Slip Op. 12-134 UNITED STATES COURT OF INTERNATIONAL TRADE

Before: Leo M. Gordon, Judge Court No. 06-00434

OPINION and ORDER [Defendant liable for unpaid duties.] Dated: November 7, 2012 Steven M. Mager and Shelley D. Weger, Trial Attorneys, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., argued for Plaintiff United States. With them on the br ief were Stuart F. Delery, Acting Assistant Attorney General, Jeanne E. Davidson, Directo r, and Patricia M. McCarthy, Assistant Director. Of counsel was Andrew Kosegi , Deputy Assistant Chief Counsel, U.S. Customs and Border Protecti on, of Indianapolis, IN. John M. Peterson and Richard F. O’Neill, Neville Peterson LLP, of New York, NY, argued for Defendant C. H. Robinson Company.

Gordon, Judge: This opinion follows a bench trial. Plaintiff United States (the “Government”) brought this action pursuant to Section 553 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1553 (2006) 1 , and 19 C.F.R. § 18.8(c), to recover certain duties, taxes, and fees from Defendant C.H. Robinson Company (“C.H. Robinson”). The court has jurisdiction pursuant to 28 U.S.C. § 1582(3) (2006). For the reasons set forth

1 Further citations to the Tariff Act of 1930, as amended, are to the relevant provisions of Title 19 of the U.S. Code, 2006 edition. UNITED STATES, Plaintiff,

v. C.H. ROBINSON COMPANY, Defendant.Court No. 06-00434 Page 2 below, the court adjudges C.H. Robinson lia ble for the duties, taxes, and fees demanded by the United States. I. Background This action involves the Government’s claim that C.H. Robinson, a bonded carrier, owes duties, taxes, and fees accr uing to the United States for three entries (“subject entries”) of wearing apparel (“subject merchandise”) from the People’s Republic of China. The subject entries we re made as transportation and exportation entries, covering merchandise destined for Mexico after passing through the United States from the Port of Los Angeles, Ca lifornia to the Port of Laredo, Texas. The vast majority of merchandise brought into the United States is entered by means of consumption entries by an importer of record. A consumption entry requires that merchandise entered into the commer ce of the United St ates meet several statutory and regulatory require ments, including the payment of duties owing upon the entered merchandise, unless the merchandise is subject to duty-free treatment. See generally 19 U.S.C. § 1505. As an exception to this general rule, C ongress established that merchandise may be entered into the United States for the so le purpose of transporting such merchandise to a foreign port of destination. In particu lar, “[a]ny merchandise . . . shown by the manifest, bill of lading, shipping receipt, or other document [such as a Customs Form 7512] to be destined to a foreign country, may be entered for transportation in bond through the United States by a bonded carrier without appraisement or the payment of duties and exported under such regulations as th e Secretary of th e Treasury shall prescribe.” 19 U.S.C. § 1553(a). A transportation and expo rtation entry (“T&E entry”) isCourt No. 06-00434 Page 3 the type of entry that is used when merchandi se is transiting the United States for eventual export from the United States . It is only when merchandise is being transported to a foreign destination and exported that duties are not owed. Based on its clear statut ory authority, U.S. Customs and Border Protection (“CBP”) developed a broad regulatory scheme in which transportation and exportation entries would operate. See 19 U.S.C. § 1553(a); see also 19 C.F.R. §§ 18.20-18.24 (2001). 2 CBP’s regulatory scheme for T&E entries is designed to ensure that merchandise destined to a foreign port of ent ry is, in fact, exported. This scheme provides a multi-layered approach to overs eeing such entries, including safeguards against non-compliance. Among these safeguards is the provision found at 19 C.F.R. § 18.8(c), which requires that a “carrier shall pay any in ternal-revenue taxes, duties, or other taxes accruing to the United States on the missing merchandise, together with all costs, charges, and expenses caused by the fa ilure to make the required transportation, report, and delivery.” The regulatory scheme also sets forth the timing of certain events regarding the transit of in-bond merchandise. For exam ple, bonded merchandise destined for export from the United States and transported by land is required to be delivered to CBP at the port of exportation within 30 days after the date of receipt by the forwarding carrier at the port of origin. See 19 C.F.R. § 18.2(c)(2). As a safeguard, if this requirement is not met, the regulation provides that failure to deliver t he merchandise within the 30-day

