Ford Motor Co. v. United States , 978 F. Supp. 2d 1350 ( 2014 )

Slip Op. 14-
UNITED STATES COURT OF INTERNATIONAL TRADE
FORD MOTOR COMPANY,
Plaintiff,
Before: Judith M. Barzilay, Senior Judge
v.
Court No. 03-00115
UNITED STATES,
Defendant.
OPINION
[Customs’ Remand Results are sustained.]
Dated: , 2014
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP (Robert B. Silverman, Ned H.
Marshak, Frances P. Hadfield); Ford Motor Company, Paulsen K. Vandevert, of Counsel, for
Plaintiff.
Stuart F. Delery, Assistant Attorney General; Jeanne E. Davidson, Director, Amy M. Rubin,
Assistant Director, International Trade Field Office, Commercial Litigation Branch, Civil
Division, U.S. Department of Justice (Edward F. Kenny); and Office of the Assistant Chief
Counsel, International Trade Litigation, U.S. Customs and Border Protection (Beth Brotman), of
counsel for Defendant.
BARZILAY, Senior Judge: This case returns to the court following a remand to U.S.
Customs and Border Protection (“Customs”) for further proceedings in accordance with the
Federal Circuit’s decision in Ford Motor Co. v. United States, 715 F.3d 906 (Fed. Cir. 2013)
(“Ford”). 1 The Federal Circuit concluded that Customs failed to adequately explain why it treats
1
Familiarity with the factual and procedural history of this case is presumed. See Ford Motor
Co. v. United States, 35 CIT __, 800 F. Supp. 2d 1349 (2011); Ford, 715 F.3d 906.
Court No. 03-00115 Page 2
North American Free Trade Agreement (“NAFTA”) post-importation refund claims under 19
U.S.C. § 1520(d) differently for purposes of waiver depending on whether they were submitted
traditionally or through the Reconciliation Program. The Federal Circuit instructed Customs to
explain whether it “applies different interpretations to the statute depending on the manner in
which claims for refunds are submitted.” Id. at 917. On remand, Customs explained that the
difference in treatment “is the result of the reasonable application of two different statutory
schemes, one controlling the reconciliation process and the other controlling post-entry NAFTA
claims only.” Customs’ Remand Results, Docket Entry No. 107 at 1 (Nov. 8, 2013) (“Remand
Results”). Plaintiff Ford Motor Company (“Ford”) maintains that Customs’ explanation for
treating the two classes of claims differently for purposes of waiver under § 1520(d) is an
unreasonable interpretation of the statute. Ford, therefore, contends that Customs must approve
all of Ford’s disputed NAFTA post-importation claims and refund the duties paid by Ford with
interest. The court has jurisdiction pursuant to 19 U.S.C. § 1581(a). For the reasons set forth
below, Customs’ Remand Results are sustained.
I. BACKGROUND
Ford imported automotive parts into the United States and sought duty free entry under
NAFTA. Ford did not seek preferential treatment at the time of entry and instead sought
preferential treatment after entering the merchandise by filing a (traditional) NAFTA post-
importation refund claim pursuant to 19 C.F.R. § 181.32. One of the requirements of a post-
importation refund claim is that the importer must present certificates of origin (“COs”) to
Customs to demonstrate that the goods qualify for duty free treatment under NAFTA. Id. Ford,
though, did not present the relevant COs covering the subject merchandise. Customs did not
Court No. 03-00115 Page 3
waive this requirement as it could have under 19 C.F.R. § 181.22(d)(1). Customs, therefore,
denied Ford’s claim because of this deficiency. Ford protested the denial of its claim. Customs
denied Ford’s protest.
II. STANDARD OF REVIEW
When Congress has "explicitly left a gap for an agency to fill, there is an express
delegation of authority to the agency to elucidate a specific provision of the statute by regulation,
and any ensuing regulation is binding in the courts unless procedurally defective, arbitrary or
capricious in substance, or manifestly contrary to the statute.” United States v. Mead Corp., 533
U.S. 218, 227 (2001) (citing Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc.,
467 U.S. 837, 843-44 (1984); United States v. Morton, 467 U.S. 822, 834 (1984); APA, 5 U.S.C.
§§ 706(2)(A), (D)). Moreover, “we have long recognized that considerable weight should be
accorded to an executive department’s construction of a statutory scheme it is entrusted to
administer . . . .” Id. at 227-28 (citing Chevron, 467 U.S. at 844 (footnote omitted); Ford Motor
Credit Co. v. Milhollin, 444 U.S. 555, 565 (1980); Zenith Radio Corp. v. United States, 437 U.S.
