Customs Law

Greetings from the customs territory of the United States, but just barely. I'm annoyed at Google today because when I tried to search for something, it sent me to www.google.com.pr en espanol.  I understand that this is a feature not a bug and that it makes life easier for the locals.  But how come I can't get to my plain old Google?  When I manually enter the Yankee-centric address, I am redirected to the .pr version.  Happily, there is "Google.com.pr ofrecido en: English." Note that the same thing happens with Blogger.  Google should set a cookie or profile tag with my preferred language and search page. Here's a question to which I should know the answer.  Why are they letting me in duty free stores here?  As I recall (and I admit I have not looked at this for a while), the reason the proprietor of a duty-free store is exempted from duty liability is that the goods are being sold for export.  Last I checked, I was still in the customs territory?  What gives?  ...

An increase in the duty on cars imported into Russia has caused violent protests. Here is the New York Time story . Forget about all the academic arguments over whether high tariffs are good or bad for the local economy. I'm interested in that bust can't possibly sort it out in a blog post. I'm not, after all, a Nobel laureate with a New York Times column. No, I am just a customs lawyers. What I do think is interesting is the comparison to the U.S. market. What do you think would have to happen to get Americans to take to the streets to protest an increase in customs duties? The U.S. has basically banned some forms of caviar, made so-called "conflict diamonds" contraband, and maintains high rates of duty on fancy foreign shoes. So, I surmise it is not luxury items that would cause a riot. I posit that an increase in the effective rate of duty on Red Stripe , Corona , and Pilsner Urquell would cause an uproar among the pretentious young intellectual crowd....

I'm short on time and I am pretty sure just about everyone has checked out of their business mindset for the holidays. Nevertheless, I'll give you this bit of news: APHIS has posted to its web site some tools for Lacey Act compliance. Lacey Act Declaration form. Plant classification database . And here, for good measure, is the APHIS Lacey Act home page .

Just when I thought things were getting dull, Wayla Guy tipped me to this story . First, just so CBS knows, my firm has an office in New York and we are happy to come by for a meeting. We'll bring sandwiches if you want. The story is that upon wrapping the 17th season of its reality show Survivor, CBS shipped a container of goods back to the U.S. The show had filmed in Gabon, West Africa. Note surprisingly, the shipment contained lots of Africana including animal skulls and hides, ceremonial masks, ostrich feathers, shells and various bones. OK, first things first, people familiar with Fish & Wildlife regulations should have that tingling of Spidey-sense. What kind of shells and bones? Do we have a Convention on the International Traffic in Endangered Species problem? What were the masks made of? Could there be elements from protected species used to decorate those masks? As John McLaughlin would say, Issue Two: The merchandise was apparently infested with termites and other v...

Seems awfully quiet out there. Washington is in pre-inauguration limbo and a lot of businesses are quiet either due to the economy, the cyclical nature of their business, vacations, or just the weather. It seems to me that there hasn't been much about which to write lately . (Perhaps I should post on whether it is worth sounding pompous to avoid ending a phrase with a preposition.) So, I will pass on this item about festive articles . After years of litigation, Customs and Border Protection has issued new guidance on how to classify festive articles in the wake of Michael Simon Design, Inc. v. U.S. This guidance does not go to bakers' wares at issue in the ongoing Wilton case, nor does it cover costumes, which were previously resolved. The upshot is that for entries post February 3, 2007 utilitarian articles like tableware, apparel, and bed linens are excluded from Chapter 95 by virtue of new Note 1(v). Following Michael Simon Design, the exclusionary note does not apply ...

For my side gig, I write technology columns for the Chicago Bar Association. I've been doing that for more than 10 years. The name of the column is "Riding Circuits." Lawyers will get the pun. One of my designated topics is online marketing. Lately, I've been reading a lot of over heated articles about the value of Twitter for lawyer business development. So, I set up a twitter account as an experiment. So far, I am unimpressed. I don't know who would want to virtually follow a lawyer around a mundane day. But, should you want to do so, feel free to follow me at http://twitter.com/customslawblog . I'm not going to commit to lots of tweets. We'll see. While I'm at it, I created a new e-mail account for this blog. E-mail generated from my blog profile had been sent to my Riding Circuits account. I don't check that very often. This should work better. The new address is customslawblog@gmail.com . Have a good weekend.

