On October 12, 2018, Judge Jane Restani of the US Court of International Trade (CIT) issued an Order requiring the United States (US Customs and Border Protection (CBP) and the Treasury Department) to issue final regulations implementing the drawback provisions of the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA) by December 17, 2018. The TFTEA amended the Tariff Act of 1930, as amended, to simplify the filing of drawback claims making them less burdensome for both claimants and CBP. Congress provided Treasury two years from the enactment of the TFTEA to promulgate regulations implementing the TFTEA’s drawback amendments. Treasury did not meet the two-year deadline, which lapsed on February 24, 2018. This date also marked the beginning of a transition year, set to end on February 23, 2019, during which drawback claimants could file drawback claims under 19 U.S.C. § 1313, as it was pre-TFTEA, or under that statutory provision as amended by the TFTEA. In lieu of new regulations, CBP published an “interim guidance document” (IGD). The IGD indicates CBP will accept claims filed under the new TFTEA rules, but will not process these claims until implementing regulations are developed by Treasury, published in a NPRM, subjected to notice and comment, edited as necessary, and issued as final rules. {Ed. Note: Although CBP is in the Department of Homeland Security, CBP revenue regulations require approval by Treasury.}
The Order was issued in an action brought by several companies who requested the CIT to direct CBP and Treasury to issue, as an interim final rule (“IFR”), certain regulations recently published as part of a notice of proposed rulemaking (“NPRM”). Of greatest concern to plaintiffs, because regulations implementing the new law were not in place, plaintiffs could not receive payment pre-liquidation, i.e. accelerated drawback. The Court concluded that an interim final rule was not an appropriate remedy, but that expedited promulgation of a final rule was warranted to prevent continued harm to plaintiffs as members of the importing public. The court ordered that the final rule be published in the Federal Register by December 17, 2018, as set forth specifically in the accompanying order. [Tabacos de Wilson, Inc., et al v. United States, et al. Slip Op. 18-138 (Ct.. Int’l Trade, October 12, 2018).]
