Trouble, With a Capital T&E
You should remember from the prior post on this case that
the Court of International Trade held C.H. Robinson liable for duties on
imported clothing from China that entered the U.S. bonded for transportation
and exportation (“T&E”), but were never exported. That is a violation of
the bond. C.H. Robinson was the bonded carrier responsible for delivering the
merchandise to Laredo, but another carrier was going to accomplish the actual exportation
to Mexico. It appears the goods made it to Laredo, but it is not clear what
happened after that.
When U.S. Customs and Border Protection audited the T&E,
C.H. Robinson produced the stamped Mexican pedimento entry documents as proof
of the export. Unfortunately, Mexican Customs subsequently declared the
pedimentos to be false. As a result, Customs hit C.H. Robinson with liquidated
damages of $75,000, which it mitigated to about $57,000. Customs then went to
court to collect that amount plus duties, taxes, and fees. The total amount was
in excess of $100,000. The Court of International Trade found C.H. Robinson breached
the bond and is, therefore, liable. This appeal resulted.
As background, keep in mind that when goods are moved via
T&E, the bonded carrier may be liable for any shortages, failures to
deliver, or irregular delivery. 19 CFR 18.8(a). In addition, the regulation
allows Customs to collect duties, taxes, and fees related to “missing
merchandise” from the bonded carrier. On appeal, C.H. Robinson’s point was that
the goods are not “missing” because it made it to Laredo, the intended port of
exportation.
But, that did not convince the Court of Appeals. While C.H.
Robinson did show documents indicating delivery to Laredo, those documents were
not conclusive proof of delivery. Customs can ask for additional evidence such
as bills of lading or delivery receipts, which C.H. Robinson did not produce.
Further, evidence that the merchandise was not exported (i.e., the false
pedimentos) leads to the possibility that the goods remain somewhere in the
U.S. If that’s true, the goods are “missing.”
Remember, C.H. Robinson was not supposed to export the
goods. Its job was done when it delivered the clothing to Laredo, where another
carrier was going to accomplish the exportation. On appeal, C.H. Robinson
argued that it was not obligated to produce evidence of exportation because it
was not responsible for exporting the goods. Neither the Court of International
Trade nor the Court of Appeals for the Federal Circuit accepted that argument.
The problem for C.H. Robinson is that it was the bonded carrier and once the
goods went missing, there was a breach of the bond. According to the courts,
that makes C.H. Robinson responsible.
Since no one could find the goods and there was no proof of
exportation, the Court of Appeals affirmed the CIT’s determination that the
government had proven by a preponderance of the evidence that the goods are
missing. That was enough and C.H. Robinson remains on the hook.
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