CIT Makes CBP Reduce Enhanced Bond Liability for Liquidated AD Shrimp

In National Fisheries Institute Inc., et. al., v. U.S. Customs and Border Protection (NFI V), the Court of International Trade approved CBP’s second remand redetermination regarding the Enhanced Bonding Requirement that had applied to certain importers of shrimp products subject to antidumping duty orders.

(The EBR had applied to frozen warmwater shrimp subject to AD and/or countervailing (CV) duties, and was terminated by CBP effective April 1, 2009, to comply with an adverse World Trade Organization (WTO) ruling. However, the termination was not retroactive. See ITT’s Online Archives or 04/01/09 news, 09040130, for BP summary.)

CBP Used Standard 10% Bond Formula on 2nd Remand

In its second remand redetermination, CBP set the limits of the bonds for subject shrimp by using the 10 percent bond formula provided in Customs Directive 99-3510-004, which was in effect prior to the adoption of the EBR.

CBP also Redetermined Total Liability by Considering Liquidated Entries

In addition, CBP redetermined, at the direction of the CIT, and “under protest,” the importers’ total liability by reducing the continuous bond liability for the duties, taxes and fees for entries that had been liquidated under the EBR requirements, and for which the time to file a protest had expired without a protest having been filed.

This Retroactive Redetermination Was Made by CBP “Under Protest”

CBP stated that it issued the redetermined bond amounts under protest, because allowing retroactive redetermination of the bond amounts adversely affected its ability to collect debts and its efficient administration of the bonds.

(The CIT added that CBP’s position was contrary to the Court’s earlier ruling in this action. Further, it rested on the untenable premise that CBP should be free to maintain in place, indefinitely, bonds for which the limits of liability were determined in a manner which was contrary to law.)

CIT Says No Claims on EBR Bonds Should Occur, but Time for Appeal

NFI also sought an order that would compel CBP to cancel any EBR bond liability at issue in this case and permanently enjoin CBP from making any claims or charges on them. The CIT agreed with NFI, determining that the unlawful action by CBP in maintaining the EBR had directly caused and would continue to cause irreparable harm, if cancellation had to await the conclusion of any appeal.

However, due to the competing interests of CBP, the CIT allowed sixty days from the judgment date to implement the Amended Second Redetermination, in order to allow CBP sufficient time to appeal or obtain a stay from the Court of Appeals for the Federal Circuit.

(In National Fisheries II, the CIT had ruled that an EBR established by CBP to cover potential liability for AD duties was unreasonable and capricious. CBP was ordered to redetermine the limit of liability on each individual continuous entry bond, without application of the EBR.

In National Fisheries IV, the CIT again ordered CBP reconsider and recalculate the bonding requirement for the importers of shrimp products subject to antidumping duty liability, this time without including entries that had already been liquidated or entries covered by older bonds, on which limits had never been subject to EBR.)

(See ITT’s Online Archives or 08/31/09 news, 09083135 and 05/28/10 news, 10052836, for BP summary of Slip Op. 09-89 in which CIT invalidated CBP’s “high value” EBR bonding requirements, ordering CBP to recalculate the bond requirement for shrimp imports and Slip Op. 10-61 in which the CIT ordered CBP to again reconsider and recalculate the EBR bonding requirement on shrimp products subject to antidumping liability.)

CIT Slip Op 10-120 (dated 10/21/10)