Customs Law

Cases in which U.S. Customs and Border Protection asks the U.S. Court of International Trade to impose a civil penalty have evolved over the years I have been in practice. It used to be understood that if Customs went through the entire administrative penalty process and moved to litigation, all bets were off. The notion was that because the Court would hear the case de novo and make a decision based on the evidence presented in Court, everything was starting from scratch. That is no longer the case. The current understanding is that civil penalty cases are collections cases in which Customs is attempting to collect the penalty it already assessed through the administrative process. This is a significant change. It means, for example, that if during the administrative process CBP only asserts that the importer was negligent , it cannot come into court asking the Court of International Trade to impose a penalty based on fraud. See, U.S. v. Optrex (CIT 2005) and U.S. v. Ford Motor Co.

As you might imagine, U.S. Customs and Border Protection has a lot of enforcement tools in its law enforcement quiver. One of those is to prevent an importer from securing the payment of duty and release of merchandise with a continuous entry bond and, instead, to require a separate bond for every single entry. Hence, the name "single entry bond." Securing a single entry bond is an administrative hassle for the importer. Another tool available to CBP is setting the bond amount. The higher the bond amount, the more up front cash the importer ties up and the harder it is for the importer to continue in business. At some point, the bond requirement can be so high that no surety will assume the risk as a price the importer can afford. That effectively puts the importer out of the importation business. Why might CBP do this? Because they do not trust the importer. In the past, for example, enhanced bond requirements have been applied to ensure the collection of antidumping and

Yes, I know it has been a while. Trust me, I feel the guilt of not posting. At the Georgetown update last month, someone actually asked me "What happened to the Customs Law Blog?" That hurt. Like most people in the customs and trade field, it has been an extraordinarily busy time. But I digress and wallow in self pity. The Court of International Trade has denied a motion for a preliminary injunction seeking to prevent the U.S. from imposing a 25% duty on imported steel under Section 232 of the Trade Expansion Act of 1962 . The case is Severstal v. U.S. This is the first of what will likely be many challenges to the 232 duties in U.S. courts and at the WTO. Under the Act, the Commerce Department studied whether imported steel presented a threat to U.S. national security. A similar study on aluminum was running on a parallel track. The report found that the availability of steel is important to national security and that the combination of imports and excess foreign capaci