I did read The Lizard King by Bryan Christy and found it thoroughly interesting.  The book is about the legal and mostly illegal trade in reptiles.  I initially thought it would be too much like reading about work.  As it turns out, there was just enough familiar info to make the book interesting.  Don't take that to mean that you need to be a Customs (or Fish & Wildlife) geek to enjoy the book.  It is more about the characters than the law and enforcement. Still, you know you are too far into this when a passing reference to the Lacey Act makes you smirk. And speaking of animal smuggling . . . Yesterday, on the flight back from New York, I read this story .  It's short, so I'll just post it here: A South African man accused of trying to smuggle hundreds of rare chameleons, snakes, lizards and frogs out of  Madagascar  inside his jacket and luggage was convicted Tuesday and sentenced to a year in jail. Jo van Niekerk, 29, a zoology student from Pretoria, was arrested i...

While I was flying from Chicago to NYC this morning, federal agents were arresting the governor of Illinois. When I landed, I and everyone else on the plane turned on their cell phone, Blackberry, iPhone, or Treo. At that moment, I overheard the flight attendant judging all of us for lacking the self restraint to be out of contact for a few hours. Apparently, anyone who turns on their phone when the wheels hit the runway has some sort of mental illness. As the phones came on, the news of the arrest quickly spread throughout the plane. People spontaneously started discussing it. The out of touch flight attendant was suddenly interested. The thing about it is that we will probably never be involuntarily separated from news again. When I was in law school, the Challenger exploded during the day. Hours went by without any news of the event leaking into my brain. I found out on the train home when I read the paper over the shoulder of the guy ahead of me. That will never happen agai...

Generally, I stay away from news involving Customs and Border Protection personnel behaving badly. There is no point in covering it as it does nothing to explain customs law and could conceivably make a bad situation worse for someone I might have to deal with in the future. So, it works both ways: its polite and it prevents future hassles for me. I'm going to make a general exception here, without going into details. The first reason is that a loyal reader tipped me to the story. This indicates that it has some level of interest in the community. Second, it illustrates that the reality of compliance is often not the same as the government's abstract notion of compliance. The story is that a CBP employee has been charged with employing an undocumented worker to clean her home. It is pretty clear that the CBP employee knew the legal status of the worker because the CBP employee advised the worker not to leave the county and try and re-enter. Here is the full story . In the first...

UPDATED TO FIX LINK (I hope). I generally stick to customs law here, but in real life I do export and trade work as well. With that in mind, here is a story I should have covered earlier. It's a sailing story, and I like those. It is also an international trade enforcement story, so that makes it doubly interesting. It seems that the Bureau of Industry and Security charged Michele Geslin and Peter Goldsmith with violating the export control regulations for helping to organize a regatta to Cuba. According to BIS, that constitutes exporting their respective vessels to Cuba without a license and that is illegal. Apparently, BIS had gone so far as to show up at the launch party to explain that export licenses were required for any vessel intending to visit Cuba. The result was a fine of $11,000 each and the denial of export privileges for three years. The details are interesting. But, more important is that the reported decision is instructive in its explanation of the process. Read i...

Here is an online tool only a compliance geek could love: Harmonized Tariff Schedule Online Reference Tool The ITC has launched a cool site that makes navigating the Tariff Schedule easier and links 10-digit HTS numbers to related Customs and Border Protection rulings. Thanks, ITC. We appreciate the effort.

By now it is old news that Customs and Border Protection has published the interim final rule on the new Security Filing popularly known as 10+2. I'm going to assume that if you find you way to this blog you know what 10+2 is all about. If not, read this 55 page notice . So, I'm just going to post a few observations: Regarding enforcement, Customs has said that it will show restraint during a transition period as importers and carriers implement 10+2 systems. This restraint, though, is dependent on a showing that importers are making satisfactory progress on good faith efforts to implement the requirements. This period of flexibility will last for about a year from the effective date of the rule. That means until about January 26, 2010. After that, an importer's compliance efforts can be considered as a mitigating factor in an enforcement action. In case you are wondering, enforcement of 10+2 (technically known as Importer Security Filing, Vessel Stow Plan, and Container St...

