Monday, November 28, 2016

Quick Post: Tyco Affirmed

The Court of Appeals for the Federal Circuit has affirmed the Court of International Trade decision in Tyco Fire Products v. United States. You can read the background on this case here. The Federal Circuit held that liquid-filled glass bulbs of the sort used in fire sprinklers are properly classified as articles of glass in Heading 7020 rather than as mechanical appliance of Heading 8424.

There are two interesting points to take away from this decision. The first is that the Federal Circuit, at least this panel, is skeptical of the value of the Brussels Tariff Nomenclature Explanatory Notes when interpreting the current Harmonized Tariff Schedule of the United States. This is in part because Customs declared the HTSUS to be a wholly new system and that the BTN Notes are of no value when interpreting the new text. The CAFC did not definitively decide this issue, but it certainly creates doubt as to the continuing value of the old notes.

The second point is that the CAFC indicates that tariff language requiring a "high proportion" of some material should usually be read to mean "more than 50%." Again, this is not a definitive holding and the Federal Circuit itself pointed out that this will not be the case where there are more than two materials. Nevertheless, this is useful guidance for interpreting the Tariff and the legal notes going forward.

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