Customs Law

The penalty case against Greenlight Organic Inc. and now its owner and president seems to be a case that will not end. For background, read the previous posts here and here . This issue raised in the most recent Court of International Trade decision has to do with a penalty claim the United States is asserting against Mr. Parambit Singh Aulakh, the owner and president of the importer. The case against Mr. Aulakh is premised on the allegation that Greenlight, under the direction of Mr. Aulakh, misclassified and undervalued shipments of athletic apparel on approximately 122 entries. There are two Court rules in play in this phase of the case. To survive a motion to dismiss under CIT Rule 12(b)(6) , the complaint must contain sufficient factual matter to state a claim to relief that is plausible on its face. That means the complaint must contain assertions of facts that allow the Court to draw a reasonable inference that the defendant is liable. It is not enough for the plaintiff to...

Consolidated Fibers, Inc. v. United States involves an importer’s motion for attorneys’ fees under the Equal Access to Justice Act (“EAJA”). And, it is a cautionary tale for importers and customs lawyers. The underlying facts are not too complicated. Consolidated entered polyester stable fiber from Korea. At the time of entry, it deposited the 7.9% estimated dumping duties that were then due. Because the producer was subject to administrative review, the liquidation of the entry was suspended. On December 10, 2007, Commerce published the results of the review and determined the assessment rate to be 48.14%. On January 14, 2008, Commerce issued instructions to Customs to liquidate the entries at the assessment rate. CBP failed to act on those instructions until May 6, 2011 when it published a bulletin notice of liquidation stating that the entry liquidated by operation of law on June 10, 2008 at the 7.9% deposit rate. But, shortly thereafter, on June 17, 2011, CBP “rate advanced” th...

The Federal Circuit has affirmed the Court of International Trade's holding that a surety is be liable for statutory interest but not for equitable interest when the importer defaults on the payment of antidumping duties. What follows is heavy on law, short on fact, and important to sureties and also importers. The case is United States v. American Home Assurance Company . When importers fail to pay duties, taxes, and fees to the U.S. government, the government can collect interest on the unpaid portion. If the importer defaults, the surety becomes liable up to the value of the bond, unless the surety has a defense it can assert (and [spoiler] actually asserts it). In this case, the importer defaulted on the payment of antidumping duties and Customs tried to collect the duties and interest from the surety. There was no question about the liability for the duties. The questions presented has to do with interest. There are multiple bases for the interest. First, interest is avail...

Apparently, the administration has pivoted to its trade agenda. Yesterday, we saw the draft letter to Congress outlining the modest goals for NAFTA renegotiations . I also tweeted the announcement that Kevin McAleenan would be nominated to Commissioner of Customs and Border Protection. The last recent action is the Executive Order issued yesterday "Establishing Enhanced Collection and Enforcement of Antidumping and Countervailing Duties and Violations of Trade and Customs Laws." What's this about? The Executive Order notes that as of May 2015, the United States has failed to collected $2.3 billion in antidumping and countervailing duties. Often, the liable importer is a foreign entity without assets in the U.S. or is insufficiently capitalized to pay the duties. Either way, the duties are uncollectable. To address this, Customs imposes bond requirements and, in certain cases, Commerce requires cash deposits of duties. As is, the bonding requirements can be onerous. ...

I have previously pointed out the few cases that I see as ending in an injustice, even where the result is legally correct. These cases always lead me to ask whether anyone in a position of power in the United States Government asked whether the ultimately successful litigation position was actually the right thing to do. Sometimes, it is not. Capella Sales & Services Ltd. v. United States , is one of those cases. The background you need to understand this case is that there has been a long-running dispute over the proper calculation of the countervailing duty deposit rate imposed on aluminum extrusions from China. In May of 2011, Commerce initially calculated the all-others rate applicable to companies in China that were not assigned their own or a separate rate as 374.15%. Following some litigation, Commerce reduced the deposit rate to 137.65%. Finally, after additional litigation, the deposit rate was reduced to 7.37% in October of 2015. At the time of entry, importers of al...

For the past couple years, I have been on the record at numerous events and in numerous publications with various ideas for how to make tariff classification litigation more efficient and, therefore, more useful for importers. There are several good ideas floating around about this. Not the least of which is the Court of International Trade's recently announced pilot program for a " small claims " process. Others have done the lion's share of the work on that. My big idea has been to promote early efforts to resolve the legal questions about how to interpret the Harmonized Tariff Schedule. My thought is that if everyone is reading the tariff the same way, the parties will know what facts matter and whether there is a real dispute. With the fact disputes eliminated or narrowed down, discovery can be focused and the parties can get to the controlling issues quickly. It's even possible that, once the parties know the meaning of the tariff terms, cases will be stipu...

Discovery is the legal process through which each side to a law suit asks the other side to disclose the facts relevant to the claims and defenses. It usually consists of depositions of knowledgeable witnesses, written questions and requests for production. Discovery disputes are unusual in customs litigation. More often than not, the parties can reach an agreement on the material facts. The dispute is usually, but not always, over the conclusions to be reached from those facts after the applicable law is properly interpreted. When a discovery dispute does arise, people notice (and by "people" I mean "me"). Meyer Corporation, U.S. v. United States  is about a discovery dispute. The underlying issue is that Customs and Border Protection audited Meyer and determined that its application of the first sale methodology of valuation was unacceptable. If you don't know what that means, go back and read this classic post from 2005. Customs also denied duty-free claim...