Union Pacific Sues Customs Broker for Failure to Pass Along AD/CV Duty Refunds
A Chicago-based customs broker faces a lawsuit in federal court filed by a client seeking to recover millions of dollars in antidumping and countervailing duties that the client claims should have been refunded by the broker. Union Pacific filed suit in Northern Illinois U.S. District Court on Aug. 15, alleging Pactrans failed to pass along $5.8 million in AD/CV duty refunds paid by CBP after an AD/CV duty investigation was terminated with no duties imposed. Union Pacific also claims Pactrans failed to pay two months’ worth of AD/CV duties, costing it thousands of dollars more in penalties.
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According to the complaint, Union Pacific had worked with Pactrans, its long-time broker, to import intermodal shipping containers in 2015. At the time, 53-foot containers from China were the subject of antidumping and countervailing duty investigations. Union Pacific gave Pactrans more than $5.8 million to pay the required AD/CV duty cash deposits on its entries. However, that May, the International Trade Commission issued its final injury determination in the investigations, finding no injury to U.S. container manufacturers (see 1505200023). As a result, Commerce that June terminated the investigations and ordered CBP to refund all cash deposits collected (see 1506080002).
Union Pacific claims it never saw the refunds. It also said an internal accounting showed Pactrans failed to pay any cash deposits between the ITC’s final injury determination in May 2015, and the termination of the investigation that June, resulting in a potential total $600,000 in penalties for Union Pacific that the railroad company “successfully remediated” to $4,359. The internal accounting also uncovered an overcharge by Pactrans of $9,400, it said. Union Pacific alleges Pactrans breached its fiduciary duty as a customs broker, as well as its contractual obligations. The complaint also seeks to “pierce the corporate veil,” bringing suit personally against three of the brokerage's owners. Union Pacific seeks a total of $5,838,992.21, plus interest, costs and fees. Pactrans did not comment.
Email ITTNews@warren-news.com for a copy of the complaint.