2 Further citations to the Code of Federal Regul ations are to the rele vant provisions of 2001 edition.Court No. 06-00434 Page 4 period constitutes an irregular delivery and the initial bonded carri er is subject to applicable civil penalties. Id. (citing 19 CFR § 18.8). Additionally, CBP’s regulations require t hat “[p]romptly, but no more than 2 working days, after arrival of any portion of the in-bond shipment at the port of exportation, the delivering carrier shall surrender the in- bond manifest [CF 7512] to the port director as notice of arrival of the merchandise.” 19 C.F.R. § 18.7(a). This regulation also states that“[f]ailure to surr ender the in-bond manifest or report the arrival of bonded merchandise within the prescribed period shall constitute an irregular delivery and the initial bonded carrier shall be subject to applicable penalties (see § 18.8).” Id. (parenthetical in original). Submission of a CF 7512 provides CBP with notice that the carrier has complied with the requirement of 19 C.F. R. § 18.2(c)(2) to deliver the merchandise to the port of exportation within 30 days of receipt. It also commences the 20-day period for the carrier to notify CBP t hat the in-bond merchandise has not been entered. See 19 C.F.R. § 4.37(b). However, if the carrier chooses to enter, rather than export, the inbond merchandise, the carrier must make that entry (for consumption, for additional movement by another carrier, or for entry in to warehouse) within 20 days after arrival at the port of destination. Id. Pursuant to 19 C.F.R. § 18. 7(b), “[t]he port director shall require only such supervision of the lading for exportation of merchandise covered by an entry or withdrawal for exportation or for transportation and ex portation as is reasonably necessary to satisfy him that the merchandise has been laden on the exporting conveyance.” 19 C.F.R. § 18.7(b). In late 2001 and early 2002, the time of the subjectCourt No. 06-00434 Page 5 entries, CBP used a self-regulating process at the Port of Laredo in which CBP did not require (1) a carrier to report separately it s arrival at the port of destination and the carrier’s exportation of the merchandise, and (2) the supervised exportation of each T&E entry. Pl.’s Resp. to De f.’s Mot. In Limine, App. 29- 30 (Dickinson Dec.), Jan. 8, 2010, ECF No. 71. Instead, at that time, C BP gave exporting carriers the benefit of the doubt that merchandise subject to a T&E entry was exported after having merely received notice of the merchandise’s arrival at the port, unless su ch notice was called into question. CBP is authorized to verify th e presumption of exportation it granted an exporting carrier of a T&E entry. Pursuant to the pr ocedures set forth in 19 C.F.R. § 18.7(c), “[w]henever the circum stances warrant, and occasionally in any event, port directors shall request the Office of Enforcement to check export entries . . . against the records of the exporting carriers. Such check or verification shall include an examination of the carrier’s records of cl aims and settlement of ex port freight charges and any other records which may relate to the transaction. The exporting carrier shall maintain these records for 5 years from the date of expo rtation of the mercha ndise.” 19 C.F.R. § 18.7(c)(emphasis added). A bonded carrier’s failure to ensure exportation or other lawful disposition of T&E merchandise exposes the carrier to liabilities for any nondelivery at the port of export ation. See id. at §§ 18.7(c) and 18.8. Any non-delivery of T&E merchandise is “presumed to have o ccurred while the merchandise was in the possession of carrier, unless conclusive ev idence to the contrary is produced.” 19 C.F.R. § 18.8(a); see al so Assessment of Liquidated Damages Under Carrier’s Bonds, 47 Fed. Reg. 2,086-01, 2,087 (Dep’t of Treasury Jan. 14, 1982 ) (final rule).Court No. 06-00434 Page 6 In addition to liability for payment of liquidated damages on the bond, the bonded carrier’s liability covers “any internal-revenu e taxes, duties, or other taxes accruing to the United States on the missing merchandise, together wit h all costs, charges, and expenses caused by the failure to make the required transportation, report, and delivery.” 19 C. F.R. § 18.8(c). Here, CBP conducted an audit under 19 C. F.R. § 18.7(c) to verify whether C.H. Robinson as the bonded carrier of t he subject entries exported the subject merchandise. CBP concluded that C.H. Robins on could neither show that the subject merchandise was nor otherwise account fo r the merchandise’s whereabouts. CBP therefore presumed that th e merchandise remained in the United States and determined that non-delivery of T&E merchandise had occurred for which C.H. Robinson was responsible. Accordi ngly, CBP made a demand on C.H. Robinson, pursuant to 19 U.S.C. § 1553 and 19 C.F.R. § 18.8(c), for payment of $106,407.86, plus interest, for duties owed on the subject entri es (“CBP’s duty demand”). Joint Ex. 23. CBP’s duty demand explained that C.H. Robi nson owed duties on the subject entries because “C.H. Robinson failed to insure that the goods were exported to Mexico” and, “[c]onsequently, the quota/visa-restricted me rchandise was diverted into the commerce of the United States, resulting in the loss of duties owed to the Government.” Id. CBP’s duty demand advised C.H. Robi nson that “this demand may be protestable pursuant to 19 U.S.C. § 1514.” Id. C.H. Robinson neither proteste d the demand nor paid the duties demanded. This action for collection of the unpaid duties ensued. Prior to trial C.H. Robinson moved to di smiss this case as a matter of law, denying legal liability for any dut ies, taxes, or fees owed on the subject entries. Def.’sCourt No. 06-00434 Page 7 Mot. to Dismiss, Mar. 30, 2007, ECF No. 19. In support of its motion to dismiss, C.H. Robinson argued that its responsibility for the subject entries was fully discharged when the subject merchandise was delivered to the Port of Laredo, as evidenced by the CF 7512s stamped upon arrival at that port. Id . at 7. C.H. Robinson contended that “any event that occurred subseq uent [to delivery in Laredo] is