CAFC Finds Automatic Interest in Unpaid Bond Lawsuits Applies to AD/CV Duties
Interest accrues on customs bonds that are subject to ongoing lawsuits for recovery of antidumping and countervailing duties, ruled the U.S. Court of Appeals for the Federal Circuit on June 17. Overturning a January 2014 decision from the Court of International Trade, the court found that the law on interest for bonds subject to lawsuits applies to all “duties,” and not just customs tariffs.
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The dispute centered around the applicability of 19 USC 580, which covers “interest in suits on bonds for recovery of duties.” The law, essentially unchanged since 1799, provides 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.” CIT had in January 2014 ruled the law only applies to customs tariffs, and not antidumping and countervailing duties (see 14012404).
In its ruling, CIT said that when the 1799 law was passed, antidumping duties did not exist (antidumping duty law was first put in place in 1921). Given the differences between AD/CV duties, which are protectionist and “remedial,” and customs tariffs, which were meant to raise revenue, CIT said it could not hold that Congress in 1799 mean to cover AD/CV duties when it said “duties” in Section 580. Therefore, while, American Home Assurance Co. owed unpaid duties on a bond it issued an importer that had skipped payment of antidumping duties on freshwater crawfish tailmeat from China, it did not owe interest on the unpaid duties for the period between its refusal of payment to CBP and CBP’s eventual victory in the case..
On appeal, CAFC found that the plain language of 19 USC 580 does not exclude AD/CV duties, so American Home Assurance Co. owes interest for the period after it refused to pay CBP. The language of 19 USC 580, covering all bonds for the recovery of duties, “is clear and unqualified,” said the Appeals Court. “The fact that Congress first enacted § 580 in 1799 and the fact that the statute at that time applied only to bonds securing payment of then-existing customs duties do not alter the plain-meaning analysis,” it said. Congress had the opportunity to alter Section 580 after it provided for antidumping duties in 1921, but “there have been no changes in the statutory language which, on their face, would serve to move bonds for securing antidumping duties outside the scope of the statute,” said CAFC.
(U.S. v. American Home Assurance Co.; Fed. Cir. # 14-1292; dated 06/17/15; Judges Moore, Schall and Reyna)
(Attorneys: Edward Kenny for plaintiff-cross appellant U.S. government; Herbert Shelley of Steptoe & Johnson for defendant-appellant American Home Assurance Company)