Split Emerges on Customs Law after Eleventh Circuit Vacates Smuggling Convictions

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On February 22, the US Court of Appeals for the Eleventh Circuit held that an indictment charging the unlawful importation of goods into the United States, in violation of 18 U.S.C. §§ 545 and 371, failed to state an offense because the unlawful act was based on a Federal Drug Administration (FDA) regulation as opposed to a congressional statute. The court therefore vacated all convictions and sentences. In doing so, the court set up a circuit split regarding the interpretation of what law must be violated for importation to be “contrary to law” under 18 U.S.C. § 545.

Appellants, the founders and officers of Naver Trading, Corp., were convicted of one count of conspiring to unlawfully import foods and six counts of smuggling goods into the United States relating to their importation of food into the United States in violation of FDA regulations. On appeal, the Eleventh Circuit sua sponte raised the question of whether the unlawful importation charge in violation of 18 U.S.C. § 525 sufficiently alleged a crime.

The court found that the US government prosecuted appellants for FDA violations that gave rise to civil remedies but did not reference any criminal statute or specify any criminal punishment. Applying the rule of lenity, the court held that “there is, at a minimum, great doubt as to whether violation of this regulation per se gives rise to criminal liability.” In so doing, it expressly disagreed with the conclusion of the US Court of Appeals for the Fourth Circuit in finding the regulation not “grievously ambiguous.”

The Eleventh Circuit also noted that the indictment did not adequately put the appellants on notice as to which statute they were alleged to have violated. As the court observed, “the passing mention of unlawful acts in [the indictment] is obscured by the vast majority of the indictment, which focuses on acts that are not criminal in nature.” Accordingly, the court concluded, the “entire indictment did not adequately set forth a violation of criminal law.”

U.S. v. Izurieta, No. 11-13585 (11th Cir. Feb. 22, 2013).