO 8. Manlhlsl _ly T S.U _ UnIls

Eaq_:onlng Counlry

TH

Co.nil? ol Cl_loln

TH

LT No

Miti_ f I_urlr LD

THCHATHA 1319DAN

14 =-port OItI

09 -26-98

18 Mll_ng _um_

LT OmI

22. Reference N_

LarllllO_ of GoO¢IIIG O NO

FO46/NALCA _d_[T CONTAINER STATION

('_ Enler_I Vtlue

"w OtG_

C. Rm_llion:thlp

34 ? TSU$._RamADAIGVO _lie

LFLC Rmll

_01

A

ManiTe

HAWB# 921422

OTH PREC PET

7113.19.5000

Merchandise

BLOCK 39 SU_

MPF

TOTAL :

T[

,_ OlI:lli'lIl(:_ oi Im_la_' Of RIIQI(I

st Qty=l C3

P_T OF 3Eb

2

_rocessi ng

MARY :

499

TAL ENTERE£

NS

NSPF

Fee

VALUE

I Illl_lnl lhll f im Illl

109.19

109.19

_OT RELATED

51997

C2500

5.7%

0.21%

RECONSTR

$51,997

JfU.S. CUSTOMSUSE _'*_ LJ_ _1_11 R AlClllilned OVI,

IIl"i_ ill Of IlIlIlIII sn¢{ UIII Ihl IIIUII

owner, purIhls_it, Or ¢o_lignlI Ior OR I Xlownlr p_rchas(rr

] ¢uatoms purpoul II Is _w'a II_P_ Ihl_IOl

I ImlIl#_ Cllcllfl Ihll! the i'_e_cmmdlsl

was OOtlm_ plt_lUI_I to I l_r¢_lal wa_ no_ O_blcr_ l_l_uln'l to a p_+c:_l_l 131'

_NCII let forth In lhl lrl_'_l_I irl tfU4 _ _ _ my _ _ b_I_.

Iill _OyllthlI Irtd Ill I1_11 Iild CQ_'IC_ III{I Ihl| I|1 _0Q_$ Of II_l'lc_l _fovl_@i_ 10 IhiI IIIl_ 0_ l_l

IO_fo_flIle CUIltO_l _llc_f In_ klfOfi'i_llllOn _Owll't I I _;l|0rll;_l Itlll °l _I_TI

NoII¢_ mqutfl_ _ FEv,_+w_ R_UClIOn ACt OI 1_0. This Inlorm_tlon Is nol_od IO In=Url IhltIntportet_llxportirl ItI compt_in| _nh U $ C_|t 0ma tawi, Io illow us to comp_ll ind ¢=ltecl lhl

tlgnl inl_unl o_ mon_, Io _|orl_ olhof IQi_cy _iqulrlmlnl:l i_ Io ¢Oli_Gl |ccurlll stlll_flc_l

Inlo_tlon On Imponl Your _apon_ io ml_dalo_

15_ _Iy and L_ Tax

2963 33

109 L9

JCTE /

)0

L9

)2

TOTALS

C A=CI_I ll_lild TI=

O

*':"=_"°' ,_) °l"" 10 9

_ . V,. I AI@ +,,,,,,,o_m,>,o,.,,o,_,,,. _',I u_ -_,._u

_) Du:y

2963 _3

319

//

/

DEPJ_errMENT OF THE TRF.._URY

u,rrEo S_ATESCUSTO,Ssee_cE

_ge # 1 of 1 36E<OKERS BOX NO. : 230

=_-MM CUSTOMS BROKERS, INC

175-01 ROCKAWAY BLVD.

.I_.M_TF:A NY 11434g glllmell Conllgnl4 NILe@ and Jl_clreml



ENTRY SUMMARY

0056247--6 Ot ABI/A 249

4 e,,wo.,. (_) Poncho. 10-09-9809-27-98 1001 * PAPERLESS ENTRY *

a Bond No T Bond T_ Code _lrokmr/LmpoNer File NO:

891 8 Oi .41286

10 Ccm=_,t= N=. (_ tm==n= af _carc: Ntrn. m_ _cir_== _ b'n_nm No-

t 3-3303947 13-3_303947


LONG ISLAND CITY_ NY. 11101

Ez_rllnO Cnuntrf

TH

(_ C=_mfry ¢;I Origin

NY TH

Sllle _) LT No

_'B q.at AWB NO_ [ 20. MO_ Of Tfl_lpQ_lllon

020 7760-9851 [ __ 40

:¢ us _o_WU.,,m.= J_) t_o.o.f, .4"_0 ;1 | 09 --27 -99

04scflOt/on ol Merr.nandlse

_01

A

02

_03

30 (A_ T.S.U $.k, NO.

