US Suit for 22-Year-Old Unpaid Duties 'Defies Foundational Restraints on Government,' Importer Says
Surety firm Aegis Security pushed back again (see 2410220026) on the U.S. lawsuit to recover unpaid duties from 2002. The long delay between liquidation and request for payment -- after CBP “likely lost the entry papers for multiple years” -- meant the U.S. could no longer reasonably expect anything from Aegis, it said (United States v. Aegis Security Insurance Co., CIT # 22-00327).
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The U.S. argued in a December motion for judgment that its action was timely (see 2412100036). It said CBP had only asked Aegis to pay up, and Aegis had failed to do so, in 2016, and that was the point at which the six-year statute of limitations began to run.
The Court of International Trade has been split on the issue, with at least one judge holding in a case that the statute of limitations begins counting down at liquidation and another, in a separate case, pinning that moment at the point payment is requested (see 2308220054 and 2403180059). In the latter instance, however, the U.S.’s case was nevertheless dismissed for timeliness, the judge finding the government had waited an unreasonably long time before attempting to collect duties on a 2004 entry of Chinese-origin garlic.
The reasonableness standard applies here, too, Aegis said in support of an October motion for judgment. The surety firm cited the government in that second case -- which had actually also been brought against it -- saying that the U.S. “could wait fifty years before sending a bill without offending [the] statute of limitations.”
It called this an “extraordinary” argument that “defies foundational constraints on the government and ordinary obligations that bind contracting parties.”
CBP had also previously announced publicly a policy that it wouldn't sue for repayment of duties if more than six years had elapsed from liquidation, Aegis said. In the present case, therefore, it was acting inconsistently with its past policy without good reason or explanation.
“In short, Customs has ‘pull[ed] a surprise switcheroo on regulated entries,’” it said.
And had CBP acted more timely, Aegis’ suretyship wouldn’t have been impaired because it “put in place a safety net of reinsurance and indemnification agreements that inarguably would have prevented any loss,” it said.