National Customs Brokers and Forwarders Ass'n of America, Inc. v. U.S.

Citation59 F.3d 1219
Decision Date05 July 1995
Docket NumberNo. 94-1476,94-1476
PartiesNATIONAL CUSTOMS BROKERS AND FORWARDERS ASSOCIATION OF AMERICA, INC., Plaintiff-Appellant, v. The UNITED STATES, Lloyd Bentson, Secretary of the Treasury, John P. Simpson, Deputy Assistant Secretary of the Treasury for Regulatory, Tariff and Trade Enforcement, and George J. Wiese, Commissioner of Customs, Defendants-Appellees, and Air Courier Conference of America, UPS Worldwide Forwarding, Inc. UPS Customhouse Brokerage, Inc., International Bonded Couriers, Inc., TNT Skypak International Express, Inc., and Federal Express Corporation, Defendants-Appellees, and DHL Airways, Inc., Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals for the Federal Circuit

Laurence M. Friedman, Tomkins & Davidson, New York City, argued for plaintiff-appellant. With him on the brief were Harvey A. Isaacs and Brian S. Goldstein.

Rhonda K. Schnare, Atty., Commercial Litigation Branch, Dept. of Justice, Washington, DC, argued for defendants-appellees, the U.S. With her on the brief were Frank W. Hunger, Asst. Atty. Gen. and David M. Cohen, Director. Of counsel was Richard McManus, U.S. Customs Service.

Evelyn M. Suarez, Ross & Hardies, Washington, DC, argued for defendants-appellees. With her on the brief was Myles J. Ambrose. Also on the brief was Eric L. Hirschhorn, Winston & Strawn, Washington, DC.

Before NEWMAN, Circuit Judge, SKELTON, Senior Circuit Judge, and RADER, Circuit Judge.

RADER, Circuit Judge.

In 1994, the United States Customs Service (Customs) issued interim regulations allowing a consignee to enter merchandise valued at $200 or less into the United States without using a licensed customs broker. Express Consignments; Formal and Informal Entries of Merchandise; Administrative Exemptions, 59 Fed.Reg. 30,289 (Dep't Comm. June 13, 1994) (Interim Regulations ). The National Customs Brokers and Forwarders Association of America, Inc. (NCBFAA) challenged the interim regulations before the Court of International Trade, which dismissed NCBFAA's complaint. National Customs Brokers & Forwarders Ass'n of America, Inc. v. United States, 861 F.Supp. 121 (1994) (NCBFAA ). Because Customs acted within its discretion and followed the proper procedures when it issued the interim regulations, this court affirms.

BACKGROUND

NCBFAA is a trade association of customs brokers licensed under 19 U.S.C. Sec. 1641 (1988 & Supp. V 1993). Generally, a licensed customs broker is the only person, other than the owner or purchaser, who may "enter" merchandise into the United States. 19 U.S.C. Sec. 1484(a) (Supp. V 1993). Section 1484(a)(1) contains an exception, however, for entry under regulations as specified in 19 U.S.C. Sec. 1498 (1988 & Supp. V 1993). Section 1498(a)(1) authorizes the Secretary of the Treasury (Secretary) to prescribe regulations for the entry of merchandise valued at $2,500 or less.

Title 19 also authorizes the Secretary to prescribe regulations for duty-free importation of merchandise of too little value to justify the expense of duty collection. 19 U.S.C. Sec. 1321 (Supp. V 1993). Congress amended section 1321 in 1993 to increase the limit on duty-free entry. North American Free Trade Agreement Implementation Act, Pub.L. No. 103-182, Sec. 651, 107 Stat. 2057, 2209 (1993). As amended, section 1321(a)(2) permits duty-free entry of merchandise valued at $200 ($100 for most gifts) or less. This section also grants the Secretary discretion to set a higher limit.

On June 13, 1994, Customs, on behalf of the Secretary, published the challenged interim regulations under sections 1498 and Customs solicited public comments on the interim regulations. Interim Regulations, 59 Fed.Reg. at 30,292. The solicitation stated that Customs would consider comments received by July 13, 1994, 30 days after publication. Id. at 30,289, 30,292. The solicitation also stated that Customs would implement the regulations on July 28, 1994, 15 days later, unless the comments showed good cause for not implementing the regulations on an interim basis. Id. at 30,289, 30,292-93. The solicitation further indicated that Customs would not consider substantive comments until after it implemented the regulations and reviewed the comments in light of experience during the interim period. Id. at 30,293.

