Customs Law

The Supreme Court has decided (5 to 4) that the "check off" fee assessed against the importation or sale of beef cattle is not unconstitutionally compelled private speech. Darn! If it were, the collected fees might be subject to recovery and a great many customs lawyers would be celebrating with steak dinners and planning for retirement. That is because the fee (collected by Customs on imports) would likely have been recoverable (with interest) following a protest of the liquidation of the entry. Alas, it seems that it shall not be. Justice Scalia's opinion finds that the fee is used to fund government speech in support of the beef industry. As a result, it is unlike cases involving fees compelling speech on behalf of private interests. Consequently, the fees do not violate the First Amendment. Since the mushroom fee was unconstitutional but the beef fee is not, beef stroganoff manufacturers are suffering mixed results. Similar fees on watermelon, cotton, avocados and ot...

There is a good article in the May 25, 2005 New York Times on some of the troubles Customs is having in securing the supply chain. It is worth a read, here is a link .

Well I don't know why I came here tonight, I got the feeling that something ain't right, I'm so scared in case I fall off my chair, And I'm wondering how I'll get down the stairs, Clowns to the left of me, Jokers to the right, here I am, Stuck in the middle with you. --Stealers Wheel Remember that transaction value is the price paid or payable for the goods when sold for export? Well, what happens if there are two or more sales for export? Believe it or not, that happens a fair amount. The most common scenario is where the U.S. customer buys from a reseller who, in turn, buys from the manufacturer. Generally speaking, the price from the manufacturer to the middleman will be less than the sale from the middleman to the importer. So, for customs valuation purposes, guess what the importer wants to use as the sale for transaction value? By the same token, guess what sale Customs wants to use? The answer is that Customs is often quite happy to apply duty to the middlema...

From seat 16F, 30,000 feet. I don’t watch a lot of TV. In fact, now that Enterprise is cancelled and The Amazing Race is over, I have nothing to watch but the 10:00 news. I don’t have cable, so don’t go on about what great stuff there is on Bravo and A&E or the History Channel. I fear cable. When I am in a hotel, cable can completely hypnotize me. I will often find myself channel surfing well past midnight just for the curious sensation of seeing all those channels go by. I don’t need that at home. Anyway, I had read that Smallville is a good series and recently became the bailee of the complete collection of the first three seasons on DVDs. I am now about half way through season two. It is, in fact, a good series if you have even the slightest fondness for comic-book superheroes. I write to make a few observations: First, if I were in high school, I would be deeply infatuated with Lana Lang . This may be good timing as I am now deprived of Science Officer T’Pol , my previous infa...

Sometimes people assume that since my job is nominally “customs and international trade lawyer,” I must get to go to glamorous and exciting foreign locations to hammer out important deals over expensive meals in even more expensive hotels. My title seems to conjure images of London cabs, Tokyo Sushi bars, and good beer in Brussels. No such luck. For me, the typical business trip is to an industrial-grade Rust Belt city or, more likely, to a factory in the almost rural area outside Rust Belt City which I think may be between Center City and Edge City. My current transportation travail is a perfect example of the true nature of business travel for me. Yesterday, I left home at about 9:00 AM to get to O’Hare for a flight to a city I will not name. Why? Because Heisenberg’s uncertainty principal does not apply to airline schedules. If you are smart enough to search the readily available public record of customs rulings and Court of International Trade decisions, you could easily compile a ...

We already know that transaction value is the price paid or payable for the merchandise. That seems appropriate. After all, people tend to sell things at a profit and pay what the merchandise is worth to acquire it. Your law and economics types call that acting rationally. Customs knows, however, that not all transactions fit Adam Smith's market forces model. The obvious place this breaks down is where there is no sale. If someone sends you 10 pounds of Vegemite as a gift, at least two things are going on. First, you are not going to pay for it so there is no price paid or payable. Second, the sender probably does not really like you much. Where there is no sale, the customs laws say there is no transaction value. If it is your Australian Mum sending the Vegemite but she expects you to pay for it, there may be a sale. Also, she definitely does not like you. Customs, however, is going to assume that the relationship between you and your Mum affected the price. In this case, she may...