not actionable against the carrier.” Id. In denying C.H. Robinson’s motion the court ruled that as the bonded carrier of the subject entries, C.H. Robins on fulfilled its obligations under 19 C.F.R § 18.8 by providing acceptabl e proof of proper delivery of the subject merchandise at the Port of Laredo, i.e., by presenting date-stamped receipt copies of the subject CF 7512s. See Order Denying Mot. to Dismiss at 3, Nov. 20, 2007, ECF No. 32. However, the court further held that C.H. Robinson not only had to certify proper delivery, but was also responsible under t he regulatory scheme to account for “missing merchandise.” Id. The court subsequently clarified that the Government has “the burden of persuasion to establish by a preponderanc e of the evidence that the subject merchandise is ‘missing’ within the meaning of the regulation, or more simply that the merchandise was not exported as required.” Order Denying Def.’s Mot. in Limine at 2 (citing Tech Licensing Corp. v. Videotek, Inc., 545 F.3d 1316, 132 6-27 (Fed. Cir. 2008), Jan. 14, 2010, ECF No. 75. Although there is a regulatory presumption that a datestamped CF 7512 showing receipt of the in-bond manifest is acceptable proof of proper delivery, C.H. Robinson, as the bonded carrier , also had a duty to account for missing merchandise if audited under the verification pr ocedures of 19 C.F. R. § 18.7. Given these considerations, the c ourt noted that the Government could not open its case inCourt No. 06-00434 Page 8 chief “by simply resting with no proffer ot her than bare reliance on a regulatory requirement that Defendant a ccount for missing merchandise.” Id. at 3. Rather, the Government would have to rebut the presumption of proper delivery by proffering “as part of its case in chief ev idence of the verification proc edures undertaken pursuant to [the regulatory scheme] and their results that raised suspicions about the exportation of the merchandise, leading [the court] to c onclude that [the merchandise] was not exported.” Id. Dependi ng on the efficacy of the Government’s opening case, C.H. Robinson, in turn, would have to come forward with its own evidence and explanations to account fo r the potentially missing subjec t merchandise. A bench trial followed to determine whether the Governm ent could establish by a preponderance of the evidence that the subject merchandise was missing and therefore never exported. In an action tried upon the facts without a jury, “the court must find the facts specially and state its conclu sions of law separately.” US CIT R. 52(a)(1); see also 28 U.S.C. § 2645(a)(1). Based on the following fi ndings of fact and conclusions of law, the court adjudges C.H. Robins on liable for duties, taxes, and fees on the subject merchandise in the amount of $106,407.86, plus interest. II. Discussion A. Findings of Fact In late December 2001, Trans-Union Group Inc./Intercambio Comercial Ekim S.A. (“TUG”), the importer of record, ent ered the subject merchandise under cover of T&E entry numbers 609 203 744, 609 203 873, and 609 203 862 at the Port of Los Angeles. Joint Exs. 4-6. C.H. Robinson was designated by TUG as the bonded carrier for the subject entries. Tr. 457:24-459:8 (Munoz direct); Joint Ex. 3; see also Joint Exs.Court No. 06-00434 Page 9 4-6. At TUG’s request, C.H. Robinson wa s to transport the subject merchandise from the Port of Los Angeles for delivery to Inte rcambio Comercial Ekim SA/L.E. Forwarding & Freight Broker in Laredo, Texas 3 using Mario’s Transports Inc. (“Mario’s Transports”). Tr. 459:9-24; 471:18-22; 479:9-480:2 (Munoz direct); Joint Exs. 3-4, 7-11. Shortly after entry, the subject merchandise exited the Po rt of Los Angeles for Laredo and then its ultimate destination of Nuevo Laredo, Mexico . Pretrial Order, Schedule C (Uncontested Facts) ¶¶ 3, 11, and 19; Joint Exs. 4-6. TUG employed Mario Pena, Inc. (”Pena”), a licensed U.S. customs broker, to receive the subject merchandise in Laredo for exportation to Mexico. See Tr. 485:14-18 (Munoz cross); Joint Ex. 4. Pena received the T&E documents - the CF 7512s - for the subject entries, and on January 2 and 4, 2002, using an unmonitored stamp machine in the lobby of CBP’s export lot at the Po rt of Laredo, obtained a date stamp showing receipt of each of the three subject CF 7512 s covering the subject entries. Tr. 273:5-18 (Mario Pena, Jr. direct); Join t Exs. 4-6. Pena’s official log book shows a record of receipt for the CF 7512s for the subject entri es, but is blank for a corresponding date of exportation for each entry. Jo int Ex. 13; see Tr. 271:23-272:6 (Mario Pena, Jr. direct). Pena never brought the subject merchandise to the CBP export lot in Laredo, nor did Pena ever see, or take possession or deliver y of the subject merchandise. Tr. 273:5-14 (Mario Pena, Jr. direct). Morever, CBP nei ther physically inspected nor took possession

