CIT Rules Against CBP Assessing 1592 Claim (as CBP Did Not Process Waiver of Statute of Limitations Correctly)
In U.S. v. Ford Motor Company (Ford), the Court of International Trade (CIT) granted Ford's motion to dismiss certain U.S. Customs and Border Protection (CBP) claims for a repayment of duties in the amount of $5,275,329 under 19 USC 1592(d), as the statute of limitations had expired.
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At issue are eleven 1985/1986 entries of engines and transmissions for which Ford incorrectly filed Customs Form (CF) 214 by designating the entries as "non-privileged foreign" instead of the correct "privileged domestic." This error caused Ford to owe additional duties of approximately $5.3 million, which Ford paid and protested in prior proceedings.
According to the CIT, during certain proceedings, Ford drafted letters waiving the statute of limitations period in 19 USC 1621 on 10 separate occasions in response to CBP's request. CBP acknowledged both "receipt" and "acceptance" of the first nine waivers; however, it only acknowledged receipt of the 10th wavier. With regard to the 10th waiver, CBP stated that under its current procedures, it now only acknowledged receipt of the waivers in accordance a June 1999 memo and Treasury Decision 01-65. CBP then amended its original penalty notice to include a claim for civil penalties under 19 USC 1592(d) demanding that Ford repay duties in the amount of $5,275,329.
The CIT rules that the 10th waiver was not in effect as CBP altered the 10th waiver by striking out the word "acceptance," yet earlier Ford waivers were both "acknowledged and accepted" after the issuance of the June 1999 memo.
The CIT adds that CBP never published a revocation of its previous policy relating to the acceptance of waivers and has only selectively enforced this new policy. As such, the CIT concludes that the 10th waiver was never accepted and when the 9th waiver expired on April 7, 2003, the statute of limitations also expired.
(See ITT's Online Archives or 10/26/00 and 08/05/02 news, (Ref: 00102566E) and 02080520, for BP summaries of earlier CIT and CAFC rulings in this case. In 2000, the CIT found that CBP did not abuse its discretion in extending liquidation on the entries of truck parties; however, the CAFC reversed this ruling in 2002 and found that CBP's delays in pursuing this civil fraud investigation were not legally permissible. See ITT's Online Archives or 09/19/01 news, 01091920, for BP summary of T.D 01-65.)
CIT Decision (Slip Op. 06-7, dated 01/13/06) available at http://www.cit.uscourts.gov/slip_op/Slip_op06/06-7.pdf