Read the trade court’s opinion [PDF 538 KB]
The importer (a Canadian company) between June and December 2011, entered 43 shipments of lanthanum oxide at three U.S. ports (Detroit, Port Huron, and Newark / New York) and initially classified these shipments under HTSUS subheading 2846.90.2010 for “rare-earth oxides except cerium oxide” for duty-free entry.
In October 2011, CBP reclassified the shipments under HTSUS 2846.90.8000 for “other” compounds or mixtures of rare-earth metals, for a 3.7% tariff rate. With this, 18 of the 43 shipments were subject to the 3.7% customs duty rate at entry, and 25 shipments previously classified as duty-free were charged 3.7% upon liquidation.
The company paid over $1.5 million in customs duties for the 43 entries.
With a document dated March 19, 2012, the company protested CBP’s classification, and filed the protest at the Port of Buffalo (the protest not only referenced the 43 entries but also covered 13 entries made at Buffalo during the same period). Of the total 56 entries, only 26 had been liquidated—with final customs duty being fully ascertained—when the protest document was filed. The remaining 30 entries (including the 13 entries at Buffalo) were liquidated after March 19, 2012.
The port director for Buffalo refused to rule on the claims, and returned the protest document to the importer. The importer, however, assumed that its petition was “deemed denied” because it believed CBP had failed to decide the merits of the document within 30 days. The importer then filed this suit with the trade court, listing its 43 entries at Detroit, Port Huron, and New York. As of May 4, 2012, the importer had only paid liquidated duties on 18 of these 43 entries.
Today, the trade court found that it did not have jurisdiction to determine the classification of the 43 entries because:
- 17 of 18 entries were not liquidated before being protested, divesting the court of authority to decide them
- 25 entries were unpaid when this judicial action was filed
The court found only one entry was timely liquidated and paid; however, the court concluded that it could not consider this entry it because it was protested at the wrong port. The court thus dismissed the case in its entirety.
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.