New importer challenge to list 3 & 4 China tariffs; immediate action in court of international trade required to preserve rights to refunds

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On September 10, 2020, a group of importers filed a lawsuit in the Court of International Trade contesting the assessment of the List 3 and List 4 tariffs that have been imposed on goods from China. The lawsuit alleges that the List 3 and List 4 tariffs were imposed untimely, and that the tariffs were imposed to retaliate against Chinese tariff measures, rather than to remedy China’s unfair trade practices, therefore making the tariffs inappropriate under the Trade Act.  Certain procedural errors on the part of the government are also alleged. 

If successful, CBP could owe importers who file independent claims a refund of Section 301 duties paid, plus interest, up until the case is resolved. It is probable that only importers that file their own lawsuits will be able to recover refunds, at least with respect to entries that have been liquidated by CBP.  While importers can file protests on liquidated entries, there is no certainty that CBP would be authorized to issue refunds to importers without a case filed in court. 

The importers’ lawsuit is based upon the CIT’s residual jurisdiction, 28 USC 1581(i).  

The deadline to file in court is two years after the cause of action accrues.  USTR published notice imposing the List 3 duties on September 21, 2018, and the duties took effect on all entries on or after September 24, 2018. To preserve the right to recover the largest refund (if successful), Importers may find the most prudent course of action would be to file a court claim on or before September 20, 2020.  All CIT deadlines, and the pros and cons of filing such claims, should be reviewed with importer’s counsel as soon as possible.   

This notice does not constitute legal advice, and is provided as a courtesy for informational purposes only. Please contact your legal counsel, as soon as possible, if you would like to file a lawsuit in the CIT to preserve your company’s potential rights to refunds on the List 3 and List 4 duties.

BDP is prepared to assist our customers, and their respective counsel, in any administrative burdens that might be required to perfect their claims in the CIT.