I can't resist posting this. I received a customer survey request from Electronic Arts. I have detailed my problems here. I was very happy to respond and let them know that the game still does not work and their customer support has been less than effective. But, when I clicked the link, this is what I got:

I'm back from the Court of International Trade Judicial Conference. We had a good time, as always. It was down at the South Street Seaport, which has its touristy aspects but still reflects old maritime NY. I moderated a panel on New Developments in Customs Law. Basically, we talked a lot about rule making and modifying policy. The point of most debate was the extent to which Customs and Border Protection can find ambiguity in a statute that the Court has found to be clear on its face. I say they can't but opinions differed. The speaker on this point will say that is an unfair characterization and I am willing to be corrected, but that is what I took from it. Another point of debate is what counts are an interpretive ruling and decision for purposes of triggering the notice and comment requirements for revoking or modifying a ruling under 19 U.S.C. 1625. I think it was an interesting panel. I would be more than thrilled if folks who were there would consider this a space to con...

I bought a copy of the PC game Spore for Jr. It seems like a cool way to learn about evolution (at least a cartoonish version of it) and any game that does not involve broadswords is an improvement. But, the darn thing does not fully work. Normally, I am the go-to tech guy in my family. I generally can solve most PC issues and I am not put off by moderately complicated tasks like swapping out hard drives or setting up wireless networks. Overall, I would say I rank in the above average category for computer literacy. That is why it is so annoying that I can't get this thing to work. Specifically, I cannot log in to the game. It does not recognize that my computer is solidly connected to the internet. This means we can only play with local data and--importantly--can't get the patches to update the game. I am not griping about this without having put in effort. I have done the following: Sent a screen shot of the error message to EA Sent a DirectX diagnostic log to EA Configured m...

Remember National Semiconductor? This is the penalty the Court of International Trade awarded interest on unpaid Merchandise Processing Fees under 19 U.S.C. 1505(c). This provision is the law that gives Customs and Border Protection the right to collect interest on unpaid duties and fees. The Court also assessed a $10,000 additional penalty under 19 USC 1592(c)(4)(B)(i.e., the prior disclosure statute). The Federal Circuit reversed that decision and remanded for a new determination. According to the Court of Appeals, 1505(c) does not provide authority for the Court to award interest as part of a penalty case. The second time around, the Court of International Trade awarded the maximum penalty allowed in the prior disclosure (i.e., the interest owed) plus pre -judgment interest. Today, the Federal Circuit affirmed the maximum penalty and reversed the pre -judgment interest. Here is the opinion . In analyzing the maximum penalty, the Federal Circuit noted that how the Court of ...

Here are the details for the December 10 seminar in New York.

On December 10, 2008 I'll be speaking at a seminar in Manhattan.  It will be me and my partner Rick Van Arnam talking about Customs enforcement, penalties, and compliance.  It's a half day.  The International Compliance Professionals Association  is co-sponsoring.  The details are: December 10, 2008 8:00 AM to 12:00 PM Kitano Hotel 66 Park Ave (at 38th) New York, New York 10016 $50 ICPA Members $65 Non-members 8:00 Registration and continental breakfast 8:30 Part I – Understanding the risks Commercial Fraud and Section 1592 What constitutes a violation Understanding the concept of materiality Quantifying possible exposure The prepenalty/penalty process What is subject to mitigation vs. cancellation The prior disclosure process Understanding Section 1595(a) When does it apply – admissibility issues, currency, trademarks etc. Understanding the seizure/forfeiture process Avenues of relief from remission to court Special Situations Demands for redelivery Marking duties Enforcement ...

A few things worthy of note: Totes Rehearing Denied The Court of International Trade has denied dual requests for a rehearing in the Totes case challenging the constitutionality of gender-specific rates of duty on gloves.  You probably remember that the Court previously dismissed the case on technical grounds but permitted the plaintiff to refile if its case.  My earlier post on  that is here .  In the motion for rehearing, the plaintiff asserted that the discrimination is facial and, therefore, plaintiff need not plead discriminatory intent or effect.  For its part, the United States argues that the case should be dismissed on jurisdictional grounds because the plaintiff never filed a protest of the underlying liquidations.  This is the "exhaustion of administrative remedies" argument, and it fails here.  The Court holds that there is no decision by U.S. Customs and Border Protection to protest.  The importer is not challenging the tariff classification nor the rate of duty...

Congratulations. In the coming months you will have many important decisions to make. Not the least of which will be your Homeland Security team. Feel free to call.