3 No entity by the name of In tercambio Comercial Ekim SA/ L.E. Forwarding & Freight Broker was authorized to re ceive bonded cargo during the time in question. Tr. 409:18- 412:3 (Ingalls direct).Court No. 06-00434 Page 10 of the subject merchandise at the Port of Laredo. Tr. 137:21-138:8 (Rodriguez direct); Joint Exs. 4-6. In March 2002, Officer O’Ruill David McCa nlas (“Officer McCanlas”) of CBP”s Office of Investigations, Fraud and Commerc ial Crimes Unit commenced an audit of C.H. Robinson, as the bonded carrier respons ible for the subject entries, to ensure compliance with CBP’s procedures for T&E ent ries. Tr. 25:10-24; 26:9-27:10; 41:21- 42:22 (McCanlas direct) and 51:17-20 (McCanl as cross). In response to Officer McCanlas’ request for proof that the subj ect entries had been exported to Mexico, C.H. Robinson produced a date-stamped receipt copy of the in-bond manifest – the CF 7512 – for each of the subject entries. Join t Exs. 4-6. C.H. Robinson also obtained from TUG and submitted to CBP three docum ents purporting to be Mexican import documents, known as “pedim entos” (“the C.H. Robinson pedimentos” or “subject pedimentos”), as proof of exportation of the subject entries. Tr. 42:23-43:13 (McCanlas direct) and 526:19-21 (Anderson re-d irect); Pl.’s Exs. 9-11. After receiving the subject pedimentos , Officer McCanlas contacted Jesus Alberto Fernandez Wilburn (“Fernandez Wilbur n”), Port Director at the Colombia Solidarity Bridge for Mexican Customs, Nuevo Leon, Mexico, which shared operations with the Port of Nuevo Laredo, requesting that Mexican Customs verify the authenticity of the three subject pediment os. Tr. 44:20-45:9 (McCanlas direct); Pl.’s Ex. 15. A search of Mexican Customs’ electroni c database revealed that the unique numbers on each of the subject pedimentos did not match the numbers for any pedimento in that database, nor was there any evidence of the existence of the subject pedimentos. Tr. 328:10-329:10 (Fernandez Wilburn direct). Moreover, the f our digit broker code forCourt No. 06-00434 Page 11 the customs broker listed on the subject pedimentos did not match the name of the customs broker associated with that c ode. Tr. 329:20-331:2 (Fernandez Wilburn direct). Lastly, the inspection stamps on each of the subject pedimentos indicated a road-check inspection in the interior of Mexico that pre-dated the purported date of entry of the subject merchandi se into Mexico, Tr. 332:6-22 (Fernandez Wilburn direct), and pre-dated the date st amp signifying payment of Mexi can import duties. Tr. 335:6- 14 (Fernandez Wilburn direct). The court heard testimony from Rudolfo Torres Herrera (“Torres Herrera”), who served in various positions for Mexican Cust oms prior to his curre nt appointment as the Assistant Commissioner for post imports. He is well versed in the Mexican importation system, including the use of pedi mentos, and was designated as an expert at trial. Tr. 164:7-22 (Torres Herrera direct ) and 206:20-207:14 (Torres Herrera direct). He testified that on valid pedimentos in spection stamps must alwa ys post-date bank stamps because Mexican customs duties must be deposited with a bank pr ior to entry of merchandise into Mexico. Tr. 184: 14-21 (Torres Herrera direct). Torres Herrrera also testified that, in September 2009, in response to another request from CBP to verify the validity of the subject pedimentos, he performed a detailed analysis of the informa tion contained in those pedim entos. Pl.’s Exs. 41-43. A search of Mexican Customs’ electr onic database for information on the unique pedimento numbers corresponding to each of the subject pedimentos revealed no information regarding the numbers corre sponding to these three pedimentos. Tr. 179:13-180:2 (Torres Herrera direct). A further search of the Mexican Customs’ electronic database for the name and broker license number of th e Mexican customsCourt No. 06-00434 Page 12 broker listed on each of the pedimentos rev ealed that there was no broker in that database matching the name and broker licens e number set forth on the subject pedimentos. Tr. 181:16-182:2 (Torres Herrera dire ct). That search, however, did reveal that the customs br oker license number provided on t he subject pedimentos belonged to a customs broker other than the broker listed on t hose pedimentos. Tr. 182:2-6 (Torres Herrera direct). Mo reover, the search revealed that the Mexican Customs’ electronic database had no record of a rela tionship between the importing company listed on the subject pediment os and either the named custom s broker or the customs broker whose license number appeared on thos e pedimentos. Tr. 182:20-183:5 (Torres Herrera direct). The results of these sear ches confirmed the results of CBP’s March 2002 inquiry. The Torres Herrera investigation also show ed that the tax identification number – a unique number assigned to all persons or entities doing busin ess in Mexico – listed on the subject pedimentos for the Mexican cu stoms broker was not in the Mexican electronic taxation database. Tr. 181:17-182:1; 183:6-184:5-7 (T orres Herrera direct). He thus concluded that the listed tax iden tification number was not valid. Id. The Torres Herrera investigation further reveal ed that the population registry number – a unique 18-digit number assigned to all Mexi can nationals upon birth – listed for the Mexican customs broker on t he subject pedimentos did not contain the required number of digits for population regi stry numbers and was identical to the tax identification number listed on the subject pedimentos. Tr. 183:7-184:7 (Torres Herrera direct). The investigation also demonstr ated that the bank listed on the subject pedimentos as having received payment of the duties owed on the entries of the subject merchandiseCourt No. 06-00434 Page 13 did not engage in any transaction with the importing company lis ted on the subject pedimentos. Tr. 184:8-185:11 (Torres Herrera direct). Finally, Mexican Customs’ electronic database did not cont ain any record of import