Palm Oil Importer Wants Case Concerning Excluded Goods Tossed Granted It Can Export Them
The Court of International Trade should dismiss a case seeking to release goods excluded over forced labor concerns with the stipulation that CBP allow the goods to be exported, plaintiff Virtus Nutrition said in a Sept. 29 brief at the Court of International Trade. Responding to the trade court's order to show cause why the action should not be tossed for a lack of prosecution, Virtus said that it does not oppose dismissal, and in fact favors it, provided that it be allowed to export the excluded palm oil shipments in accordance with the terms of the agreement signed between Virtus and CBP in February 2021 (Virtus Nutrition v. United States, CIT #21-00165).
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Virtus imported the palm fatty acid distillate and palm stearin from Malaysia. CBP excluded the imports from entry while it examines Virtus' supply chain for signs of forced labor (see 2105130055). The products were held under a Withhold Release Order that bars the entry of palm oil products made in Malaysia by Sime Darby Plantation Bhd on the grounds that the manufacturers' palm oil was made with forced labor.
After the goods were entered but not yet excluded, Virtus and CBP entered into a "Temporary Storage Agreement" to figure out where to keep the merchandise while the administrative and judicial proceedings played out. Under the agreement, Virtus had to secure the goods and make sure CBP inspectors could access them. A part of the agreement, though, allows Virtus to export the goods if they are not released as a result of the WRO. The goods were then excluded from entry.
Virtus said its intention was to show that it was more likely than not that the excluded merchandise did not have any content from Sime Darby and was thus not subject to the WRO. This goal "was thwarted," though, when the manufacturer declined to participate in the litigation. Virtus then turned to re-export options, telling the trade court that it has two. The company is in talks with Mitsui & Co. to take back the detained palm fatty acid distillate and with another buyer to buy the palm stearin. If the case is to be dismissed, the trade court should keep in mind the terms of the Temporary Storage Agreement and allow the company to export the goods, the brief said.
Citing past CIT cases, Virtus said it is "appropriate" for the dismissal to be conditioned on a disposition of the detained goods following the terms of the agreement. The agreement continued its right to export the merchandise if its challenge did not succeed in having the goods enter the U.S. "That, unfortunately for Virtus, has been the result of this action," the brief said. "Such an outcome expressly having been acknowledged in the Temporary Storage Agreement, Virtus is entitled to the benefit of its bargain with CBP." In crafting the agreement, "there was a true meeting of the minds," Virtus said, and thus it should be upheld.