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Court of International Trade Orders Treasury and CBP to Issue TFTEA Drawback Final Regulations

Court of International Trade Orders Treasury and CBP to Issue TFTEA Drawback Final Regulations

On October 12, Judge Restani of the Court of International Trade (“CIT”) issued Slip Opinion 18-138 in the case of Tabacos de Wilson, et al v. Mnuchin et al.  This Opinion also contains an Order that on or before December 17, 2018, Treasury and CBP shall file the final rule for Modernized Drawback with the Office of the Federal Register.  This action by the Judiciary is a significant validation of Charter’s position that Treasury and CBP had violated the clear intent of Congress by withholding these regulations.

Charter formed a coalition and funded this litigation in an effort to require Treasury and CBP to comply with the requirement to issue regulations on the calculation of drawback claims by February 28, 2018, as contained in Sec. 906 of the Trade Facilitation and Trade Enforcement Act (“TFTEA”).  The issuance of these regulations is critical because CBP will not process payments for TFTEA drawback claims until the regulations are issued as final.

Judge Restani’s Order requires Treasury and CBP to issue these final regulations no later than December 17, 2018 and provides Treasury and CBP discretion on whether to issue:

(1) the entire set of regulations (i.e. all 455 pages that were contained in the proposed regulations); or

(2) a narrower set of regulations related only to the calculation of claim.

The Order clarifies that provisions related to excise taxes may become effective sixty (60) days after publication in the Federal Register.

The Department of Justice (“DOJ”) reserved the right to appeal.

The Opinion and Order can be found at:  https://www.cit.uscourts.gov/SlipOpinions/Slip_op18/18-138.pdf

If you have any questions, please do not hesitate to reach out to any member of Charter’s Drawback team at Drawback@charterbrokerage.net.