Wednesday, October 15, 2008

Cancel My Subscription to the Bulletin

The Customs Bulletin is a publication with a long and important history. Through the Bulletin, Customs and Border Protection provides notices to the trade regarding important decisions of the Court of International Trade, changes in policy, and new regulations. It also includes a bunch of mundane but important stuff like exchange rates. I’d venture to say that besides the Federal Register, the Bulletin is Customs’ most important and most “official” means of communicating to the public. If something is in the Bulletin, I’m willing to bet that Customs assumes importers are aware of it.

In Travelers Indemnity v. United States, the Court of International has, as far as I can tell, let us all off the hook when it comes to knowing what is in the Bulletin. The facts are important here, so I will summarize.

Travelers was the surety for an importer of televisions subject to an antidumping duty order. At the time of entry, the importer deposited estimated dumping duties 1.38%. Liquidation of the entries was suspended during litigation. After all the litigation was final, the assessment rate was set at 7.43%. During the course of litigation, the importer dissolved, leaving the surety on the hook for the resulting increase in duties (up to the limit of the bond).

The relevant timeline goes like this:

May 27, 1997 final termination of all litigation, suspension lifted
October 22, 1997 Customs published the final judicial decision in the Customs Bulletin
February 4, 2005 Commerce sent liquidation instructions to Customs
March 18, 2005 Customs liquidated the entries

When Travelers received the bills, it properly asked itself “What happened between May of 1997 and March of 2008?” This question is relevant because under 19 U.S.C. 1504(d), entries not liquidated within six months of the lifting of the suspension are deemed liquidation by operation of law at the rate applicable at the time of entry.

For deemed liquidation to occur, Customs has to have notice of the lifting of the suspension. Previous cases have held that the Courts’ publication of their decisions do not constitute notice to Customs. Why? I don’t know, but it is true.

But, what about the Bulletin notice. Surely, if Customs knows enough to publish notice of the decision it can follow the results of the case. Apparently not.

This is what we learn from Travelers:

Customs’ officials are trained to rely on the electronic message from Commerce for liquidation instructions

Customs employees charged with liquidating merchandise do not receive copies of the Bulletin

Customs employees charged with liquidating merchandise are not responsible for reading the Bulletin

Customs employees charged with liquidating merchandise are affirmatively trained and instructed not to rely on it

The government prints 2,421 copies of each Bulletin, 2,000 of which are sent to CBP employees

The timing of the Bulletin’s publication of “Decisions . . . Concerning Customs and Related Matters of the Federal Circuit . . . .” is inconsistent

Based on these facts, the Court of International Trade concluded that the Bulletin is not an unambiguous source of information FOR CUSTOMS EMPLOYEES. In other words, CUSTOMS EMPLOYEES are not deemed by law to know the contents of the Bulletin and, therefore, CUSTOMS EMPLOYEES can’t be required to act according to the information it contains. So, the deemed liquidation period did not start to run until February 4, 2005 and the merchandise was properly liquidated at the final assessment rate.

You know where I am going with this, right? If the agency that puts out the Bulletin has gone to federal court to say that it is inconsistent in publication, not widely circulated internally, not used as an authoritative source, and generally not considered legal notice, then why should the rest of the world be held to anything in the Bulletin. What happens when CBP publishes a notice in Bulletin that it is changing the classification of some merchandise? Does the importer who did not act accordingly get to argue that it exercised reasonable care because the Bulletin is not widely circulated and is considered unreliable by Customs? To me, that seems to follow from this case.

Now, there are some fine points to consider. First, when Customs is serious about some change in policy or regulation, the notice goes in the Federal Register. The Courts uniformly agree that a Federal Register notice constitutes legal notice. Also, Customs might be able to show actual knowledge of something in the Bulletin. So, obviously, fact matter. Still, I am surprised Customs and Justice took this position in litigation.

1 comment:

matt said...

I'm glad someone younger than I has noted this official adjudication of the Bulletin's irrelevance. As a public service to the fine civil servants who read this blog, you can find this obscure document on your own website at www.cbp.gov/xp/cgov/trade/legal/bulletins_decisions/bulletins_2008/. But I'm glad I won't have to waste time reading it anymore.