two elements of a valid 1520(c) claim that seem to be the most
troublesome are: (1) what is an error or mistake in the construction
of a law, and (2) how must the error be proved (manifest from
the record or established by documentary proof)?
Kind Of Error Or Mistake Can Be
Corrected Under 1520(c)(1)?
the years, Customs and the courts have attempted to sort out the
kind of mistakes that can be corrected under 1520(c)(1). Frequently,
these decisions seem contradictory. However, much of the confusion
has been made clear by decisions of the United States Court Of
Appeals for the Federal Circuit in Aviall of Texas, Inc., v.
United States, 70 F.3d 1248 (CAFC, 1995), and Executone
Information Systems v. United States, 96 F.3d 1383 (September
we may refer to other cases or situations involving mistakes and
errors, the Circuit Court’s decisions in Aviall and
Executone make it clear that any type of mistake, error
or inadvertence is correctable under 1520(c)(1) so long as it
is not a result of error or inadvertence in the construction of
Distinction Between Mistake Of Fact
And Mistake Of Law
many years Customs and the courts have wrestled with the legal
distinction between a mistake of fact and a mistake of law, with
is generally accepted that a clerical error exists when an error
is made in the copying or typing of numbers or figures, or when
a transposition of numbers has occurred. But this is not always
so in the case of a mistake in judgment.
example, the transposition of two numbers in the classification
of merchandise resulting in the classification of a jacket as
water resistant rather than waterproof is a clerical error correctable
under 1520(c)(1). The same error, however, can also occur with
a mistake in judgment when the individual responsible for the
classification of the article decides that the jacket is water
resistant rather than waterproof. In the case of transposed numbers,
relief will be afforded under 1520(c)(1); however, in the case
of mistakes in judgment, it might not.
a mistake in judgment can be corrected under 1520(c)(1) will depend
on whether there was an underlying mistake of fact or inadvertence
that led to the faulty decision, or whether the mistake was a
result of a misunderstanding as to the legal basis for the decision
which resulted in the error.
is generally accepted that a mistake of fact occurs when a person
believes the facts to be different than they really are and takes
some action based on the incorrect information.
Executone Information Systems, the court explained that
a mistake of fact occurs in instances when either (1) the facts
exist but are unknown, or (2) the facts do not exist as they are
believed to exist. For instance, in our example of the jacket,
a person may not be aware that the jacket in question has a waterproof
coating applied to the fabric. This would be a mistake of fact
because there exists a fact (the coating over the fabric) of which
the person is not aware.
the mistake could be the result of inadvertence. Inadvertence
has been variously defined as an oversight, accident, or a result
of inattention or carelessness.
example of inadvertence could be the reading of an invoice with
a style number different than that actually imported. If this
is the case, and the article with the style number believed to
be on the invoice was only water resistant when, in fact, the
jacket style number that was actually on the invoice is waterproof,
then the decision to classify the imported merchandise as water
resistant rather than waterproof was the result of inadvertence,
and the error is correctable under 1520(c)(1).
ITT Corp. v. United States, 17 CIT 26 (1993) rev. on other
grounds, the Court of International Trade concluded that an error
on the part of a customs broker in classifying merchandise based
on the use of company records relating to merchandise that was
not the same as that imported was not a mistake of law, but a
mistake of fact or inadvertence. More recently, in Aviall
of Texas, Inc., v. United States, 70 F.3d 1248 (CAFC, 1995),
the Court of Appeals upheld a finding of the CIT that a customs
broker’s oversight to timely renew a blanket aircraft certification
statement was inadvertence, not negligence, where the broker was
unaware of the actual expiration date, but took immediate steps
to remedy the mistake once the expired certificate was brought
to its attention.
Mistake In Classification Is Not
Necessarily A Mistake Of Law
common misconception is that a mistake in the classification of
goods is a mistake of law, and therefore it cannot be remedied
under 19 U.S.C. § 1520(c)(1). In Executone Information Systems,
the Court of Appeals noted that a careful reading of cases on
this subject clarifies that if the mistake in classification occurred
as a result of an underlying mistake of fact with respect to the
nature of the goods rather than as a result of an incorrect interpretation
of law, then the mistake in classification is correctable under
Black & White Vegetable Co. v. the United States, Slip
Op. 00-162 (CIT, 2001), an importer misclassified an entry of
“Persian Limes” due to a mistake in the botanical
name of the fruit. The importer discovered its error after the
time period for filing a protest had past, and filed a request
for reliquidation under § 1520(c)(1). In the ensuing litigation
before the Court of International Trade (CIT), Customs asserted
that classification determinations were matters of law, and that
the mistake here was as to the importer’s belief as to the
legal classification of the limes under the tariff. Customs also
asserted that the importer failed to exercise “reasonable
care,” by failing to determine the correct botanical designation
of the limes, and therefore was barred from recovery under 1520(c)(1).
court rejected Customs contentions and concluded that the taxonomical
classification of plants and animals (even where the description
is integrated into the tariff) is inherently a factual exercise,
and that therefore such determinations could be considered a “mistake
of fact”. The court went on to hold that this mistake has
satisfied the requirements set forth in the regulations as a “mistake
court left open the question as to whether reasonable care was
first required under 1520(c), but rather, held that even if reasonable
care were required, the importer had acted reasonably in accordance
with the standards set by “similarly situated persons”,
as demonstrated by the fact that Customs’ own import specialists
and the entire trade community were also wrong about the botanical
taxonomy of the fruit.
