Removal of Goods From FTZ for Consumption Not 'Importation,' US Says
The U.S. reiterated its stance that a cigarette seller’s products were considered imported on the date of arrival for admission to a foreign-trade zone, not the date on which they left it for domestic sale. It asked the Court of International Trade to dismiss the importer’s complaint with prejudice (King Maker Marketing v. United States, CIT # 24-00134).
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Importer King Maker Marketing said in August that it imported paper-wrapped cigarettes into an FTZ several times in 2013 and 2014, only later bringing them into the country to be sold domestically (see 2408020050). King Maker then “came into possession of, and exported, certain other cigarettes,” which made it eligible for a duty drawback based on the substitution of unused merchandise. It filed for the drawback in 2018, it said, after the “8-digit HTS subheading standard for 'substitutability'” came into force.
CBP denied the drawback claims for untimeliness. King Maker claims its drawback requests weren’t untimely because its goods were only imported when they were brought into the country itself (see 2412310041).
In response, the U.S. in its Feb. 4 reply said nothing in the language of the relevant statutes supports King Maker’s definition of the term “importation.”
“[T]he long-standing meaning of importation is ‘the act of bringing goods and merchandise into a country from a foreign country,’” it said.
It claimed the parties agree that there are “two concepts at play: importation and entry.” And courts have recognized that entry isn’t necessary for importation “as early as 1816,” it said.
The government disagreed that the Foreign Trade Zone Act of 1934 created a “sea change” in the definition of the term “importation.” The act doesn’t define the word, and at the time of its passage, it was commonly understood as the act of “bringing an article into a country from the outside.”
It claimed that the “indisputable facts” show the entries were “imported into the United States, i.e., brought here from another country, and then placed in a ... [Foreign] Trade Zone.” Just because goods in foreign trade zones aren’t subject to customs regulation doesn’t mean they aren’t imports, it said.
Congress knew this when it drafted the drawback statute King Maker is looking to use, the U.S. said, citing the legislature’s use of the phrase “entry or importation” in one provision.