CIT Allows CBP to Fix Liquidation Error, Raise AD Rates After Time Limit for Reliquidation
CBP can sometimes correct mistaken duty assessments past the normal statutory time limit for reliquidation if it does so quickly enough after discovering the error, the Court of International Trade said in a Sept. 27 decision. In a case involving a court-approved settlement on the amount of antidumping duties owed on ironing tables from China, the trade court allowed CBP to reliquidate entries from Target and other companies that the agency had liquidated at the wrong rate, even though the 90-day period for reliquidation had already passed.
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The settlement, which ended a “very long and very expensive” court case, had directed CBP to liquidate the entries at 72.29%. CBP instead incorrectly liquidated them “as entered” at 9.47%. “It was a big error, undercollecting millions of dollars on the subject entries,” CIT said. CBP was told of its mistake more than 90 days after liquidation, so the agency sought a court order allowing it to reliquidate the entries after the applicable deadline. Target said that would violate its rights to the finality of liquidation.
Whether CBP can correct liquidation errors is a “case-by-case” decision, and “what most likely tips the balance in one direction or the other is how quickly the party with an interest in a judgment moved to assert their rights once they knew or should have known about the error,” CIT said. A “suitable benchmark” for deciding whether a party moves quickly is the 180-day time limit for protests provided by 19 USC 1514, CIT said. “Basically, did the party petition the court within 180 days of the error’s actual or constructive revelation?”
Home Products International, a domestic manufacturer, discovered the error in August 2017, and told CBP about it just after the 90-day window for reliquidation had closed. CBP then told CIT about the issue in October. While Target argued Home Products should have known about the error earlier, in May 2017, the government’s notice to CIT was still within the trade court’s 180-day benchmark, it said. “Anything beyond that time period … would give the court pause, but here, the Government and Home Products were well within it,” CIT said.
And Target itself had notice of the error when its entries were incorrectly liquidated, CIT said. “Home Products argues that the equities, therefore, cannot possibly favor Target or the other importers who remained silent upon receiving a fortuitous windfall when the erroneous liquidations occurred as entered (at 9.47 percent),” CIT said. “The court agrees that the equities do not favor Target. Having presided over the ten years of litigation in this action, the court is likewise reluctant to squander all that collective time, effort, and expense. If Customs’ error goes uncorrected, what exactly was the point of this litigation?”
(Home Products International, Inc. v. U.S., Slip Op. 19-126, CIT # 07-00123, dated 09/27/19, Judge Gordon)