Interim Final Rule, Not Proposal, for TFTEA Drawback Necessary to Satisfy Statute, Importers Tell CIT

The Court of International Trade should still force the government to issue an interim final rule on drawback calculations even though CBP released its proposed drawback regulations under the Trade Facilitation and Trade Enforcement Act on July 27 (see 1807270024), drawback filers and importers said in a filing that same day. "This Court can and should compel the required agency action by directing defendants to publish the required calculation regulation, and any other portion of the regulations required to make it effective, as an interim final rule, with immediate effect. (Alternatively, the Court can simply declare all of the [notice of proposed rulemaking] to be in force as an IFR,)" the companies said in the filing.

While the filing explains that the companies received the proposed rulemaking only hours before making the submission to the court, "a cursory examination of the NPRM indicates that there is no single, discrete section of the proposed regulations which completely sets out the calculation rule," it said. Another filing coming this week will set "out those portions of the NPRM which Plaintiffs believe need to be implemented as an IFR in order to carry out the decision in this Court’s June 29, 2018 opinion, and to compel the agency action unlawfully denied," it said.

The NPRM is insufficient for meeting the statutory requirements of TFTEA, the companies said. "An NPRM is merely a proposal to make a regulation, at some indeterminate future date," they said. "It has no independent force and effect of its own, does not bind or compel the agency in any way, and does not confer any rights or obligations on private sector stakeholders."

During a July 20 meeting between the litigants, "it became clear that no single agency can control timing of the rule," the companies said. "While the government representatives were no doubt sincere in their desire to move quickly, none could offer a possible date by which final rules might be implemented," they said. There also are some controversial issues related to excise taxes, which delayed the NPRM and "are almost certain to delay publication of the final rule." The idea of an interim rule was discussed at the meeting, but the government said there wasn't sufficient "good cause." Even though "the conditions for publishing regulations without advance comment are to be narrowly construed, they are more than present here," the companies said.

The filing is part of a lawsuit brought against CBP that said the government is improperly not processing requests for accelerated payment on TFTEA drawback claims (see 1803260048). The CIT previously said it would consider ordering its own deadline if the agency didn't comply with the statute quickly (see 1806290028). Tabacos de Wilson, Tobacco Rag Processors, Brown-USA, Nippon America, Skate One Corporation, Alliance International, C.J. Holt and Customs Advisory Services filed the suit in late March.

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