443, 450 (1978)). Accordingly, the court applies the two-step framework provided in Chevron to
review Customs’ interpretation of the statutory scheme it is entrusted to administer.
III. DISCUSSION
In Ford, the Federal Circuit concluded that
[t]he NAFTA and § 1520(d) require that COs be presented within one year of the
date of importation. Customs has the power to waive this requirement, but did not
do so in this case. Yet at the same time, Customs has waived the requirement to
present COs for all participants in the reconciliation program. Absent a reasonable
explanation, Customs may not exercise its waiver power in a manner that
effectively interprets the statute in different ways for different types of post-entry
refund claims.
Court No. 03-00115 Page 4
Ford, 715 F.3d at 917. The Federal Circuit provided the following remand instructions:
The record in this case so far is inadequate to decide whether there is a
reasonable explanation for treating traditional § 1520(d) claims differently than §
1520(d) claims made under the reconciliation program. It is clear that importers
who participate in the reconciliation program are treated differently for purposes
of waiver under § 1520(d) than those who do not. Indeed, Customs has treated
Ford's traditional claims different from Ford's reconciliation program claims. The
Trade Court has yet to consider whether this different treatment is simply a valid
exercise of Customs’ waiver authority—similar to § 181.22(d)(1)(i)-(iii)—or
whether it shows that Customs applies different interpretations to the statute
depending on the manner in which claims for refunds are submitted. Nor has the
court considered whether Customs has a reasonable explanation for treating these
classes of claimants differently. Accordingly, we remand for the Trade Court to
consider these issues in the first instance. As was the case in Dongbu, if Customs
cannot provide a reasonable explanation for the different standards, it is “free to
choose a single consistent interpretation of the statutory language.” 635 F.3d at
1373.
Id.
In the Remand Results, Customs provided the following explanation: 2
The CAFC’s remand inquiry appears to be based upon the incorrect
assumption that Customs’ authority to waive presentation of the CO with regard
to NAFTA reconciliation claims stems solely from the NAFTA and 19 U.S.C. §
1520(d). As discussed in greater detail below, the basis for this waiver stems from
a wholly different set of statutes, namely, 19 U.S.C. §§ 1401(s), 1484, 1508 and
1509, which govern the reconciliation process. Thus, the fact that Customs waives
the presentation of all COs in the reconciliation context, but did not grant a CO
waiver to Ford in the § 1520(d) claim at issue, is not the result of two different
interpretations of § 1520(d); rather, it is the result of the reasonable application of
two different statutory schemes, one controlling the reconciliation process and the
other controlling post-entry NAFTA claims only. As further demonstrated below,
Customs’ exercise of its waiver authority in the context of reconciliation and its
exercise of its waiver authority in the context of § 1520(d), as set forth in the
Customs regulations, are both amply justified by their respective underlying
statutes. Finally, the availability of these two avenues for claiming NAFTA has
the desirable effect of maximizing importers’ opportunities to claim NAFTA in
2
As this explanation contains detailed descriptions of many critical components of the
Reconciliation Program which serve to differentiate it from the traditional post-importation claim
filing process, the court believes a summary would not be particularly helpful and cites a
significant portion of the remand results in this opinion.
Court No. 03-00115 Page 5
the manner best suited to them, while providing Customs with the mechanisms for
ensuring the accuracy of those claims, to the general benefit of all involved
parties.
....
In order to understand the significant differences between these two
procedural vehicles for filing such claims, it is important to consider the
legislative framework for the reconciliation program. In this regard, it is noted
that Title VI, Subtitle B, of the North American Free Trade Agreement
Implementation Act, Pub. L. 103-182 (December 8, 1993) established the
National Customs Automation Program (“NCAP”), an automated and electronic
system for the processing of commercial importations. “Reconciliation,” a
component of NCAP, was codified into law under new subsection (b) of section
484 of the Tariff Act of 1930, 19 U.S.C. § 1484(b), and defined in 19 U.S.C. §
1401(s) as “. . . an electronic process, initiated at the request of an importer, under
which the elements of an entry . . . that are undetermined at the time the importer
files or transmits the documentation or information required by section
1484(a)(1)(B) of this title . . . are provided to the Customs Service at a later time .
. . .”
