Federal Circuit Should Reconsider, Find Constitutional Right to Rely on CBP Rulings, Says AAEI

The U.S. Court of Appeals for the Federal Circuit should reconsider its decision that importers have no constitutional due process right to rely on CBP rulings, said the American Association of Exporters and Importers in an amicus brief submitted to the court on Aug. 27. Finding otherwise, as the court did in a long-running case on white sauce imported by International Custom Products, “renders the customs rulings program merely advisory,” contrary to law and the intent of Congress, said AAEI.

As expected, International Custom Products on Aug. 13 requested the three-judge panel reconsider its holding that ICP must pay over $28 million in duties before challenging a CBP rate advance that contravened an existing agency ruling (see 1506300073). In the June 30 decision, the Federal Circuit panel held to the requirement that all duties must be paid before challenging denied protests in court. The panel denied ICP’s arguments that the duty payment requirement in this case is an insurmountable hurdle that would violate its due process rights. Importing at a given duty rate is not constitutionally protected, it said.

In its request for rehearing, ICP argued the court misconstrued its arguments. ICP had not said importers have a protected right to import at a given duty rate, but that they have a right to rely on CBP’s rulings. Under 19 USC 1625, CBP must follow notice and comment procedures if it intends to revoke or modify a ruling. The law gives CBP “no discretion to refuse to follow an advanced classification ruling” unless revoked or modified under 19 USC 1625, so “importers have a legitimate claim of entitlement to having advance classification rulings followed, rather than a mere abstract need or desire for advance classification rulings to be followed until lawfully superseded, revoked or modified,” said ICP, citing Supreme Court precedent. ICP also requested that the entire Federal Circuit reconsider the decision "en banc."

According to AAEI’s brief, which is yet to be formally accepted by the court, the issue is of “enormous importance” to the importing community. “CBP has issued more than 187,000 published rulings to tens of thousands of ruling holders concerning the classification, appraisement, rate and amount of duty, country of origin, and legal status applicable to particular imported goods and transactions,” it said. If the Federal Circuit’s decision is allowed to stand, holders of rulings, “who undertook an effort to assure compliance with the customs laws, have no greater legal protections than companies that did not bother to seek a ruling,” it said. “CBP may disregard the revocation or modification procedures" without consequences, "to the detriment of an importer who cannot prepay its duty bill. John Peterson of Neville Peterson filed the brief on behalf of AAEI.

Email ITTNews@warren-news.com for a copy of the request for rehearing.