Warning: Off Topic First, I am peeved at myself for taking the small chainring off my bike. I had a three-ring crank set and took the small ring off to save weight. This image will give you an idea of what I am talking about, although it is not my exact gear. It turns out that the relatively minute amount of weight is completely unnoticeable. I would do much better trying to take 20 pounds off the saddle (if you know what I mean) than saving a few grams on the bike itself. Moreover, on those occasions when my chain jumps off the chainring, it now becomes almost hopelessly entangled in the lugs where the granny ring used to attach. It is very annoying. I know I need a new chain and that I should lubricate more often, but I still find this makes me feel very stupid. To make matters worse, I have no idea where that chainring went; so I can't replace it. So, to avoid a similar fate, I as this question: Does anyone have experience with rigid boom kickers in lieu of a topping l...

A while back, an anonymous reader posted a comment to my post about the case in which Customs and Border Protection summarily denied a protest relating to the detention of merchandise in an origin case. The original post is here . The issue I raised came down to whether Customs and we should assume that importers who end up presenting fraudulent origin documents to CBP are victims or accomplices. Obviously, there will be cases in which either one will be correct. But overall? What do you think? The commenter said this: The importer is almost unfailingly complicit when these types of dual documents are used. And these companies have no reservations in challenging adverse determinations against their false documents because the government does not have the resources to verify overseas production (ICE did not and will not take this kind of case, leaving CBP to its own devices). Attempts at informed compliance in these instances do not lead to future compliance as you suggest; it acknowled...

Greetings from Canada! I am up hear to speak at the IECanada conference tomorrow. I wish I had more time to stay, but I am doing a travel hit and run to Toronto. I need to be in Chicago on Thursday to speak at a World Trade Center NAFTA event. It's nice to be asked, but October has been a little ridiculous. On the plane, I read a couple rulings that I found interesting. First, H021886 : The facts are the kind of oddball thing that only comes up in this area. None of my friends out there writing contracts or litigating injuries will ever see a case like this. Here is how Customs and Border Protection describes the merchandise: The merchandise at issue is identified as the "Maison Tropicale." It is a structure constructed from sheet steel and aluminum. It was designed by the French architect Jean Prouvé in 1949 and produced in 1951. The Maison Tropicale was created in response to a French government-sponsored competition beginning in 1947 to develop ideas for low cost housi...

Western Power Sports is one of those cases that just stinks of underlying policy issues. The gist is that Customs asked the importer to verify the origin of apparel it had imported. In response, the importer produced “delivery records, employee time cards, and other production-related documents.” After reviewing the documents, Customs found they failed to substantiate the origin claim and issued the dreaded Notice of Redeliver. Western Power protested and Customs and Border Protection denied the protest apparently stating that the documentation was falsified. In the Court of International Trade, Western Power claimed that the general denial of the protest without specifically listing the reasons for the rejection violated constitutional and administrative law rights. According to the Court, the constitution only requires that the agency alert the interested party to the issue and provide a reasonable opportunity for the interested party to object. Since the protest denial stated that ...

Miguel Delgao lost his brokers license when it was discovered that he had been part of a scheme to import liquor into a bonded warehouse where paperwork was prepared showing it was to be exported. But, instead of being exported, the liquor was diverted back to the U.S. without the payment of federal liquor taxes. Apparently, Mr. Delgado does not argue that his conviction on 14 counts of violating 26 U.S.C. § 5601(a)(11) was proper. He might, but that is not the point for us. What he argued at the Court of International Trade was that his felony convictions did not relate to the importation of merchandise nor did they arise out of the conduct of customs business. 19 U.S.C. § 1641(d)(1)(B). To cut to the chase, the Court disagreed . First, the fact that the plan was never to export the goods from the warehouse but to divert them to the U.S. commerce does not mean the plan did not involve exports. Rather, the statute only requires that exports be involved or closely related to the transac...

The Customs Bulletin is a publication with a long and important history. Through the Bulletin, Customs and Border Protection provides notices to the trade regarding important decisions of the Court of International Trade, changes in policy, and new regulations. It also includes a bunch of mundane but important stuff like exchange rates. I’d venture to say that besides the Federal Register, the Bulletin is Customs’ most important and most “official” means of communicating to the public. If something is in the Bulletin, I’m willing to bet that Customs assumes importers are aware of it. In Travelers Indemnity v. United States , the Court of International has, as far as I can tell, let us all off the hook when it comes to knowing what is in the Bulletin. The facts are important here, so I will summarize. Travelers was the surety for an importer of televisions subject to an antidumping duty order. At the time of entry, the importer deposited estimated dumping duties 1.38%. Liquidatio...

