CIT Charges Coaxial Cable Importer Over $4 Million in Unpaid Duties, Civil Penalties

The Court of International Trade found that New York-based importer NYWL Enterprises is on the hook for over $4 million in unpaid duties and civil penalties after the court found the importer knowingly misclassified its entries of Siamese coaxial cable from China. In an April 16 decision, Chief Judge Mark Barnett ordered NYWL to pay the U.S. $379,665.83 in unpaid duties and a civil penalty of $3.76 million plus post-judgment interest, and costs.” The U.S. had alleged fraudulent violations of 19 USC 1592, which Barnett accepted as true after NYWL failed to defend itself.

The judge said the public would best be served by a large penalty as NYWL's actions represent “a pattern of disregard for the customs laws of the United States,” rather than a one-off mishap. Barnett said NYWL's failure to defend itself made it difficult to assess the penalty but said the $3.76 million price tag is reasonable. “Given the nature and seriousness of the violation, the requested penalty does not shock the court’s conscience,” he said. The importer could have been hit with as much as $9 million, the domestic value of the merchandise.

From March 4, 2011, to Feb. 16, 2012, NYWL made 107 entries of coaxial cable through the Port of Chicago that CBP determined were classified under the wrong tariff schedule subheading. In attempting to prove NYWL actively knew it misclassified its entries, the government said that the company's CEO Dian He knew of the correct classification due to his experience with two other corporations importing Siamese coaxial cable. Working with these companies as the sole corporate officer, He imported the coaxial cable using the same customs broker as employed with NYWL.

The customs broker, while employed by He, also imported coaxial cable containing commercial invoices stating the correct HTS subheading, proving intentional misclassification, the judgment said. The Department of Justice initially requested a default judgment last year due to NYWL's failure to respond to the claims against it, but Barnett said the DOJ would first need to prove intentional misclassification (see 2011020037).