Reconciliation is designed to reduce the administrative burden of making
adjustments to entries by establishing an electronic process whereby an importer
may identify an entry, and later provide information that was indeterminable at
the time the identified entry was filed. The information which may be provided
later, once it is determined, includes valuation, classification, HTSUS heading
9802 eligibility, and NAFTA. See “Modification of National Customs
Automation Program Test Regarding Reconciliation,” published in 62 FR 51181
(September 30, 1997) and “Revised National Customs Automation Program Test
Regarding Reconciliation,” published in 63 FR 6257 (February 6, 1998). See also,
1993 U.S.C.C.A.N. 2686, House Rpt. (Ways and Means Committee) No. 103-
361(I), H.R. 3450, P.L. 103-182 (North American Free Trade Agreement
Implementation Act), Sec. 637, indicating that “[t]he introduction into the law of
two new provisions, the import activity summary statement and the reconciliation,
will permit importers and customs brokers which are capable of interacting with
Customs in an electronic mode to handle Customs transactions in a more
business-like way, reducing paperwork and many of the administrative costs.”
One reconciliation entry may provide the missing information for up to 9,999
previously identified original entries, thus providing great efficiencies in the
submission and processing of the newly determined information.
In the context of NAFTA eligibility, the undetermined entry information is
whether the merchandise qualifies for a preferential tariff rate under NAFTA. If
the importer believes that its goods may be NAFTA eligible, it flags the entry
summary to indicate that it may make a NAFTA claim via reconciliation. Once
determining whether the goods in the original entry qualify for NAFTA, the
importer then files a reconciliation entry indicating whether or not the goods in
the identified entry are NAFTA eligible.
Court No. 03-00115 Page 6
19 U.S.C. § 1401(s) indicates that “. . . [a] reconciliation is treated as an
entry for purposes of liquidation, reliquidation, recordkeeping, and protest.” Thus,
the reconciliation is liquidated by CBP pursuant to 19 U.S.C. § 1500(d). If
NAFTA eligibility is claimed and CBP agrees, CBP liquidates the reconciliation
entry with benefit of NAFTA and issues a refund. If CBP does not agree, it
liquidates the reconciliation entry without benefit of NAFTA. The liquidation of
the reconciliation entry may then be protested pursuant to 19 U.S.C. § 1514(a)(5),
and, if necessary, reliquidated by CBP.
In addition, reconciliation-related forms and documents, such as the
NAFTA CO, are considered "entry records" under the recordkeeping laws and
their presentation may be waived at the time of filing the reconciliation entry.
Specifically, the recordkeeping requirements of 19 U.S.C. § 1508(a), requiring
importers and certain other parties to “. . . make, keep, and render for examination
and inspection records (which for purposes of this section include but are not
limited to, statements, declarations, documents and electronically generated or
machine readable data) . . .” apply to reconciliation entries and their supporting
records and documentation. Moreover, pursuant to 19 U.S.C. § 1484 and 19
U.S.C. § 1509(a)(1)(A), Customs has the authority to waive presentation of entry
records otherwise required at the time of filing an entry. This waiver authority
applies to both regular and reconciliation entries. (See description of
“reconciliation” in 19 U.S.C. § 1401(s), discussed supra, as an entry for
recordkeeping and liquidation purposes.). In accordance with the statute, see 19
U.S.C. § 1509(e), CBP has listed the required “entry records,” the presentation of
which may be waived, in the Appendix to Part 163 of the Customs regulations,
headed “Interim (a)(1)(A) List.” The NAFTA CO is included in this list. Thus, a
NAFTA CO is considered an entry document and its submission at the time of
filing the reconciliation entry may be waived. However, as an entry record, the
NAFTA CO can later be demanded by CBP; furthermore, if CBP wishes to
review the CO and the importer does not produce it, the importer is subject to
penalties and the reconciliation entry is subject to reliquidation. See 19 U.S.C. §
1509(a)(1)(B) and § 1509(g).
Likewise, CBP's Federal Register Notice establishing the reconciliation
program clearly states that a NAFTA CO is an entry record the presentation of
which may be waived by CBP at the time of filing a reconciliation entry. See 63
FR 6257, 6259 (“The Certificate of Origin is part of the a1A list . . . and covered
by the record-keeping provisions of the Customs laws . . .”). Accordingly, CBP
waives the presentation of the paper NAFTA CO at the time of the filing of a
reconciliation entry. This ensures the reconciliation process is fully electronic, as
required by 19 U.S.C. 1401(s), relieving an importer from the burden of
submitting thousands of paper COs with a single reconciliation entry, while
allowing CBP to process the reconciliation entry much more efficiently in a fully
automated environment.