8. AOA _ ¢_12e NO

Manif_

:11 _'_ Gross Weightv

B MImlfes( Qty

st Qty=3 CT

_) Nil in_lmtlfy

T.,_.U_.A. UnlfS

_S

;_1 llinuIllf_lr I 0.

THTHAL IN334;

;5 t.m:e.on of Go,:clslG 0 NO.

F046/bIALCA AMI]

33 F.nteced Vetue

CHGS

C. Rll(lllonlhf0

HAW]a@ 921445

OTH PREC MEt

7113.19.._OC

Merchandise

SILVER _El_

7113.11. 500_

M_chandi se

OTHR WRK]} PF7103.99. 100C

Merchandi se

BLOCK 39 SU_

MPF

TOTAL :

ART OF JEN

10

Pr oc ess_i ng

RY 0/$18/D_

1

_rocessi ng

EC S]]qS, CU]1

Processi ng

MARY :

499

NSPF

--L_e

OTHER

NT SET

_OT RELATED

C895

30

800

C5

TC TAL ENTEREE VALUE

) OechlrlllOn of Imponem m Recorc_ (Ownar or P_r.lled _ a_lllortzl_l Agent

I cincinne Ileal I I_ Ule

ll_.pOlIlr O{ riced IUM UlII fhll llChill _1_nl_ _ i=_arc:hesei" Oi"I----Ii [ ..... _ .... _" ¢'_nslgr_l #o# OR

G'U_lorns p'ur_o _ll _ as Shown _bofe L-2J agent

I lUnhe_ _o¢_le_ _lf fh_ m4_rchendl=lera; _li_d psml'_li_f ¢0 I ;)_lrcrlllse muinn_o_ll_-_ pu_iuim4 ;Q 4 _:_A_4_

r_ (_ mg_i_menf to p_c_mle rand Ihst t_o OR _ _ 1_ _ _ _ suitsr_nls

l also _li.';lre thll_ the Itlmlmellt¢ I_ the _l:umentl hmln 111114lutly dl_tolll lo 11_II _ Of m7_WlIdlQe• ln_ inIIIlf the We _rl¢ll, VilU_I, quIql#l_l_ _l_lfll. d_lwlblc_, le_l I_mlloin_$Ira4 mTIIUII mn_ _ flt'q I_ _ end _ Ifl i_Odl Or II_'lCmS ll_l=*,_ld o I_1 II It o lnllmereJtlntl em eilltm' Ir_ Or I1 n_luf.l_ coa( mill lull, dlaclomed I Idfl k'_mid_fmly furnish IO the

aQptOpfllfe c1&ll_l offl¢lf in, inlor:nlllOn II_wing I dlfhn'e(ll Itlll CH blOtS

titleImp_nmreex_onm= ere ¢0_ I)'inQ wire gJ Cullom! Ilwl. I0 re[low ut to c=mg=l and ¢=Uecf IlUl

_l_fll lumoun! of m_f_ey, to imfafcl Ol_r Cgen¢l_ nlQulrlmenl=. Ind Io _fil= I=WlII Ill Iltl_l• folmlll_l I_ I_Nrll YOo'r tie.hill is m4mdilo_

34 ? TS.gg.A.R=flADAICVO Rale

(:_ I R.E. R=te

O VIzl NO

5.3%

0.21%

/-?26

284

1

0

3

1

LR. Tu

Do_rs Omca

d

$2

_B

O. 4%

0.21%

)NSTRUCTE UMMARY

$136,383

÷u._ CUSTO,_Suse÷•k. L_ Code 8 ascmmllm,d Om:f

C Ascertained Tex

0 _i_ice nl_ Olhet

F.._ecl. Totll

TOTALS

o,ny

7731

0

• _ B017

J_CO_LA ATTY IN FACT

_0

71

320

!. ". DEPARTM_:NT OF THE TREASURY

UNITED STATES CJJSTOMS SERVICE"

