Read the trade court’s opinion [PDF 533 KB]
The importer in November 2013 attempted to import wearing apparel into the United States under cover of eight consumption entries. On examining the entries, U.S. Customs and Border Protection (CBP) inspectors determined that the quantities of garments in the containers for each of the eight entries exceeded those reported on the accompanying commercial invoices and packing lists. While the overage varied somewhat for each entry, the actual quantity attempted to be entered generally was more than double the declared quantity.
CBP subsequently detained the entries. The importer then directed the exporter of the merchandise to prepare and forward to it corrected invoices. Upon receiving the corrected invoices, the importer attempted to file Port of Entry Amendments (PEAs) and asked CBP to release the merchandise. The importer tendered the requisite additional estimated duties based on the quantities and values in the PEAs, and filed prior disclosures with CBP, indicating that incorrect values and quantities had been reported on the entries. CBP, however, did not release the merchandise and returned the PEAs.
A contested number of the entries were deemed excluded from entry, on various dates in December 2013 and January 2014. The importer filed a protest with CBP to challenge the deemed exclusions. CBP then seized the entries between December 6, 2013, and January 2, 2014, and issued notices of seizure between December 20, 2013, and January 16, 2014. The seizure notices stated that the declared quantities in the seized entries “were used to facilitate the importation of the wearing apparel . . . that was attempted to be clandestinely introduced” into the country (i.e., the undeclared quantities)….”
In January 2014, the importer filed suit in the trade court to contest CBP’s denial of its protest, invoking 28 U.S.C. § 1581(a) as the basis for the court’s subject matter jurisdiction. The government moved to dismiss, among other reasons, for lack of subject matter jurisdiction.
The trade court concluded that only it could provide judicial relief to the importer from the denial of the protest, but that only a federal district court could provide judicial relief to the importer from the seizure of the merchandise. Because the trade court found that this case was, at basis, a seizure case, it was in the sound interest of judicial economy to stay this proceeding, pending the importer’s selection of remedies for the seizure notices.
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.