# United States **Court of Appeals** 
**for the Federal Circuit**

______________________

FORD MOTOR COMPANY, Plaintiff

- Appellant,

v.

UNITED STATES, Defendant

- Appellee.

______________________

2012

- 1186

______________________

Appeal from the United States Court of International

Trade in No. 03

- CV

- 0115, Senior Judge Judith M. Barz ilay.

______________________

Decided: May 3, 2013

______________________

S TEPHANIE A. D OUGLAS , Bush Seyferth & Paige PLLC,

of Troy, Michigan, argued for plaintiff

- appellant. Of

counsel on the brief were R OBERT B. S ILVERMAN

, N ED H.

M ARSHAK

, J OSEPH M. S PRARAGEN and F RANCES P.

H ADFIELD , Grunfeld, Desiderio, Lebow itz, Silverman & Klestadt, LLP, of New York, New York. Of counsel wa s P AULSEN K. V ANDEVERT , Ford Motor Company, of Dea rborn, Michigan.

E DWARD F. K ENNY , Trial Attorney, Commercial Lit igation Branch, Civil Division, United States Depart me ntFORD MOTOR CO v. US 2

of Justice

, of New York, New York, argued for d e fen d ant

appellee. Of counsel on the brief were S TUART F. D ELERY

, Actin g Assistant Atto r ney Ge n eral, J EANNE E. D AVIDSON

, Dire c tor; B ARBARA S. W ILLIAMS , Attorney in Charge,

Intern a tional Trade Field Office, New York, New York.

Of counsel was B ETH C. B ROTMAN , Office of Assi s tant Chief Counsel, International Trade Litigation, U ni t ed States Customs and Border Protection, of New York, New

York.

______________________ Before N EWMAN

, P ROST and R EYNA

, Circuit Judges

. Opinion for the court filed by Circuit Judge R EYNA

. Dissenting opinion filed by Circuit Judge N EWMAN

.

R EYNA

, Circuit Judge

. Ford Motor Company (“Ford”) appeals from a final judgment of the Court of International Trade (the “Trade Court”) upholding the denial by the U.S. Customs and Border Protection (“Customs”) of Ford’s claims for post

entry duty refunds. See Ford Motor Co. v. United States (“ Ford III ”) , 800 F. Supp. 2d 1349 (Ct. Int’l Trade 2011). We agree with the Trade Court that 19 U.S.C. § 1520(d) requires Ford to file the relevant certificates of origin (“COs”) within one year, and that its failure to do so could not be excused by 19 C.F.R. § 10.112. Nevertheless, because Customs has failed to adequately explain why it
treats post

- entry claims for refunds under § 1520(d) differently depending on whether they were filed on paper or through the reconciliation program, 1 we vacate the Trade Court’s judgment and remand for further procee dings.

1 As we discuss below, the reconciliation program is an alternative means of filing post

- entry NAFTA refund claims under § 1520(d).FORD MOTOR CO v. US 3

B ACKGROUND

A

The North American Free Trade Agreement (“NAFTA”) seeks to “eliminate barriers to trade in, and
facilitate the cross

- border movement of, goods and se rvices between” the United States, Canada, and Mexico. NAFTA art. 102(1). One way in which it accomplishes this is by allowing NAFTA origin qualifying goods to enter into the United States duty free. See NAFTA art. 502. To obtain this preferential tariff trea tment, an importer

must:

a) make a written declaration, based on a valid Certificate of Origin, that the good qualifies as an originating good;

b) have the Certificate in possession at the time the declaration is made; [and]

c) provide, on the request of [ Customs], a copy of

the Certificate . . . .

NAFTA art. 502(1). The NAFTA also provides a mech anism by which parties who, for whatever reason, do not seek preferential treatment on entry may nevertheless

obtain it later:

Each Party shall provide that, wh ere a good would have qualified as an originating good when it was imported into the territory of that Party but no claim for preferential tariff treatment was made at that time, the importer of the good may, no la ter than one year after the date on which the good was imported, apply for a refund of any excess d uties paid as the result of the good not having been accorded preferential tariff treatment, on prese ntation of:

a) a written declaration that the good qualified as an originating good at the time of importation;FORD MOTOR CO v. US 4

b) a copy of the Certificate of Origin; and

c) such other documentation relating to the impo rtation of the good as that Party may require.

NAFTA art. 502(3). Congress codified this provision in § 1520(d):

Customs Service may, in accordance w ith regul ations prescribed by the Secretary , reliquidate an entry to refund any excess duties . . . paid . . . for which no claim for preferential tariff treatment was made at the time of importation if the i mporter, within 1 year after the date of importa tion

, files, in accordance with those regulations, a claim

that includes

— (1) a written declaration that the good qualified under the applicable rules at the time of impo rtation;

(2) copies of all applicable NAFTA Certificates of Origin (as defined in sect ion 1508(b)(1) of this title), or other certificates or certifications of origin, as the case may be; and

(3) such other documentation and information r elating to the importation of the goods as the Customs Service may require.

19 U.S.C. § 1520(d) (emphases added). The requirements of the statute are essentially identical to the requirements set forth in the NAFTA. Pursuant to this statute, Cu stoms has promulgated regulations setting forth the proc edures for filing post

- entry claims for refunds an d requiring additional documentation:

A post

- importation claim for a refund shall be filed by presentation of the following:

(1) A written declaration stating that the good qualified as an originating good at the time ofFORD MOTOR CO v. US 5

importation and setting forth the number and date of the entry covering the good;

(2) Subject to § 181.22(d) of this part, a copy of each Certificate of Origin . . . pertaining to the good;

(3) A written statement indicating whether or not the importer of the good provided a copy of the

en try summary or equivalent documentation to any other person. . . .