Here is a link to a notice published today (10/8/2008) in the Federal Register.  In the notice, APHIS sets out its planned phase-in of Lacey Act enforcement. The notice says that APHIS is working with Fish & Wildlife to define crop plants and common cultivars, which are exceptions to Lacey Act reporting requirements.  In addition, the notice says that paper reporting will begin as scheduled on December 15 and that an electronic reporting system is planned for as early as April 1.  APHIS says there will be no enforcement actions for failing to file a paper declaration, although false declarations may result in prosecution.  After the electronic system is up and running, compliance will be phased in for groups of products based on a schedule APHIS has set. Beginning April 1, 2009 (assuming the system is in place), APHIS will require electronic reporting for HTSUS Chapters 44 and 6.  Beginning July 1, 2009 APHIS will add chapters 47, 48, 92, and 94.  Depending on how things are work...

Look at this picture. It was in an artist's sketch book when she returned from Canada. Customs and Border Protection questioned her for an hour to determine whether she was engaged in copyright infringement. Based on that picture! I understand that what CBP was really worried about is corporate espionage. It's possible that the sketch was of some new and unreleased GM vehicle that she surreptitiously sketched at a proving ground in the wilds of Canada. But it's not. The artist had done the sketch as part of a project involving a crochet cozy to cover an entire SUV to illustrate something about the evils of foreign oil. Whatever. That's why we have artists. But is it credible that copyright infringement might have been involved? A copyright protects an original work of authorship stored in a tangible medium of expression, like a sketch on paper. It is infringement to copy the original work of someone else. Copying is defined as producing a work that is so similar that th...

I am feeling a little guilty about the lack of substance and insight of late. I won't make excuses other than to say that I've had my head in a recently filed appellate brief, some travel, and other distractions. I do have some upcoming events that may be of interest. Preparing for these have been part of the distractions: On October 16, I'll be in NY helping with a CITBA program on courtroom skills. This should be a fun program. We are going to be doing mock-trial segments in front of Judge Wallach who will tell the us all what we did right, did wrong, or could do better. On October 29, I'll be in Toronto at the IE|Canada meeting to discuss customs valuation. Here are the details on that event. October 30, 2008 I will be speaking on NAFTA at a program near Chicago sponsored by the World Trade Center of Illinois. Here is a link to the brochure . Lastly, I'll be back in NY in November for the 15th Judicial Conference of the U.S. Court of International Trade. ...

On Wednesday, I did a talk for IPC , the trade association for the printed circuit board industry. The talk went well, I think. Afterwards, I sat down for a short interview about trade issues. You can watch that interview here . Note: The link takes you to a landing page. You'll have to click on the link on the right side of the page to get my interview. Here are the highlights: Profile is not the most flattering view What is happening to my hair? Remember when I exercised? Do I always sound like Kermit the Frog? Other than that, you can judge for yourself.

This Washington Post article puts an interesting historical perspective on laptop searches. It is one thing to say, as I have, that the law permits the searches without probable cause. It is another to point out that Customs and Border Protection has had instructions out to the field setting limits on what can be searched, copied, and detained. This article talks about the evolution of that standard and the very real concern that CBP is sharing its information with other law enforcement agencies.

This new book is not about Jim Morrison . Rather, it is the tale of reptile smugglers and the Fish & Wildlife Agent who pursued them. The author is Bryan Christy. Here is a review from a paper in Malaysia, where much of the action apparently takes place. Sounds like a good read; although awfully close to work for pleasure reading.

Giving New Meaning to "Magic Bus" Customs and Border Protection seized 484 pounds of marijuana from a privately owned bus entering from Mexico. I am hopeful that Ruben Kincaide will be able to get Danny and Keith out of jail before their next gig. If you don't get the hilarity in that post, you are under 40. Practice Safe Computing Finding irony in advice from DHS not to take your laptop abroad because a foreign government or private entity might compromise the privacy of your data. CBP Returning Artifacts to Mexico No word yet on the Elgin Marbles.

Reliable sources are telling us here at Customs Law Blog Central that enforcement of the Lacey Act Amendments will be delayed past the current December 15 schedule. Right now, we understand that the enforcement date will be April 1, 2009. Additionally, implementation may be phased in with the initial emphasis on "core" wood products such as lumber. Work is being done to determine whether an existing Fish & Wildlife database might be used to permit electronic filing of the required declarations. Lastly, debate continues over the actual and intended scope of the law and whether the relevant agencies have authority to define the scope through regulations (providing, for example, a de minimis exception). More info is here . Note that the article linked in the previous post is 10 MB. Remember, I am not a journalist nor am I your lawyer. This is just a rumor for now. I will resist the urge to ask whether Cagney will be on time.

