US Drops Appeal of Case on Customs Passenger Processing Fees
The U.S. dropped its appeal of a Court of International Trade decision finding that CBP isn't entitled to Customs Passenger Processing Fees paid by individual passengers who cancel their tickets and never actually travel to the U.S. After the government said it was dropping the case against Southwest Airlines, the U.S. Court of Appeals for the Federal Circuit dismissed the proceeding (Southwest Airlines Co. v. United States, Fed. Cir. # 25-1797).
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In March, the trade court sided with Southwest, finding that the statute, 19 U.S.C. Section 58c(a), doesn't allow CBP to collect the fees when the customer doesn't travel to the U.S. and no customs inspection services are performed (see 2505150043). The court also said CBP's guidance letters, requiring airlines to pay the fees when collected from the passenger but the passenger doesn't fly, can't usurp the agency's lack of an interest in the fees, according to the statute.
Adam Feinberg, counsel for Southwest, said in an email that the case wasn't settled and that the government decided to drop the appeal.