Fla. Bread Importer Wins Refund of Expired Tariffs

(CN) - A Florida company is entitled to a refund of the tariffs it paid to import toasted bread from Spain after July 2007, because that's when the duties were supposed to automatically expire, a trade court ruled. The tariffs had been imposed in retaliation for the European Union's refusal to lift a ban on the importation of U.S. meats treated with certain growth hormones.

The dispute began in 1985, when the European Commission - now the EU - banned the meat imports. The United States successfully challenged the ban before the World Trade Organization, which found that the hormone ban was not based on sound science or relevant international standards.

When the EU refused to lift the hormone ban, the WTO's dispute settlement body authorized the United States to impose retaliatory tariffs equal to the amount it was damaged as a result of the ban, which in 1999 was determined to be $116.8 million annually.

The U.S. Trade Representative implemented a "retaliation list" targeting European imports, including "rusks, toasted breads and similar products." The products imported by Hialeah, Fla.-based Gilda Industries were taxed under that list.

But under an "automatic termination" provision, the retaliatory action was set to expire after four years, unless the domestic industry benefitting from the action asked for an extension.

Gilda filed suit in 2007, claiming the government allowed the retaliatory measures to renew, even though no one had requested a continuation.

The Court of International Trade agreed that the list should have expired in July 2007, and ordered the government to refund the retaliatory duties collected between July 29 and March 23.

The court said federal regulations clearly established when and how the retaliatory action would expire, and what must be done to renew it.

"Accordingly, it would be contrary to the plain language of the statute ... to find that the USTR has the discretion to delay the onset of a termination provision that is, by its very nature, automatic and nondiscretionary," Senior Judge Musgrave concluded.

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