Wednesday, October 03, 2012

Seizures Go to District Courts

Remember how excited I was about CBB Group Inc. v. United States? That was the case about the exclusion of merchandise from the United States and reminding the world that exclusions, which are not seizures, are protestable events. Denied protests of exclusions end up in the Court of International Trade.

In a recent case, PRP Trading Corp. v. United States, the Court revisited this topic, but with an unfortunate twist. The goods involved were aluminum extrusions allegedly from Malaysia. Customs and Border Protection detained that merchandise on the suspicion that it might have a different country of origin. While not discussed in the case, this likely relates to the fact that there is an antidumping duty order on aluminum extrusions from China.

Once the importer provided the merchandise to Customs for examination, Customs had 30 days to decide what to do with the merchandise. For two of the entries, the 30 days elapsed without a decision, causing the goods to be legally "deemed" excluded. On February 7, 2012, Customs decided to seize all of the merchandise and on March 23, provided notice of the seizures to the importer. Between those dates, on February 29 (according to the summons), the importer protested the exclusions. Consequently, Customs apparently had seized all of the merchandise at the time of the protest. And, the goods had been seized by April 12, when the case was commenced.

According to the Court of International Trade, the seizure on February 7 is the crux of the case. Because the seizure was accomplished prior to the commencement of the action, the Court of International Trade held that it lacked jurisdiction over the claim. The Court provided the plaintiff a week in which to provide reasons why the case should be transferred to a district court. In the absence of a reason to do that, the case will be dismissed.

There are some strange aspects of this case, which I needed to find by digging into the briefs. Apparently, Customs held on to the merchandise for a couple weeks before examining it. According to plaintiff, that caused a delay in the running of the deemed exclusion clock, which should not benefit the government. Honestly, I don't quite follow. When imported, Customs has five days in which to release the goods. After that, it is automatically considered "detained." After 30 more days, the goods are considered "excluded." That is a protestable event. So says 19 CFR 151.16. It seems to me that the clock runs pretty automatically, so I am not sure what impact CBP's delay may have had.

Second, I am really concerned about the delay between the seizure and the notice of seizure: about six weeks. The plaintiff in this case seems to have been prejudiced by that delay. This raises the question as to what is the legal date of the seizure. Is it the date CBP decides to act or the date it tells the importer it has acted. Maybe it is the date the importer receives the notice. I'm not sure of the answer as the regulation requiring notice (19 CFR 162.75) does not appear to specify. There may be an answer to this question, but that will require more work than I have time for at the moment. If anyone knows the effective date of the seizure, drop a comment.

No comments: