Agent's liability for US customs duty

A US port agent received a notice from the US Customs Service of its intention to impose a fine on one of the agent's US tramp principals.  It was alleged that the principal had  failed to pay duty on foreign repairs to the principal's US flag ships.

As US ship agents are jointly and severally liable for the payment of such duty and the principal had declared bankruptcy, attorneys were appointed by the Club to protect the agent's interests.  The appeal to the US Customs was, unfortunately, rejected and the agent was found liable to pay US$ 35,000.  In view of the amount involved and the potential costs of taking the appeal process through the courts without any guarantee of success, the agent paid the claim and recovered from the Club.  The complex nature of the case resulted in legal costs of US$ 20,000 being incurred, which were also paid by the Club.

This is an example of how an agent, through no fault of his own, can become involved in matters which more properly concern the shipowner.