transactions involving the importing company listed on the subject pedimentos during the period 2001-2002. Tr. 185:12-21 (Torres Herrera direct). Torres Herrera also testified about the lik elihood that cargo accompanied by the subject pedimentos could have passed legally through Mexican Customs into Mexico. According to Torres Herrera, all information listed on a pedimento is included in a bar code appearing at the center of the document, Tr. 169:18-170:8 (Torres Herrera direct), and all cargo entering Mexico must pass through a series of checkpoints where Mexican Customs visually examines eac h pedimento and the bar code is scanned for verification against Mexican Customs’ elec tronic database. Tr. 190:16-195:13 (Torres Herrera direct). He indicat ed that there are th ree check points in the enclosed Mexican Customs’ compound in the Po rt of Nuevo Laredo through wh ich all truck cargo must pass upon crossing the U.S./Mexico border. Id. At the first inspection booth, a Mexican Customs official scans the bar code. If the pedimento is not in Mexican Customs’ electronic database, Mexican Customs w ould seize the subject merchandise. Tr. 191:13-24 (Torres Herrera direct). At the second inspecti on booth, which is operated by a private company, the bar code is scanned again to verify the results of the first scan. Tr. 19 1:25-193:25 (Torres Herrera direct). If the pedimento is not in Mexican Customs’ electronic database, the s ubject merchandise would be seized. Id. At the third check point, the pedi mento is visually inspected for a final time before cargo is permitted to leave the compound. Tr. 194:2-19 (Torres Herrera direct). AnyCourt No. 06-00434 Page 14 discrepancy or irregularity f ound in the pedimento during the three stage check-point process would lead to a physical inspection and/ or seizure of the cargo, and all such inspections or seizures would be register ed in Mexican Customs’ electronic database. Tr. 191:13-194:14 (Torres Herrera direct); Tr. 341:12-16 (Fernandez Wil burn direct). In addition to the three check points at the Mexican Custom s’ compound in Nuevo Laredo, cargo traveling by road to the interior of Mexi co is subject to a fourth check point located 20 kilometers from the U.S./Mexico border. At this fourth ch eck point, operated by Mexican military, federal, and/ or state police, each pedim ento is examined and the bar code is again scanned. Tr. 194:12-19 (Torre s Herrera direct). If any discrepancy is identified, the subject merc handise would be seized. Tr. 191:13-194:19 (Torres Herrera direct). Torres Herrera testified that, in his ex perience, illegal entr y (smuggling) of merchandise into Mexico is most often ac complished by using pedimentos that, unlike the subject pedimentos, are valid in all respects except for the listed country of origin. He testified that in those cases, but for t he country of origin, th e information contained on the face of the pedimento would matc h that found in the Mexican Customs’ electronic database so as to minimize the ri sk of suspicion during the importation checkpoint process. Tr. 195:17-196:17 (Torres He rrera direct). Because the subject pedimentos contained numerous discrepancies that were unver ifiable by a search of official Mexican electronic databases and because the subject pedimentos contained information whose falsity could have been a scertained by a visual inspection of a trained Mexican Customs official, Torres Herre ra concluded that, in his expert opinion, the subject pedimentos were not valid Mexican import docu ments, Tr. 179:3-11 (TorresCourt No. 06-00434 Page 15 Herrera direct), and that any cargo accom panied by these pedimentos could not have passed into the territory of Mexico undetec ted by Mexican Custom s. Tr. 190:18-195:13 (Torres Herrera direct). A ccordingly, in his expert opini on, the merchandise purported to have been imported into Mexico using the subject pedimentos never entered Mexico. Tr. 189:24-190:15 (Torres Herrera direct). Pursuant to the procedures in place in 2002, Mexican Customs would have seized cargo whose pedimentos did not appear in Mexican Customs’ electronic database. Tr. 341:12-16 (F ernandez Wilburn direct ). While there is no evidence of the subject pedimentos in Mexican Customs’ electronic customs database, Tr. 179:18- 180:2 (Torres Herrera direct) and 328:10-329: 10 (Fernandez Wilburn direct), there is also no record of a seizure of the subject merchandise by Mexican Customs. See Pl.’s Ex. 15; Tr. 58:14-59:3 (McCanlas cross) and 327:8-18 (Fernandez Wilburn direct). In response to the Government’s case in chief, C.H. Robinson relied on the three date-stamped CF 7512s for the subject entries; the subject pedimentos; the driver hand tags and freight bills for transport of the subject merchandise; and Pe na’s official log book as evidence regarding the final dispositi on of the subject entries. Pl.’s Exs. 19 and 22. While C.H. Robinson demonstrated proof of delivery of the subject merchandise at the Port of Laredo, in accor dance with 19 C.F.R. § 18.8(c), by submitting the three datestamped CF 7512s, see Order Denying Mot. to Dismiss at 3, no information contained on the face of the three CF 7512s provides any indication of the exportation or nonexportation of the subject merchandise after its presumed arrival at the Port of Laredo, see Joint Exs. 4-6; Tr. 32: 19-33:9 (McCanlas direct) and 87: 9-89:20 (Lopez direct). The same can be said for the driver