(4) A written statement indicating whether or not the importer of the good is aware of any claim for refund, waiver, or reduction of duties rela ting to the good within the meaning of Artic le
303 of the NAFTA . . . .

(5) A written statement indicating whether or not any person has filed a protest or a petition or request for reliquidation relating to the good under any provision of law . . . .

19 C.F.R. § 181.32(b). In addition to the two documents specified in the statute, these regulations require three

additional written statements.

As is evident from the above, the treaty, statute, and regulations each require that a post

- entry claim for r efund of duties must be filed within one year of import ation and must include the relevant COs. The regulations provide a penalty for late filing: a claim may be denied “if the claim was not filed timely, if the importer has not complied with the requirements of [19 C.F.R. §§ 181.31

- .33, or] if th e Certificate of Origin . . . cannot be accepted as valid . . . .” 19 C.F.R. § 181.33(d). Similarly, “[i]f the importer fails to comply with any requirement under this
part, including submission of a Certificate of Origin

. . . , the port director may de ny preferential tariff treatment to the imported good.” 19 C.F.R. § 181.23(a) (emphasisFORD MOTOR CO v. US 6

added); see also 19 C.F.R. § 181.31 (stating that Customs may refund duties subject to § 181.23).

Although Customs may deny claims when the rel evant COs are not filed within one year, this requirement may be waived. See NAFTA art. 503(c) (“[A] Certificate of Origin shall not be required for . . . an importation of a good for which the Party into whose territory the good is imported has waived the requirement for a Certificate of Origin[.]”). Customs has waived the requirement to present certificates for:

(i) An importation of a good for which the port d irector has in writing waived the requirement for a Certificate of Origin because the port d irector is otherwise satis fied that the good qual ifies for preferential tariff treatment under the NAFTA;

(ii) A non

- commercial importation of a good; or

(iii) A commercial importation for which the total value of originating goods does not exceed US$2,500 . . . .

19 C.F.R. § 181.2 2(d)(1). This court has acknowledged § 181.22(d)(1) as an exercise of Customs’ waiver power, concluding that although no reference to waiver appears in § 1520(d), the regulations provide for waiver either under 19 C.F.R. § 181.22(d)(1) or via the reconcil iation

program. Ford Motor Co. v. United States (“ Ford II ”) , 635 F.3d 550, 555

- 56 (Fed. Cir. 2011). Indeed, Customs’ power to waive the timely filing of COs was one of the grounds this court relied on in determining that the filing of COs was not a juris dictional requirement. See id. at

557.

B

In addition to the waiver provisions found in § 181.22, Customs has implemented the NAFTA’s waiver authorityFORD MOTOR CO v. US 7

via the “reconciliation program.” 2 This program is sep arate from, but coexists with, the procedures described above for obtaining refunds under § 1520(d). Any impor ter may apply to participate in the program. The only requirements are (1) that participants file entry summa ries through the Automated Broker Interface (“ABI”) and (2) that participants pos sess adequate bond coverage. Millions of entries have been processed through the

program.

The reconciliation program was developed through a series of notices in the Federal Register over a period of

many years. E.g. , Announcement of National Customs Automation Program Test Regarding Reconciliation, 62 Fed. Reg. 5673 (Feb. 6, 1997). Customs publishes a compliance guide (“the Guide”) that consolidates info rmation about the program. See ACS Reconciliation Prot otype: A Guide to Compliance, available at http://www.cbp.gov/linkhandler/cgov/trade/trade_program s/reconciliation/reference_desk/acs_recon_guide.ctt/acs_re con_guide.pdf . The Guide is perhaps the best single source for information about the program.

The reconciliation program is designed to addre ss the problem that at the time of importation, certain info rmation might not yet be known. According to the Guide,

More and more transactions involve final adjus tments to an import price that may not be known until months after the merchandise is purch ased and imported. Filers and ports previously made their own special arrangements to reduce the a dministrative burden of such adjustments. Howe v2 T his program is also known as the “reconciliation prototype.” The parties have used the terms “reconcili ation prototype ” and “reconciliation program” interchang eably. For consistency, t his opinion will use the term

“ reconciliation program. ”FORD MOTOR CO v. US 8

er, these local, informal versions of “reconcili ation” were problematic because they varied a great deal from place to place, often had no legal basis, and lacked adequate financial co n trols.

Id. at 4. Relevant to this appeal, one such piece of info rmation is the NAFTA origin eligibility of an imported

item. Id. at 12. This is especially true in the case of go ods that involve high numbers of inputs and components, such as automotive goods. Indeed, the reconciliation program was established to facilitate trade in goods important to NAFTA trade, such as the automotive sector.

Filing a NAFTA claim under the recon ciliation pr ogram requires two steps: flagging the entry summary and filing the reconciliation. Id. at 9. In the flagging step, participants file entry summaries as they normally would through the ABI. Each entry submitted through the ABI can be flagge d for reconciliation in up to four categories. One of those categories indicates that the importer desires
a post

- entry refund of duties pursuant to § 1520(d). The portions of each entry that are not flagged for reconcili ation may be liquidated independe ntly of those that are flagged, and may be protested separately. The flagged portions remain open and outstanding.

The second step of the reconciliation process is the fi ling of reconciliations. A reconciliation finalizes outstan ding information assoc iated with previously flagged entries. As in § 1520(d) and § 181.31, NAFTA reconcili ations

— that is, reconciliations that seek to finalize a post

entry claim for refund under § 1520(d)

— must be filed within one year of the import date. They also must co nta in the three additional certifications required by § 181.32(b)(3)

- (5). Compare Guide at 67, with § 181.32(b)(3)

- (5). Importantly, however, Customs has waived the requirement that the COs must be filed within one year of importation. See Modification of Nat’l Cu s-FORD MOTOR CO v. US 9

toms Automation Program Test Regarding Reconciliation, 62 Fed. Reg. 51181, 51182 (Sept. 30, 1997); Guide at 12.

