CIT Sets December Deadline for Final TFTEA Regulations Allowing Calculation of Delayed Claims
CBP must issue final regulations on drawback under the Trade Facilitation and Trade Enforcement Act by Dec. 17, 2018, the Court of International Trade said in an Oct. 12 decision. Capping a contentious case brought by a set of customs brokers and importers (see 1803260048), CIT Judge Jane Restani ordered that the final regulations must take effect immediately on Dec. 17, except for certain excise tax drawback provisions that may take effect 60 days later.
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The final regulations need not include all provisions of CBP’s Aug. 2 proposed rule on TFTEA drawback, but only a bare minimum required for calculation of TFTEA drawback claims as identified by the broker and importer plaintiffs in the lawsuit. The regulations must be issued as a true final rule, rather than an interim rule, seeing that CBP has already received comments on its proposal, CIT said.
Under TFTEA, CBP was required to issue the final regulations by Feb. 24, 2018. That would have started a one-year transition period wherein claimants could file drawback claims under either the modernized TFTEA regulations or the old drawback rules, ending Feb. 23, 2019. “Had regulations been promulgated promptly, this transition period would have allowed importers a chance to understand and adjust to the new regulations and its associated programmatic changes, as well as to obtain the regulatory benefits associated with the new statute,” Restani said in the accompanying opinion.
The upcoming end of the transition year, along with CBP’s slowness to issue its proposed rule -- CIT had wanted it out by July 5 (see 1806290028) -- and “the agencies’ unwillingness to coordinate and propose a schedule that allows for useful notice to importers for final preparation of claims under the new statute and receipt of payment in advance of liquidation as provided by regulation, requires court action,” CIT said.
The government and the customs broker and importer plaintiffs in the case had been in court-mandated discussions over a timeline for issuing the final TFTEA drawback regulations (see 1808280037), with the government initially opposing efforts to have the rules issued before “early 2019” (see 1809100043). In their final submissions, filed Oct. 11, the customs brokers and importers had sought a Nov. 15 deadline for the calculation provisions of the final rule, while the government requested a Dec. 31 deadline.
"Once accelerated payment regulations applicable to 'TFTEA-Drawback' claims become operational, that is the calculation regulations are in effect, CBP shall process the delayed claims seeking accelerated payments as soon as possible," Restani said in a footnote included in the decision.
"The ball is in the government's court now,” said John Peterson of Neville Peterson, who represents the customs brokers and importers that brought the lawsuit. “Of course, the plaintiffs and the entire drawback community are happy to discuss with the government what steps should be taken by the Dec. 17 deadline, should the government wish to consult," he said. CBP and the Justice Department did not comment.
(Tabacos de Wilson, Inc. v. United States, Slip Op. 18-138, CIT # 18-00059, dated 10/12/18, Judge Restani)
(Attorneys: John Peterson for plaintiffs Tabacos de Wilson, Inc., Tobacco Rag Processors, Inc., Brown-USA, Inc., Nippon America Group/Okura USA Inc., Skate One Corporation, Alliance International, CHB, Inc., C.J. Holt & Company, Inc., and Customs Advisory Services, Inc.; Claudia Burke for defendant U.S. government)