Recent CIT Case Starves Trade Bar of Guidance in Forced Labor Exclusion Matters, Law Firm Says
A recent Court of International Trade case that dealt with goods excluded over forced labor concerns ended "with a whimper," leaving the trade bar without any answers on how to challenge CBP forced labor detentions, Crowell & Moring lawyers wrote in a Dec. 29 blog post. Attorneys John Brew, Laurel Saito and Wing Cheung said that while the "importing community was hoping for such guidance," it will be forced to wait as it is "unlikely" that the plaintiff, Virtus Nutrition,will appeal the matter.
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Virtus imported palm fatty acid distillate and palm stearin from Malaysia. CBP barred the imports from entry while it examined the importer's supply chain for signs of forced labor. The products were held under a withhold release order barring entry of palm oil products made in Malaysia by Sime Darby Plantation. After the goods were entered but not yet excluded, Virtus and CBP entered into the storage agreement to determine where to keep the merchandise during the administrative and judicial proceedings. Under the agreement, Virtus had to secure the goods and ensure CBP inspectors could access them. It also allows Virtus to export the goods if they are not released. The goods were then excluded from entry.
After the manufacturer declined to participate in its eventual legal challenge, Virtus filed for a voluntary dismissal of the case on the condition that it be allowed to reexport the goods. The trade court said the storage agreement doesn't provide a basis for the re-export stipulation because the agreement doesn't guarantee Virtus the right to export its merchandise but rather says if the shipments are excluded, the plaintiff is responsible for reexport or destruction (see 2212150031). The court ruled Virtus could challenge the exclusion under 28 U.S.C. 1356.