hang tags and the freight bills for the transport of theCourt No. 06-00434 Page 16 subject merchandise, Pl.’s Ex. 19; Tr. 90:2-92: 23 (Lopez direct), and the official Pena log book, Joint Ex. 13; Tr. 268:12-22; 272:14-24 (Mario Pena, Jr. direct). Although C.H. Robinson m ade efforts to provide additional evidence of the disposition of the subject merchandise after it s purported arrival at the Port of Laredo, those efforts proved to no avail. In early November 2004, Gordon Anderson (“Anderson”), Vice President of C.H. Robins on’s brokerage operations during the time in question, sent an email message to Donald Munoz (“Munoz”), the account manager at C.H. Robinson responsible for the subject entrie s. Joint. Ex. 18. In this email message, Anderson asked Munoz to locate any re cords demonstrating that the subject merchandise had been exported to Mexico. Id.; Tr. 460:10-461:3 (Munoz direct). C.H. Robinson’s search for proof of export included attempts to locate “Customs documents, financial receipts, Mexican carrier and or broker proof of export, paperwork showing arrival into the plant in [M]exico, etc.[,] ... documents from the truckers used[,] [including] drivers log [and] other docum entation showing delivery was made ... [and] any sort of financial trail, to include P.O.’ s and method of payment and confirmation of funds received by [the] custom er for [the] transaction[,] [a s well as] warehouse ledger info, [and] proof of delivery to receiving party ... [and any in formation from the] party in Mexico [who] was responsible for cleari ng Mexican Customs.” Joint Ex. 18. C.H. Robinson’s internal efforts failed to lo cate any such records or any other evidence that the subject merchandise ha d left the territory of the Un ited States. Id.; Tr. 492:6- 493:22 (Munoz re-direct) and 526:19-21 (Anderson re-direct). C.H. Robinson, through Munoz, contacte d TUG to obtain additional proof of exportation in 2004. See Join t Ex. 18. However, TUG never provided any proof (otherCourt No. 06-00434 Page 17 than the subject pedimentos at the time of the original tr ansaction) to C.H. Robinson that the subject merchandise was exported to Mexico. Joint Ex. 18; see also Tr. 491:17-20; 493:12-22 (Munoz re-d irect). C.H. Robinson was also unable to obtain a financial trail for the subject merchandise, such as purchase orders, methods of payment, confirmation of a funds transfer by TUG, information from a warehouse ledger showing that the subject merchandise had sh ipped, documentati on from the Mexican customs broker, proof of delivery to the receiving party in Mexico or similar documentation, showing that the subject merchandise was re ceived in their warehouse, nor was C.H. Robinson able to locate a record of any taxes or fees paid by TUG to its Mexican customs broker for services of cl earing Mexican Customs. Tr. 492:11-493:11 (Munoz re-direct). C.H. Robinson also fa iled to present any evidence, including a driver’s log from Mario’s Transports, to dem onstrate delivery of the subject merchandise in Mexico. Lastly, C.H. Robinson pres ented no evidence demonstrating that, pursuant to Customs’ regulations, another party reliev ed it of its responsibility to export the subject merchandise. C.H. Robinson never r eplaced or cancelled the subject entries with immediate exportation or consumption entries. Pr etrial Order, Schedule C, Uncontested Facts ¶¶ 8, 16, & 24. The court notes that, throughout the five-year history of this litigation up through the time of trial, C.H. Robinson had prof erred the subject pedimentos (obtained from TUG) as proof of exportation. At trial, however, C.H. Robinson conceded that the subject pedimentos were not genuine document s and could not be verified in Mexican Customs’ electronic database. Tr. 18:18-19:24 (Peterson openi ng statement); see also Def.’s Proposed Concls. of L. ¶ 20 (“C.H. Robi nson does not deny t hat the pedimentosCourt No. 06-00434 Page 18 were not genuine.”) and ¶ 35 (“[T]he invali d pedimentos which C.H. Robinson presented to Customs did not constitute acceptable proof of exportation . . . .”). At that point, C.H. Robinson sought to create an infer ence that the subject merchandise was smuggled into Mexico. Tr. 19:6-16 (Peterson opening statement). De spite its efforts, C.H. Robinson presented no evidence (direct or circumstantial) that would lead to the inference that the subject merchandise was smuggled into Mexico. To the contrary, the subject pedimentos, in the expert opinion of Torres Herrera, were more likely than not evidence of diversion of the subject merc handise into the commerce of the United States rather than evidence of smuggling into Mexico. Tr. 201:19-24 (Torres Herrera direct). Critically, the dispos ition of the subject merchandise after its purported arrival at the Port of Laredo remains unknown to C.H. Robinson, and C.H. Robinson presented no evidence nor anyone with personal knowle dge of the whereabout s of the subject merchandise. There is no direct evidence as to t he whereabouts of the subject merchandise. However, the Government presented docum entary evidence and the credible testimony of several lay witnesses, including Office r McCanlas and Fernandez Wilburn, along with the credible testimony of its expert, Torres Herrera, that a llows the court to draw a reasonable, if not strong, infe rence that the subject pedim entos were not valid Mexican import documents, a fact ultima tely conceded by C.H. Robins on. The