Monday, June 30, 2008

CBP on Laptop Searches

Customs and Border Protection has responded to the public and congressional attention it has attracted via searches of digital devices at the border. Customs' side of the issue is nicely presented here:

Leadership Journal: CBP Laptop Searches

Friday, June 27, 2008

Can Lou Dobbs Define Sovereignty?

Yesterday, I dropped an angry comment on the blog in response to a Lou Dobbs video they posted there. That blog labels itself as "Exposing true rights for Americans and Canadians." The comment appears not to be making it past the moderator approval process, so I will reproduce it here. I admit that I was not clever enough to save a copy, so this will not be a verbatim recitation of that comment.

Lou Dobbs is an idiot. CNN should fire him for that report. The report focuses on whether there is in fact a road construction project known as the NAFTA superhighway. It appears to be true that there are road and rail infrastructure projects going on in Texas. There is also even a surface transport hub proposed for Kansas City. Assume that is all true. What's the problem?

Throughout the report, the title at the bottom of the screen reads, "NAFTA Superhighway: Threat to Our Sovereignty." But nothing in the report discusses sovereignty. What makes a road construction project or other infrastructure improvements a threat to sovereignty? American consumers and businesses buy merchandise produced in and imported through Mexico. The road will facilitate the freer flow of merchandise. And, it seems CNN has not noticed that the road goes in both directions. If this is a threat to sovereignty, then so is the expansion of O'Hare Airport and so is a new bridge between Windsor and Detroit. The road project does not mean that Mexican troops will be stationed in the U.S. or that Canada Post will suddenly be delivering our mail.

If your response is that I am missing the fact that the super secret SPP is behind this, I am not. The Security and Prosperity Partnership is a framework for policy discussions between North American governments. Why? Because neighboring countries talk to one another. All three governments have an interest in security and prosperity. Of course they will talk about that.

But, you say, I don't understand that this is all controlled by the evil northeastern elite at the Council on Foreign Relations. Yes it is true that the academic wonks at the CFR have written and spoken on the efficiencies and benefits of greater North American integration. Somewhere along the way, someone even came up with the notion of a unified currency: the Amero. None 0f that discussion means the U.S. is moving any closer to giving up its sovereignty.

I'm not worried. Wake me when they close the U.S. Mint.

Thursday, June 26, 2008

First Sale: Alive For Now

In an appearance before the Senate Finance Committee on June 24, Commissioner Basham stated that CBP would not proceed with its proposed reinterpretation of the value law to eliminate so-called first sale valuation. So, that's good. Whether CBP tries to do this again in 2011 is another and open question. In the meantime, CBP will be collecting data to provide to the ITC to do a report on the actual application of first sale valuation.

Here's hoping that the data collection process does not turn into a big deal. Personally, I'd like to see FS as a Special Program Indicator and let everyone move on with their lives.

Blog Roll

I've updated my blog roll to eliminate some dead links and add a few new ones (primarily in the cycling section). If you have any nominations for others to add, please drop a comment below.

Wednesday, June 25, 2008

Laptop Searches Catch the Attention of Senators

Interesting article from PC World.

Senators Question Border Laptop Searches

A good portion of the article seems to have more to do with accusations of racial profiling and interrogations than searching digital devices.

Let's Go Down to the Warsaw . . .

so we can watch this excellent Drew Carey video from Reason.TV.

Maybe Drew Carey will be replacing Ben Stein as America's witty smart person. I've seen Drew as a contestant on game shows; he seems pretty smart. Ben Stein has lost all sorts of credibility with me now that he is a pitchman for the movement to protect the alleged academic freedom to teach intelligent design as science.

UPDATED (6/30/2008) to fix the link.

Tuesday, June 24, 2008

Contemplating Cycling Accidents

I've been able to ride to work a few time recently. That's been good; although, I am reminded that I have not yet had time to tune up the bike. It sounds and feels a little dry. My legs and lungs also require a tune up, but there is little I can do on that front.

Yesterday, while passing parked cars on narrow city streets, I was thinking about riders in Chicago who have recently been killed or injured. See one story here. Having had my own slight accident with a car, I decided to head south on the path through the Skokie Sculpture Park. This took me past the statue of Gandhi and and otherwise odd collection of art and what someone thinks is art (which, I guess makes it art). Unfortunately, the path ends abruptly at Touhy. Standing there befuddled for a moment, I was joined by another cyclist heading to the Loop and wondering how best to hook up to the Lake Front Trail. I proposed heading south on McCormick to Devon and east to pick up the marked route to the lake front. We headed off together and found the route to be a reasonably easy ride. For some reason, the other guy decided to head south on Clark and I continued on my way.

But here's the thing. There has to be a better way. The path through Skokie seems to pick up again and make it to Lincoln and Peterson or so. That appears to be close to the Channel Trail, which makes it as far as Lawrence (or so I am told).

So, here is my question to North Shore bike commuters: What is the best way to get to the Loop maximizing trails and minimizing opportunities to tangle with traffic?

