Trade Court Rules to Protect Brokers

Customs and Border Protection may not revoke a broker's entry filer code without providing some form of due process, the U.S. Court of International Trade ruled on Monday.

USCIT Judge Richard K. Eaton ruled Customs officials in San Diego in October 2008 improperly deactivated customs broker Guillermo Lizarraga's filer code for alleged "misuse" without stating the reasons, and giving him no chance to respond.

Brokers need the code to electronically file entries through the Automated Broker Interface in the Automated Commercial System. Ninety-six percent of all entries are made through ABI, so loss of the filer code effectively puts a broker out of business.

As the case progressed through court, Customs admitted it had no basis in fact for deactivating Lizarraga's filer code, and asked that the case be declared moot.

Lizarraga's attorney Arthur Purcell said Customs' confession was welcome, "but we wanted the judge to issue a declaratory judgment that what Customs did was illegal, just to send a message that they can't do it again."

Purcell said Customs will likely develop a procedure for filer code cases that gives brokers the chance to respond to Customs' claims of misuse, but they will not be entitled to the same formal process Customs uses to revoke a license.

"I think the case was important because it checked actions of the agency that hadn't been checked before," Purcell said. "Now Customs has to think about how this affects one's business and reviewing their actions, because they do have such a dramatic impact."

-- Contact R.G. Edmonson at bedmonson@joc.com.