Read the Federal Circuit’s decision [PDF 112 KB]
The government initiated this action to recover customs duties, taxes, and fees for three entries of wearing apparel from China from a customs-bonded carrier. The goods entered the United States pursuant to as “transportation & exportation” entries, but apparently never were exported and have been “missing” ever since.
The goods entered the United States at the Port of Los Angeles. A Mexican company was the importer of record. The “transportation & exportation” entry documents signed by the customs-bonded carrier indicated that the goods were to be delivered to a freight forwarder in Texas, for export to Mexico. While a U.S. licensed customs broker stamped the entry documents at an unmonitored stamp machine in Laredo (at the time, CBP did not supervise such exports or require carriers to report the arrival at the port of destination), the goods were not transported to the export lot. CBP did not inspect the goods.
Later, CBP conducted an audit, and the customs broker stated that the goods had been exported to Mexico. However, when contacted by CBP, Mexican customs officials found the Mexican import forms were false.
CBP charged the customs-bonded carrier with “misdelivery” and filed three claims against the carrier, each for $25,000. Eventually, the liquidated damages of $75,000 were reduced to just over $57,000.
The government eventually filed suit in the Court of International Trade to recover over $106,000 in unpaid duties, taxes, and fees. The trade court found the carrier liable because it had failed to account for the missing merchandise.
The Federal Circuit today affirmed, finding that the trade court had properly weighed all the evidence to find that, while there was no direct evidence as to where the goods were, the government had presented enough evidence to establish that the goods were missing.
For more information, contact a professional with KPMG’s Trade & Customs practice:
John L. McLoughlin
Todd R. Smith
Luis A. Abad
Or your local KPMG Trade & Customs professional.