CIT Consolidates Cases on NAFTA Duty for Peanut Product Imports from Mexico

On April 4, 2011, the Court of International Trade agreed to consolidate for trial, two actions¹ on whether approximately 70 entries of peanut products imported into the U.S. from Mexico between December 2005 and October 2006 were entitled to preferential duty treatment under the North American Free Trade Agreement (NAFTA).

In Sweet Little Mexico Corp v. U.S, U.S. Customs and Border Protection disputes the country of origin of the peanut products, accuses SLM of negligence for their importation, and seeks a maximum penalty equal to either the domestic value of the imports (allegedly $2,320,332.75) or two times the loss of lawful duties, taxes and fees (allegedly $2,296,859.31).

SLM disputes CBP's claim that insufficient documentation was provided to support its NAFTA claims. SLM filed a motion for consolidation with the action in International Fidelity Insurance Corporation (IFIC) v. U.S., in which IFIC, acting as surety, filed a summons to contest CBP's denial of SLM’s protest that the imports were entitled to NAFTA duty preference. IFIC paid the duties but has yet to file a complaint. CBP opposed consolidation.

The CIT granted the motion to consolidate the two actions, in part, to the extent and for the purpose of trial on the issue of whether the entries were entitled to preferential duty treatment under NAFTA.

¹Sweet Little Mexico Corp v. U.S. (Court No. 10-00374) and International Fidelity Ins. Corp v. U.S. (Court No. 09-00236), which is still currently on the CIT's Reserve Calendar.

(Slip Op. 11-35, dated 04/04/11)