.,>ageg 1 c_ 1 3&8/ _/OKERS BOX NO. : 230' _M CUSTOMS BROKe.S, INC

/ 175-01 ROCK.AWAY BLVD.JAMAICA NY 11434

NYElele

l UItlmst| C.m13IgneQ NB_ t_ Addrlol

SAMUEL AARON, INC.31-00 47TH AVENUELONG ISLAND CITY, NY. 11101

g L C4' AW'B NO

024 7760--9976

Immotllng Carder

LH I FLT # 400

ENTRY SUMMARY

2¢ U S. P_1 ol Unlld_g

4701

[_) _ttty N_

0056371-44 'E_W O=_B

10--07 -r-r3L E_ No

891

10 C_n:iIgnel NO+

13-3303947

+-I:"b i ABI/A

1001;' aon_ Tyae _al

8

_I_ _mme_ Dim

24910-22-98

* PAPERLESS ENTRY *

Bro_dtmoortlr _Io NO

01.41522

20 ModlafTrln|ao_lllOn

40

24. Fo_llgn Port glLmmlng

_ D=tl

14-07-98OelcdCllon of MIrchllndI_

_o

ADA C'40 Cul NO Manliest Oly

Mani-Fe=t Qty-=l CT

_INV # TS-451 _ HAW

01 OTH PREC HET AR] OF 3EWA 7113.19.5000 I

Herchandi se

9LOCK 39 SUM

_PFTOTAL :

T[

OVlnllly

T S U S.X. Urdll

_S

6_ 92-1763NSPF

>r-ocessi ng --el

_ARY :

499

rAL ENTERED VALUE

OOcllrltl_ a| Importer ol RIcof¢l (O'+l_lt _4"pui'o"+l|lr} or AglltO_'IZld A_lnl

25.4425.04

I d¢:ll*'l thll I im Ihl

Proposer o| 11cord ing thml Ibl IctUll _ OWn_ O_ purchg_l+ ¢+r_ .... pliTcl_l=lr, o_ COA_llglrlll l_" OR J].l

loll1| Inert(L...JI Ill=lhl_ Ol_flrl |rlll IN mlt_.llln_lll

Wll 00|i_'141_ _UIIUil I_I _o i gur c.?ll: i 14_ not _ pt="J_ Int 10 1 _ Or

_¢_ 10rllrMN tO gut¢._l_l Ind {hlt the OR _ + to _ imd _ idltm'nlmt_

I IdlO 0l¢-I,111 t_M (111 llltlmlnll b lhl gocum.gnll fNmlUl Inld fUl_ dIlg;losl Io thl bill O+ my

l?Id IOylhlll In_ lrl li%IHl In+ ¢O¢m<_ Ind li_ll I0 g¢l_dl _" lltYh=ll i_'ovldld to _ |lflll ol lhl

Ippk'101_1111l CUllOnll offk;IK Iny Inlon1_tk_ specking l _grlamnl ql=le O! II¢II

R,.,;;,.- m_ulre= gy Fi_;?,._.it Re_u_Mlon Acl of 19_0. T'n_ In_Otmltlo_ Is n_l_ m tnsun_ mat

U_pol't |PIll i _ootlt rl Ir+t ¢ompl?lnQ wl_ U,._ C_|lOmll law1, to iIIow ui Io coml_ll ii1_ ¢oUI1¢1 I_1_/lt _1 c# qlon_y, 1<3Inlorce oiler I_++lnc T m_ulmmlnt_, 11_4 Io cofle<:t Iccurlll stl|l=flC_l

IIIIOrl_ll o_ o:x 11_101:_(s You_ mlpcf_|e nl rnandlto_ __..___._J

(_ Im_:;_lef of Record N t_ A_ttol_l.... l _31fnp _rtat N_,-3303947



TH_4 E.t_ott 01ll

10--06-98

C_untty Ol Otlgln IA. Milling Oot"umlnl:

TH

® ,y.o @ ,T=.,.

