CIT Rules Ford's NAFTA Refund Claims Untimely as Origin Docs Filed After 1-Yr

The Court of International Trade has ruled in favor of U.S. Customs and Border Protection in Ford Motor Company v. U.S., denying Ford's claims for a refund of duties under NAFTA after untimely filing its NAFTA certificates of origin beyond the statutory one year limit. The CIT agreed with CBP that a valid refund claim exists only when the importer has filed all required documentation. As such, all components of a claim, including copies of the certificates of origin, must be filed within one year of importation.

(Under NAFTA, importers may file post-importation claims for refunds of duties paid on goods that would have qualified for preferential tariff treatment when entered. 19 USC 1520(d) requires that refund claims be filed within one year after the date of importation. CBP enacted implementing regulations (19 CFR 181.31) that reaffirm the one-year time limit and specify five requisite components of a claim, including copies of all certificates of origin for the entries (19 CFR 181.32(b)).)

Ford Sought Duty Refund After Untimely Filing NAFTA Certificates of Origin

Between January 1997 and January 1999, Ford imported certain automotive parts into the U.S. from Canada. At the time of entry, Ford did not assert that the goods were eligible for duty-free treatment under NAFTA and CBP liquidated the goods as entered. In May 1998, Ford electronically filed a post-importation claim seeking a refund of the duties it paid and reliquidation of its entry pursuant to 19 USC 1520(d). Ford did not submit copies of the NAFTA certificates of origin for this entry until November 1998, more than one year after the date of importation. Therefore, CBP denied Ford’s 1520(d) duty refund claim.

Ford protested the denial of its 1520(d) claim and CBP denied this protest on the same grounds. In 2010, Ford challenged this denial before the CIT, which ruled that it did not have jurisdiction to hear Ford’s case on the grounds that CBP had not made a protestable decision in denying Ford’s refund claim. However, in March 2011, the Court of Appeals for the Federal Circuit (CAFC) reversed the CIT's decision, finding that the CIT had jurisdiction, and remanded the case back to the CIT for further proceedings.

CIT Agreed w/ CBP that All Claim Components Must Be Filed Within 1-Yr

The CIT ruled to grant CBP's motion for summary judgment. Ford had argued that the one year time restriction only applies to the 1520(d) claim and not accompanying certificates. However, CBP argued that a valid refund claim exists only when the importer has filed all the documentation that 1520(d) and 181.32(b) require and therefore, importers must file all components of a claim (including copies of the certificates of origin) within one year of importation.

The CIT found that CBP grounded its conclusions in the plain language of the relevant statutes and regulations and responded adequately to Ford's arguments on protest. The CIT stated CBP's interpretation accords with the CIT's own reading. As such, the CIT stated 1520(d) and the implementing regulations require importers to file within one year of importation copies of applicable certificates of origin.

Remedial Regulation Does Not Apply as It Would Circumvent NAFTA Mandate

Ford noted that the "remedial regulation" of 19 CFR 10.112 states that when a free entry or reduced duty document is not timely filed, but failure to file was not due to willful negligence or fraudulent intent, such document may be filed at any time prior to liquidation of the entry or before the liquidation becomes final. However, the CIT referenced a previous CAFC ruling which held that an importer cannot use 10.112 to circumvent the clear mandate of NAFTA and 1520(d).

The CIT explained that it cannot read 10.112 to ease the refund claim requirements under 1520(d) and 181.31-32 as doing so would render fundamental aspects of the statute and regulations void (i.e. that importers must file within one year after importation a claim that includes copies of all applicable NAFTA certificates of origin). Moreover, the legislative history of 1520(d) overwhelmingly reiterates the one-year time period for claiming entitlement to a refund premised on NAFTA eligibility. Therefore, the CIT stated that 10.112 does not excuse Fords' untimely filing of its certificates of origin.

Accordingly, the CIT ruled to grant CBP's motion for summary judgment and denied Ford's motion for summary judgment.

(See ITT's online Archives 10011940 for summary of the CIT's 2010 ruling on this case.

See ITT's Online Archives 11032320 for summary of the CAFC's remand of this case back to the CIT.)

(Slip Op. 11-145, dated 11/28/11)