On August 6, 2009, the CIT issued its decision in Polly U.S.A., Inc. v. United States that an importer of unisex medical uniforms was ineligible for preferential duty treatment under the AGOA because the importer failed to provide a traceable production time line. Plaintiffs Polly U.S.A., Inc., Mansheen Industries Ltd., and W&W Garments Ltd. (collectively, “Polly”) imported unisex medical uniforms into the United States under HTSUS subheading 9819.11.12, which provides duty-free treatment to certain apparel items imported from designated sub-Saharan countries under the AGOA. Polly claimed the country of origin of the imported merchandise was Swaziland—an AGOA beneficiary. CBP requested production documentation to establish country of origin, including cutting and sewing records, information about production processes and time lines, and worker documentation and records. While Polly provided documentation, CBP found many inconsistencies and concluded that the documentation failed to establish a traceable production time line. Accordingly, CBP liquidated entries of the subject merchandise at 16 percent ad valorem. Polly protested and CBP denied the protest, leading to the filing of this action.

The CIT ultimately upheld the CBP’s decision. In making its determination, the CIT rejected Polly’s arguments that all it was required to do to receive the AGOA preference was to file its country-of-origin declaration, and that the CBP was imposing an unrealistic high standard of recordkeeping in view of the economic situation in Swaziland. The CIT, citing the regulations governing verification of claims for AGOA benefits, noted that claims for preferential treatment are subject to “whatever verification the port director deems necessary,” and importers have a duty to “establish and implement internal controls which provide for the periodic review of the accuracy of the declarations or other records.”