21 Mlnt_lctutlt LD

THTHAS IL248BAN22- R/Jflmnc_ NO.

L_P_IIIon of G¢_dmlG O, NO

FO46/MALCA AMIT CONTAINER STATION

t

3_3 (A) _JltlrlO Vllml

CHG$

C Ralll_=_N_

IOT RELATED

3382C50

34 _ TSU_A. RatlADA/CYD Rite

(_ I R.C Rail

O Visa No

_. LI_ Code

RJ[CONSTRUCSUmmARY

$3,382

+ U.S.CUSTOMSUSE+

C ASClnllnla Tlz

TOTALS

Duly

OOllIPS Cants

7 .0

Tlz

192 _7

)o

)0

77

0 A_IClPllllnad 011111 _) 01111r

25

E Inld Totll 7gill

_ -*_. ¢_*m 7r_3_ itlqrlGn.J

321

pr

t _RTMENT OF THE TREASURY

/ _. ,EO 5"_'ATE$ CUS_OK5 SER_qCE _"

Page _ 1 o_ ! E_EB_'C_F__S BOX ,NO. i 23.0

CUSTOMS B_'_,_r_¢S: INCI_7_--01 ROCKA_AY BLVD.

3_AI_A HY 11#3 _

t Ultlmsls Conslgnle Nem_ ins Addrus

ENTRY SUB _ARY

F® '_'"_ _ wry,_0s_=.C_5<_6-5 .. -01 ABI/A

Enlry Oatl _ P¢¢( Code

I 0-0&-98 4701

II i_icnd No. 7 Bo.d Tyl_ CeCil

891 B

! 10 Camdgm_ N¢

13-_303_47


LOnG ISLAND CITY, N_¢. ili(Jl

t;Y

SIlte

(_ B LO_AWBNo

C035 6015-6154

_m_n 9 Ca_to_

SR / FLT _ 102

20 Mode Of TrlnsP_Mollon

4O

24 F_ndg_ 9m_ Of 'Jd¢_ 9

25. U _L Port _ Ualec_lnll

4701

fl, ADA CVO Ca=4 NO

IlL Entry 5umml Dills

10-21-98

-* PA_'EI'_LESS E_N'[RY *

Bn_klrllm_o_ FIW No

Oi .415<:8

A

In_oo_ D_t_

10--05-9S

D_llCHp41_ el MlrcftsndlSe

Manllesl Qly

_) list Or..mnt(tyT S U S.,A. UNIs

LSAHUEL AARON, INC.

31-00 47TH AVENUE

LO_i_3 ISLAND CITY, NY. £[tOt

E_onlng Country14 1E.(_,j0_ll 9_TH

_) Counlrf ol Oq_ln 11. Ml_lln_l Doc_mtnta

TH

,, ,,o. @ .o.,.

21 ManufsclUret LD 22 Roflmt,¢ll NO.THN0_'E=.R 1 <_BA_

E/.49;/_.TI'_'S "r_C. cr__.rrl.c

1

33. _ P.nl_lt¢l Veto•

CHG_

C R_de|lonlhi_

34 ? TSUS.A. RatlAOAICVD P,41e

(_ LR.C RIte

0 Vl=i No

_) Duly 4rid LR. T_

Oo_sr_ Cants

nan_E

O*H PF_EC _l

P_-chandis_

BLC_3K 39 SUP

HPF

TOTAL :

T(

_2

A_7 Of- aEk N!._F

&

:_r-oc _:_3S i__ Fee

rAL EN rE;_EL VALUE

{_b_tssslto_ O( tm_Lal{ Of Rs_3_'d tO_P_{ ¢_ P'4(Ctt4_4lS_ _s AUthOCLTa_ _kget_

I 41ellis to_t I Im II_!

Im_)ofl_r of m_r¢ lind lhll _ I_U_ _ o_r o4" purcJ_=mf OrI ! o_m_. ;mrct_lae_, or c_n_gnN lot OR i_lt_J i.._J iQsnl Illerlmfemltof_= purposes M ss el•own it+owl.

