The nub of the issue is 19 U.S.C. § 1504(a)(2)(C), which states:
An entry or claim for drawback filed before December 3, 2004, the liquidation of which is not final as of December 3, 2004, shall be deemed liquidated on the date that is 1 year after December 3, 2004 [i.e., on December 3, 2005], at the drawback amount asserted by the claimant at the time of the [drawback] entry or claim.
Ford's claims were filed prior to December 3, 2004 and not liquidated by December 3, 2005. As a result, Ford believes it is entitled to the drawback claim in full. Customs, on the other hand, believes that because the drawback claims involved underlying entries that had not yet liquidated, the claims were not ripe and 1504(a)(2)(C) did not apply.
Rather, according to Customs, the controlling law is paragraph (B) of the same section, which states:
An entry or claim for drawback whose designated or identified [i.e., underlying] import entries have not been liquidated and become final within the 1-year period described in subparagraph (A), or within the 1-year period described in subparagraph (C), shall be deemed liquidated upon the deposit of estimated duties on the unliquidated imported merchandise, and upon the filing with the Customs Service of a written request for the liquidation of the drawback entry or claim. Such a request must include a waiver of any right to payment or refund under other provisions of law. The Secretary of the Treasury shall prescribe any necessary regulations for the purpose of administering this subparagraph.
According to Customs, the Ford claims could not be paid unless the entries were liquidated or Ford paid the estimated duties and filed a written request coupled with a waiver of any other refund. Ford did not do that.
Note that both (B) and (C) are exceptions to the rule of (A). The basic rule is that a drawback claim will liquidate as made by the claimant if it is not liquidated within one year of the date of the claim.
The Court disagreed with Customs and the Government. The way the Court reads the statute paragraphs (B) and (C) perform separate and independent duties. Paragraph (A) sets the general rule of one-year deemed liquidation. Paragraph (B) allows a claimant to force the liquidation of the drawback claim even though Customs has not yet liquidated the underlying entries. This is akin to the accelerated disposition of a protest. It forces CBP to act and the claimant can then decide what to do with the result. Paragraph (C) is the clean up provision that deals only with drawback claims pending on December 3, 2004. Paragraph (C) basically tells CBP to act on those claims within a year or they will be deemed liquidated as claimed.
To make a very long story short, that is how Ford won this case. The claims it filed prior to December 3, 2004 were deemed liquidated on December 3, 2005 even if underlying entries remained unliquidated. Paragraph (C), according to the Court of International Trade, is clear and unambiguous in its meaning. Nothing in the legislative history appears to be contrary to that conclusion.