In light of the above, we maintain that the waiver of the submission of the
CO in the context of reconciliation - which itself is recognized as an “entry” - is
Court No. 03-00115 Page 7
based upon the authority given to CBP in the National Customs Automation
Program, as well as the entry filing and recordkeeping statutes cited above. These
statutes authorize the agency to excuse the presentation of COs (as well as other
entry-related documents) at the time of entry (or reconciliation), with the caveat
that Customs may later demand these documents which are required to be retained
by the importer. In addition, this waiver of the presentation of documents is
subject to the safeguards that failure to present the documents when demanded by
Customs at a later date may result in the imposition of recordkeeping penalties
and/ or the liquidation or reliquidation of the involved entries without benefit of
NAFTA irrespective of the usual time frames for taking such action provided by
other statutes. The waiver of the presentation of the CO in connection with
NAFTA reconciliation is not based on Customs' determination regarding the
NAFTA eligibility of the particular goods in issue, but on a general policy
determination, as reflected in the aforementioned statutes, that the entry process
should be automated and streamlined.
By contrast and as recognized by the CAFC, Ford Motor Co., 715 F.3d at
909-910 (cited supra), Customs’ authority to waive possession (and thus also
presentation) of COs in the context of § 1520(d) claims, as exercised in 19 C.F.R.
§ 181.22(d), is based solely on the waiver authority provided by the Agreement.
The above-cited statutes pertaining to entry and/or entry recordkeeping
requirements provide no basis for, nor are otherwise relevant to, waivers provided
in connection with such § 1520(d) claims. It thus follows that Customs'
determinations regarding the waiver of possession of COs in connection with §
1520(d) claims, of the kind at issue in the instant case, represent Customs' only
interpretation of that statute. Such determinations are independent and separate
from its waiver of only the presentation of COs in the context of NAFTA claims
made at the time of filing a reconciliation entry, which are based on the entry and
recordkeeping statutes underlying the reconciliation program.
In addition, Customs [sic] broad exercise of its waiver authority in the
context of reconciliation is reasonable in light of the statutory safeguards in place
allowing the agency to later audit the importer and, if warranted, deny NAFTA
eligibility, reliquidate the entries without favorable duty treatment, and/ or
otherwise penalize the importer for failure to provide CO certificates upon request
by Customs. See discussion of 19 U.S.C. § 1509, supra. Because Customs has the
ability to reverse its initial acceptance of an importer's reconciliation NAFTA
claim pursuant to 19 U.S.C. § 1509, it is willing to waive presentation of the CO
at the time of the filing of the NAFTA reconciliation claim. In short, Customs'
ability to reliquidate entries and penalize importers whose goods are not NAFTA
eligible in the context of reconciliation reasonably explains Customs willingness
to grant an across the board waiver of the presentation of the CO for NAFTA
reconciliation claims. However, all of these same safeguards are not available to
Customs once it issues a CO waiver pursuant to section 181.22(d) of the Customs
regulations (e.g., the agency cannot assess a penalty for failure to provide the CO
if it has previously waived the requirement that the CO be in the importer's
Court No. 03-00115 Page 8
possession). It is thus understandable that such waivers are not as readily granted
in the context of § 1520(d) claims.
Finally, we note that the above-described statutes, as implemented by
Customs, currently provide three opportunities for an importer to assert a NAFTA
claim: 1) at the time of filing the original entry, 2) at reconciliation, provided that
the original entry was flagged for reconciliation, or 3) via a § 1520(d) claim. The
availability of all three methods undoubtedly inures to the benefit of importers.
Likewise, each vehicle provides Customs with an opportunity to ensure that
NAFTA is properly applied to the claimed goods, either by requiring that a CO be
presented, by requiring that the CO be retained by the importer for subsequent
review, or by requiring that a port director be otherwise satisfied that the goods
that are the subject of the claim are NAFTA eligible. All of these claim
mechanisms fairly and properly implement the Agreement, and should not be
negated.
Remand Results at 1-6 (footnotes omitted).
Accordingly, Customs maintains that its interpretation of § 1520(d) represents a
permissible construction of the statute. More specifically, Customs explains that waiver under §
1520(d) is separate and distinct from waiver under the Reconciliation Program. Customs states
that waiver under § 1520(d) applies to traditional post-importation claims under NAFTA.
