CIT: Tools of Trade Are Not for Sale

This is the last post covering cases from 2021. I can't say I am sad about seeing the end of 2021. Thank you all for reading my posts here and following me on  Twitter . Here’s hoping all of you have a happy, safe, and professionally satisfying new year.  The case of the day is  Porsche Motorsport North America, Inc. v. United States , in which the plaintiff sought to secure duty-free entry for certain merchandise under HTSUS item 9801.00.85, which covers “[p]rofessional books, implements, instruments, and tools of trade, occupation, or employment, when returned to the United States after having been exported for use temporarily abroad, if imported by or for the account of the person who exported such items.” The items in question were vehicle parts exported from the U.S. to Canada by Porsche in a trailer to be stationed at Porsche team racing events in Canada. According to Porsche, it exported the trailer to "promote the Porsche brand" by providing parts to participants

The "Treatment" of Bicycle Seats

The Court of Appeals for the Federal Circuit has pedaled into the controversy over the classification of children's bicycle seats. In this context, that means extra seats that can be attached to a bicycle to carry a child as a passenger, as opposed to seats (or "saddles" for children's bicycles). The underlying dispute is whether such seats are classifiable as seats of Heading 9401 (duty free) or as bicycle accessories of 8714.99.8000, which are subject to a 10% rate of duty. The CAFC opinion in Kent International, Inc. v. United States is, however, not about the classification itself. Rather, it is about what to make of Customs' handling of entries of this merchandise and whether that handling constitutes a legally enforceable "treatment." Kent, it appears, is an importer trying to do this right. In 2005 it received a binding ruling from CBP stating that the seats should be classified as bike accessories in Heading 8714. After that, including between A

The Case of the Unseen Seizure

The Court of International Trade has exclusive jurisdiction to review Customs & Border Protection's denial of a valid protest, including a protest of the exclusion of merchandise. 28 USC 1581(a) (CIT jurisdiction) and 19 USC 1514(a)(4) (exclusions are protestable). An exclusion can happen in two ways. First, CBP can make an affirmative decision on admissibility within 30 days of the merchandise being presented for examination.  After those 30 days and if the merchandise has still not been released, the goods are "deemed excluded." 19 USC 1499(c)(5)(A). Deemed exclusions are as protestable as affirmative exclusions. A seizure, on the other hand, is subject to the exclusive jurisdiction of the U.S. District Court in the district where the merchandise is located. 28 U.S.C. 1356 . A seizure is not an exclusion and is not protestable. In other words, seizure and exclusion are two distinct legal actions subject to two distinct avenues of review.  The process CBP must follo

CAFC Affirms, No Double Drawback Problem on Wine

Back in 2020, we covered National Association of Manufacturers v. Department of Treasury  in which the Court of International Trade invalidated a CBP regulatory amendment that prohibited drawback of certain excise taxes based on the export of domestically-produced wine that was exempt from the export tax. The Federal Circuit has now affirmed that decision, along much the same lines of reasoning as applied by the CIT, so go read that post for more details. In brief, Customs and Border Protection (but apparently not Congress) perceived there to be a problem in the way drawback law has been applied to wines with respect to excise taxes. Prior to CBP amending the regulations, drawback could be claimed for the recovery of excise taxes paid on imported wine where the corresponding exported wine was a domestic product that was exempt from the excise tax. The exemption might apply because the wine was exported from a bonded warehouse without being offered for sale in the U.S. The apparent conc

Otter Products Redux

Way back in 2016, the Federal Circuit affirmed a Court of International Trade Decision finding that certain Otter Products device cases were not "similar to" the items listed in HTSUS Heading 4202, which covers various containers for personal effects including suitcases, camera cases, handbags, bottle cases, jewelry boxes and similar containers. Instead, the phone cases were properly classified as articles of plastic in Chapter 39. You can read my riveting coverage of that decision here .  In a new(ish) Otter Products decision , the plaintiff asked the Court of International Trade to extend the favorable tariff treatment to entries that had been part of a voluntary prior disclosure to Customs and Border Protection. My guess is that if you have found your way to this post, you are familiar with voluntary prior disclosures; but lets get that context on the table. An importer has an obligation to exercise reasonable care when reporting information to Customs concerning the merch

CIT Stays Judgment in Derivatives 232 Challenge

Still catching up. This time, I look at PrimeSource Building Products, Inc. v. United States , which is another piece of litigation spinning out of President Trump’s Section 232 duties on steel and aluminum products. I posted about the merits decision in this case here . In that decision, the Court found that the extension of the duties to derivative products occurred beyond the 105-days in which the President is authorized to act. At an earlier stage, the Court enjoined CBP from collecting the duties and required the importer to maintain a sufficient bond to ensure payment to CBP should the decision be reversed on appeal. That injunction dissolved on the issuance of the judgment by the Court of International Trade. This new decision arises out of a request from the United States to stay the enforcement of the judgment and reinstate the terms of the injunction while the government appeals to the Federal Circuit on the merits. A stay pending appeal is not uncommon. It is a tool that

Errors in 232 Exclusion Can Be Hard to Fix

Exactly how to go about getting refunds of incorrectly collected Section 232 duties on steel and aluminum products is a complicated issue. The result, it seems, turns on what caused the incorrect collection. And it is important to act quickly to preserve the right to collect a refund because it turns out that failing to act can result in the loss of the refund. This all comes up in the context of Voestalpine USA Corp and Bilstein Cold Rolled Steel LP v. US . The underlying facts in this case are not terribly complicated. In July of 2018, Bilstein submitted to Commerce a Section 232 exclusion request. The request contained a non-existent 10-digit HTSUS code. Despite the error, and the fact that requests are supposed to be reviewed by CBP for “administrability,” Commerce granted the request with the invalid HTSUS code. VoestAlpine, the importer, entered steel that should have been covered by the exclusion and, noting that the correct HTSUS code on the entry would not match the exclus