International Business Law
Title: United State sv Golden Ship Trading Co.
2001 WL 65751 (2001)
Court of International Trade
Section 1592(e) was enacted to show the burden of proof that both the prosecution and the defendant bear in a penalty action based on negligence.
J.Wu purchased three shipments of t-shirts from Hui and had signed Hui’s entry papers claiming the country of origin of the t-shirts as the Dominican Republic. Customs discovered the country of origin was China and not the Dominican Republic. The bodies of the t-shirts were produced in China and they were shipped to Dominican Republic where sleeves were attached and “Made in Dominican Republic” labels were inserted. As Chinese made shirts, the shipments should have been imported with a textile visa.
U.S. Customs had established that material false act or omission had occurred and the court has held that the statements on the entry papers signed by J. Wu were both material and false.
The onus was on Ms. Wu to show that she was not negligent in verifying the information contained in the entry documents before signing them. She had to show that she had exercised reasonable care under the circumstances.
Ms. Wu could not prove that she had exercised reasonable care under the circumstances. She claimed she had relied on the word of Hui and information provided by him. She also claimed that the exporter was so fraudulent in covering his tracks that even Customs had a hard time discovering it. She also pointed out that Hui did in fact have a t-shirt factory in Dominican Republic and that some work on the shipment had been done there.
The court disagreed because it was felt that Ms. Wu did not make any attempt to verify the information on the entry documents. She didn’t even ask where the fabrics for the t-shirts were made or where the customs house broker got his information. The court stated that there was a difference between legitimately attempting to verify the entry information and blindly relying on the exporter’s assertations.
On the grounds that Ms. Wu failed exercise reasonable care under the circumstances in verifying entry document information, the court found her negligent in introducing merchandise into the commerce of the United States. Therefore, she was in violation of 19 U.S.C § 1592(a)(1)(A) and must pay a civil penalty pursuant to 19 U.S.C § 1592(c)(3)(B).
Since Ms. Wu was unable to provide sufficient evidence that she verified the information on the entry documents that she signed, she should pay the fine imposed.
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