The case concerns late-filed certificates of origin under NAFTA, and today’s decision includes a dissenting opinion.
Read today’s decision [PDF 181 KB]
The case concerns imported goods, for which the importer paid the tariffs and later filed a claim for refund. For the transactions at issue, the importer filed its refund claim before the one-year deadline but did not file the corresponding certificates of origin until after the one-year deadline.
The parties agreed to use one entry as a test case for these transactions. At the time of import (June 1997), it was not asserted that the goods were eligible for preferential treatment under NAFTA. The post-entry duty refund claim was filed in May 1998; however, that claim did not include the certificate of origin (which were submitted in November 1998). Also, the importer had not obtained a written waiver.
Customs denied the refund claim finding that the NAFTA certificate of origin was not furnished within one year of the date of importation.
The importer challenged this decision by Customs in the trade court, which in January 2010 agreed with the Customs’ finding that a certificate of origin must be filed within one year. The Federal Circuit however reversed this January 2010 decision of the trade court, but declined to decide whether Customs was required to accept the late-filed certificates of origin.
On remand, the trade court again upheld Customs’ determination that the regulations require importers to file within one year of importation copies of applicable certificates of origin. The importer had claimed that Customs improperly treated claims differently if processed under the written rules or made under the reconciliation program, by waiving the one-year requirement under the reconciliation program but refusing to do so for written claims.
Federal Circuit vacates, remands
Today, the Federal Circuit found:
- NAFTA and the statute require that certificates of origin be presented within one year of the date of importation.
- Customs has the authority to waive this requirement, but did not do so in this case.
- Customs has waived the one-year requirement for presenting certificates of origin for all participants in the reconciliation program.
- Without a reasonable explanation, Customs may not exercise its waiver power in a manner that effectively interprets the statute in a different way for different types of post-entry refund claims.
Because the trade court did not reach the issue of Customs’ exercise of its waiver power in different manners, the Federal Circuit vacated the lower court’s judgment and remanded for further proceedings.
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.