CIT suspends liquidation of imports subject to Section 301 tariffs

On July 6, a panel of three judges from the International Trade Tribunal (CIT) granted a motion for a preliminary injunction to suspend the liquidation of unliquidated inflows of imports from China subject to Section 301, Schedules 3 and 4a. The ruling gives importers assurances that unliquidated entries subject to Lists 3 and 4a are fully protected and will remain refundable for the duration of this dispute.

This unprecedented litigation involves more than 6,500 importers challenging the authority of the United States Trade Representative (USTR) to impose certain tariffs under the Trade Act of 1974 and the Administrative Procedures Act. Specifically, the lawsuit claims that Schedules 3 and 4a, which impose tariffs of 7.5% to 25% on more than $ 300 billion in imports, are beyond the authority of the USTR. In April 2021, the government announced its opinion that the CIT did not have the power to order reimbursement of liquidated goods receipts from Lists 3 and 4a, even though the plaintiffs prevailed over the merits in the larger dispute. . The plaintiffs immediately filed a motion for a preliminary injunction to stay the liquidation and protect their ability to seek reimbursement of duties paid.

The three judges agreed that the plaintiffs’ claims had a good chance of success on the merits, but they were divided 2-1 on whether the injunction was necessary to avoid irreparable harm to the importers who paid the charges. rights. The notice specifies:

“Instead of arguing that the alleged irreparable harm of the plaintiffs is reparable (because the court can order the re-liquidation or reimbursement), the government asserts the opposite proposition, that is, the court cannot order the reverse charge or refund. Thus, the government’s position is that all fees paid are permanently irrecoverable, whether or not they have been collected illegally.

The judges disagreed as to whether, under existing case law, the CIT clearly has the power to order the reliquidation and reimbursement of liquidated entries which have been the subject of a collection. illegal rights. Two judges concluded that the precedent was inconclusive as to the authority of the CIT and, whether the United States Court of Appeals for the Federal Circuit subsequently found that the CIT had no liquidation power , the plaintiffs – without injunction – could suffer irreparable prejudice from the liquidation of entries subject to section 301 duties. The majority also noted that the government’s categorical refusal of refunds settled the decision in favor of importers. The dissent concluded that the Federal Circuit’s position made it clear that entries could be reliquidated and that refunds could be granted regardless of the stay of liquidation and, therefore, the risk of irreparable harm was low and no injunction was necessary.

The CIT injunction order gives the US government a choice: it can suspend the liquidation of entries at the request of importers or it can stipulate the reimbursement of any rights recognized illegally collected for one or more particular entries. In order for importing participants to request the suspension of clearance of their unliquidated entries, certain information must be provided to US Customs and Border Protection (CBP):

  1. Official importer number, including suffixes.
  2. Court number and date of filing of the dispute to which the importer is a party.
  3. Registration number and registration date for each registration to be prohibited.
  4. The CBP center and the team assigned to each entry concerned.

Customs brokers should be able to help gather this information, although they will likely be very busy with similar requests from multiple clients. Importers have 28 days from ordering, until August 3, to submit this information to a “repository” that CBP will establish and maintain.

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