UPDATE (6/30/2008):

It turns out that the Channel Trail does not end at Touhy; it was just blocked for repairs. I took that route in today and found brand new pavement from Touhy to Lincoln, which was great. The ride through the park was also great. At the end of the trail, there is a bit of a mess at Lincoln. The trail heads behind a strip mall and apartment building and dumps on to the sidewalk. At that point, there is a sign directing riders to the left. You'll note the unofficial single track on the left that is a shortcut to the next segment of trail. If you follow the sidewalk along Lincoln, as I did, you cross the channel and a side street and turn left again. Now you are going north but headed for the top of the next segment of the Channel trail. This segment also winds through parks and little patches of prairie along the channel. It was far more pleasant than my normal route down Western and across Pratt and I had no fear of getting doored for a good long portion of the ride.

At Lawrence, the trail ends. I followed the bike signs along Lawrence past Lincoln Square to Clark. I turned south on Clark for just a couple blocks where I found a sign directing me to head east on Wilson to the lakefront. Both Lawrence and Wilson have bike lanes. All in all, a nice alternative route that did not add significantly to the distance. I'll see if I can backtrack on the way home.

Thursday, June 19, 2008

Court Decisions

In reverse chronological order:

Auto Alliance: Discovery disputes are pretty rare in the Court of International Trade. This one seem like it was a doosey. Who hasn't wanted to depose opposing counsel? Turns out that it is hard to justify.

Optrex: Speaking of discovery disputes, this case also involved a contested privilege question. Here, the U.S. brought a penalty action against Optrex concerning the classification of LCD display panels. Initially, Optrex defended on the basis that it had sought the advice of counsel and, therefore, exercised reasonable care. That seemed to make sense until the Court of International Trade told Optrex that if its defense is based on seeking the advice of counsel, then Optrex had waived the privilege and must turn over that advice. Well, it now turns out that the advice to Optrex was that the classification it was using was probably wrong but that there was an argument that might possibly distinguish the products from the relevant Federal Circuit decision. Consequently, the advice from counsel included the caveat that applying for a binding ruling from Customs and Border Protection would be advisable. Optrex opted not to follow this advice. According to the Court, this constitutes negligence to the tune of 1.5 times the nearly $1 million in unpaid duties. So where does that leave the careful importer? If you have a reasonably defensible internal process, you might be better off not seeking advice of counsel. [Note: I did not say that. You imagined it.] If you get advice, you better follow it.

UPS: This is another round in the litigation over CBP's effort to assess penalties against a broker for misclassifying electronic components. The underlying issue in this part of the case has to do with the correct interpretation of 8473.30. That subheading covers "Parts and accessories of machines of heading 8471" and has two un-numbered subdivisions. The first is for "Not incorporating a cathode ray tube . . . ." The second is for "Other." The defendant argued that the language "[n]ot incorporating a a cathode ray tube" applies only to the finished article, not the part or accessory. Similarly, the "other" category requires only that the finished article, not the part or accessory include a CRT. The court rejected this attempted application of the so-called "last antecedent rule" as inconsistent with both the rules of grammar and common sense, which is pretty harsh language. The simple point seems to be that these subdivisions of the subheading are set off and indented but over the listing of tariff items. Everything below the limiting language has to conform to that limitation, not the language above.

Pomeroy: There is a similar issue raised in this classification case involving candle-powered lamps. The language in heading 9405 says this: "Lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included; illuminated signs, illuminated nameplates and the like, having a permanently fixed light source, and parts thereof not elsewhere specified or included . . . ." The issue was whether the phrase "having a permanently fixed light source" modifies "lamps and lighting fittings." This is a good illustration of the power of the semi-colon. The modifier only applies back to the items listed in the same grouping separated by the semi-colon. Thus, "having a permanently fixed light source" does not modify "lamps and lighting fittings."

Ahh, but there is a problem. Note 1(e) to Chapter 70 excludes from that chapter "Lamps or lighting fittings, illuminated signs, illuminated name-plates or the like, having a permanently fixed light source, or parts thereof," which it directs to 9405. Note that there is no semi-colon here. To me, that implies that "permanently fixed" limitation applies all the listed goods. So only lamps with permanently fixed light sources are excluded from Chapter 70. The Court does not need to address this issue directly because, finding ambiguity in the language, it looked to the Explanatory Notes for clarity. In the ENs, it found reason to preclude the classification of the lamps in Chapter 70.

These last two cases, surprisingly enough, illustrate why I think classification cases are so interesting. They are like intellectual puzzles with the HTS providing the rules. The only way to arrive at a legally correct classification is to apply the rules, in the proper order. Miss a rule, and you can get off the rails real fast. From the standpoint of an advocate, the fun is in trying to find the gaps that give us room to maneuver.


I have a bunch of substance to post. I have a couple comments on the UPS and Pomeroy decisions from the CIT and need to talk about the Optrex decision in some detail.

But, I can't do it now.

In the meantime, I give you these two items.

First: Scooting Across the Border. Read that article. I'll wait because I have a question.


