CIT Orders Apparel Importer to Pay $51K Penalty After Prior Disclosure

The Court of International Trade on Jan. 11 ordered an importer to pay a $51,102 penalty for negligent misclassification of wearing apparel that was brought to CBP’s attention by way of a prior disclosure. Selecta (dba Dickies Medical Uniforms) had paid $839,694.38 to the government in 2009-10 as part of a valid prior disclosure of its misclassification of medical scrubs and lab coats. That represented the lost revenue to the government as a result of Selecta’s negligence. But the company did not respond to a subsequent CBP penalty notice seeking $51,102, which was the interest that accrued up until the prior disclosure on the unpaid duties, taxes and fees. Selecta didn’t answer the government’s court complaint either. As a result, CIT found the importer to be in default, and ruled that it has “no basis to conclude that the penalty the government seeks, calculated as the amount of the interest from the dates of liquidation to the dates of payment, would be inequitable.”