A recent decision by the Court of Appeals for the Federal Circuit will stand as an important precedent on the finality of liquidation and will prevent the federal government from seeking additional import duties when the statute of limitations on reliquidation has run. The decision was obtained by Sandler, Travis & Rosenberg on behalf of a major retailer.
This case involves U.S. Customs and Border Protection’s incorrect liquidation of 224 entries at a lower antidumping duty rate than had been specified by the Department of Commerce. CBP did not recognize the error until after the expiration of a 90-day window for voluntary liquidation, whereupon it sought and received a CIT order directing reliquidation at the higher duty rate. The plaintiff in this case then moved for the CIT to stay that order because it imported 40 of the incorrectly liquidated entries and therefore paid significantly less in AD duties than if those entries had been correctly liquidated.
According to the CAFC, the CIT denied that motion despite the fact that (1) 19 USC 1501 gives CBP 90 days to correct liquidation errors (a time limit exceeded here) and (2) neither of 19 USC 1514’s two relevant exceptions to the finality of CBP’s liquidations – for protests and civil actions – were applicable in this case. Instead the CIT concluded that it, not CBP, has the final say over entry liquidation, which it said must be done in accordance with its decisions. The CIT also held that it has power to ignore statutory provisions regarding the finality of liquidation decisions when equitable factors (e.g., the plaintiff importer’s financial windfall from CBP’s erroneous liquidation in this case) weigh in favor of doing so.
In an April 21 decision, the CAFC effectively rejected the CIT’s reasoning. The CAFC said this case is governed by a 2004 decision holding that it doesn’t matter if entries are liquidated at duty rates contrary to those set by a court judgment because even an “admittedly erroneous decision to liquidate falls within the ambit of [19 USC] 1514(a)(5), which shields such decisions from challenge, without regard to their legality.” The CAFC asserted that Congress has crafted a statutory scheme that specifically articulates grounds for the finality of liquidations, along with certain exceptions to such finality, and that those exceptions did not apply in this case.
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