Industry News

CIT Orders Retroactive Refund of EC-Beef Hormone Retaliatory Tariffs
June 23, 2009

In a recent decision, the U.S. Court of International Trade (CIT) ordered the retroactive refund of 100% duties on imports of toasted bread from Spain, as the authority for collection of these duties lapsed on July 29, 2007See Gilda Industries, Inc. v. United States, Slip Op. 09-58 (June 16, 2009).  The CIT ordered U.S. Customs and Border Protection (CBP) to refund all beef hormone retaliatory duties that it collected from Gilda between July 29, 2007 and March 23, 2009, the date the United States Trade Representative (USTR) removed Gilda’s products from the list of EC imports subject to retaliatory duties.[1]

If the CIT’s ruling is upheld on appeal, companies who imported goods subject to increased duties in connection with the EC-Beef Hormones Dispute from July 27, 2007 to March 23, 2009 could be eligible for duty refunds by filing either a protest (for unliquidated entries) or court action under 28 USC 1581(i). Any potential refund would be equivalent to the amount of additional duties paid plus interest since the time of collection.

In its decision, the CIT stated that the statute which allows for the collection of retaliatory duties, 19 USC § 2417(c), provides that if a retaliatory action has been in effect “during any 4-year period”, representatives of the domestic industry benefiting from the action must, within the last 60 days of the 4-year period, submit to the USTR a formal request for continuation of the action.  Section 2417(c) further provides that if a request is not submitted, the retaliatory action terminates at the close of the 4-year period.          

According to the CIT, the USTR failed in its obligation to provide notice and request comment from the domestic beef industry in the 60 days prior to the end of the second 4-year term, and the industry made no request to continue the duties.  Despite USTR’s failure to provide notice and request comment, the U.S. beef industry was not relieved of its need to make the request.  The CIT reasoned that the statute does not indicate that USTR’s failure to perform its duties as to notification affected the requirement that the domestic industry must request a continuation of the duties.  Rather, the statute indicates that Congress did not intend to give the USTR any discretion in the matter, and when the domestic industry fails to request continuation, termination is automatic and non-discretionary.

As a result, the CIT held that the retaliatory measures terminated by operation of law on July 29, 2007, and the USTR’s decision finding otherwise was not in accordance with law.  U.S. government sources have indicated that they are considering their options concerning an appeal.  Legal sources expect that an appeal will be filed in this case.

Importers seeking to take advantage of this court decision should consult a Barnes/Richardson attorney as soon as possible to determine whether they may be eligible for a potential refund of duties with interest retroactive to July 29, 2007.

[1]  The 100% duties were originally authorized in retaliation for the European Communities’ (EC) failure to implement a WTO Dispute Settlement Body finding that the EC hormone ban was not based on scientific evidence and as such was contrary to the EC’s WTO obligations.  As previously reported, in May 2009, the U.S. and European Union (EU) signed a memorandum of understanding on a provisional agreement as a “way forward” to resolving the beef hormone dispute.  Certain products were removed from the retaliation list effective March 23, 2009, as part of a U.S. decision to rotate the products that were subject to 100% duties, remain free of the 100% duties under the provisional agreement.

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