US Floats Changes to 'Repository' for Enjoining Entries Subject to Section 301; Plaintiffs Oppose

The U.S. government laid out two changes it made to the repository for entries subject to Section 301 duties in response to the plaintiffs' concerns, in an Aug. 9 joint status report filed at the Court of International Trade. Following the court's order of a preliminary injunction against liquidation of entries with Section 301 exposure pending resolution of litigation (see 2107060077), much haggling has been done between the parties over the terms of the injunction, prompting continued changes from the U.S. (see 2108020029).

The first change offered by the Department of Justice in the status report includes the preparation and submission of a list of unliquidated entries for each plaintiff importer seeking the suspension of liquidation. These importers will be required to submit a list of their entries into ACE and to the appropriate CBP Center of Excellence and Expertise, DOJ explained. ACE doesn't have the capability to "automatically transform the submission of a list of entries through DIS into suspension of liquidations of those entries," DOJ said. This requires effort on behalf of the interested importers to submit their own entries to the repository.

The second change involves CBP's ability to enact the suspensions of liquidations, which must be done by CBP personnel. This step is completed when a CBP user manually uploads an Excel spreadsheet into ACE using the ACE "mass update functionality" to alter the liquidation status for up to 5,000 entries at a time. As such, importers must submit Excel spreadsheets of no more than 5,000 entries at a time, DOJ said. This process will prompt CBP to distribute the work evenly among the Centers.

The remainder of DOJ's comments in the joint status report further fleshed out the proposed changes made to the repository. For instance, DOJ offered to only require monthly entry submissions as opposed to every third Monday. CBP also added "if known" to the condition that the importer's Excel submissions must be made a "minimum of 30 days in advance of the scheduled liquidation date for the Subject Entries." Also, importer emails must include a "sequential" batch number as opposed to a "cumulative one," leading to email subjects being labeled as "Batch 1" and "Batch 2," and so on. The plaintiffs appreciated these changes, acknowledging the U.S.'s "incremental progress" on these issues. The plaintiffs did, though, suggest a switch to quarterly over monthly reporting.

However, DOJ said that it would be "immensely burdensome" for it to generate the reports for all the importers looking to suspend liquidation on their entries itself, indicating that the government sees importer submissions as part of any long-term solution to the preliminary injunction. CBP's latest estimates have the number of entries for which liquidation is to be suspended in the millions. "And, since existing ACE mass processing functionality requires an appropriate CBP user to upload a spreadsheet limited to no more than 5,000 entries at a time, the suspension of liquidation for millions of Subject Entries will likely require the uploading of thousands of individual spreadsheets, which CBP does not have the manpower to generate," DOJ said.

The plaintiffs took issue with this contention, arguing that any long-term solution certainly includes CBP suspending liquidation of the entries on their own. While CBP's changes may result in more favorable conditions for entry submissions in the short term, they do not fulfill the terms of the injunction, the plaintiffs argued. "The Government should be required to demonstrate on a periodic basis the progress it is making toward implementing a long-term solution that is based on its own use of ACE or other data," the plaintiffs said. "Even if Plaintiffs are required to generate and submit data in the near-term, Plaintiffs suggest that part of the design of a long-term solution should include the identification of entries to be suspended at the time of entry, thereby eliminating the need for ongoing reporting and the risk of entries inadvertently liquidating."

This could be done through certain data elements in an entry, including a new "entry type" to point out entries for which liquidation is to be suspended, the plaintiffs said. On a less practical note, the plaintiffs argued that CBP certainly wasted no time in imposing the Section 301 tariffs, and yet "in the face of a Temporary Restraining Order and Preliminary Injunction ordering Defendants to refrain from liquidating entries more than one month ago, CBP has to this date not found a way to come into compliance with the mandate." DOJ also could have avoided this by merely arguing for the availability of a refund, the plaintiffs said.