CAFC Rules Gov't Cannot Retain Unliquidated AD/CV Duties After Orders Revoked

In Canadian Wheat Board, et al. v. U.S., the Court of Appeals for the Federal Circuit affirmed a Court of International Trade decision that the U.S. government cannot retain unliquidated antidumping and countervailing duties that were deposited prior to the revocation of an AD or CV duty order, and that the duty depositors are entitled to a return of those duties.

(In 2003, the International Trade Administration issued AD and CV duty orders on Canadian hard red spring wheat (A-122-847 and C-122-848). In 2004, Canadian wheat entered the U.S. subject to the orders, and AD/CV duties were deposited on the entries. Liquidation of those duties was suspended when the Wheat Board requested an administrative review of the entries.)

NAFTA, ITC Found U.S. Industry Not "Materially Injured" by Canadian Imports

The Wheat Board challenged the International Trade Commission's injury determination before a North American Free Trade Agreement (NAFTA) bi-national panel, which remanded the case to the ITC after finding unsubstantial evidence that the dumping had materially injured the domestic wheat industry. On remand, the ITC also found that the domestic industry was not materially injured by the wheat importation. The ITC's remand determination was challenged, but a NAFTA panel affirmed the finding.

ITA Revoked AD/CV Orders, Told CBP to Still Liquidate Earlier Entries for Duties

ITA then instructed U.S. Customs and Border Protection to terminate the suspension of liquidation of hard red spring wheat from Canada and to cease collection of cash deposits as of January 2, 2006, and in February 2006 revoked the AD/CV duty orders. However, ITA noted that the revocations did not affect the liquidation of entries made prior to January 2, 2006 and instructed CBP to liquidate those earlier entries at the AD/CV rates in effect at the time of entry.

(See ITT's Online Archives or 02/17/06 news, 06021730, for BP summary of the ITA's revocations of the AD and CV duty orders.)

CIT Ruled Wheat Board Entitled to AD/CV Duty Return, CBP Refunded Deposits

The Wheat Board filed suit in the CIT to enjoin ITA from liquidating the duties on its wheat imported prior to January 2, 2006 and sought a return of the deposited duties. The CIT granted a preliminary injunction against liquidation of the duties and concluded that the Wheat Board was entitled to the return of its deposited unliquidated duties, explaining that because the entries were suspended and unliquidated when the AD/CV duty orders were revoked, they should not be subjected to those orders.

The CIT directed ITA to instruct CBP to (1) liquidate all unliquidated entries of the Canadian wheat covered without regard to AD and CV duties and (2) refund all AD and CV duty cash deposits on all unliquidated entries of the Canadian wheat made on or before January 2, 2006.

CAFC Affirms CIT, Says Orders Retaining Unliq Duties Not Valid if Revoked

The CAFC affirms the CIT's judgment, reasoning that AD/CV orders retaining unliquidated deposited duties cannot be valid if the duty orders authorizing them are invalid. Therefore, once the NAFTA panel finally determined that the unliquidated AD/CV duty orders were invalid, ITA had no valid basis for retaining the unliquidated duties that the Canadian Wheat Board had deposited pursuant to those orders.

ITA contended that NAFTA panels are limited to granting "prospective" relief and that requiring it to return the unliquidated duty deposits would be retroactive relief. In response, the CAFC states that barring ITA from retaining the deposits and requiring that they be returned was effectuating the NAFTA panel decision and would be considered prospective action, as was the CIT's directions to ITA to refund the unliquidated entries. The CAFC noted that the statutory provision prohibiting NAFTA panels from providing retroactive relief appears to be directed to prevent attempts by the panels to invalidate duties that had already been liquidated and not those still under suspension, as in the current case.

(See ITT's Online Archives or 04/19/11 news, 11041949, for BP summary announcing the CAFC's ruling in this case.

See ITT's Online Archives or 11/23/09 and 11/04/08 news, 09112360 and 08110425, for BP summaries of the CIT's judgment in this case.

See ITT's Online Archives or 10/24/03 news, 03102430 and 03102435, for BP summary of the ITA's issuance of the AD and CV duty orders, respectively.)

(Appeal Number 2010-1083, dated 04/19/11)