Importers Hopeful CBP Processing of TFTEA Drawback Claims Can Begin in October
CBP could begin processing drawback claims as soon as October if all goes according to the plans of a group of customs brokers and importers challenging CBP’s failure to meet a February deadline, said John Peterson of Neville Peterson, who represents those brokers and importers in the case at the Court of International Trade.
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At a conference held Aug. 23, the importers and brokers gave the court a list of sections of a recently issued proposed rule which, if enacted immediately, would allow CBP to calculate refunds and “satisfy the requirements of the Trade Facilitation and Trade Enforcement Act,” Peterson said. CBP issued the lengthy proposed rule on Aug. 2 (see 1807270024), well after the Feb. 24 deadline for final drawback regulations set by TFTEA.
At that Aug. 23 conference, the court gave the government two weeks to come up with its own list of sections it thinks would have to be enacted to carry out TFTEA’s mandates. The two sides are due back in court Oct. 2. If the two sides can agree on a list of sections at that time, Peterson says, he will ask the court to have CBP make those sections “effective right away so that we can get drawback claims flowing to people.” CBP and the Justice Department declined to comment.
The government has “declined to process any claims under the new law, even though it has been in effect for six months, and they’re really slowing things down under the existing law,” Peterson said. Peterson thinks Judge Jane Restani, who is presiding over the case, “is going to tell the government, ‘there’s some stuff you have to do and you have to do it quickly.’” He’s “cautiously optimistic.”
For its part, the government has said it can turn around final regulations quickly, but “it’s not possible,” Peterson said. There are many brand new provisions in the rules that deserve “a thorough rulemaking proceeding,” he said. The problem with the missed deadline “is just as far as the rule for calculation,” he said. CBP’s proposed rule would affect drawback in other ways not provided for by TFTEA, including by restricting the use of substitution drawback for certain excise tax claims. Comments on the proposal are due Sept. 17 (see 1808020049), and CBP has already denied one request to extend the comment period (see 1808210006).
Tabacos de Wilson, Tobacco Rag Processors, Brown-USA, Nippon America, Skate One Corporation Alliance International, C.J. Holt and Customs Advisory Services filed the case in March (see 1803260048). CIT handed them a partial victory in June, but held off for the time being on ordering CBP to issue the new regulations (see 1806290028). The plaintiffs have since asked the court to order CBP to issue a partial interim rule (see 1807300020).