A challenge to Section 232 tariffs that began Feb. 8 on finished steel and aluminum products could proceed quickly, if the Court of International Trade approves a jointly proposed schedule filed Feb. 14 that would have written arguments in the case wrapped up by May. CIT a day earlier issued a preliminary injunction barring CBP from collecting the tariffs from the importer that filed the lawsuit, PrimeSource. Oman Fasteners has requested a similar injunction in a separate case, but as of press time the court had not ruled on the motion. The preliminary injunction for PrimeSource results from an agreement between the government and PrimeSource nine days after the lawsuit was filed.
An importer challenging new Section 232 tariffs on steel and aluminum derivatives is now seeking to bar CBP from collecting the tariffs only on its own entries, and not on entries from all importers subject to the new duties. PrimeSource Building Products, after “further consultations” with the government, withdrew its original motion for a universal temporary restraining order on Feb. 12 (see 2002060075), and filed a new motion for temporary restraining order and preliminary injunction barring the government “from collecting duty deposits pursuant to Proclamation 9980 … on entries by PrimeSource Building Products Inc. filed on or after 12:01 am February 8, 2020.” Oman Fasteners on Feb. 7 filed a similar request for an order that only affects its own entries, in a separate challenge to the Section 232 tariffs. In a letter about PrimeSource’s request, the government said it does “not consent to a temporary restraining order or injunction.” A teleconference on the case is scheduled for Feb. 13.
The U.S. Court of Appeals for the District of Columbia Circuit affirmed on Feb. 4 a $20,000 penalty on a wildlife importer for an exporter’s failure to sign a permit required by the U.S. Fish and Wildlife Service. Global Tropical Imports and Exports said it’s the Tanzanian exporter’s fault that the export permit wasn’t signed, and argued FWS shouldn’t have held it “vicariously liable” for the missing signature. But the Endangered Species Act requires a valid export permit, and says FWS may assess a civil penalty against any violation of the ESA, not just knowing violations. “Although the regulations required Majoka's signature, it was Global's independent statutory duty to ensure that Majoka signed the document,” the court said. “Thus, we reject Global's argument that FWS wrongly imposed a form of vicarious liability.”
The following lawsuits were filed at the Court of International Trade during the week of Feb. 3-9:
A good manufactured in the U.S. with foreign components does not have to be substantially transformed to qualify as a U.S. good for government procurement purposes, the U.S. Court of Appeals for the Federal Circuit said in a Feb. 10 decision. Acetris had appealed the Department of Veterans Affairs decision to disqualify from eligibility for a procurement contract Acetris’s pharmaceuticals manufactured in the U.S. from an Indian active pharmaceutical ingredient. The VA relied on a CBP ruling issued in April 2018 that found the country of origin was India because the drugs did not undergo a substantial transformation (see 1804030065). India is not a party to the World Trade Organization’s Government Procurement Agreement. The Federal Circuit, affirming a ruling from the Court of Federal Claims, found the VA does not have to defer to CBP rulings, and that the term “U.S.-made end product” in the Foreign Acquisition Regulations does not only encompass products wholly manufactured or substantially transformed in the United States. “Instead, such products may be -- as Acetris’ products are -- 'manufactured’ in the United States from foreign-made components,” CAFC said.
The following lawsuits were filed at the Court of International Trade during the week of Jan. 27 - Feb. 2:
The following lawsuits were filed at the Court of International Trade during the week of Jan. 20-26:
The Justice Department is adding new lawyers to its international trade office, indicating that there could be an uptick in Section 592 penalty cases against importers, according to Crowell & Moring’s 2020 Litigation Forecast. The hiring comes amid increased scrutiny on valuation and country of origin issues as Section 301 tariffs incentivize importers to find ways to reduce duty liability. “This likely means that CBP has already determined that a significant amount of penalty cases are not going to be resolved administratively and will proceed to litigation,” said David Stepp, a customs lawyer with the law firm.
The following lawsuits were filed at the Court of International Trade during the week of Jan. 13-19:
The U.S. Court of Appeals for the Federal Circuit on Jan. 13 upheld a lower court decision that found Commerce cannot suspend liquidation retroactively prior to the beginning of a scope inquiry, even when no formal scope inquiry is conducted. The agency had in 2013 found washers imported by United Steel and Fasteners were subject to, and had always been covered by, the antidumping duty order on helical spring lock washers from China. It directed CBP to suspend liquidation for unliquidated entries all the way back to 1993, when the AD duty order was originally issued (see 13071529). CIT sustained the scope ruling, but said Commerce’s regulations prevent it from ordering retroactive suspension of liquidation prior to the date of a scope inquiry’s initiation, unless CBP had already suspended liquidation (see 1701120034). CAFC agreed, noting that Commerce itself, when issued the relevant regulations, said importers have the right to rely on CBP liquidation decisions until Commerce rules otherwise.