CAFC Agrees with CIT, Rules That 100% EC-Beef Hormone Duties Expired in 2007
On October 13, 2010, the Court of Appeals for the Federal Circuit affirmed the lower court's ruling that the beef hormone 100% retaliatory duties assessed against certain toast imports of Gilda industries had terminated by operation of law on July 29, 2007.
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The CAFC's decision, which it states is precedential, upholds the CIT's order to retroactively refund, with interest, the 100% duties paid by Gilda Industries on toasted bread imported from Spain after the retaliatory duties expired.
(The CIT had ordered U.S. Customs and Border Protection to refund all beef hormone retaliatory duties that it collected from Gilda Industries, Inc. between July 29, 2007 and March 23, 2009, the date the U.S. Trade Representative removed Gilda's products from the list of European Community imports subject to such duties.
The duties were originally authorized in retaliation for the EC's failure to implement a WTO Dispute Settlement Body finding that the EC hormone ban was not based on scientific evidence, and hence was contrary to the EC's WTO obligations.)
Authority to Collect 100% Beef Hormone Duties Was for 4-Year Period
The CIT had ruled that the statute which allows for the collection of retaliatory duties, 19 USC 2417(c), provides that if a retaliatory action has been in effect "during any 4-year period," representatives of the domestic industry benefiting from the action must, within the last 60 days of the 4-year period, submit to the USTR a formal request for the continuation of the action.
If no such request was submitted, the retaliatory action "shall terminate at the close of such 4-year period."
Industry Had Failed to File Request for Continuation as Required by Statute
According to the CIT, the USTR failed in its obligation to provide notice and request comment from the domestic beef industry in the 60 days before the end of the second four-year term, and the industry made no request to continue the duties, but the court ruled that USTR's failure did not relieve the industry of its need to make the request.
Retaliatory Measures Terminated by Operation of Law
The court also stated that the sole point of contention turned on whether the statute indicates unambiguously that the beef industry's failure to submit requests within the time period specified in 2417(c)(1)(B) caused the retaliatory list to terminate by operation of law on July 29, 2007, or whether the USTR's failure to notify the domestic industry of the impending termination prevented the operation of the automatic termination provision.
The court reasoned that the statute does not indicate that USTR's failure to perform its duties as to notification affected the requirement that the domestic industry must request a continuation of the duties. Rather, the statute indicates that Congress did not intend to give the USTR any discretion in the matter, and when the domestic industry does not request continuation, termination is automatic and non-discretionary, the court found.
Therefore, the retaliatory measures did in fact terminate by operation of law on July 29, 2007, and the USTR's decision finding otherwise is not in accordance with law, the court determined.
(See ITT's Online Archives or 06/22/09 news, 09062225, for BP summary of CIT decision. See ITT's Online Archives or 12/11/09 news, 09121105, for BP summary that U.S. would appeal CIT ruling.)