OK. Here's my question: Who decided that motorcycles and scooters get to cut ahead in traffic just because they can fit between two lanes of cars? I ask this because this very morning I rode my bike to work. While waiting to make a left turn at a light (off Western to Pratt), I waited behind a car with another car behind me. In other words, I acted like I was a car. While sitting there waiting for the arrow, a guy on a blue Schwinn with a basket on the handlebar and a chain guard sped past us and positioned himself at the front of the otherwise orderly line. Am I supposed to do that? I admit to occasionally hopping on the sidewalk to avoid a snarl, but that seems different.

In the case of scooters at the border, I am surprised these guys don't occasionally run into a car driver who is not happy about being pushed back in line by scooters.

Second: Check out this vintage article from the New York Times. It is an 1898 article summarizing a bunch of then-recent customs decisions. A sidebar covers the issue of the classification of a mummy for museum display. It's hard to imagine customs decisions getting that much attention today.

Wednesday, June 18, 2008

Happy Belated Smoot-Hawley Day

I tried to do a mobile post of this yesterday, June 17th, the first annual Smoot-Hawley Day celebration.

Enjoy the holiday. Now is a time to gather with your colleagues and be nostalgic about 25% rates of duty. If anyone in your office raises the question of whether the Smoot Hawley Tariff Act might have contributed to plunging the world into a global depression, tell them that the Tariff Fairy will not put a new HTSUS under the tariff bush this year.

If anyone has ideas for SHD traditions, please put them into the comments. Perhaps a non-tariff barrier obstacle course, or the annual running of the phytosanitary measures?

Friday, June 13, 2008

EFF to be Amicus in Laptop Search Case

This news item from Slashdot says that the Electronic Frontier Foundation and the Association of Corporate Travel Executives are filing an amicus brief in an effort to have the full 9th Circuit Court of Appeals rehear and reverse the three-judge decision in Arnold upholding the border search of a laptop computer. You can read the brief here.

A previous post on the Arnold decision is here.

Wednesday, June 11, 2008

Export News

It's not exactly CROSS, but the Bureau of Industry and Security has finally produced an online database of guidance on exports subject to the Export Administration Regulation. Here's a link:

U. S. Bureau of Industry and Security - Policies and Regulations

Plus, while I am thinking about exports, a helpful e-mailer reminded me that I have failed to cover the long-anticipated actual implementation of mandatory electronic filing of export documents via the Automated Export System (or AESDirect). The new rule requiring electronic filing takes effect July 2 although enforcement will be delayed until October 1, 2008.

Census has put together some resources for the trade. Those can be found here.

I know there is a segment of my readers who would like a detailed dissection of the new rule. I recognize that there is a place for that. It's just not here. I like to stick to the big picture or, where court decisions are involved, the excruciatingly small picture. More on that later. In lieu of attacking the Mandatory AES rule myself, I'll let Cortney Morgan, an associate in the DC office of my law firm, do the dirty work.

Monday, June 09, 2008

Honey Laundering

Here is a link to an interesting story from the Chicago Tribune. The article is about criminal cases pending here involving the transshipment of honey to avoid antidumping duties on honey from China. It's not very common for these things to break into the local media, but this story involves criminality, a hint of international intrigue, and just a bit of danger in the form of honey tainted by banned antibiotics. At no point in the story, though, is there a comment from the plastic bear with the pointy head.

Wednesday, June 04, 2008

On and Off Topic Nonesense

I have a small sailboat in Lake Michigan. It's just big enough to let me and my crew of two harbor hop up to Milwaukee or down to Chicago in fairly uncomfortable conditions. In my impractical dreams, I have a much larger boat and my harbor hopping shifts to the Caribbean.

With that in mind, click this link. It graphically tracks the travels of a 51' yacht called Event Horizon. The crew of this boat blogs here. Cool.

Somewhat related to Customs law is this news item. The article conveys the story of an attempt at smuggling cocaine pressed into the form of a Jesus statue, and I don't mean a former Cub's shortstop Ivan deJesus bobble-head. The article says CBP will test the statute to determine its purity. That seems sacrilegious to me, but I'll leave it to those of you in that camp to complain.

Next, all the stars finally aligned and I road my bike to work on Monday. The ride in was fine, if a slow 1:30 (it's 20 miles). The ride home took about the same time, but the last 5 miles or so was a serious slog. I drank about 12 ounces of Accelerade on the way home but did not do much else to prepare. I'm pretty sure I have now experienced the delayed bonk. There is way more info than you want to know, so I'll cut to the chase. By Tuesday morning, I thought I had the flu and had to go home from work early. Turns out that a four-hour nap, a PBJ, and a bottle of Gatorade fixed me right up. Looks like I need to load up on the Gu packets. And, by the way, I can't recommend Accelerade as commuter fuel. It does not dissolve as well as either PowerBar powder or GuO2 and it has a decidedly medicinal taste.

Last thing, and I ask this with honest respect for the parties involved, what's up at the Court of International Trade? Is there a surplus of paper to eat through? The last batch of customs slip opinions have all been tree-killers:

U.S. v. UPS, 48 pages
Pomeroy Collection v. U.S., 41 pages
DuPont v. U.S., 70 pages

At some point, I'll finish reading these decisions and let you know whether there is anything there of general interst.