For any of you who were worried, I did get the bike home from work the next day. Turns out that when I fell, I broke a rear spoke so it had to go to the shop. Seems like I should learn how to fix that and true up the wheel myself. The mechanic recommends replacing the rear wheel before too long. Today was the Tour of the North Shore Half Century. My friend and I started early in a cold wind. It was about 50 degrees when we started. The ride is not what I would call a model of organization and parts were not well marked. One would think after doing this for 30 years, it would be old hat. We got off the route two or three times. I blame signage for that. I did get through it for a total of 53 miles in 3:38:12. By no means fast. But, considering my level of conditioning, I am not complaining. The route took us along bike paths and suburban streets through some very affluent areas. So, there were nice houses to see along the way and the occasional glimpse of the lake. To see the route, lo...

As I mentioned earlier, commissions need to be included in the value of merchandise reported at the time of entry (or later reconciled, but that is a whole other point). But, as if to make this complicated, not all commissions are dutiable. The statute says that: The transaction value of imported merchandise is the price actually paid or payable for the merchandise when sold for exportation to the United States, plus amounts equal to . . . any selling commission incurred by the buyer with respect to the imported merchandise . . . . There are two kinds of commissions: dutiable selling commissions and non-dutiable buying commissions. The thing about dutiable selling commissions is that the buyer is paying a cost associated with selling the goods. Think of it as the buyer paying the commission to the sales staff. Why does that happen? Don't ask me, but it does. So, if it is not added to the entered value, that value is understated because it is a cost the seller would otherwise have ...

First, I need to set the proper mental image for you. When picturing me in your head, picture the character on the Simpsons generally known as Comic Book Guy . I know I don't really look like that. I don't have a beard and my complexion is less yellow, otherwise, it's close enough. Weather permitting, I commute to work on my bike . Since this is Chicago, the weather does not permit often and I spent much of the fall and winter doing little more than eating. Hence, today I tipped the scale at 20 pounds more than the last time I rode to work. Still, I was excited to start the new season. Plus, I am planning to do a 50 mile ride ("half century") next Sunday, so I need to get warmed up. I had much anticipation as I packed my pannier last night. Even though I tried to exercise through the winter, I generally failed. I knew it would be a bit hard, so I promised to take it easy. No hammering the flats, as they say. The whole ride is 20 miles of city streets and bike path...

Royalties always need to be added to the reported value to make transaction value. Well, maybe. As we lawyers like to say, it depends. Let's start with the law because that is what we are supposed to do. The law says that transaction value should include: any royalty or license fee related to the imported merchandise that the buyer is required to pay, directly or indirectly, as a condition of the sale of the imported merchandise for exportation to the United States. That seems relatively clear. If the buyer has to pay a royalty or license fee to get the goods, it is part of the value of the merchandise and should be reported. But, it is not at all clear. Why? Because Customs has a regulation that says: Royalties or license fees for patents covering processes to manufacture the imported merchandise generally will be dutiable. Royalties or license fees paid to third parties for use, in the United States, of copyrights and trademarks related to the imported merchandise generally will ...

This is gross, so consider it one of my off-topic random posts. I have pink eye. I got it from my own personal germ vector who happens to be the four year old that lives in my house. My doctor once referred to children as little nuclear incubators of germs. Currently, I am listing pink eye as number six on the top ten list of reasons not to have kids. I'm working out the rest of that list. For the uninitiated, pink eye falls into two flavors: viral and bacterial. The green oozey stuff gluing my eye shut is apparently evidence that I have become the host for bacteria. It also means I can deal with it via antibiotic drops. The viral version can stick around for weeks. This morning, I woke up with my right eye stuck shut and swollen. I walked around in my shorts yelling "Cut me Mick. Cut me!" but got no attention and no laughs. I have been on drops for about 24 hours and they seem to be helping. I'm glad I can handle the drops because I am very squeamish when it comes to...

Customs entry . . . $100 Commercial invoice . . . $100 A cancelled check . . .$100 Customs compliance relating to valuation . . . Priceless. Basically, that is it 98% of the time. Your entered value should correspond to the price you agreed to pay for the goods. That amount should be what is shown on the invoice, reported to customs and paid to the supplier. Of course, it is a lot trickier than that when you start looking at the details. Most entries are appraised on the basis of the transaction value of the merchandise. Transaction value is defined as the price paid or payable for the merchandise when sold for export to the United States. To that amount, there are certain specified additions that must be reported to account for elements of value not included in the price. Why is this important? For two reasons. First, the practical answer is that most duties are calculated on an ad valorem basis. We say things like ad valorem when we want to prove we went to law school and that this...