Recent Court Decisions Affecting International Trade
CIT rules in favor of Customs' liquidation of certain roller chain. In Peer Chain Co. v. U.S., the Court of International Trade (CIT) ruled that Customs correctly assessed $167,111 in antidumping (AD) duties and interest on Peer Chain, an importer of roller chain from Japan, despite the fact that the interest portion of the assessment was caused by the Commerce Department being five years late in notifying Customs (and providing public notice) that a court-ordered suspension of liquidation of the entries had been lifted.
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Among other things, the CIT determined that Customs timely and validly liquidated the entries within six months of notification from Commerce, pursuant to 19 USC 1504(d). The CIT also ruled that neither statute nor relevant case law attaches any consequence to Commerce's five-year notification delay. In addition, the CIT ruled that Peer Chain's due process rights were not violated. (Slip Op. 04-19, decided 03/03/04, available at http://www.cit.uscourts.gov/slip_op/Slip_op04/slip%20op%2004-19.pdf)
CIT Rules in Favor of the 10% Formula for Continuous Bonds. In Carolina Tobacco Company v. U.S. Customs Service, the CIT ruled in favor of Customs' determination that the Carolina Tobacco Company's $80,000 continuous bond is inadequate to ensure compliance with Customs law and regulations, and must be replaced with a $3 million continuous bond. Customs based this determination on Directive 99-3510-04 (Directive), which in pertinent part states that the continuous bond shall be nearest to 10% of duties, taxes, and fees paid by the importer/broker during the calendar year preceding the date of the application.
Carolina argued that the Directive merely calculates a 10% bond amount based on a set formula, without an individualized assessment of the risk a particular importer poses to the collection of the revenue, as mandated by 19 CFR 113.13. In response, Customs stated that the 10% formula represents its assessment of the security necessary to accomplish the statutory goals in most situations (i.e., law abiding importers).
The CIT found reasonable Customs' explanation of the interplay between the Directive and 19 CFR 113.13, in light of the discretion ceded to Customs by Congress in 19 USC 1623(a). Therefore, the CIT ruled in favor of Customs. (Slip Op. 04-20, decided 03/04/04, available at http://www.cit.uscourts.gov/slip_op/Slip_op04/04-20.pdf)