record before the court and the credible testimony of these witnesses, in particu lar that of Torres Herrera, further allows the inferenc e that the subject merchandise could not have been imported into Mexico using the subject pedimentos. Those pedimentos would not have been validated by an inspection of Mexican Cust oms’ electronic database and would not haveCourt No. 06-00434 Page 19 passed visual scrutiny by Mexican Customs offici als. Therefore, the court finds that the subject merchandise is missing. Additionally, the documentat ion that C.H. Robinson provided during the audit process to CBP, as well as at trial, did not establish (a) exportati on out of the United States, (b) entry into the co mmerce of the United States along with payment of duties, (c) warehousing, or (d) transfer to another carrier for exportati on of the subject merchandise. The record before the court and, in particular, the cr edible testimony of Defendant’s two witnesses, Anderson and Munoz, further demonstrates C.H. Robinson’s inability to proffer, no less obtain evidence (other than the datestamped CF 7512s and the subject false pedim entos) that accounts for the subject merchandise. Therefore, the court finds C.H. Robinson was unable to account for that merchandise in accordance with 19 C.F.R. § 18.8(a). B. Conclusions of Law As explained above, merchandise seeking to pass through U.S. ports for export without appraisement or payment of duty is ent ered at the port of a rrival under cover of a T&E entry. See 19 C.F.R. § 18.20(a). The statutory and regul atory framework imposes various responsibilit ies and deadlines fo r the handling of a T&E entry. Among them, T&E merchandise must be transported from the port of arrival by a bonded carrier, 19 U.S.C. § 1553(a); 19 C.F.R. § 18.20(a), and must be delivered to CBP at the port of destination within 30 days of receipt by the bonded carrier at the port of arrival (if transported on land). 19 C.F. R. § 18.2(c)(2). Within no more than two working days after arrival of any portion of the merchandi se at the port of de stination, the bonded carrier must notify CBP of such arrival by surrendering the in-bond manifest (CF 7512).Court No. 06-00434 Page 20 19 C.F.R. §§ 18.2(d) and 18.7(a). The final dispositi on of the merchandise – either exportation or official entry into U.S. commerce or warehouse – must then be effected within 20 days of the notice of arrival. See 19 C.F.R. § 4.37(b). A bonded carrier’s failure to comply with any of these procedure s exposes the carrier to the liabilities set forth in 19 C.F.R. § 18.8. See 19 C.F.R. §§ 18.2(c)(2), 18.2(d), 18.7(a), and 18.8(a); see also id. at § 4.37(b). Additionally, a bonded carrier responsible for a T&E entry is subject to postexportation audit by CBP “[w]henever the ci rcumstances warrant, and occasionally in any event.” 19 C.F.R. § 18.7( c). Post-exportation audits are designed to “check export entries and withdrawals against the records of the exporting carriers” and “shall include an examination of the carrier’s records of claims and settlement of export freight charges and any other records which ma y relate to the transaction.” Id. When CBP determines that merchandise co vered by a T&E entry is missing or unaccounted for, the non-delivery is ‘presumed to have occurred while in the carrier’s possession, and therefore, the carrier is treated by [CBP] as being responsible for that loss [such that CBP] will collect from t he carrier duty on the missing merchandise.” Assessment of Liquidated Damages Under Carrier’s Bonds, 47 Fed. Reg. 2,087. A bonded carrier’s liabilities for any mi ssing T&E merchandise include liquidated damages on the bond, 19 C.F.R. § 18.8(b), as well as “any internal-revenue taxes, duties, or other taxes accruing to the United Stat es on the missing merchandise.” Id. at § 18.8(c). When audited pursu ant to 19 C.F.R. § 18.7, a bonded carrier’s failure to account for the exportation of merchandise cove red by a T&E entry is a legally sufficient basis for the imposition of duties under 19 C. F.R. § 18.8(c). See 19 C.F.R. §§ 18.7(c)Court No. 06-00434 Page 21 and 18.8(c); Order Denying Mot. to Dismiss at 3. The Government may collect duties pursuant to 19 U.S.C. § 1592(d) , or alternatively under 19 U.S.C. § 1553 and 19 C.F.R. § 18.8(c). Order Denying Mot. to Dismiss at 2-3. The allocation of legal responsibility for the subject entries in this action is governed by the regulatory fram ework applicable to a T&E entry. See Joint Exs. 4-6; see also Joint Ex. 13. Against this fram ework, each subject date-stamped CF 7512 showing receipt of the in-bond manifest enjoys a presumption that it is proof of proper delivery of the subject merchandi se by C.H. Robinson. Order Denying Def.’s Mot. in Limine at 3. However, C.H. Robinson’s obligations under 19 C. F.R. § 18.8(c) go beyond the certification of proper delivery of the merchandise covered by the subject entries to include a responsibility to account for missing merchandise. Order Denying Mot. to Dismiss at 3. Despite C.H. Robins on’s arguments to the contrary, there is no statute or regulation that imposes a burden on the Go vernment to search for or establish the location of missing merchandise. As the bonded carrier responsible for the subj ect entries, C.H. Robinson, has a duty to ensure that the subject merchandise was time ly exported out of t he United States or lawfully entered into U.S. co mmerce or warehouse. See Or