Tuesday, March 26, 2013

Messin' with Customs

Link Snacks, Inc. v. United States is a straight forward and very frustrating case from the Court of International Trade. The sole question is whether beef jerky made of dehydrated cured beef is classifiable as cured beef (1602.50.09, 4.5%) or as other beef (1602.50.20, 1.4%). The problem for the plaintiff is that the beef is undeniably cured and that not all beef jerky is made of cured beef. Further, there is no tariff item specifically addressing dehydrated beef or beef jerky. Thus, the alternative is between an eo nomine classification for cured beef (which this is) and a basket provision for other beef (excluding corned beef). Given that "other" means beef that is not cured or pickled and that this jerky was cured, the plaintiff had a tough case.

Plaintiff made several solid arguments about the essential nature of beef jerky. What turns a meat into jerky is not curing. Rather, it is the dehydration that turns it into the well know tough strips of meat leather beloved by Sasquatch and Sasquatch pranksters. This lack of moisture is what defines jerky regardless of whether the meat is or is not cured.



According to the Court of International Trade, there was evidence introduced showing that other jerky producers do not use cured meats. Consequently, this creates an opportunity for Link Snacks to engage in some tariff engineering. If it produced jerky from un-cured meats, it would seem that its jerky would qualify for the lower rate of duty. That makes me wonder whether the sudden prevalence of uncured pepperoni and salami in my market has more to do with tariff rates than with artisanal charcuterie.

The reason this case is frustrating is that the tariff schedule does not appear to be designed to recognize beef jerky as a food item. As was mentioned above, the defining characteristic of jerky is its low moisture content. There should be a breakout under cured and uncured meats for dehydrated meat to account for jerky products.

Further, I am confused by tariff item 1602.50.10 which covers uncured meat, corned beef. Corned beef is a salt cured beef product.  The Link Snacks case is very clear that the addition of salt and nitrate to meat is the definition of curing. Corned beef appears to contain both. See this federal government discussion of the allowable amount of nitrate in corned beef. To that extent, Heading 1602 appears to have a problem in that it is treating corned beef, eo nomine, as uncured meat.

The only way I can reconcile that is by assuming that the corned beef of 1602.50.10 is not treated with both salt and nitrate while cured corn beef (i.e., with both salt and nitrate) would be in 1602.50.09. Unfortunately, that does not seem to be the case as this ruling involves corned beef that is treated with both salt and nitrate but is classified 1602.50.10 as an uncured meat. Here is a similar ruling.

I can't find a single ruling in which corned beef was treated as cured meat. I know it is incorrect to compare two tariff items at different levels of indentation. The comparison here is between cured and other, not between cured and corned beef. Still, the fact that a cured meat is specified at the same eight-digit level as corned beef makes me think that the "cured or pickled" meat of 1602.50.09 might mean something different than what it seems to mean.

Corned beef notwithstanding, on its face, the jerky in this case was cured and that would exclude it from 1602.50.20, which is what the Court of International Trade held.

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