C

With this background in mind, we turn to the facts of the instant case. Ford imports large numbers of autom otive goods into the United States, many of which qualify for duty free entry under the NAFTA. Following the initial implementation of the NAFTA, it took several years for Ford and other automotive importers to develop a process for generating COs in advan ce of shipment in order to claim NAFTA preference at the time of entry. As a result, by April 27, 1998, Ford had filed over 2000 post

entry claims for refunds of duties paid on NAFTA

- eligible goods.

Prior to the introduction of the reconciliation pr ogr am, there was no paperless process for submitting the high volume of claims that producers such as Ford were required to submit. Because Ford was involved in the development of the reconciliation program, it was aware that such a system would eventually b e put into place. In the interim, Ford attempted to work with the various ports of entry to develop a process for the electronic submission of § 1520(d) claims under which the requir ement to file COs within one year would be waived. Some ports allowed Ford to make post

- entry claims without submitting the COs. Ford attempted to obtain a similar agreement with the port of Detroit, but no agreement was reached. Nevertheless, for a period of time Ford believed that the Detroit port had authorized it to subm it claims electronically. As a result, Ford filed over 600 post

- entry claims for refund electronically without submitting a hard copy CO.

This case concerns transactions in which Ford i mported goods, paid the tariffs, and later filed a claim for
refund. In the transactions at issue, Ford filed its claim
before the one

- year deadline but did not file the corr e-FORD MOTOR CO v. US 10

sponding COs until after the deadline. The parties have agreed to use one entry, No. 231

- 2787386

- 9 (“the Entry”),
as a test case for these transacti ons. The Entry was imported into the United States on June 27, 1997, via the Detroit port of entry. Ford did not assert at the time of entry that its goods were eligible for preferential trea tment under the NAFTA. Ford electronically filed post

entry duty refund claim number 3801

- 98

- 351235 on May 13, 1998, less than one year after the date of importation, asserting that it was entitled to reliquidation and a duty refund under 19 U.S.C. § 1520(d)(ii). The May 13 claim did not, however, include copies of the COs, which Ford submitted on November 5, 1998, over a year after the date of importation. Ford had not obtained a written waiver under the terms of § 181.22(d)(1). On May 21, 1999, Customs denied Ford’s claim, stating that “[t]he NAFTA
Certificate of Origin was not furnished within one year of the date of importation.” J.A. 135. Ford protested the denial of the claim, and Customs denied the protest in August 2002. HQ 228654 (Aug. 29, 2002), available at

2002 WL 31641984.

Ford challenged Customs’ decision in the Trade Court. The Trade Court concluded that the requirement to file a CO within one year was jurisdictional and dismissed Ford’s challenge. See Ford Motor Co. v. United States (“Ford I”), No. 03

- 00115, 2010 WL 98699 (Ct. Int’l Trade

Jan. 12, 2010). This court reversed, holding that “so long as notice of a party’s § 1520(d) claim is timely filed within one year of importation, failure to adhere to § 1520(d)’s formalities, such as filing a certification of origin, will not deprive the Trade Court of jurisdiction . . . even if such failure may end up being dispositive of the party’s claim.”

Ford II , 635 F.3d at 557. We explicitly declined to decide whether Customs was required to accept Ford’s late

- filed COs under 19 C.F.R. § 10.112. Id. a t 558.

On remand, the Trade Court again upheld Customs’ determination, noting that “§ 1520(d) and the implemen t-FORD MOTOR CO v. US 11

ing regulations require importers to file within one year of importation copies of applicable certificates of origin.”

Ford III , 800 F. Supp. 2d at 1352. The court rejected Ford’s argument that 19 C.F.R. § 10.112 could excuse the late filing of COs. Id. at 1353

- 54. Ford had also argued that Customs improperly treated claims under § 1520(d) differently from claims made under the reconciliation

p rogram, waiving the one

- year requirement under the reconciliation program but refusing to do so for § 1520(d) claims. In a footnote and without analysis, the court dismissed this argument, stating that Ford’s “entries were not subject to the program and t he court’s inquiry must focus on the statutory and regulatory scheme which governed [Ford’s] entries.” Id. at 1352 n.5.

Ford again appeals to this court. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).

D ISCUSSION

Ford argues that (1) Customs must accept the late

filed COs because it has waived the one

- year deadline for filing COs under the reconciliation program, and to do otherwise here would result in two conflicting interpret ations of § 1520(d); and (2) that pursuant to 19 C.F.R. § 10.112, Cus toms is required to accept the late

- filed documents because they were presented prior to final liquidation. Because the Trade Court devoted most of its analysis to the latter argument, we begin with § 10.112.

A

Ford’s argument that Customs was required to accept
the late

- filed COs in this case breaks down into two parts: (1) that § 1520(d) does not expressly require COs to be filed within one year, and (2) that 19 C.F.R. § 10.112 therefore requires Customs to accept the late

- filed COs as timely. Customs disagrees on both points. We address each argument in turn.FORD MOTOR CO v. US 12

1

Ford begins by arguing that § 1520(d), when read in conjunction with Customs regulations, does not require imp orters to file COs within one year. More particularly, Ford argues that although the claim must be filed within one year, the COs may be filed later. We disagree.

The NAFTA agreement could not be more clear: an importer may apply for a post

- entry refund “no later than one year after the date on which the good was imported.”