der Denying Def.’s Mot. to Dismiss; see also 19 U.S.C. § 1553(a); 19 C.F.R. §§ 18.7(c) (providing for audit of “exporting carriers” (emphasis added)) and 18.8(a)). Had C.H. Robinson wanted to expose itself only to li ability for transporting the subject merchandise from one port to another, without needing to ensure the proper exportation of the merchandise, it could have done so by using an immediate transportation without appraisement entry. See 19 U.S.C. § 1552; 19 C.F.R. §§ 18.11-18.12. Before delivering the merchandise toCourt No. 06-00434 Page 22 another carrier for exportation, C.H. Robinson could then have ensured that the new carrier filed an Entry for Exporta tion, see 19 C.F. R. §18.25, making the new carrier liable in the event that the new carri er failed to export the merchandise. Alternatively, C.H. Robinson could have had the merchandi se entered into a warehouse or for consumption. See 19 C.F.R. § 18.23(b). C.H. Robinson chose none of these options. Rather, by permitting itself to remain the carrier of the subject merchandise entered under a T&E entry, it would seem obvious t hat C.H. Robinson was responsible for ensuring the exportation of the subject merchandise. It is equally obvious that by failing to do so C.H. Robinson made itself liable for any violations that may have occurred relating to the exportation of that merchandise. To recover taxes, duties, and fees accruing to the Unit ed States, the Government bears the burden to prove, by a preponderance of the evidence, that the subject merchandise is “missing.” Order Denying Def.’s Mot. in Limine. Proof by a preponderance of the evidence requires the court, as the trier of fact, “to believe that the existence of a fact is more probable than its nonexistence.” Bosies v. Benedict, 27 F.3d 539, 542 (Fed. Cir. 1994) (citing In re Winshi p, 397 U.S. 358, 371-72 (1970) (Harlan, J., concurring)). In this action the Government has est ablished that the subject merchandise is missing, and C.H. Robinson, in turn, has fa iled to account for that missing subject merchandise. The court concludes on the record before it that it is more probable than not that the subject merc handise was not exported, as required by statute and regulation. Consequently, pursuant to 19 U.S.C. § 1553 and 19 C.F.R. § 18.8(c),Court No. 06-00434 Page 23 C.H. Robinson is liable for “any internal-re venue taxes, duties, or other taxes accruing to the United States” on the missing subjec t merchandise in the am ount of $106,407.86. III. Conclusion For the foregoing reasons, the Government has established that C.H. Robinson did not export or otherwise account for the subject merchandise and that the Government is therefore entitled to a judg ment for unpaid duties on the subject entries in the amount of $106.407.86, plus interest. In early March 2004, C.H. Robinson paid CBP $57,212 as settlement of the liquidated damages clai ms related to the subject entries. Comp. ¶ 15. Subsequently, the Government admitted that the maximum amount of liquidated damages ow ed by C.H. Robinson was cap ped at the amount of the bond on the subject entries, i.e., $25,000. Id. at ¶ 18; see also C.H. Robinson Int’l v. United States, 64 Fed. Cl. 651, 660 (2005) Consequently, in seeking its requested relief, the Government acknowledges that a judgment in its favor should be offset by any overpayment in liquidated damages by C.H. Robinson on those entries. Comp. at Prayer for Relief. Additionally, the Government seeks pre-judgment interest on the unpaid duties. The award of pre-judgment inte rest is within the sound discretion of the court based on considerations of equity and fairness. See United States v. Imper ial Food Imports, 834 F.2d 1013, 1016 (Fed. Cir. 1987) (c iting United States v. G oodman, 6 CIT 132, 140-41, 572 F. Supp. 1284, 1290 (1983)). The purpose behi nd pre-judgment interest is to make the Government whole by reimbursing it for what in effect amounts to an interest-free loan to Defendant. Id. Pre-judgment interest shall run from the dat e of Customs’ final demand for payment, September 21, 2006, to t he date of judgment, see United StatesCourt No. 06-00434 Page 24 v. Yuchius Morality Co., 26 CIT 1224, 1240-41 ( 2002), at the rate pr ovided in 28 U.S.C. § 2644 and in accordance with 26 U.S.C. § 6621, see United States v. Golden Gate Petroleum Co., 30 CIT 174, 182-83 (2006) (cit ing Goodman, 6 CIT at 140, 572 F. Supp. at 1290). In this action, there has been no unreasonable delay on the part of the Government, and therefore, equity favors awarding the Government pre-judgment interest to compensate the Government for t he loss of use of the unpaid duties. Finally, the Government is awarded post-judgment inte rest based on the same considerations of equity and fairness and shall be calculated at a rate in accordance with 28 U.S.C. § 1961. See Golden Gate Petroleum, 30 CIT at 183 n.9 (citing G oodman, 6 CIT at 140- 41, 572 F. Supp. at 1290). Accord ingly, the parties are hereby ORDERED to file, on or before November 20, 2012, a joint proposed judgment in conformity with this opinion taking into a ccount any overpayment in liquidated damages by C.H. Robinson on the subjec t entries; and it is further ORDERED that if the parties are unable to reach agreem ent on a joint proposed judgment, each party shall file its own proposed judgment on or before November 20,
2012.

/s/ Leo M. Gordon Judge Leo M. Gordon

Dated: November 7, 2012 New York, New York