According to Customs, these types of claims are not treated as entries and therefore do not have
certain statutory safeguards to remedy mistakes and misconduct in awarding duty free treatment
under NAFTA. Customs explains that a claim for waiver under the Reconciliation Program
implicates a different statutory scheme. According to Customs, claims made pursuant to the
Reconciliation Program are treated as entries and therefore have a set of statutory safeguards that
permit Customs to remedy mistakes and misconduct in awarding duty free treatment under
NAFTA. Therefore, Customs contends that its waiver authority under § 1520(d) must be viewed
within the context of these two separate mechanisms for filing post-importation claims under
NAFTA.
Court No. 03-00115 Page 9
Ford, however, claims that Customs is “clearly wrong in its belief that its CO filing
waiver authority under the Reconciliation Program stems from a wholly different set of statutes
than the NAFTA and 19 U.S.C. §1520(d).” Ford Comments on Custom’s Remand Report,
Docket Entry No. 110 at 3 (Dec. 18, 2013) (quotation marks omitted) (“Ford Comments”). Ford
disputes Customs’ account of the safeguards available solely in the reconciliation context. Id. at
14-16. Ford maintains that the safeguards available to Customs are the same regardless of
whether the claim was made pursuant to the Reconciliation Program or through the traditional
process. Ford argues that the Remand Report fails to articulate a reasonable explanation for
treating the two classes of NAFTA post-importation claims differently under § 1520(d). The
court disagrees.
Customs has provided a reasonable explanation for treating claims under § 1520(d)
differently for purposes of “waiver”. Article 503(c) of NAFTA establishes Customs’ waiver
authority and provides that “[e]ach Party shall provide that a Certificate of Origin shall not be
required for ... an importation of a good for which the Party into whose territory the good is
imported has waived the requirement for a Certificate of Origin.” Ford Motor Co. v. United
States, 635 F.3d 550, 555 (Fed. Cir. 2011). Although Congress did not reference “waiver” in §
1520(d), it is “obvious that § 1520(d) was designed in part to permit the implementation of
Article 503(c)’s waiver authority via Customs’ regulations.” Id. Customs, in turn, has
promulgated a regulation implementing its waiver authority. See 19 C.F.R. § 181.22(d)(1). The
regulation permits Customs to waive “possession” of a CO when an importer files a traditional
post-importation claim, provided that the “port director has in writing waived the requirement for
a Certificate of Origin because the port director is otherwise satisfied that the good qualifies for
Court No. 03-00115 Page 10
preferential tariff treatment under the NAFTA.” Id. The language of the regulation talks about
“possession,” not presentment or other language suggesting that the importer retain the document
for future inspection. Waiving possession is different from waiving presentment. Customs
explains, and the court agrees, that waiving possession is irreversible. See Remand Results at 6.
Customs cannot ask an importer to later produce a CO if it has already excused the importer
from “possessing” that very document. Therefore, the port director is given discretion to grant or
deny an importer’s request for a waiver of the CO requirement.
Under the Reconciliation Program, however, Customs has waived the requirement that
importers “present” COs at the time of filing a post-importation claim. See Automated
Commercial System (ACS) Reconciliation Prototype: A Guide to Compliance, Version 4.0,
Docket Entry No. 110 Exhibit No. 11 at 12 (Dec. 18, 2013) (“Guide”). This permits importers to
bypass the step of presenting hard copies to the port director and allows the program to be
administered electronically. Importers who file post-importation claims through the
Reconciliation Program are required to retain the COs in the event that Customs decides to verify
the correctness of their entry records. See 19 U.S.C. § 1508(a). The procedures that guide
Customs if it does need to verify such information are specifically provided for under 19 U.S.C.
§ 1509. These statutes control Customs’ administration of reconciliation-based post-importation
claims because a claim itself under the program is treated as an “entry” under 19 U.S.C. §
1401(s). As Customs explained, this implicates a specific set of statutory safeguards for ensuring
the correctness of those entries and remedying any potential misconduct by importers. The
record keeping requirements and auditing procedures give Customs well-defined procedures for
ensuring the correctness of entries made through the fully automated Reconciliation Program.
Court No. 03-00115 Page 11
Ford, for its part, suggests that the safeguards available to Customs are the same for
traditional and reconciliation-based claims. It relies on 19 C.F.R. § 181.81, which states
Except as otherwise provided in § 181.82 of this part, all criminal, civil or
administrative penalties which may be imposed on U.S. importers, exporters and
producers for violations of the Customs and related laws and regulations shall also
apply to U.S. importers, exporters and producers for violations of the laws and
regulations relating to the NAFTA.
The court, though, cannot adopt Ford’s formulation of the safeguards regime that applies to
traditional claims. Although the regulation does provide Customs with certain remedies related
to NAFTA, those potential remedies are associated with assigning penalties and do not establish
a clear set of guidelines for ensuring the correctness of documents that were initially waived.
