Gilda involves 100% retaliatory duties assessed on Gilda's imported toasted bread products. The duties were in response to a European policy to block imports of U.S. beef after the WTO found that the ban was not supported by scientific evidence. The procedure for continuing the retaliation required that a representative of the benefiting U.S. industry request the continuation of the retaliation. In 2007, no one from the beef industry made such a request. As a result, Gilda argues that the retaliatory duties expired. The Court of International Trade agreed and ordered that the duties collected after the 2007 expiration be refunded with interest. This is the decision on appeal to the Court of Appeals for the Federal Circuit.
The law involved here is 19 USC 2417(c), which arguably automatically terminates retaliation on the four-year anniversary of the action unless the beneficiary domestic industry requests that it continue. The relevant language is that absent a request, "such action shall terminate at the close of such 4-year period." Further, the statute requires that the USTR provide the industry with notice at least 60 days prior to the action terminating. In the case, the USTR failed to do that.
According to the Federal Circuit, the "shall terminate" language quoted above is mandatory in nature because it includes consequences for failing to act, i.e., the termination of the action. This is in contrast to the requirement that the Trade Representative "shall notify" the industry. That part of the statute does not contain a consequence for failing to notify the industry. As a result, the CAFC found it to be directory in nature. According to the Court, the lack of timely notice, therefore, did not toll the automatic termination.
In a valiant effort to set things right, the USTR also argued that its failure to provide notice to the industry should not result in the loss of protection to the industry. After all, the statute was passed to protect the domestic producers. On this front, the CAFC took a hard stance and held that even absent notice from the USTR, the beef industry was obligated to make a timely request for continued retaliation.
So, it would appear that some folks are going to be entitled to pretty substantial duty refunds. This controversy has been the source of a lot of suspended cases at the Court of International Trade. I suspect, there are more than a few customs lawyers out enjoying some wine and cheese in celebration.
Well, Jane, it goes to show you, it's always something.