No Protesting NAFTA, Really!

For years, Customs has said that importers can't seek a refund of duties paid on NAFTA-originating merchandise via standard refund. The reason for this is that if the importer failed to make a claim at the time of entry and Customs liquidates it accordingly, it made no mistake that can be challenged. At least that has been Customs' take on the question. If you want a post-entry refund, you need to apply for it via a request for reliquidation under 19 U.S.C. § 1520(d). These requests must be filed within one year of the date of importation.

The Court of Appeals for the Federal Circuit has now had the opportunity to weigh in on this in a case called Xerox Corp.Vv. United States. Xerox filed protests to seek NAFTA refunds and Customs denied all but one of the protests finding them to be untimely. This is because all but one of the protests was filed more than a year after the date of entry. Customs treated the remaining protest as a request for reliquidation.

The Federal Circuit look at the law, regulationss, and legislative history and found that the one-year limit is a strict requirement. More important, the Court also held that the lack of a NAFTA claim at the time of entry means that Customs made no decision regarding the NAFTA status of the goods. As a result, there was no protestable decision and, therefore, there could be no valid protest of the NAFTA status of the merchandise. Obviously worried about how far this holding might apply, the Court was clear that is did not mean to imply that when Customs liquidates merchandise "as entered," there is no protestable decision. Mainly, this seems to be because 19 U.S.C. § 1520(d) specifically addresses this question. But, it seems to be a dangerously slipper slope. We'll have to see.

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