-._1. 17

201. 17

_'fJTF---_-LA_D

95797

C 1 (_)

)NSTRUCTEUMMARY

U.S. CUSTOMS USE _IJ{I C._ds _ Alce_efn_lOut_

_3

17

TOTALS

546U _3

I Iwrt_ Oldltl trill tel mllfcl_ln¢llllwtl Ot_t lln4d p_lulm! to e p_r c,ns=s w_ nm _ p_ to i _ or

[] ceOrt_lri_lnlloF_r¢l_ ..... dlhlllhs OR 0 a_°11_rdtO_tl_'l_elt_d61didetn°_lpttoll lid forth I_ (he b1_olcll srll true

f alSO ¢_l:laze toll (1_1 Itofemlnll In _e d_.umsntl hlrridn filed h_y dl_clole to tile I_lt Of my

I_owl• ¢l=O_•I_¢1 boflof 1_• II_s t_dcelk +r=lu4l 4vlqtlt 11'4, m_ltell_ dt Iw_e ¢lr.._ feel, co•milliemeled myllUes mml inl tnl_ I_ ¢_1¢1. end tllil Itl |_dl ot el•dells Of¢_ldld to toe smllsl _JI tl_mlt_J_l_lll e_er frill as it rl¢l_ld cost tm _flr dll_"_sll_ | _11 h_rm_itol_ |uml_h to thl

4p_ropdllte cut•ores Offlce_ Iny _l_mltlo_ Stll_rlnQ I ¢llltore_| slits Of feels

NO(Ice mqul_e= _ ?E#;_'-¢"_ _.,;v,._;on A_ of I_tl_. TNI :.;;;,.;;lOtt I1 .,...;],_ tO SnSUnD thid

to1_'14_l/_s_orlof1 I{11 CO•plan 0 wftlt U S Cuid0_rsl Iiw|, Io sll=w us to ¢ompuit sn¢_ collfct the

t=_ttnl Ii_Oun/..........................el m¢_¢'_ to snloll=l otl_if iQef1¢y mqulrlnmnl_, end to r.otlect amcur|to ididl_llc_f

C. A:lCerletoecl Taz "r,s 0 bO

_1

Tmid

_._

17

322

u_rw_l_=_ml vr IM= IM,_UMTu.rno _A,_S ¢USTO.Sse_cE.-/

/ Page f- 1 of I 3&_/ I_.EI_'S BOX NO.- 230/ G_MM CUS TOMS i_OKERS, 1NC

175--01 ROCKAWAY BI_VD.

JAI_AICA _Y 114._4

e Ultlm6tl Con.lgnle Nlme |nd A4dr$11

SAhLEJ_ AARON, INC.31-00 47_H AVENUE

LOI_CI IBLARD CITY, NY. 11101

ENTRY SUMMARY

Q F.ntrf NO. _ _ Entry Type Co_= I= _ s=._,, o.,.

0<)-_---_3t0-2 01 AI_I/A I 249, Em_ 0.,. (_ _. me Iu- 19-913

IC_--02--_ 1001 * PA._Ef_LESS ENTRY

6 Bond NO

B91

tO Consignml No

t3--3._C,_gq 7

_YStile

i1 _k_ 'r)'_l CO_I I I 8rokerl(moortsr F111 NO

8 [ O1. _' 140__O_it Of _d NI_ led _dWa_S

SANLIEL AAP.UN, INC.31--OO 47114 AVENUE

LF__ ISLAFID CITY, ,_'(. 11101

E_p_ln9 Country 14 E1pon Dill

IH 10--01-9t_

Country of Odgm 16 M_mln_ DoCument|

rH

B L m AWE NO, 20 M_ Of TIl_spO_lltlOfl 21 Manufsclmet ( O _- RI|I_ln¢_

OB5 601_-299_ _0 T_{J_R 16BAN

ImpO_ln_ Carrier 24 F_llgn Po_ of L_dlng 25 Location of GOOd|IG O N_

SR / FLT # 102 E149/_I_'5 INC. C_4-£R

;¢k U S P_n at Unlading

4701

8, ADA CVD C_-_m Na

_npo_ O=te

t 0--02--9B

Oq_-_Iplb_n @l M_rcnlndl=e

O1

A

,_IH PREC _l

7113.19. _

:' L*_s,=. w.,,., _j .._ o..m._.Manlfe._ _y T S U SJk Urals

_t (_ty--4 CI

_5

ART Of- JP_l_4

-_-ocessi ng

,_IARY :

