Court of International Trade

The government is not limited to facts CBP includes in penalty notices when it seeks penalties from importers in court, the Court of International Trade said in a decision issued Dec. 22 (here). Rather, it can rely on facts and evidence gathered during the court case itself, CIT said. However, the court declined to rule against an importer accused of duty evasion based on those facts and evidence in a Section 1592 penalty case, finding neither side had established enough of a case either way.

The following lawsuits were filed at the Court of International Trade during the week of Dec. 12-18:

CBP allowed itself more discretion than statutorily allowed for deciding when to begin an investigation following submission of an antidumping or countervailing duty evasion allegation, law firm Kelley Drye said in comments to CBP (here). The firm submitted the comments as part of CBP's request for comments on its interim regulations implementing the Enforce and Protect Act provisions (see 1608190014). The interim rule gives CBP 15 days to decide whether to begin an investigation after the "date of receipt," which effectively "permits the agency an unlimited, and undefined, period of time to initiate an investigation," Kelley Drye said.

The U.S. Court of Appeals for the Federal Circuit on Dec. 15 affirmed a lower court ruling ordering the government to cover attorney’s fees and costs paid by International Custom Products in one of several contentious cases involving a CBP ruling letter improperly revoked without notice and comment (here). The decision likely brings to a close a series of cases dating back to 2005 on a CBP notice of action reclassifying ICP’s white sauce (see 06030725), which led to a 2,400% duty increase and put the company out of business (see 12121239).

While the president doesn’t have express constitutional authority to modify tariffs, several congressionally approved statutes give the White House authority to change tariffs based on a findings that other countries’ exports to the U.S. pose a threat, according to a recently released Congressional Research Service (CRS) report (here). But such delegations of power usually accompany clearly defined conditions and often include time restrictions, the report said.

The following lawsuits were filed at the Court of International Trade during the week of Dec. 5-11:

Military flashlights assembled by Energizer in the U.S. from mostly Chinese components are not U.S. goods for “Buy American Act” procurement purposes, the Court of International Trade said on Dec. 7 (here) as it sustained a CBP final determination. Even though the flashlights cannot be used for illumination when unassembled, they do not undergo a substantial transformation when assembled because the imported components were predetermined to be used in a flashlight, CIT said.

The following lawsuits were filed at the Court of International Trade during the week of Nov. 28 - Dec. 4:

References to “Pignolia” in the tariff schedule include only nuts of the Pinus pinea tree, the Court of International Trade said in a decision issued Dec. 2 (here). Other kinds of pine nuts, including seeds of the Pinus koraiensis tree imported by Specialty Commodities, are not classifiable as pignolia in the Harmonized Tariff Schedule, CIT said.

The Court of International Trade on Dec. 2 declined to dismiss a penalty case brought by the government against an importer’s chief executive officer that claimed he was improperly notified. The CEO, Julio Lorza, said CBP only included his company, International Trading Services (ITS), on pre-penalty and penalty notices of Section 592 violations related to entries of sugar. CIT, citing previous cases on the subject, found (here) that CBP is not required to name a company’s corporate officers in a penalty notice for the government to bring a case against them, and that Lorza in any case knew he could be held responsible.