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Wharfage and tonnage fees dispute between CBP and Virgin Islands

Wharfage, tonnage fees dispute; CBP and Virgin Islands

The U.S. Court of Appeals for the Federal Circuit today affirmed a decision of the U.S. Court of Federal Claims that the collection of wharfage and tonnage fees from the Virgin Islands Port Authority (VIPA) by the U.S. Customs and Border Protection (CBP) was not an illegal exaction.


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The case is: Virgin Islands Port Authority v. United States, 2018-1698 (Fed. Cir. April 26, 2019). Read the Federal Circuit’s decision [PDF 119 KB]


This dispute between VIPA and the United States centered on whether certain fees were lawfully collected by CBP from users of ports in the U.S. Virgin Islands. The fees at issue were wharfage fees (the charge assessed for the service or use of the wharf) and tonnage fees (the fee charged a vessel for entering and using a port of the U.S. Virgin Islands).

CBP collected the wharfage and tonnage fees from 1969 to 2011; deducted the costs it incurred from providing its services; and remitted any remaining funds to the Virgin Islands Deposit Fund (a fund controlled by the government of the Virgin Islands). The funds were then transferred to VIPA.

A dispute arose from CBP’s increasing collection costs, which outpaced the collection of the disputed fees starting in 2004. This left VIPA without any proceeds from the disputed fees.

VIPA sent a letter to CBP in February 2011, indicating that VIPA would start to collect the disputed fees beginning in March 2011. CBP then stopped collecting the disputed fees, and VIPA started to collect them instead.

In 2012, VIPA sued CBP to recover the approximately $10 million in disputed fees that CBP had collected from February 2008 to March 1, 2011. The federal claims court granted the federal government’s motion for summary judgment.

On appeal, VIPA challenged whether CBP had committed an “illegal exaction” by collecting the disputed fees allegedly without authorization from 2008 to 2011 The Federal Circuit today affirmed, holding that CBP was authorized to collect the disputed fees from February 2008 to March 2011, and that this authority had not been revoked.


For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner and Global Practice Leader
T: 312-665-1022

John L. McLoughlin
Principal and East Coast Leader
T: 267-256-2614

Andy Siciliano
Partner and National Practice Leader
T: 631-425-6057

Luis (Lou) Abad
Principal, Washington National Tax
T: 212-954-3094

Irina Vaysfeld
T: 212-872-2973

Amie Ahanchian
Managing Director
T: 202-533-3247

Robert Waldrop
T: 212-954-8117

Gisele Belotto
Managing Director
T: 305-913-2779

Christopher Young
T: 312-665-3229

Andy Doornaert
Managing Director
T: 313-230-3080

George Zaharatos
T: 404-222-3292

Jessica Libby
Managing Director
T: 612-305-5533

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