Ask an Attorney - By Taylor Pillsbury, Esq., MS Customs
By Taylor Pillsbury, Esq., MSCustoms
Question: Like many businesses and agencies, CBP’s decision-making process has been slowed significantly by the Covid-19 pandemic. Have the applicable liquidation and statute of limitations deadlines been extended or tolled in response to this?
Answer: No. Despite the unusual circumstances caused by the pandemic, CBP is still required to meet its various deadlines or face the consequences. One of the more significant deadlines is the entry liquidation deadline. Under 19 USC 1504 an entry must be liquidated within one year of the date of entry unless it has been extended or suspended by court order. The remedy for the importer when CBP misses the deadline is that the entry liquidates “as entered”. This remedy can have a tremendous effect where CBP is contemplating collecting ADD/CVD and/or Section 301 (“China tariffs”) that were not declared at the time of entry.
A second important deadline for CBP is the Statute of Limitations for initiating a penalty action under 19 USC 1592 (also known as the “fraud statute”). Under relatively new “whistleblower” provisions a party that notifies CBP of potential compliance violations stands to personally recover a portion of amounts collected by the government stemming from the tip. The influx of “tips” has led to an increase in 592 Penalty and/or False Claims Act actions. In order for an importer to be liable for failing to exercise reasonable care under 592, CBP must file its action in court within five (5) years from the date in which the cause of action accrues. This is typically the date of entry.
Where CBP action has been taken or will be, it is important to know and track the deadlines that apply to the given circumstances. This is especially true now that more actions are being filed and we are seeing more delays in the decision-making process.