NAFTA art . 502(3). Application is made by presenting “a written declaration that the good qualified as an origina ting good at the time of importation” and “a copy of the Certificate of Origin.” Id. The statute is essentially

identical. See § 1520(d). The regulations echo this r equirement, adding only a reference to the provisions of § 181.22(d) allowing the requirement to be waived under

certain conditions. 19 C.F.R. § 181.33. The NAFTA, the statute, and the regulations each reflect the intent of Congress that, at a minimum, these two items must be presented within one year of importation to initiate a

claim. See Xerox Corp. v. United States , 423 F.3d 1356,

1 362 (Fed. Cir. 2005) (citing H.R. Rep. No. 103

- 361(I), at 38 (1993), 1993 U.S.C.C.A.N. 2552, 2594 (“In order to qualify for such reliquidation, the importer must, within one year after the date of importation, file a NAFTA claim in accordance with the impl ementing regulations, which includes . . . copies of all applicable NAFTA certificates of origin . . . .”); S. Rep. No. 103

- 189, at 22 (same)).

The requirement that COs be filed within one year is not negated by the fact that the NAFTA also allows parties to require the submission of “other documentation relating to the importation of the good” as part of the application for refund. See NAFTA art. 502(3). Ford suggests that this requirement allows Customs to request additional documentation after an application for refund has been made, and that, at least when the application isFORD MOTOR CO v. US 13

made at exactly one year, such a request would necessar ily require Customs to accept documentation after the one

year deadline. We are not persuaded. It is true that, like
the NA FTA, § 1520(d)(3) allows Customs to require additional documentation as part of the application. But the ability to require more does not relieve importers from the clear obligation imposed by the NAFTA provisions
and statute to file their claim

— including the relevant
COs

— within one year. Furthermore, Customs has in fact exercised its power to require additional documentation, but, contrary to Ford’s argument, has applied the same

one

- year deadline to the additional documents. See 19 C.F.R. § 181.32(b)(3 )- (5). Taken to its logical conclusion, Ford’s argument would permit importers to submit claims under § 1520(d) without any of the required document ation and without regard to the one

- year deadline, so long as the required documents were submitted before liquid ation. We do not believe § 1520(d)(3) permits such a result.

Xerox established that jurisdiction does not exist u nless a claim is filed within one year of importation. Ford

II explained that, when a claim is filed within one year, jurisdiction exists regardless of whether the claim co ntains the relevant COs. We now hold that submission of the relevant COs within one year of importation is a substantive requirement of § 1520(d), and a claim may be
denied if the COs have not been filed within that time and the requirement to file them has not been waived. Ford failed to provide the COs within the one

- year deadline in this case. It therefore may prevail only if it can identify some basis upon which Customs was both permitted and required to excuse the deadline in this case.FORD MOTOR CO v. US 14

2

Ford points to 19 C.F.R. § 10.112 as the authority it claims requires Customs to accept its late

- filed COs. 3 Section 10.112, which predates NAFTA by several de cades, provides that “[w]henever a free entry or a reduced duty document . . . required to be filed in connection with the entry is not filed at the time of the entry . . . , but failure to file it was not due to willful negligence or frau dulent intent, such document, form or statement may be filed at any time prior t o liquidation of the entry or, if the entry was liquidated, before the liquidation becomes final.” 19 C.F.R. § 10.112.

The Trade Court concluded that it could not read § 10.112 to excuse the requirement to file COs within one

year. Ford III , 800 F. Supp. 2d at 1354 (“The court cannot read § 10.112 to ease the content requirements for claims under § 1520(d) and §§ 181.31

- .32 as it would render fundamental aspects of the statute and regulations void.”). In particular, Ford’s theory “would force the court to read out of the statute and regulations the clear i nstruction that importers must file ‘within 1 year after the date of importation . . . a claim that includes . . . copies of all applicable NAFTA Certificates of Origin.’” Id. at 1353

- 54 (quoting § 15 20(d)). The court observed that the importance of the one

- year deadline

— which was “thrice repeated in NAFTA, the corresponding statute, and Customs’ implementing regulations”

— was “obvious,” id. at 1354, and that “the legislative history of § 1520(d)
‘over whelmingly reiterates the one

- year time period for

3 Ford did not seek to file the COs under § 10.112,

but makes this argument only in its appeal. In Ford II

, we reasoned that this argument was properly made on appeal because Customs’ denial of Ford’s § 1520(d) claim could be viewed as implicitly deciding not to accept Ford’s

late

- filed COs under § 10.112. 635 F.3d at 557.FORD MOTOR CO v. US 15

claiming entitlement to a refund premised on NAFTA eligibility.’” Id. (quoting Xerox , 423 F.3d at 1362). The
court also took note of this court’s statement in Xerox that “an importer cannot use section 1 0.112 to circumvent the clear mandate of NAFTA and 19 U.S.C. § 1520(d).” Id. at 1353 (quoting Xerox , 423 F.3d at 1365). Finally, the court noted that as the specific regulation, § 181.31 (which applies expressly to post

- entry claims for refunds of

duties ) would control over § 10.112. Id. at 1354. It rejec ted Ford’s argument that Aviall of Tex., Inc. v. United

States , 861 F. Supp. 100, 105 (Ct. Int’l Trade 1994), and Gulfstream Aerospace Corp. v. United States , 981 F. Supp. 654, 667 (Ct. Int’l Trade 1997 ), required otherwise, noting that while those cases supported § 10.112’s preeminence over other regulatory provisions, “neither address[ed] the issue of whether § 10.112 would apply if its application would render meaningless statutory (and treaty

- based) requirements.” 800 F. Supp. 2d at 1354.

