CIT Rules on Multiple Attempts to Obtain Preferential Treatment for Nicaragua Apparel
In Presitex USA Inc., v. U.S., the Court of International Trade granted a motion to dismiss a case involving apparel imported from Nicaragua during a period when the U.S.-Caribbean Basin Trade Partnership Act, Trade and Development Act of 2000 (CBTPA) was in effect. The CIT ruled that the Court lacked jurisdiction over Presitex's 19 USC 1520(d) claim and refused to exercise jurisdiction over Presitex's 19 USC 4034 claim which was still under review by Customs.
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In September 2005, Presitex filed entry summaries and paid duties of 16.6 percent for seven entries of apparel imported from Nicaragua classified under subheading 6204.62.40.
In February 2006, Presitex submitted a Post Summary Adjustment (PEA) to reclassify the goods under subheading 9820.11.27, duty free under the CBTPA. Customs rejected Presitex's reclassification claim stating that the cutting and sewing had been done in China, and thus CBTPA did not apply.
The entries were liquidated in July 2006. In March 2007, Presitex filed a number of protests, arguing that the cutting and sewing was done in Nicaragua. Customs denied all protests as untimely filed.
In July 2008, Presitex sent a letter to Customs requesting reliquidation with refunds of duty and interest pursuant to 19 USC 1520(d). In September 2008, Customs returned the letter with an insufficiency notice, and Presitex commenced an action with the CIT asserting jurisdiction under 28 USC 1581(i).
The CIT ruled that it did not have jurisdiction under 28 USC 1581(i), because that section may not be invoked when jurisdiction under another subsection [of 28 USC 1581] is, or could have been available. The refusal to reliquidate under 19 USC 1520(d), however, could have been protested under 28 USC 1514(a)(7), and the CIT would have had jurisdiction to review a denial of this protest under 19 USC 1581(a).
The CIT went on to state, however, that even if Presitex had exhausted its administrative options and then commenced an action under 28 USC 1581(a), its claim under 19 USC 1520(d) would have failed. 19 USC 1520(d) permits reliquidation of qualifying goods in accordance with legislation implementing certain free trade agreements, including the Dominican Republic-Central America-United States Free Trade Agreement (DR-CAFTA). At the time of importation, however, Nicaragua was not yet a DR-CAFTA Country, and these goods could not qualify under its rules of origin.
Initiating a new line of attack, Presitex submitted an administrative request to Customs on April 8, 2009 for retroactive application of DR-CAFTA tariff provisions under 19 USC 4034. This section provides for retroactive application of DR-CAFTA duty rates and refunds of any excess duties paid with respect to entries of textile and apparel goods from an eligible DR-CAFTA country, if the goods meet certain conditions and requirements.
The CIT, however, declined to rule on this claim since it was not included in the original complaint filed by Presitex, nor had Presitex sought to file a supplemental complaint. In addition, the Court stated that any such claim would not be reviewed by the Court since Customs had not yet made a final determination with respect to the underlying reliquidation request.
The CIT granted the Motion to Dismiss filed by the U.S. and dismissed the action in its entirety.
Slip Op 10-9 (dated 01/26/10) available at http://www.cit.uscourts.gov/slip_op/Slip_op10/Slip-Op%20Public%2010-09.pdf