CAFC Affirms Judgment Against C.H. Robinson for Failure to Deliver T&E Merchandise
A bonded carrier of merchandise imported under a transportation and exportation entry is only responsible for ensuring delivery, but CBP may ask for documents showing exportation in order to prove the merchandise was delivered, said the U.S. Court of Appeals for the Federal Circuit on July 28 as it affirmed a judgment against C.H. Robinson. The carrier had been ordered by the Court of International Trade in 2012 to pay $106,407.86 in unpaid duties, taxes and interest for a shipment of wearing apparel from China that was allegedly diverted into the U.S. while en route to Mexico. The Appeals Court agreed that the CF 7512s stamped by a Laredo customs broker at an unmonitored CBP facility aren’t enough to prove C.H. Robinson fulfilled its responsibility to deliver the merchandise.
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Shipment Went Missing Between Los Angeles and Nuevo Laredo
In December 2001, C.H. Robinson was hired as bonded carrier on three entries of apparel entered for transportation and exportation (T&E). C.H. Robinson was to transport the shipment from Los Angeles for export at the Port of Laredo. A customs broker in Laredo received the CF 7512s associated with the shipment and stamped them using an unmonitored machine in the lobby of CBP’s export lot at the Port of Laredo. CBP says it never inspected or took possession of the merchandise. At the time the Port of Laredo worked on an honor system, relying on a post-audit system instead of verifying arrival and exportation of the merchandise.
In March 2002, CBP began an audit of C.H. Robinson to ensure compliance with procedures for T&E entries. As proof of compliance, C.H. Robinson produced the date-stamped CF 7512s, as well as three “pedimentos,” or Mexican import documents. When contacted by CBP to verify the pedimentos, Mexican customs said they were fake. Unable to track down the shipment, CBP issued liquidated damages claims against C.H. Robinson for $57,212, which the company paid in 2004. It then demanded C.H. Robinson pay $106,407.86 for duties, taxes and interest, finding the goods must have instead been diverted into the United States. CBP filed suit to collect in 2006.
After a jury trial, CIT in November 2012 held C.H. Robinson liable and ordered the company to pay (see 12110921). As the bonded carrier responsible for the entries, C.H. Robinson had a duty to ensure timely exportation from the U.S. or entry into U.S. commerce of warehouse, CIT said. The government proved the merchandise was missing, it said, but C.H. Robinson could not prove its whereabouts.
CF 7512 Doesn’t Alone Prove Delivery, Says CAFC
On appeal, CAFC upheld the decision. The court agreed with C.H. Robinson that a bonded carrier of merchandise imported under a T&E entry is only responsible for ensuring delivery, not exportation. It also agreed that CF 7512s are identified in CBP’s regulations as acceptable proof of delivery. But CBP also has the authority to verify that delivery actually occurred, and when the agency verifies it can ask for documents showing exportation as evidence that the merchandise was delivered.
Here, CBP sought additional proof that the merchandise had been delivered and exported. C.H. Robinson was only able to provide the CF 7512s stamped at an unmonitored facility. In light of the evidence that the shipment had gone missing, that was not enough, said CAFC. C.H. Robinson could have avoided liability if it had evidence of proper transfer or disposition of the merchandise, such as bills of lading, delivery receipts, or valid Mexican import documents. But here, because the government proved the merchandise was missing and C.H. Robinson was not able to prove otherwise, the Court of International Trade correctly found the company liable, said CAFC.
(U.S. v. C.H. Robinson, Fed. Cir. 13-1168, dated 07/28/14, Judges O’Malley, Reyna and Wallach)
(Attorneys: Steven Mager for plaintiff U.S. government; Richard O’Neill for defendant C.H. Robinson)