## Facts

- Joanne Wu formed Golden Ship Trading Company, Inc. to import T-shirts and served as its sole owner and officer.
- Wu arranged with an exporter, Hui Tse Nu, to import T-shirts purportedly made in the Dominican Republic, and she hired a licensed customs broker to handle entry paperwork.
- The dispute concerned three entries of T-shirts for which entry documents and markings declared the country of origin as the Dominican Republic.
- Wu did not independently verify the exporter’s origin claims and signed entry documentation reflecting Dominican origin.
- Customs determined the T-shirts’ bodies were produced in China and shipped to the Dominican Republic, where sleeves were attached before export to the United States.
- Under applicable origin rules for textiles and apparel, the Dominican processing (attaching sleeves) did not constitute a substantial transformation sufficient to change origin from China to the Dominican Republic.
- The United States alleged Golden Ship and Wu negligently made material false statements about origin in violation of 19 U.S.C. § 1592(a) and sought civil penalties plus recovery of marking duties under 19 U.S.C. § 1592(d).
- Defendants argued Wu exercised reasonable care by relying on the exporter and broker and contended the government did not prove marking duties were actually lost because of the mis-marking.

## Issues

1. Whether Golden Ship and Wu negligently violated 19 U.S.C. § 1592(a) by entering merchandise through materially false country-of-origin statements declaring the Dominican Republic instead of China.
2. Whether Customs could recover marking duties under 19 U.S.C. § 1592(d) without showing the United States was deprived of those duties as a result of the violation.

## Decision

- The Court of International Trade granted the United States’ motion in part and denied it in part, and granted defendants’ cross-motion in part and denied it in part.
- The court held Golden Ship and Wu liable for negligent violations of § 1592(a) based on materially false origin declarations and imposed civil penalties.
- The court denied recovery of marking duties under § 1592(d) because the government did not establish, on the summary-judgment record, that marking duties were owed and lost as a result of the improper marking.

## Legal Principles

- 19 U.S.C. § 1592(a) prohibits entering or introducing merchandise into U.S. commerce by means of material and false statements or omissions; negligence is established by a failure to exercise reasonable care.
- Importers have an affirmative duty of reasonable care regarding the accuracy of entry statements, including country of origin; reliance on a supplier or customs broker does not, by itself, satisfy that duty.
- A false country-of-origin statement is material if it can affect Customs’ administration of duties or other Customs-enforced legal requirements (including origin-based rules such as quota/visa treatment and marking consequences).
- For textiles and apparel, minor assembly operations that do not amount to substantial transformation do not change country of origin for marking and entry purposes.
- Under 19 U.S.C. § 1592(d), Customs may recover only duties of which the United States was deprived “as a result of” the unlawful conduct; Customs bears the burden to prove duties were owed and lost.

## Conclusion

The court found Golden Ship and its owner negligently failed to exercise reasonable care in verifying country of origin and thus violated § 1592(a), but it refused to award marking duties because Customs did not prove the United States was deprived of such duties due to the mis-marking.


United States v. Golden Ship Trading Co., 25 Ct. Int’l Trade 40 (2001)