Surety Firm Continues Defense Against Demand for Payment on Decades-Old Customs Bond After AHAC

The U.S. "consistently fails to consider" the filing of a collection action in the Court of International Trade as a valid "'demand' for liquidated duties," surety firm Aegis Security Insurance Co. told the trade court in an Aug. 30 reply brief. Given this failure, the government is illegally trying to limit the concept of "demand" to the issuance of a bill in its attempt to get Aegis to pay a customs bond on entries that liquidated in 2006, the brief said (United States v. Aegis Security Insurance Co., CIT # 20-03628).

The U.S. also doesn't provide any case law that backs its position "that it has an unlimited amount of time to bill for the collection of duties that have been previously fixed by the liquidation of an underlying entry," the surety company argued.

Aegis backed these two claims with CIT's own words as found in the recent opinion United States v. American Home Assurance Co., in which the court said the six-year statute of limitations on customs bond collections runs from the date of liquidation and not the date CBP demands payment of the bond (see 2308220054). The surety cited AHAC in declaring that the "courts have long disfavored rewarding a party for taking advantage of a delay in the commencement of a statute of limitations when the delay is caused by that party's unilateral act."

T. Randolph Ferguson, counsel for Aegis, told Trade Law Daily that he was happy with the AHAC decision and that he believes other judges at the trade court will follow suit. While Ferguson said the fact pattern in the Aegis suit -- which is one of two currently at CIT brought by the government -- is a "bit more complicated" than the AHAC matter, Judge Stephen Vaden will get to a similar place as Judge Richard Eaton did in AHAC "if the judge will just go on the statute of limitations question." Vaden indicated he may do so during oral argument, Ferguson noted.

One of the lingering questions surrounding the issue of the U.S. attempts to collect on decades-old customs bonds is whether the government will appeal the recent decision. As evidenced by the Commerce Department's stance on China's Export Buyer's Credit Program, the government is content with not appealing adverse rulings. Ferguson said he expects an appeal since the government "does not like to be told 'no,'" though he said if the decision was not appealed, the U.S. could be free to continue demanding payment from sureties on entries for which liquidation has passed more than six years ago. There would be some companies that would just "pay for peace" and not take the issue to the court, Ferguson said.

Back at CIT, Ferguson claimed in his brief that the U.S. "offered no explanation as to why" Commerce waited almost eight years to advise CBP that the suspension of liquidation on the entries was dropped and that, as a result, the entries were deemed liquidated. "Customs accepts no responsibility for failing to track the antidumping duty administrative review covering the Subject Entries and making a timely determination that the entries were deemed liquidated" and instead "makes the cavalier assertion that it 'slips through the cracks,'" the brief said.