Two tire importers in Miami face years in prison for their alleged failure to pay excise taxes on their tire imports, the Justice Department said in a Feb. 21 press release. Marco Parra and Eira Luces-Parra, a married couple who owned Road Plus Tire, allegedly collected excise taxes from some tire retailers that bought their imported tires, but failed to file an excise tax return. In other instances, they allegedly did not collect the taxes at all, instead obtaining false bills of lading claiming that the tires were exported so they could claim an excise tax credit. The two were indicted by a federal grand jury Feb. 20 in the South Florida U.S. District Court. If convicted, they face a maximum of five years in prison for each count, DOJ said.

Correction: The Justice Department did not admit that PrimeSource is likely to succeed on the merits in its challenge to Section 232 tariffs on steel and aluminum “derivatives,” as part of its agreement on a preliminary injunction temporarily stopping collection of the duties on entries from PrimeSource (see 2002200025).

The following lawsuits were filed at the Court of International Trade during the week of Feb. 10-16:

Ford Motor Company recently filed a Supreme Court appeal of a case involving tariff engineering of Ford transit vans to obtain a lower rate for passenger vehicles. The automaker’s Feb. 13 petition for certiorari says the Supreme Court’s intervention is necessary to end uncertainty for U.S. importers caused by the U.S. Court of Appeals for the Federal Circuit’s “doctrinally incoherent and erroneous precedent,” and to rectify the CAFC’s errant decision not to address certain arguments made by Ford at a lower court.

Correction: A preliminary injunction issued Feb. 13 by the Court of International Trade says CBP cannot collect “duty deposits” entries of goods from a single importer, PrimeSource, for new Section 232 tariffs on finished steel and aluminum products that took effect Feb. 8.

A challenge to Section 232 tariffs that began Feb. 8 on finished steel and aluminum products could proceed quickly, if the Court of International Trade approves a jointly proposed schedule filed Feb. 14 that would have written arguments in the case wrapped up by May. CIT a day earlier issued a preliminary injunction barring CBP from collecting the tariffs from the importer that filed the lawsuit, PrimeSource. Oman Fasteners has requested a similar injunction in a separate case, but as of press time the court had not ruled on the motion. The preliminary injunction for PrimeSource results from an agreement between the government and PrimeSource nine days after the lawsuit was filed.

The U.S. Court of Appeals for the District of Columbia Circuit affirmed on Feb. 4 a $20,000 penalty on a wildlife importer for an exporter’s failure to sign a permit required by the U.S. Fish and Wildlife Service. Global Tropical Imports and Exports said it’s the Tanzanian exporter’s fault that the export permit wasn’t signed, and argued FWS shouldn’t have held it “vicariously liable” for the missing signature. But the Endangered Species Act requires a valid export permit, and says FWS may assess a civil penalty against any violation of the ESA, not just knowing violations. “Although the regulations required Majoka's signature, it was Global's independent statutory duty to ensure that Majoka signed the document,” the court said. “Thus, we reject Global's argument that FWS wrongly imposed a form of vicarious liability.”

An importer challenging new Section 232 tariffs on steel and aluminum derivatives is now seeking to bar CBP from collecting the tariffs only on its own entries, and not on entries from all importers subject to the new duties. PrimeSource Building Products, after “further consultations” with the government, withdrew its original motion for a universal temporary restraining order on Feb. 12 (see 2002060075), and filed a new motion for temporary restraining order and preliminary injunction barring the government “from collecting duty deposits pursuant to Proclamation 9980 … on entries by PrimeSource Building Products Inc. filed on or after 12:01 am February 8, 2020.” Oman Fasteners on Feb. 7 filed a similar request for an order that only affects its own entries, in a separate challenge to the Section 232 tariffs. In a letter about PrimeSource’s request, the government said it does “not consent to a temporary restraining order or injunction.” A teleconference on the case is scheduled for Feb. 13.

The following lawsuits were filed at the Court of International Trade during the week of Feb. 3-9:

A good manufactured in the U.S. with foreign components does not have to be substantially transformed to qualify as a U.S. good for government procurement purposes, the U.S. Court of Appeals for the Federal Circuit said in a Feb. 10 decision. Acetris had appealed the Department of Veterans Affairs decision to disqualify from eligibility for a procurement contract Acetris’s pharmaceuticals manufactured in the U.S. from an Indian active pharmaceutical ingredient. The VA relied on a CBP ruling issued in April 2018 that found the country of origin was India because the drugs did not undergo a substantial transformation (see 1804030065). India is not a party to the World Trade Organization’s Government Procurement Agreement. The Federal Circuit, affirming a ruling from the Court of Federal Claims, found the VA does not have to defer to CBP rulings, and that the term “U.S.-made end product” in the Foreign Acquisition Regulations does not only encompass products wholly manufactured or substantially transformed in the United States. “Instead, such products may be -- as Acetris’ products are -- 'manufactured’ in the United States from foreign-made components,” CAFC said.