CIT Says Statute of Limitations in Penalty Cases Runs From Entry Date

The statute of limitations in customs penalties runs from the date of entry, not from the date that the importer directed the violation to be committed, the Court of International Trade said in a March 31 decision that denied a motion to dismiss a fraud case against Florida businessman Zhe "John" Liu (U.S. v. Zhe "John" Liu, CIT # 22-00215).

Liu had argued that the statute of limitations had expired because the penalty case was filed exactly five years after the entry date, but the five-year period for filing the case actually began when Liu formed a shell company to commit the violations or directed the violative entries to be filed (see 2212130060).

Judge Jane Restani was not convinced, saying that Congress specifically established that the statute of limitations in penalty cases is five years from the date of entry. The government's claim of aiding and abetting violations due to negligence also began to run on the date of entry, Restani said.

The judge also held that the U.S. met the standard for liability. Its allegation that Liu formed GL Paper and that he controlled and directed the operations of the company and its entries of steel wire hangers and that Liu established several companies for the purpose of importing wire hangers via transshipment through Malaysia to avoid paying antidumping duties rise above mere speculation, the judge said.

"While the degree of Liu’s involvement in the entry of the merchandise by GL Paper remains an issue of fact, the Government has met the pleading standard for liability not based on fraud," Restani said.