Jewelry Importer Says CBP Waited Too Long to Reliquidate Drawback Claims
CBP lacked the authority to reliquidate three drawback claims regarding three jewelry entries made by Importer Zale Delaware, since the drawback claims deemed liquidated, Zale argued in a Nov 24 complaint at the Court of International Trade (Zale Delaware v. United States, CIT # 25-00139).
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
Zale said that in 2013, CBP approved the company's "drawback privilege to receive accelerated drawback payments and waived prior notice of exportation for [Zale's] drawback program." From 2014 to 2016, the importer received "accelerated drawback payments concerning various drawback claims filed with CBP."
Then, in 2014 and 2015, Zale filed three drawback claims, all three of which saw the liquidation date extended. The first and second drawback claims were finally liquidated in August 2023, "close to nine years after the initial claim date" and well after the date on which the "underlying consumption entries became final," which was in January 2017. The third drawback claim was liquidated in July 2019, over four years after the initial claim date and after the date on which the underlying goods were finally liquidated, which also was in January 2017.
CBP said the drawback claims weren't eligible for deemed liquidation, since they have “imports that were not liquidated and final in the first year.”
Zale argued at CIT that 19 U.S.C. 1504 says that "unless liquidation is suspended or extended, any entry or claim for drawback that is not liquidated within one year from the date of entry or claim is deemed liquidated by operation of law at the drawback amount asserted by the claimant." CBP can extend the deadline for liquidation for drawback claims by up to three years, "resulting in a maximum of four years from the date of the claim before deemed liquidation occurs."
Thus, the importer said all three of its entries were deemed liquidated at the latest by July 2019. As a result, "CBP's subsequent liquidation" of the drawback claims "was contrary to law, null, void, and without legal effect." The agency "lacked authority to liquidate or reliquidate the claim after deemed liquidation occurred pursuant to 19 U.S.C. § 1504(b)," the complaint said.