Retroactivity for Recent Tranche 3 Duty Exclusions May Be Limited by Liquidation Timelines

The recently announced exclusions from the Section 301 tariffs on the third list of products from China (see 2003230043) seem to be unintentionally limited by the statutory liquidation timelines, lawyer Chris Kane said in a March 31 LinkedIn post. While the notice allows for retroactive applicability to Sept. 18, 2018, when those tariffs took effect, it's not clear that importers have any way to be fully refunded for that period, he said. The Office of the U.S. Trade Representative published the official notice with numerous tranche three exclusions on March 26 (see 2003230043).

Kane, a lawyer with Simon Gluck & Kane, noted that “on the day the exclusions were published in the Federal Register, entries from November 16, 2018 were already outside the post liquidation protest period.” That's because “CBP liquidates an entry 314 days, or roughly 10 months and the importer has 180 days thereafter to protest.” Based on that timeline “the last day to protest the section 301 duties paid on excluded items on a September 24, 2018 entry was February 4, 2020,” he said. The agency CBP “no refund request instructions for entries dated September 24-November 16, 2018.” The USTR didn't comment.

Importers might have a tough time getting that money back, Barnes Richardson lawyer Larry Friedman said by email. “Once the 180-day protest period is over, the importer has no recourse and the liquidation becomes final,” he said. “The only exceptions are if CBP revisits the entry and finds a violation (in which case it can collect duties and penalties going back five years) or if the issue itself was not protestable or the protest avenue would have been futile or manifestly inadequate. That is an unusual circumstance, but when it happens the importer can file a case in the” Court of International Trade.

CBP didn't comment but did highlight a 2019 CSMS message that notes potential need for liquidation extension requests for when exclusion requests are still pending (see 1905220063). “The CSMS did suggest that importers request suspension and that would have prevented the specific problem,” Friedman said. “At the same time, the CSMS also tells importers that if the entry liquidates, a protest can be used to secure a refund. There is nothing wrong with following that route.”