Ford argues that the regulation gives Customs the “full panoply of claim validation, audit,
investigation and sanction authority that it has for all other Customs violations.” Ford Comments
at 15. But 19 C.F.R. § 181.81 refers to “penalties” and does not reference the full set of record
keeping and auditing procedures set forth under §§ 1508(a) and 1509. The court cannot assume
that those procedures are also covered by the regulation. This becomes even more problematic
when considering that the port director waives “possession” of the CO, not just presentment. An
importer would have a valid defense to any request by Customs to produce a CO if the port
director had already waived possession of that document beforehand.
Ultimately, Customs’ waiver authority under § 1520(d) must be viewed within the
context of two distinct programs for processing post-importation refund claims under NAFTA.
The court notes that Customs has not always provided importers the clearest guidance on this
issue and has referenced § 1520(d) when discussing the Reconciliation Program, which implies
that “waiver” is the same whether the claim was made through reconciliation or not. See, e.g.,
Court No. 03-00115 Page 12
Guide at 20. On remand, though, Customs has explained that there are two separate statutory
schemes that cover post-importation claims under NAFTA. Remand Results at 3-6. More
specifically, Customs has explained that its waiver authority under the traditional method of
filing post-importation claims is controlled by § 1520(d). It has also explained that its waiver
authority under the Reconciliation Program is controlled by 19 U.S.C. §§ 1484(d)(1) and
1509(a)(1)(A). Therefore, Customs takes exception to the entire premise of the remand and
takes the stance that waiver under § 1520(d) is limited to traditional claims only.
Although § 1520(d) may establish Customs’ waiver authority in general, it does not
control the actual process of waiver with respect to reconciliation-based claims. It is clear that
reconciliation claims operate under a different framework that is specifically tailored for the
electronic processing of the post-importation claims. 3 The same cannot be said for traditional
claims. They operate under the procedures set forth in 19 C.F.R. § 181.22. There are legitimate
reasons for applying waiver differently depending on the type of claim. Under these
circumstances it is reasonable for Customs to treat the two types of post-importation claim filing
3
The Reconciliation Program itself was the result of years of discussions among the various
international trade actors responding to a long recognized need for procedures to acknowledge
the manner in which world trade had changed. The number of suppliers and countries of origin
made it difficult, if not impossible, for importers to provide complete information to Customs
within the time frames provided by the original trade statutes and regulations. Importers and the
government were bent on changing these to the benefit of both. The entry process needed to
encompass certain flexibilities to allow for information to be provided when it was available
pursuant to reasonable commercial practices. This, in turn, required an automated procedure to
accomplish these goals. The Reconciliation Program is the automated system created to reach
this end and even address problems caused by numerous “special arrangements” to make
previously indeterminable final adjustments to import prices. Guide at 4. ”[T]hese local,
informal versions of ‘reconciliation’ were problematic because they varied a great deal from
place to place, often had no legal basis, and lacked adequate financial controls.” Id. (quotation
marks in original). The Reconciliation Program represents a method of filing a NAFTA post-
importation refund claim which is “separate from, but coexists with, the procedures described
above for obtaining refunds under § 1520(d).” Ford, 715 F.3d at 910 (emphasis added).
Court No. 03-00115 Page 13
processes differently with regard to waiving the CO presentment requirement and the court has
no hesitation in affirming the disparate treatment here.
Moreover, the interpretation advanced by Ford would effectively remove discretion
expressly provided to the port director to grant or deny waiver under the traditional process for
filing NAFTA post-importation claims. The court cannot endorse this interpretation. The statute
gives Customs a good deal of discretion to define the scope of its waiver authority. Customs has
exercised that discretion by promulgating a regulation that gives the port director authority to
waive possession of the CO. See 19 C.F.R. § 181.22(d)(1). At some point, Customs may
abandon this policy in favor of a fully centralized program that eliminates the inconsistencies
associated with relying on the port director to make determinations about waiver. Under the
current regime, however, there are legitimate reasons for treating claims differently for purposes
of waiver. Therefore, Customs’ explanation for treating claims under § 1520(d) differently for
purposes of waiver constitutes a permissible construction of the statute.
IV. CONCLUSION
For the foregoing reasons, Customs’ Remand Results are sustained. Judgment will be
entered accordingly.
Dated: , 2014 /s/ Judith M. Barzilay
New York, NY Judith M. Barzilay, Senior Judge