We agree with the Trade Court. As discussed above, the treaty and statute clearly require the COs to be filed within one year of importation. It is true, as the Ford III court observed, that the Trade Court has he ld that § 10.112 is remedial in nature and should be liberally and broadly construed. See Gulfstream , 981 F. Supp. at 667;

Aviall , 861 F. Supp. at 105. But both Aviall and Gulfstream dealt with § 10.112 in relation to other regul ations. Here, reading § 10.112 broadly would conflict with the statute. This it cannot do. Section 1520(d) unambi guously requires the COs to be submitted within one year. Both this court and Customs “must give effect to the unambiguously expressed intent of Congress.” Chevron

, U.S.A., Inc. v. Natural Res. Def. Council, Inc. , 467 U.S. 837, 842 (1984). Accordingly, we will not read § 10.112 in

a manner that would eliminate the one

- year deadline
from the statute. See Xerox , 423 U.S. at 1365 (“[W]e may not construe 19 C.F.R. § 10.112 to increase the one

- year time period for making a post

- importation NAFTA claimFORD MOTOR CO v. US 16

. . . .”). The Trade Court was correct that the COs were required to be filed within one year and that § 10.112 did not require Customs to accept them after one year had passed.

B

We now return to Ford’s first argument: that Cu stoms must waive the one

- year deadline here because it has done so under the reconciliation program. Ford contends that to do otherwise would impermissibly apply two different interpretations to § 1520(d). Customs responds that waiver for the reconciliation program is justified by the requirements that importers must satisfy to be eligible to participate, which it contends are d esigned to satisfy Customs that covered goods qualify for

NAFTA treatm ent.

As an initial matter, we observe that Customs u ndoubtedly has the power to waive the one

- year deadline for the filing of COs. As this court noted in Ford II

, Article 503(c) of the NAFTA explicitly provides that the requirement to present a CO can be waived. 635 F.3d at 555. In fact, “[w]hile § 1520(d) does not specifically refer to the waiver provision of NAFTA Article 503(c), it is obvious that § 1520(d) w as designed in part to permit the implementation of Article 503(c)’s waiver authority via Customs’ regulations.” Id. Ford does not dispute that Customs has the authority to waive presentation of the COs; to the contrary, it argues that Customs has properly waived presentation of COs in the reconciliation program, and that it was improper for Customs to claim a lack of

au thority to exercise its waiver power in this case.

It is undisputed that Ford’s request for a refund of d uties paid on the Entry was not made through the reconci liation program. Customs therefore argues, and the Trade Court agreed, that the reconciliation program is not relevant to this proceeding. See Ford III , 800 F. Supp. 2d at 1352 n.5. We disagree. It is true, of course, that FordFORD MOTOR CO v. US 17

did not process its post

- entry refund request for the Entry through the reconciliation program, and that the specific waiver requirements of the program do not apply to the entry. But that is not the only way in which the reconcil iation program is relevant. When the Entry was imported on June 27, 1997, the reconciliation program had already been announced, but did not yet include post

- entry
NAFTA refunds. See 62 Fed. Reg. 5673. The reconcili ation program was modified to include NAFTA eligibility and to waive the CO requirement on Sept. 30, 1997. 62 Fed. Reg. 51181, 51181 (Sept. 30, 1997). This was after the Entry wa s imported, but before the COs were due. Those modifications became effective on Oct. 1, 1998. Id. Ford’s claim for post

- entry refund of duties paid on the Entry was denied on May 21, 1999. Thus, Customs had announced its intention to waive the CO requ irement under the reconciliation program prior to the one

- year deadline for the Entry, and the change was effective prior to the denial of Ford’s claim for refund. Indeed, the record reflects that Customs has approved Ford’s post

- entry requests for refund s made through the reconciliation program when Ford did not submit the related COs within one year. The reconciliation program is therefore
relevant to the extent that it shows whether Customs applied a different interpretation of § 1520(d) to claims

Ford submitted under the reconciliation program than to Ford’s traditional § 1520(d) claims

— in particular, the Entry.

Absent a reasonable explanation, an agency may not simultaneously interpret the same statute in two different ways. In Dongbu Steel Co. v. Un ited States , 635 F.3d 1363, 1365 (Fed. Cir. 2011), we examined the Department of Commerce’s (“Commerce”) interpretation of an ambig uous statute that could be read to allow Commerce to use or not to use an accounting practice called “zeroing” in antidumping investigations. We had repeatedly affirmed Commerce’s practice of using zeroing in both investig a-FORD MOTOR CO v. US 18

tions and administrative reviews. Subsequently, in response to an adverse World Trade Organization dec ision, C ommerce stopped using zeroing in investigation s but continued to use it in administrative reviews. In reviewing this new policy, we observed that the statute was ambiguous, and that we had previously held that either practice, on its own, was reasonable. See id. at 1372. Furthermore, it was not unr easonable for Co mmerce to change its interpretation of the statute. Howe ver, as a general rule, it was unreasonable for an agency to simultaneously interpret the statute one way in invest igations and another in administrative reviews. Where an agency sim ultaneously applied different interpretations to a statute, it was required to “provide an explanation for why the statutory language supports its inconsistent interpretation.” Id. Because the record contained no such explanation, we remanded to allow Commerce to explain its reasoning why the statute should be interpreted in two different ways. Id. at 1372

- 73; see also Nat’l Org. of Veterans’ Advocates, Inc. v. Sec’y of Veterans Affairs , 260 F.3d 1365, 1368 (Fed. Cir. 2001) (remanding for the
government to explain why it interpreted the identical language in two related statutes in two different ways);
SKF USA Inc. v. United States , 263 F.3d 1369, 1381

- 82 (Fed. Cir. 2001) (holding that to overcome the presum ption that the same term had the same meaning in diffe rent statutes, Commerce was required to provide a reasonable explanation).

