United States Court of International Trade
Court Imposes Penalty on Importer
Before the Court in The United States v. Titan Metals Corporation, Slip Op. 19-49, Court No. 13-00398 (April 22, 2019) was an action by the government to collect unpaid antidumping duties and a civil penalty under 19 U.S.C. § 1592 for negligent tariff misclassification against Titan Metals, a small business engaged primarily in buying domestic origin forging scrap and selling it to India. At issue was a “onetime importation of stainless steel flanges from India, which Titan Metals declared as free from antidumping duties on its entry summary.” Id. at 2. The Government alleged the merchandise was subject to antidumping duties and Titan Metals violated 19 U.S.C. § 1592 by making materially false statements and omissions in its entry documentation. For the following reasons, the Court ordered “Titan Metals to pay $146,368.64 in antidumping duties and a penalty,” 50% of the statutory maximum.” Id.
“19 U.S.C. § 1592 imposes a monetary penalty for negligent tariff misclassification. The Government has the burden of proof to establish the act or omission constituting the violation, and the alleged violator shall have the burden of proof that the act or omission did not occur because of negligence.” Id. at 10. When considering imposing a penalty, the Court considers 14 non-exclusive factors. Titan Metals argued the merchandise was American Goods Returned and therefor no antidumping duties were owed. Titan Metals acknowledged that fraudulent entry documents were submitted, but argued any penalties should be below the statutory maximum because of mitigating factors. The court said that Titan Metals’ shipment was subject to the order because the order definitively covered the merchandise and because Titan Metals has not met the regulatory requirements for declaring its merchandise as American Goods Returned. In regards to the penalty amount, the Court said “because Titan Metals is a one-time importer, a small business, and has no history of prior violations, but nonetheless falsified CBP documents and failed to cooperate fully with CBP, the court imposes a penalty amount of 50% of the statutory maximum.” Id. at 21.