News of Interest

The Federal Circuit has done the importing community a favor by reversing a CIT decision that effectively undermined the value of a prior disclosure. Traditionally, importers have made prior disclosures to avoid penalties in excess of interest on the unpaid amounts. In U.S. v. National Semiconductor, the Court of International Trade held that the U.S. was also entitled to interest to compensate it for the loss of revenue, separate and apart from the penalty. The CIT based this decision on 19 USC 1505(c) which establishes the rate of duty applicable to underpayments of duties due on liquidation or reliquidation.

In short, the Federal Circuit held that 1505(c) was not an independent authorization for the U.S. to collect interest in a prior disclosure situation. The Court reversed and vacated this aspect of the decision and sent it back to the CIT for further consideration.

Prior disclosers may not breathe again.

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