What Is A Mistake Of Law?
Executone, the Court of Appeals explained that a mistake
of law occurs when the facts are known, but their legal consequences
are not. In other words, § 1520(c)(1) may not be used to rectify
incorrect interpretations of the law by an importer, customs broker,
Computime Inc. v. United States, 9 CIT 553 (1985), an importer
argued that LCD watch modules were classifiable as other electrical
articles and not watches or watch parts. Customs knew the articles
were LCD watch modules but refused to classify them as other electrical
articles despite a decision by the court in Texas Instruments
v. United States, 1 CIT 236, holding otherwise. The court
found that Customs’ decision was not based on a mistake
of fact as to the article but a conscious decision on the part
of Customs to not classify the goods as other electrical articles.
of knowledge of a more favorable tariff provision is also not
a mistake of fact, but one of law. Concentric Pumps, Ltd.
v. United States, 10 CIT 508.
Universal Cooperatives Inc., v. United States, 13 CIT 516
(1989), the court explained that there are decisional mistakes
and ignorant mistakes. A decisional mistake was explained as
a mistake in which a party makes the wrong decision between two
known alternative set of facts and an ignorant mistake occurs
when a party is unaware of the existence of the correct alternative
set of facts.
a lack of knowledge of the existence of facts that would support
an article’s eligibility for more favorable tariff provision
is a mistake of fact. See, C.J. Tower & Sons v. United
States, 68 Cust. Ct. 17, C.D. 4327, aff’d 499 F.2d 1277
our example of the jacket, if the importer knew that the jacket
was coated, but was unaware of the fact that coated jackets might
be treated differently than non-coated jackets with respect to
tariff classification, or simply misunderstood the definition
of waterproof as applied to treated fabrics, then a mistake of
law has occurred and no relief is available under 19 U.S.C. §
Must The Mistake Of Fact Or
Inadvertence Be Proved?
the error is plainly evident from the papers submitted at the
time of entry, it will be the responsibility of the importer to
demonstrate by affidavit or testimony, or by presentation of other
credible proof of the underlying facts that a mistake of fact
or inadvertence occurred. Failure to do so will result in the
finding that the error cannot be remedied under 19 U.S.C. § 1520(c)(1).
Executone Information Systems, the Court of Appeals found
that classification of Executone’s merchandise at an 8.5%
duty rate was the result of a mistake of fact because Executone
thought that the duty free forms had been filed when, in fact,
they had not. As the court said, this is precisely the type of
error that is correctable by § 1520(c)(1). Why, therefore, was
Executone’s § 1520(c)(1) claim ultimately denied? Because,
as noted by the court, an importer must provide evidence of the
underlying facts that a mistake of fact or inadvertence occurred. In Executone’s case, it did not adequately explain why its
customs broker did not file the forms when it should have. As
such, the court concluded that while there was a mistake of fact
or inadvertence, Executone did not establish that it did not occur
as a result of intentional or negligent inaction.
result can be compared to that in Aviall of Texas, Inc., v.
United States, 70 F.3d 1248 (CAFC, 1995), wherein the § 1520(c)(1)
claim was granted because the broker admitted that it forgot to
renew the certification.
To Do After Discovery Of A Mistake
Or Error In The Entry Of Merchandise
after the discovery of an error or mistake in the entry, classification,
or valuation of merchandise, the importer or broker should take
action to advise one another of the problem.
a determination should be made as to whether there is still sufficient
time to file a protest under 19 U.S.C. § 1514. If not, consideration
should be given as to whether a § 1520(c)(1) claim can be made.
or not a valid § 1520(c)(1) claim can be made will depend on many
factors, not the least of which is whether the error was the result
of a lack of knowledge of the underlying facts, or as a result
of a lack of knowledge of law or an incorrect legal interpretation.
Next, assuming one can establish that a mistake of fact or inadvertence
occurred, one would still need adequate proof as to the existence
of the mistake or inadvertence. This may be demonstrated by documentary
proof, affidavit, or testimony of the parties involved.
To Do If Your Claim Is Denied
should not be dissuaded from pursuing the matter even if the 1520(c)(1)
claim is initially denied. The vast majority of 1520(c)(1) claims
are denied by Customs, particularly if the claim relates to the
classification, special duty rate or tariff preference treatment.
protest procedure under 19 U.S.C. § 1514 provides for situations
involving the denial of a 1520(c)(1) claim. Under appropriate
circumstances, the denial of the 1520(c)(1) will be reversed at
the Customs Headquarters level if Further Review is requested,
and if not, proper follow through of the administrative procedures
is a prerequisite to judicial review.