MEe-ch_ z _,e,

BL£;C|< ._,9SLI_

MF'I-

TOIAL

33- (a) Emec_l'VsluI

CHG$

C Relltmn_lg

N_PF

e_

34 ? TS.USJLI_I_AOAICVO Rill

LRC Rate

O _lss No

D_ll=r,_ elms

".E;T RELA_ EE

25_2&_

C-30

TC i_. F_N_LI(EL V__L__

im_o¢ler _twnir o_ p_Ul_BLSII_ of AUthoflze¢l A_¢;(I|o( ot Recom

I dicllm thmt I lira I_I

Wnpo_lr of te_ _ thlt Ihe _.-'luelowfl_r _l_er _ c_lalgnle I_ owner or purchmsl_ of

[] _zI,om• p_o.., 1. 1, •h_wn IC_,I. OR [] •gin, m.reot

I _llh_' {lib:levi Ihll the mef(:_lmdls•

eel (W_lilnl_l ]=urlulnl to I _¢n_=l w,l_ c_ _ pu=_i.m 1o • _ or

pd¢_= sit I_rll_ In U_ Inv_e _• Ira* _ _ Cm _ _ to _ m- iX'_r_ m L_m m /I _1•0 {leclire Ihil Ihl •tltlmeetl In the _cumlfltl nellie IIIl_ tully ¢;1=¢1o14 Iolhe i_ll of mT //

k_wle_|g• and _llIf Ihl _e prk:_l _,•lulL qul_lll•l mDalel d;iwbl_ke lee• commllilan$ Jr*im_ eye,Ill •no •el •rum in_ con1¢1 lind thll ifl gOO_l o¢ si _¢I_ _id IO InS seller of Ul_mir_lln_l...,,l_lf, ...... , ,educed COlt .r. I=rly dli=loee_L, will Immedl.te.7 lumlsh to lb. / ,

ep_lp_le _lelom• OtflcoI _? _Ifocmstlo_ =hoIw n_ = _ _1hl¢_fll still of laCl_ - /(NOUCe mqulfel_ by Peplnlorl_ ...... on Act _ II1_0 T_II InlOzmmUoe Is nlKIod IO 1;15ml U14t r

_Oonerlle_o_nerl Ire =_mply_ O with U $ Cuiloml Iiwl to =1_,+ ul to compute =rid ¢olllct _ I _'_) _g_ilu • of Ol=l_r_l

r_l imount Of morl_l,, Io lnlorc• Other Igen¢7 mqul+_mlnt:l mnO to ¢ofl=ct Item+ill ltell=h¢_l _I_ hJ_l_P r%r'l J_" I_I

I.r'_ormlllon 0;_ b_0Onl _olrr,esp_le . mln_llo_' _ _''I'" f"

tECONSTRUSUMMAB

+ U e" CUSTOMS USE +

A. LIq C/Idl B AICI_IIAId _Wty

C A$cer1_dnlcl Tax

A•¢er_•lnI_ Other

E Alel_lllnl_ TOIII

TOTALS

!4 2/El

TIt 0

2

t477B ._3

J

2_

_D

Othlr

_) TOlII15263 ;-"_

O_. c,S

1 N FACT_L_T _y

323

BROKERS BOX NO. = 230GEMM CUSTOMS BROKERS, INC

l_z_/ 175-01 ROCKAWAY BLVD.F JAMAICA NY 11434

I U_tl _sl_nlt NIme t_ A_Tstl

SAMUEL AARON, INC.31-00 47-rH AVENUE

LONG ISLAND cITY, MY. 11101

NY

BLmAWBNQ

020 8154-0561

_ ImDQfqr_; _tT_,

/ LH / FLT # 40O

;_ U.S. _ o/ Unlsdlng _ _ 0lie

4701 10--09-98

31 Gtoe:l Wll;rll(_ Mll'l{IIll Qly

S% Wty----Z L,

AR7 OF JE_

2

_rocessing

MARY :