Although Ford raised the argument that Customs a pplies different interpretations to § 1520(d), the Trade Court has not yet addressed it. In Ford I , the Trade
Court discussed the facts only briefly before granting Customs’ motion to dismiss for lack of jurisdiction on the grounds that the CO had been filed more than one year after the goods were imported. Our reversal of that

dismissal in Ford II necessarily did not address wh ether Customs had interpreted § 1520(d) in conflicting ways. InFORD MOTOR CO v. US 19

Ford III , the Trade Court dismissed Ford’s “conflicting interpretations” argument in a footnote, stating: “[Ford’s] reference to Customs’ Reconciliation Program, which waives the necessity o f submitting certificates of origin with refund claims, is inapposite. [Ford’s] entries were not subject to the program and the court’s inquiry must focus on the statutory and regulatory scheme which governed [the] entries.” Ford III , 800 F. Supp. 2d at 1352 n.5 (internal citation omitted). Given this procedural history, it is not surprising that the record provides no explanation for Customs’ divergent approaches to exerci sing its § 1520(d) waiver power.

Customs did provide some indication of its reason ing on appeal. In its brief, Customs argued that the reconci liation program is consistent with § 181.22(d)(1)(i) because
C ustoms satisfies itself that imported goods will qualify for NAFTA treatment when it accepts participants into the reconciliation program. Appellee’s Br. 19. It acknowledged that it had waived the one

- year deadline under the reconciliation program, but asserted that this

was irrelevant. Id. at 18

- 19. When pressed on this issue at oral argument, Customs took a different position,

arg uing that the fact that importers must apply to and be accepted to the reconciliation program justifies treating reconciliation claims differently from traditional claims. Oral Argument at 19:20, available at http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20

12

- 1186.mp3 . But this argument is belied by Customs’ minimal requirements for acceptance in the program, as well as by the fact that Ford has had its own entries treated differently depending on which vehicle it used to

file them.

The record in this case so far is inadequate to decide whether there is a reasonable explanation for treating traditional § 1520(d) claims differently than § 1520(d) claims made under the reconciliation program. It is clear that importers who participate in the reconc iliationFORD MOTOR CO v. US 20

program are treated differently for purposes of waiver under § 1520(d) than those who do not. Indeed, Customs
has treated Ford’s traditional claims different from Ford’s reconciliation program claims. The Trade Court has yet

to consider whether this different treatment is simply a valid exercise of Customs’ waiver authority

— similar to § 181.22(d)(1)(i)

- (iii)

— or whether it shows that Customs applies different interpretations to the statute depending
on the manner in which claims for refunds are su bmitted.
Nor has the court considered whether Customs has a reasonable explanation for treating these classes of claimants differently. Accordingly, we remand for the
Trade Court to consider these issues in the first instance.

As was the case in Dongbu , if Customs cannot provide a reasonable explanation for the different standards, it is “free to choose a single consistent interpretation of the statutory language.” 635 F.3d at 1373.

C ONCLUSION

The NAFTA and § 1520(d) require that COs be pr esented withi n one year of the date of importation. Cu stoms has the power to waive this requirement, see Ford II

, 635 F.3d at 555, but did not do so in this case. Yet at the same time, Customs has waived the requirement to present COs for all participants in the reco nciliation program. Absent a reasonable explanation, Customs may not exercise its waiver power in a manner that effectively interprets the statute in different ways for different types of post

- entry refund claims. Because the Trade Court did not reach this issue, we vacate its judgment and remand for further proceedings in accordance with this opinion.

VACATED AND REMANDED

# United States **Court of Appeals** 
**for the Federal Circuit**

______________________

FORD MOTOR COMPANY, Plaintiff

- Appellant,

v.

UNITED STATES, Defendant

- Appellee.

______________________

2012

- 1186

______________________

Appeal from the United States Court of International

Trade in No. 03

- CV

- 0115, Senior Judge Judith M. Barz ilay.

______________________

N EWMAN

, Circuit Judge, dissenting

.

I agree that the statute and regulations require that the refund claim must be filed within one year of imp ort ation. However, the issue here is not the timely filing of the claim for refund; the timeliness of that filing is not disputed. The issue is whether the Customs regulation

, 19 C.F.R. § 10.112

, that permits later filing of a suppor ting “ document ” if certain conditions are met, applies to
the Certificate of Origin that is required in orde r to obtain
the claimed refund.FORD MOTOR CO v. US 2

§ 10.112 Filing free entry documents or reduced duty documents after entry.

Whenever a free entry or a reduced duty doc ument

, form, or statement required to be filed in connection with the entry is not filed a t the time of the entry or within the period for which a bond was filed for its production, but failure to file it was not due to willful negligence or fraudulent i ntent, s uch document, form

, or statement may be filed at any time prior to liquidation of the entry or, if the entry was liquidated, befor e the liquid ation becomes final . . .

The Court of International Trade sustained Customs ’ ruling that the Certificates of Origin cannot be filed after the year within which the claim was filed, and this court

agrees , ruling that the NAFTA statute bars applying

R egulation § 10.112 to NAFTA importations. The NAFTA statute is silent as to any su ch bar.

The NAFTA statu t e and regulations do not overrule or qualify or even mention this earlier regulation, al though this regulation was not obscure, and has been widely applied in Customs transactions. 1 It cannot be presumed that by silence such an imp ortant and useful
benefit was intended to be eliminated as to Canada and

Mexico even as t he purpose of the NAFTA is to support
and ease trade with Canada and Mexico. I t is not likely

that the treaty intended, by silence, to remove this flex ibility from th e NAFTA nations

. The provisions of the NAFTA statute and regulations,

with a one

- year limitation for filing refund claims, track

similar time

- limit s in other Customs statutes , which are,

1 Additionally, a pplicable regulations do not ma nd ate denial of claims with late C ertificates of Origin , but rather provide that the port director may deny these

claims. See 19 C.F.R. § § 181.2 3 , 181.33.FORD MOTOR CO v. US 3

without dispute, subject to § 10.112. I f it were intended that only imports from North American nations would no longer have this flexibility , surely the NAFTA treaty, and the implementing statu t es and regulations, would have

mentioned it. The court ’ s opinion recognizes that the legislative history is silent , but nonetheless endorses the silent change in law . Silence cannot cancel and withdraw a long

- standing provision of applicable law and recognized procedure.

