## Facts

- Pentax Corporation and related entities imported photographic equipment into the United States.
- The imported goods were manufactured in the People’s Republic of China but were marked as originating in Hong Kong.
- Federal law requires imported goods to be marked with their country of origin. Violations may trigger an additional 10% ad valorem “marking duty” under 19 U.S.C. § 1304(f).
- Customs concluded the mismarking violated 19 U.S.C. § 1592 and calculated $5,157,601.30 in § 1304(f) marking duties.
- Pentax sought penalty mitigation through prior disclosure under 19 U.S.C. § 1592(c)(4).
- Customs required Pentax to tender the $5.2 million in § 1304(f) marking duties as a condition of prior-disclosure treatment, reasoning the amount was recoverable under 19 U.S.C. § 1592(d) as “lawful duties” of which the United States was or might be deprived.
- The Court of International Trade upheld Customs’ requirement and denied injunctive relief; Pentax appealed.

## Issues

1. Whether § 1304(f) marking duties are “lawful duties of which the United States is or may be deprived as a result of” a § 1592(a) violation, making them recoverable under § 1592(d).
2. Whether an importer must tender § 1304(f) marking duties as a prerequisite to obtaining prior-disclosure treatment under § 1592(c)(4).

## Decision

- The Federal Circuit reversed the Court of International Trade.
- The court held that § 1304(f) marking duties are not duties of which the government was deprived “as a result of” a § 1592(a) violation within the meaning of § 1592(d).
- Because § 1592(d) did not cover § 1304(f) marking duties, Customs could not require Pentax to tender those duties as a condition for prior-disclosure treatment under § 1592(c)(4).

## Legal Principles

- For recovery under 19 U.S.C. § 1592(d), “as a result of” requires but-for causation between the § 1592(a) violation and the government’s deprivation of lawful duties.
- Section 1592(d) targets recovery of duties that would have been owed absent the misconduct but were not collected because of the violation.
- Marking duties under 19 U.S.C. § 1304(f) arise only upon mismarking and function as an additional assessment triggered by the violation, rather than a preexisting duty the government was deprived of.
- Customs may not condition § 1592(c)(4) prior-disclosure benefits on tender of amounts not recoverable under § 1592(d).

## Conclusion

The Federal Circuit ruled that § 1304(f) marking duties are not recoverable under § 1592(d) as “deprived” duties caused by a § 1592(a) violation, and therefore cannot be required as a precondition to prior-disclosure mitigation under § 1592(c)(4).


Pentax Corp. v. Robison, 125 F.3d 1457 (Fed. Cir. 1997)