Automatic Interest on Late Bond Payouts Doesn’t Apply to AD Duties, Says CIT
A law requiring interest on customs bonds that are subject to lawsuits for recovery of duties does not apply to antidumping duties, said the Court of International Trade in a Jan. 23 decision. Although 19 USC 580 requires interest on bonds when the “recovery of duties” is at stake, antidumping duties are separate from regular duties and were not intended to be included under the law when it was added to the books in 1799.
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Section 580 requires that “upon all bonds, on which suits are brought for the recovery of duties, interest shall be allowed, at the rate of 6 per centum a year, from the time when said bonds became due.” It imposes interest, accruing from the date of CBP’s original demand for payment, if the government is forced to go to court to collect from the surety and wins. The law has changed little since it was codified in 1799. Meanwhile, the law imposing antidumping duties wasn’t passed until 1921. Congress hasn’t since clarified whether the word “duties” in Section 580 applies to antidumping duties, nor have any courts ruled on the issue, said CIT.
The government has recently interpreted the law to apply to cases where the government seeks to recover antidumping duties from a surety, but the U.S. Court of Appeals for the Federal Circuit declined to rule on the issue because the government’s arguments were too undeveloped (see 13123101). According to CIT, courts have in the past applied old legal language to new circumstances when warranted by the clear language and intent of the original law. “Supreme Court precedent teaches that the meaning of statutory language can expand over time,” said CIT.
This time, the government fleshed out its reasoning for including antidumping duties under Section 580. Just like antidumping duties, customs duties were partially used for protectionist purposes, it said. Congress has also used the word “duties” to refer to both customs duties and antidumping duties. As a result, Congress expanded Section 580 by keeping its original language after antidumping duties emerge, it said.
In its ruling, CIT found antidumping duties to be clearly different. First, different entities administer customs law and antidumping duty law. The duties are also applied differently. Regular customs duties are assessed on all imports of a particular product, and are set by an act of Congress. On the other hand, “special” antidumping duties are imposed only on certain imports, and are can be revoked every five years in sunset reviews.
Customs duties and antidumping duties also serve very different purposes, said the court. “The critical purpose of early duties was to generate revenue for the nascent country,” said CIT. “Antidumping duties, by contrast, are not intended as revenue-generating devices,” but as a remedy to unfair trade practices. CIT has previously found, and the government itself has argued, that antidumping duties are different from customs duties. “For these reasons, the court cannot conclude that Congress in 1799 clearly would have intended [Section] 580 to extend to all duties, no matter how distinct” said CIT.
Surety Still Liable for AD Duties, Interest
Despite finding against the government on its claim for Section 580 interest, the court nonetheless found surety American Home Assurance Co. liable for $600,000, the amount of a bond covering antidumping duties on entries of freshwater crawfish tail meat from China by importer JCOF (USA) International. The court also awarded pre- and post-judgment interest for other reasons.
(U.S. v. American Home Assurance Co., Slip Op. 14-07, dated 01/23/14, Judge Goldberg)
(Attorneys: Edward Kenney for plaintiff U.S. government; Herbert Shelley of Steptoe & Johnson for defendant American Home Assurance Co.)