Ford complied with the one

- year filing period for all of the refund applications

— with a month to spare. In

accordance with § 10.112, the “ document s”— the required
C ertificate s of O rigin

— were filed “ prior to liquidation .”

Thus the only appropriate inquiry under § 10.112 is whether there was willful negligence or fraudulent intent in the time of filing , for if not, these documents were timely filed

.
Precedent is in accord. In Gulfstream Aerospace Corp.

v. United States

, 981 F. Supp

. 654 (Ct. Int’l. Trade 1997)

an aircraft parts importer sought duty -fr ee treatment of entries that only became eligible for such treatment under the Agreement on Trade in Civil Aircraft after their reclassification by the United States Customs Service. Customs denied the importer’s protest

, on the ground that the importer had not filed the required certifying doc uments simultaneou sly with parts’ entry summaries. At

issue was whether 19 U.S.C. § 1520 (c) (1) forgave the late certifying documents if filed prior to liquidation. The
C ourt of International Trade held that the importer was entitled to duty

- free treatment under 19 U.S.C. § 1520(c)(1) , observing that the remedial nature of § 10.112 provided the proper ground for relief:

At the time [19 C.F.R. § 10.112] was promulgated,
Customs stated that the purpose of the regulation

w as “to relieve certain existing restrictions to the

fil ing of free entry documents.” This regulationFORD MOTOR CO v. US 4

provides for the late filing of duty free entry do cuments or reduced duty documents after entry. The language of 19 C.F.R. § 10.112 does not limit its application to certain documents or exclude

certain docum ents. In addition, Customs did not amend 19 C.F.R. § 10.112 when it promulgated the obligatory language of 19 C.F.R. § 10.183 nor did Customs state that 19 C.F.R. § 10.183 was an exception to the broad remedial effect of 19 C.F.R. § 10.112. Customs promulgated 19 C.F.R. § 10.112 to alleviate onerous filing requirements arising out of the narrow construction of duty e ntitlements; therefore, 19 C.F.R. § 10.112 should be liberally construed.

Id. at 667 (emphases in original) ( quoting Aviall of Tex.,

Inc . v. United States , 861 F. Supp

. 100 (Ct. Int’l Trad e 1994) ).

Customs distinguishes Gulfstream from this case , a rguing that Gulfstream was decided under 19 U .S.C. § 1520(c)(1) (since repealed ) and by noting that Ford has

not claimed that i ts failure to tim ely file the Certificates of Origin was the result of a § 1520(c)(1)

- type “clerical error, mistake of fact or other inadvertence.” Customs also argued tha t § 10.112 cannot appl y because the Certi ficates of Origin were required “at time of” entry. Howe ver , the Gulfstream court resolved any distinction between the phrase “at time of” entry and “in connection with” entry, concluding : “The Court finds that Customs’ inte rpretation of the phrase ‘in connection with’ entry has been inconsistent over time, and Cu stoms’ actual practice

indicates no intention to create a distinction between this phrase and ‘at time of’ entry.” Gulfstream

, 981 F. Supp.

a t 668 . Customs’ arguments regarding any significant

distinction between “at time of” entry and “in connection with” entry in the instant case are equally unpersuasive.FORD MOTOR CO v. US 5

The Court of International Trade

, in Corrpro I

, squarely addressed the issue of whether § 10. 112 excuses the late filing of C ertificates of O rigin for § 1520(d) pu rposes. See Corrpro Cos. v. United States (“ Corrpro I ”)

, 28
CIT 1523 (2004) (not reported in F. Supp.), rev'd on jurisdictional grounds, 433 F.3d 1360 (Fed. Cir. 2006)

. In Corrpro I the importer, Corrpro Companies, challenged
Customs’ determination that merch andise was not ent itled to duty

- free NAFTA treatment. Corrpro did not claim preferential treatment under NAFTA within one year of the date of importation under § 1520(d). However, Corrpro filed protests to Customs’ liquidation under 19 U.S.C. § 1514(a), arguing that the goods were classifiable as free of duty under NAFTA. Adopting the reasoning in

Aviall that § 10.112 “does not limit its application to certain documents” and should be interpreted broadly, the court held that § 10.112 applies to NAFTA refund claims: “[T]he Court ho lds that 19 C.F.R. § 10.112 supersedes 19 C.F.R. §§ 181.31 and 181.32 . . . [U]nder [§ 10.112], Co rrpro may submit its NAFTA Certificates of Origin, at any time prior to liquidation, barring willful negligence or fraudulent intent in compliance.” Corrpro I

, 28 CIT at

1531.

In Corrpro II

, this c ourt held that claim

- notice doc uments must be submitted within § 152 0(d)’s one year limit

or the Court of International Trade does not have jurisdiction. Corrpro Cos. v. United States (“ Corrpro II ”) , 433
F.3d 1360 (Fed. Cir. 2006) ; s ee also Xerox Corp. v. United

States , 423 F.3d 1356, 1365 (Fed. Cir. 2005) (“[A] n i mporter cannot use section 10.112 to circumvent the clear mandate of NAFTA and 19 U.S.C. § 1520(d) that allows an importer only one year to file a claim in the first i nstance for NAFTA treatment. ” (emphasis added) ).