499

ENTRY SU M_m_a--RY-

056409--9 t ABI/A

,. s.,. o.t. (7) _.. _, 10--26-9810-09-98 4701 * PAPERLESS ENTRY *

0 Bond NO. ? Bond Type C44e _ BtokerllmO_l_ Fqe Na

891 8 , 01.41595

10 Con_.lgnet No, (_ Smportm of Re¢_¢l He_ ind Ad(l_elS _ ImPOnlr No

13-3303947 [313-3303947SAMUEL AARON, INC.31-00 47TH AVENUE

LONG ISLAND CITY, MY. 11101

_ Ez_llnQ C_/nlry _4 ExDo_ Dale

TH 10-08-98

Countrr of OItgin le Mlellnq _mlmla

TH

20 Modl e.f TrllnBporllllan 21 Mlnofl_lurlr I._ 22. Rliemnce NO.

40 THTHAL IN3347BAN

24 F_IQn Port ol t,adlng Z5 Location =4 G=ods/G.O N_.

FO46/MALCA AMIT CONTAINER S-rATION

33 ? _;..GV.It;4 3aL 9 T SUSA Rat" _ Oulylndl.R. Tl,

T.S U._J_. Units C. _oblti_'_hlp _- LR._. I_lle _lm _lflts"*rise NO

_OT RELATED

NSPF

78536 5 7"/. 4476 _o

C50

:ee O. 21% 1#=4 _3

[NV VALUE 79230. ;%

_ESS NDC (=95

164.931&4.93

$78 _536

_"U.S. CUSTOMS USE'_' TOTALS

4476

0

0 At=Itlalnec_Other _ Olher 1_4s. *,=e,,_nld To,., _ _=_ 4641

_) m_.l,=, o_.=,,,.._, n,,..=_o,,. J"}" O_. _

01

A

_ T.S U B,.4. NO_

8 ADA ¢Y0 Call No.

rlan_e

4AWB# 921905

3]H PREC ME]

7113.19.5000

_erchandise

BLOCK 39 SU_

_PF

TOTAL :

TC VALUETAL ENT E.REI:

I ds_trs Inll I im the_np_41_ of record end _ll Ihl |¢IU|I

CUlloml purpalU II 12 IhOWn amo_eI Im-thlr 4e(_l Ih_( She mef=hlr_ll4

wee o_1 abed pursuenl to I pue_as4 wcs n_ _L_e_ _ _ | pun_4_e m

m |gmeme_4 Io pvrchl=e ind IBit _l [] b _'_ I_1_ _ IO W _ _=_ _ Io

I ilio d_¢llrl I_11 I_ II=l_md_| _ I1_ dol:_nll _ereln II(id fudy dll¢_le Io U_I I_lt of my_ll_ldd_• illd _lf Ig_ U_I ptlcl_ _llull. Q_ulnlltlll. _bllu. dtlwl_l_ fell. _'l_ll_,l

_llxpo_em Im e._mp lyil_ wlU_ U._ °_11_1 _wt. Io I/low _ to cl_l in[_ _Ne¢l lhe

._5

)0

;8

324

INC

JA_IAICA NY i1434

| _gtmlll| Conllgnu NIml In_ _tcsl

SAML_L A_RC_, 1NC.31--00 4?TH AVENL_

LON_9 ISLAND CITY, hr¢. tirol

_.....

O_b510-7 Oi A_I/A

(_ 8bofAWSNo

020 8154-1i54

t_OotUng C4fflat

LH / FLT _ 400

4 _nl_ Date _ Por[ C_4e

lO-l&-_ 1001

;' BomJ Ty_4 C_d68 Bona No.

891

10 _n$lQnea NO

i 3-3--J039_

NYStI_Q

l i Mode of Ttlnspoi'[aUcm

4O

Foca_t_ Pon ol Lading

import DaM

10-16-98

Otlcd_ion o( M1rcha_dise

i En1_ Summa oats

24910--_0-98

* PAPERLESS ENTRY ÷

6mk_i_mp0Mct F111 No.