1321. Interim Regulations, 59 Fed.Reg. at 30,290. The interim regulations added new section 143.26 to title 19 of the Code of Federal Regulations. Section 143.26(b) authorizes consignees to enter shipments of merchandise that meet the requirements of section 1321(a)(2), including the requirement that the merchandise be valued at $200 or less. Id. at 30,296. The interim regulations also added 19 C.F.R. Sec. 111.3(e), a clarification that persons entering merchandise under section 1498 need not be licensed customs brokers except as required by section 143.26. Id. at 30,294.

NCBFAA filed comments opposing implementation of the interim regulations on June 24 and again on July 1, 1994. On July 25, 1994, three days before the scheduled effective date, NCBFAA challenged the regulations in the Court of International Trade. NCBFAA, 861 F.Supp. at 124. The Court of International Trade granted a temporary restraining order prohibiting implementation of the regulations. Id. Then on August 16, 1994, the court denied NCBFAA's motion for a preliminary injunction and dismissed the suit. Id. at 133. NCBFAA appealed.

After the Court of International Trade dismissed NCBFAA's challenge, Customs implemented the interim regulations on August 23, 1994. Express Consignments; Formal and Informal Entries of Merchandise; Administrative Exemptions, 59 Fed.Reg. 43,283 (Dep't Comm. Aug. 23, 1994). Customs adopted final rules substantially identical to the interim regulations on April 14, 1995. Express Consignments; Formal and Informal Entries of Merchandise; Administrative Exemptions, 60 Fed.Reg. 18,983 (Dep't Comm. Apr. 14, 1995).

DISCUSSION
I.

The primary question on appeal is whether 19 U.S.C. Secs. 1321 and 1498 authorize Customs, on behalf of the Secretary, to implement regulations such as 19 C.F.R. Secs. 111.3(e) and 143.26(b) permitting consignees to enter merchandise into the United States. This court reviews Customs' construction of trade statutes under a standard of review supplied by the Supreme Court. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984). Under this review standard, this court must first determine whether the trade statutes have directly spoken to the issue of who may enter merchandise under sections 1321 and 1498. If the trade statutes are silent or ambiguous on this issue, then this court must determine whether Customs' decision to allow consignees to make entry was based on a permissible construction of the statutes. Id.

First, the plain language of sections 1321 and 1498 authorizes the Secretary to decide who may enter the covered merchandise. Section 1498(a), titled "Entry under regulations," authorizes the Secretary "to prescribe rules and regulations for the declaration and entry of" merchandise valued at $2,500 or less. Similarly, section 1321(a) authorizes the Secretary, "under such regulations as he shall prescribe," to admit merchandise valued at $200 ($100 for gifts) or less on a duty-free basis. These statutes empower Customs, on behalf of the Secretary, to regulate entry of the covered merchandise.

Section 1484, moreover, does not limit Customs' authority to regulate entry of the separate class of merchandise covered by section 1498. Section 1484 plainly carves out an exception for entries under section 1498:

Except as provided in section[ ] ... 1498 ... one of the parties qualifying as "importer of record" under paragraph (2)(B) ... shall ... using reasonable care [make and complete entry].

19 U.S.C. Sec. 1484(a)(1) (emphasis added). This exception relieves owners or purchasers of section 1498 merchandise from the section 1484 requirement of using an "importer of record" to enter their merchandise. Therefore, while section 1484(a)(2)(B) provides that a consignee may not act as "importer of record," this limitation is irrelevant to entry under section 1498. Section 1484 does not speak to whether a consignee may enter merchandise under section 1498.

Section 1498(b) reinforces Customs' authority to allow persons excluded from making section 1484 entries to enter merchandise under section 1498. Section 1498(b) authorizes Customs, on behalf of the Secretary, "to include in such rules and regulations [issued under section 1498(a) ] any of the provisions of section 1484." By authorizing Customs to include some or all of the section 1484 provisions in the regulations governing section 1498 entries, title 19 necessarily authorized Customs to exclude any of the section 1484 provisions. Thus section 1484 does not limit Customs' discretion to decide who may enter merchandise under section 1498.

Similarly, the provisions governing licensing of customs brokers in 19 U.S.C. Sec. 1641 do not limit Customs' discretion to decide who may enter merchandise under sections 1321 and 1498. Section 1641(b)(1) provides that only a licensed broker may conduct "customs business" on behalf of a principal. This language, however, arises in the context of sections 1321 and 1498 which explicitly authorize Customs to prescribe rules for entry of special classes of merchandise. Read in context, therefore, section 1641 does not deny Customs authority to promulgate regulations governing entry of section 1321 and section 1498 merchandise. Stated otherwise, title 19 does not expressly dictate who may enter this special merchandise. See Chevron, 467 U.S. at 842, 104 S.Ct. at 2781.

Thus, this court must move to the second Chevron question--whether Customs' decision to allow consignees to make entry under sections 1321 and 1498 was "based on a...

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