In both Aviall and Gulfstream the Court of Intern ational Trade stated that “§ 10.112 should be liberally
construed” over other reg ul atory provisions. Aviall

, 861 F. Supp. at 105; Gulfstream

, 981 F. Supp. at 667. In theFORD MOTOR CO v. US 6

earlier Ford ruling this court rejected Customs ’ position, and remanded for proper application of the NAFTA provisions . Section 10.112 has never been held to be

“ meaningless ” as applied to NAFTA importations, as the majority now holds.

Precedent supports the distinction between late

claims

- notice documents, which are non

- waiveable “juri sdictional requirements,” and the subsequent filing of supporting documents for timely filed claims. Gulfstream cites this distinction, noting “[I]t is clear that the regul ation [§ 10.112] was promulgated to make the privilege of free entry less onerous by extending the time for filing of

claim

- supporting documents and, thereby, enabling free entry of merchandise that would otherwise have been

e xcluded from such treatment.” Gulfstream , 981 F. Supp.

at 667 (emphasis added) ; Mattel, Inc. v. United States , 624 F.2d 1076, 1079 n.8 ( C CPA 1980) ( internal quotation omitted).

The m ajority opinion states that “ [t]aken to its logical conclusion, Ford’s argument would permit importers to submit claims under § 1520(d) without any of the required documentation and without regard to the one

- year dea dline , so long as the required documents were submitted before liquidation.” Maj. O p. at 13 (emphasis added). This

is inaccurate . Ford’s argument is that a claim exists when the importer files a request with Customs for a refund of duties and alleges its goods qualify for duty

- free

treatment . Ford argues that a C ertificate of O rigin must accompany, but is distinct from, the refund “claim.”

The Court of International Trade correctly acknow ledged that this court, in Ford II , distinguished “notice of a party’s § 1520(d) claim” from “ the accompanying certificate of origin.” Ford Motor Co. v. United States , 800 F. Supp. 2d 1349, 1352 n.3 (Ct. Int ’ l Trade 2011)

. Section 1520(d)

, working harmoniously with § 10.112

, would require claim

- notice documents to be filed “within 1 yearFORD MOTOR CO v. US 7

after the date of importation,” and claim

- supporting

do cuments to be filed “before the liquidation becomes final.” (quoting § 1520(d); § 10.112 ). This consistent interpretation of the statute, regulations and precedent permits the requirements of § 1520(d), § 10.112 and the

r econciliation p rogram to legally c oexist. See Clark v.

Martinez , 543 U.S. 371, 378 (2005) ( explaining that a statute “cannot, however, be interpreted . . . both [ways] at the same time”); Glover v. W est , 185 F.3d 1328, 1332 (Fed. Cir. 1999) ( explaining that court s must “attempt to give full effect to all words contained within th [e] statute [and] regulation [s] , thereby rendering superfluous as little of the statutory or regulatory language as possible ”).

In entering into the NAFTA, and as ratified and cod ified, neither the executive nor the legislative bodies n or any historical documentation we have found reflected an
intent to remove the benefit of the pre

- existing general regulatory provision of § 10.112. I have un earthed no hint
of an intent to add this burden and rigor to trade with
Canada and Mexico . The entirety of this history shows a contrary intent, to facilitate such trade.

This view is reinforced by NAFTA Article 503(c) and the subsequently adopted reconciliation program, in which the filing of C ertificates of O rigin is waived entir ely. T he policy reflected in this program reinforces the
view that it is incorrect to hold that the NAFTA statute

remove d, from NAFTA importations

, flexibilities in filing

claim

- supporting documentation and access to § 10.112.

The record sh ows, and Customs does not deny, that Ford worked diligently to meet NAFTA requirements throughout the uncertain implementation of Customs’ refund procedures. C ertificates of O rigin from exporter

suppliers often lagged behind merchandise entries by

many mo nths. To account for this, Ford implemented internal procedures to ensure that NAFTA duty

- free claims were filed only for eligible parts and materials, andFORD MOTOR CO v. US 8

only after the necessary C ertificates were in

- hand. B etween 1996 and 1997, Customs conducted five separate

“ NAFTA Origin Verification ” audits of all of Ford’s NAFTA preference claim activities. The final report of one of the audits stated that Ford’s record keeping was a “noteworthy accomplishment.” J.A. 154

. Ford claims that this meant, among other things, that “Customs knew that Ford had in its possession NAFTA C O ’s to support all of Ford’s NAFTA preference claims.” Id.

The record also shows that the process for submitting duty

- free proof documents varied greatly from port to
port

, and differed de pending on which Customs filing vehicle was used. For example, while Customs in Detroit was denying Ford’s § 1520(d) claims for failure to timely
file the C ertificates of O rigin , Custom s p orts in Buffalo, Laredo, and El Paso were processing and refunding Ford’s
claims where Ford did not file the C ertificates with Cu stoms within one year of the date of entry. At these other ports Ford submit ted C ertificates of O rigin if and when Customs requested that Ford do so. Ford negotiated with Customs for nearly tw o years in an attempt to establish a mechanism to efficiently submit C ertificates of O rigin in support of electronically filed claims. Ford seems to have largely coped with Customs’ uncertain and inconsistent duty

- fre e refund process despite Customs’ belated gui dance on filing of C ertificates

. At a minimum, if Customs wishes to change its pos ition or remove the application of § 10.112 from NAFTA importations, Customs should have given notice of pr oposed clear regulations, and enforced a uniform practice

at all ports. It is clear that Ford acted reasonably and in accordance with precedent and custom. Although this

court now remands to give Customs an opportunity to formulate a post

- hoc reasonable explanation for its a ctions, Customs has had an opportunity to establish its
actions as reasonable and has failed. See Maj. O p. at 19

.FORD MOTOR CO v. US 9

I would hold that Ford’s C ertificates were timely filed, and end this litigation.