Owner of Aluminum Pallets Seeks Dismissal of Forfeiture Case, Says CBP Knew of Duty-Free Imports for Years
A warehouse purportedly controlled by Perfectus Aluminum on Oct. 3 asked the Central California U.S. District Court to dismiss a government lawsuit seeking forfeiture of over 500 containers of aluminum pallets. The warehouse company says the government’s entire case is based on the illegally retroactive application of a 2017 scope ruling that found aluminum pallets are subject to AD/CV duties on aluminum extrusions from China (see 1707100006).
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The warehouse is "one of four warehouses the government claims are subject to forfeiture because they were used to store aluminum pallets imported from China and owned by Perfectus Aluminum Inc.," according to a press release from the warehouse company. The owner of the warehouse is Zhijie Wang, who appears on immigration records as the ex-wife of Chinese aluminum magnate Zhongtian Liu, but is alleged by the government to be his current wife.
In its forfeiture complaint, the government claimed Perfectus, a company controlled by Liu, evaded more than $1.5 billion in duties by importing “bogus” aluminum pallets, for the purpose of melting them down (see 1709180035). But CBP “has for years known about this property and subjected it to numerous inspections,” allowing the entries of pallets to liquidate duty-free and even finding no issues in an audit conducted in 2014, the warehouse company said.
The lengthy period of time Perfectus was allowed to import the pallets free of AD/CV duties, and the government’s subsequent reversal, amount to a violation of the importers’ due process rights, the warehouse company said. “If this property were truly contraband, then there would not have been six years of government inaction. The opposite is true: The fact that the government has not taken any action against the pallets over the last six years is proof that these products, openly and accurately declared when they were imported and long known to the government, are not in fact contraband and were not imported in violation of the AD/CVD Orders,” it said.
Though the 2017 Commerce Department ruling found aluminum pallets are subject to aluminum extrusions duties, scope rulings cannot be applied retroactively, especially to imports that “long preceded (by years) the ruling.” That scope ruling also remains in limbo, pending a challenge at the Court of International Trade that Perfectus is unable to file due to the government’s delay in serving it with a copy of the scope ruling, the warehouse company said.
The lengthy period Perfectus was allowed to import the extrusions without paying AD/CV duties and with CBP’s knowledge amounts to a trap, and violates “constitutional principles of due process and fairness,” the warehouse company said. “The government’s failure to act until now -- a failure that it attempts to explain away based on its untenable theory -- lulled the importers to import millions of dollars of the pallets only to face, once the trap was sprung, the years-later imposition of treble penalties of over $1.5 billion,” the warehouse company’s motion to dismiss said.
Email ITTNews@warren-news.com for a copy of the warehouse company’s motion to dismiss.