Administrative and Judicial Review of U.S. Customs and Border Protection Decisions

AuthorJohn B. Brew, Alexander H. Schaefer
Pages161-183
CHAPTER 8
Administrative and Judicial
Review of U.S. Customs and
Border Protection Decisions
JOHN B. BREW, ALEX H. SCHAEFER1
H OVERVIEW
Importers and other interested parties have administrative and judicial rights they
can invoke to secure certainty as to certain elements of import transactions or to
challenge adverse CBP decisions. The customs statutes and regulations provide
a series of tools to help impor ters and domestic parties protect their interests,
including:
1. Advanced interpretive rulings, which allow importers to advocate for
their desired interpretations of CBP regulations and thereby avoid sur-
prise (and expense) on import transactions prior to importing goods into
the United States;
2. Requests for internal advice, which allow ports to seek agency clarifica-
tion as to the proper interpretation or application of customs laws as they
relate to specific ongoing or past transactions;
3. Requests to modify or revoke prior adverse CBP treatment or decisions
and the opportunity for public comment in advance of CBP’s modifica-
tion or revocation of prior treatment or decisions;
4. Protests, which allow importers to seek administrative review of certain
unfavorable decisions made by CBP; and
5. Domestic interested party petitions, which allow for American manufac-
turers, producers, wholesalers, or unions to contest the appraised value,
classification, or rate of duty assigned to imported merchandise by CBP.
The goal of this chapter is to provide key information about the process
and pitfalls involved in employing each of these tools, as well as the options for
seeking judicial relief from adverse CBP decisions. You will find references to
appropriate portions of relevant statutes and regulations throughout. This chap-
ter focuses on administrative and judicial review of the most common sorts of
CBP decisions—namely, its decisions as to the tariff classif ication, valuation, and
country of origin/marking of commercial goods entered into the United States
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162 CHAPTER 8
for consumption. Other chapters deal with administrative and judicial review of
other CBP actions (see Chapter 0, “Customs Bonds and Liquidated Damages,”
and Chapter , “U.S. Customs and Border Protection’s Authority to Assess Mon-
etary Penalties”); however, additional CBP actions and decisions are beyond the
scope of this book (e.g., those concer ning broker, carrier, foreign trade zone, and
certain other agency issues).
The administrative and judicial appeal process for CBP matters involves
arcane and intricate legal rules with strict time limits as well as limits on how
and when certain challenges may be made. Many court rulings on challenges to
CBP decisions involve lawyers’ creative attempts to resolve issues that were not
properly or timely raised during the administrative process.
H ADVANCED INTERPRETIVE RULINGS
When importers desire certainty about how customs laws apply to their transac-
tions, they may request an advanced interpretive ruling from CBP. In response
to such a request, CBP will issue a binding ruling that applies to that particular
transaction as well as to other transactions involving substantially similar facts.
Interpretive rulings can be requested for almost every type of customs law issue,
but they must be prospective in nature. In other words, the request must be
made before importation takes place. Ruling requests cannot relate to specific
matters or situations presently or previously under consideration by CBP or the
courts.2
If all impor ters sought binding rulings on all transactions, the work required
by CBP to respond to those requests would foreclose CBP from doing anything
else. There is no legal obligation to seek a ruling as to every transaction, nor is
there a need to do so in many instances. Instead, there are two common factors
that drive parties to seek advanced rulings from CBP: the transaction involves
significant potential duty assessments, and the proper application of the law is
not perfectly clear. In addition, by seeking a ruling from CBP, importers (or other
interested parties) demonstrate compliance with the “reasonable care” standard
they are bound to uphold.
Part of the commercial certainty that the ruling process offers is insulation
from changes in CBP policy or practice. That is, if CBP concludes that a ruling
was incorrect, it is obliged to undertake a notice-and-comment revocation pro-
cess prior to revoking it, and if the ruling is ultimately revoked in favor of a new
interpretation, CBP can only apply that new interpretation prospectively. Put sim-
ply, the agency has no authority to revoke an importer’s ruling retroactively, but
where an importer is making import declarations without having secured a bind-
ing ruling, if CBP disagrees with the importer’s view as to, say, tariff classif ication
or valuation, the agency can and frequently does seek duties on entries made over
the preceding five years. Where the disagreement concerns, for example, a prod-
uct that the importer has treated as duty-free but the agency concludes should be
dutiable at 6 percent, the resulting duty burden can be significant (to say nothing
of the interest, penalties, and other associated costs that may ensue). And even
where the dispute does not have a duty impact, CBP still can seek penalties where
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