01. 4179+%

(_ Im_tlm! of R1cor_ Mlml and Ag_;II!I

sAh_JEL _RON, !NC31-00 +7TH A_ENb_

LONG ISLA_D CITY,

i _ [zpo_lng Ccun_-_

Counu7 of O_lgl_

TH

LT NO

! 21 Manufil_l_r_l_ I 0

TH THAL I_ 7B_

__47

26. U S _rl of t_li_llng

4701

• ADA C90 Case No

Manife

_L_WB_ 9221_5

(_i OTH_ b_KD•TlO::S.,_. -_o_

Mc_chandi se

C_32 OTH _C MET

A 71_3. 19.5000

Mer-chand _ se

_LOCK 39 SL_

TOTAL :

T_

31 _ Gross Weight

O k4anttesf Oty

_t Q_y=2 CI

__C STNS, CU_1

_roces_ing

499

(AL EN [ EF_E(

NS| C_anUly In

TS USA. Und:

_S

NT S_1"

N'Cr--r_l.

_._ to4a_ion of GOO_I, IG O No

FO4&/MALCA A_IT CI]NTA_NE_ STATION

i 33 _ En_e_sa v=lu,i 3_ T S U.SJ_ Pale' C_GS AD_CVO RBIa

C Allll_nshl:

_T RELATED

396

CI

_tzt Ku

O. 4%

0.21%

V_U_

3NSTRUCTE;U MARY

132.64

132.&4

_b3,164

I¢_arl that I Im lha immon.,o(,,co,,,,,+ m.t =, .re.a, i _+ _ g _' I_ *==,,,..,.e<,o.,_ _ o+_ __F'-I '_=". ,+'=o'. =' ="='_",, 'o' OR F"_I o"'=" = _'='' o. I I _079

I _her _1_Im lhlt lhI _rC_ll w_ r=_ =Otawmd _ la l_h_l = C A=Cl_ah_d TIX TI*

| _I _lgmwmenllOp_aH_l_t_e OR _ | _l=_U_e_nd_==m I I v

_,+...... ,=..,.,..,.,=..... .Ol L_ =_%'="_='='='_='=_._=, ,.l Illo _leP.II+_ U'l_t Iill Itmlmlntl I.n the docun'_ntl n_,ln I1hm' lul_ I_lK:ll_e to II1_ blal o! mT | I _ ' _ _ "32kl'_O_lld And _41flll| IPIIIt_W prh:l.i vIlulI, quIqlltkla, _I_4KtU, driwg_u:kl, leas. _lpmmllllO<lSIh%_.a_3"4_tlU Irl_ lm Ir_, lu_3 comber, nx_l th_ I_ goo_x o_ ,.rvl:al pro.gel to P:. sell.for he n _ --_(Chi_lll ilt_r _11 Or It _ _ll _I fully_ilC_05@_ I _ l_¢_litily fu_sh I0 lhe | _ A_c_naO TGIll TOLLS

...t.t ......... tI.., ._ lhto,m.t...Ing . .llt.r.nl ,lit..l t... I / _ A_...nl_ TOtll _ 3 _

tlohlm_tO m(:n_t_m_m_g_h_ymqu_Tem_t_*s_t_c_ct_¢w_st_=_``_Nj`_CL+_ _-- M_[_-'_ ]_N FACT,.,,=.,+,- ,=.+,..+.,..,.-...,<,.,+ .,.,...... . :-',7"+..-+.-+....... _ ....

F6'

54

325

INTENTIONALLY LEFT BLANK

326

CERTIFICATE OF SERVICE

I, JEROME L. HANIFIN certify that I am an attorney with the office of

Serko Simon Gluck & Kane LLP with offices located at 1700 Broadway, 31 st

Floor, New York, N.Y. 10019, and that on June(,/, 2007, on behalf of Samuel Aaron

Inc., plaintiff herein, I caused a copy of the annexed Joint Appendix to be served

upon

Gardner Miller, Esq.

United States Department of Justice

Office of the Assistant Attorney General

Commercial Litigation BranchInternational Trade Field Office

26 Federal Plaza

New York, N.Y. 10278

the attorney for the defendant herein, by depositing two true copies thereof in a

United States mail receptacle, properly enclosed in a securely closed envelop, duly

franked or postage prepaid, addressed to said attorney as above indicated.

_'_me I_. I-l_ni_

joint appendix - discover columbia law

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