Customs Lawyer Urges Talks With Counsel Over Waiving Statute of Limitations in Penalty Cases
Importers under investigation by CBP for customs penalties should consult with their lawyers on whether and when to waive the statute of limitations, customs lawyer Larry Friedman of Barnes Richardson said. Commenting on the Court of International Trade's recent decision in U.S. vs. Crown Cork & Seal, Friedman said that waiving the statute of limitations is often "the correct thing to do" since it "allows both sides to fully investigate the matter and permits settlement discussions."
Friedman added that the "key lesson" from the Crown Cork case, in which the importer was alleged to have fraudulently misclassified metal can lids, is that CBP knows how to mine import data for enforcement and that importers should do the same for compliance. In Crown Cork's case, CBP said that the importer, from 2004 to 2009, imported the same goods from both Europe and Canada, but the company properly classified the parts as from Canada since NAFTA allowed for the duty-free treatment of the lids (see 2302280053).
"If two parts have similar descriptions, functions, and composition, but are assigned different tariff classifications, that should be investigated," Friedman said. "The different classifications should either be explained (and documented) or resolved. That may prompt a prior disclosure to CBP or, if there is no violation, just a correction for unliquidated and future entries. Again, that is a conversation to have with counsel."