CIT Rules that Government is Entitled to Twenty Years of Interest on Over $1 Million in Unpaid Duties
In U.S. v. Golden Gate Petroleum Co., the Court of International Trade (CIT) elaborates on its February 2006 decision concerning the same parties. In the prior case, the CIT ruled that Golden Gate was liable for over $1 million in unpaid duties. However, the Court did not decide whether interest was due, or the amount of such interest, and instructed the parties to negotiate and to come to an agreement. Because the parties proved unable to reach an agreement, the issue was returned to the Court for resolution.
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In the earlier decision, Golden Gate failed to prevail in its assertion that the broker had mistakenly shown Golden Gate as the importer of record on the entry documents. The CIT dismissed this argument noting, among other things, that Golden Gate was shown as the importer of record on the entry as well as the principal on the bond; in addition, its importer number appeared on the bond, and it was shown as the purchaser on the pro forma invoice.
Golden Gate had further claimed that the liquidation of the entry should be void based on the incorrect value on the initial paperwork submitted by its broker. However, the CIT also denied this claim stating that Golden Gate had not protested this issue prior to deemed liquidation becoming final. Alternatively, the CIT stated that relief could have also been pursued through 19 USC 1520(c), but that no such claim was made.
The issue in the current decision was the imposition of interest on the unpaid duties. The controlling statute, 19 U.S.C. 1505 (c), states, in part, that "Dutiesshall [emphasis added] be due 15 days after the date of [final] liquidationand unless payment of the duties is receivedwithin 30 days after that date, shallbear interestat a rate determined by the Secretary of the Treasury."
The Court reiterated the general rule that it could not exercise its equitable powers in view of the statute specifically authorizing prejudgment interest. In addition, the Court noted that the Government, while slow in initiating its action, had provided Golden Gate with ample notice concerning the interest and the consequences of nonpayment. Accordingly, the Court determined that the Government's actions did not approach the level of misconduct that might have compelled it to contradict the settled law in this matter. Consequently, based on the clear language of the statute, the Court ordered full payment of the interest on the unpaid duties without adjustments.
(See ITT's Online Archives or 03/21/06 news, 06032130 for BP summary of February 2006 earlier Golden Gate decision.)
CIT Slip Op. 07-05 (dated 01/17/07) available at http://www.cit.uscourts.gov/slip_op/Slip07-05.pdf