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NAFTA Drawback is STILL Constitutional

By Larry

A while back, this issue generated a lot of good comments. Thanks to the Federal Circuit, we can start that again.

In NuFarm America's, Inc. v. United States, the Court of International Trade held that the requirement that importers pay customs duties within 60 days of the export of goods to a NAFTA country that previously entered the U.S. under a duty deferral or waiver program did not violate the export clause of the Constitution.

The Federal Circuit agrees with the CIT's analysis of the allegedly offending regulation. According to the Court of Appeals, the regulation imposes a duty on the imported goods by reason of their having been imported. The exportation only triggers the timing of the payment of the import duty.

I'm still not 100% comfortable with this outcome. If this merchandise were imported to a non-NAFTA country, there would be no duty liability. The duty liability on attaches when the goods are exported to a NAFTA country. While I get that the duty is a normal customs duty applied to imported goods, the liability only arises when it is exported and then only to a NAFTA country. It strikes me that there more to NuFarm's argument than meets the eye.

Full post as published by Customs Law on April 07, 2008 (boomark / email).