Ford says evaluating options after Federal Circuit ruled in CBP's favor
In a regulatory filing, Ford said that on March 8, 2013, U.S. Customs and Border Protection ruled that Transit Connects imported as passenger wagons and later converted into cargo vans are subject to the 25% duty applicable to cargo vehicles, rather than the 2.5% duty applicable to passenger vehicles. As a result of the ruling, CBP is requiring Ford to pay the 25% duty upon importation of Transit Connects that will be converted to cargo vehicles, and is seeking the difference in duty rates for prior imports. The company's protest of the ruling within CBP was denied, and Ford filed a challenge in the U.S. Court of International Trade, or "CIT." On August 9, 2017, the CIT ruled in Ford's favor. On October 6, 2017, CBP filed a notice of appeal to the U.S. Court of Appeals for the Federal Circuit, and on June 7, 2019, a panel of three Federal Circuit judges ruled in favor of CBP. "We are evaluating our options following the most recent ruling. If we ultimately receive a favorable ruling, we will receive a refund of the contested amounts paid and we will treat the refund as a special item. Similarly, if we are required to pay the higher rate for prior imports, the payment will be treated as a special item. Accordingly, the company adjusted EBIT guidance provided above is not affected by either a refund or a payment related to this matter," Ford said in the filing.