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NAFTA Chapter 20 covers dispute resolution between the parties. Seems like Chapter 20 is going to get a workout. The NAFTA requires the U.S. to open its market to Mexico-based long-haul truckers. This was supposed to have happened years ago. There has already been a dispute panel finding that the U.S. is in violation of the agreement. Hat tip to NAFTAclaims.com for the document. So, it is somewhat depressing (you know, in a rule of law sense), that compliance has once again been dealt a serious blow. This time, the obstacle is the House Committee on Transportation and Infrastructure . Where was the opposition to this program in 1994 when both houses of Congress voted to approve it? Note to students in my NAFTA class: PAPER TOPIC ABOVE!

I've been in the Pacific Time Zone this week. Although it would be nice to say that I was surfing, sunning, and sailing, I was actually working. Still, it is always refreshing to see a palm tree and an ocean. Speaking of palm trees, I did a piece on the Lacey Act amendments for the National Customs Brokers and Forwarders Association of America. I don't have too many details in the article, but I think this is important stuff. If you've been visiting this blog for any length of time, you know I tend to focus on the big picture and assume the details will get worked out in the trenches. So, the fact that I am actually worried about this one should mean something. Personally, I think this is a bigger deal than the proposed uniform rules of origin.

Yes, I am a geek at heart. No, I did not run out and buy Spore . But, I did work on a few creatures with my 7 year old. Here is Bluesox. Don't mess with him. Am I the only one who's noticed that this is essentially the same game as Sim Earth, which I played 15 years ago? Much better graphics, of course. UPDATE: Jr. found an Easter Egg in the free download of Spore Creature Creator. In the main screen that shows the galaxy, click and drag to spin the galaxy. If you spin it fast enough, in either direction, a human face pops up. It is Will Wright , the creator of Spore. So, in the context of the game, it is the face of God.

Once while wondering aimlessly in Whole Foods, I grabbed a sample "gourmet marshmallow." I was not expecting anything too different from the Campfire marshmallows we used toast as kids. I was wrong. They were great. They were much less sweet and closer in consistency to nougat than to what I had expected. Since then, I have learned that some people (but no one I know) make marshmallows at home. See here if you want to try. In a completely different universe are those tiny colored rocks found in Lucky Charms. Over the years, I have referred to them as marshmallows or marshmallow bits. It turns out that is not correct. Instead, those "charms" are "marbits," which are described by Customs and Border Protection as dried marshmallow confections. Here is the full description from HQ H014873 (Jun. 5, 2007): The samples are dry, brittle, multi-colored pieces, approximately ½-inch wide and ¼-inch thick, in the form of hearts, half-moons, hats, and other ...

Here is an interesting story from Philadelphia, Customs and Border Protection has identified that city as a distribution hub for qat (A/K/A khat). Qat is a shrub from the Arabian Peninsula and East Africa the fresh leaves of which are chewed for their stimulant effect. While legal in Yemen and elsewhere, quat is a controlled substance here. The interesting thing about this story is the generally low level of prosecutorial effort put into qat after the goods are seized. Apparently, the anti-qat forces (if there are any) have got to get better media people. They need a Reefer Madness-style movie extolling the evils of qat and a clever commercial. "This is Haile. This is Haile's brain on qat."

A commenter to this post asked what the Supreme Court decided. While I should be watching Bill Clinton make nice with the Obama camp, I'll work for you my loyal readers instead. You may recall that the issue was whether simply possessing explosives while making a false declaration to Customs was sufficient to constitute the crime of carrying an explosive "during the commission of a felony." The false statement was the felony. The defendant's argument was essentially that the false statement had nothing to do with the explosives. The Ninth Circuit Court of Appeal agreed that the "during" element means that the explosive has to have something to do with the felony. The Supreme Court, in an 8 to 1 decision, disagreed with the Court of Appeals. Here is the decision . Mr. Justice Breyer dissented . He took the position that the Court's reading of the statute is overly broad and criminalizes behavior Congress did not intend to make criminal. His prima...

The season is rapidly coming to an end for me. It's mainly an issue of darkness and the fact that September and October will be full of travel. I figure I have a few more good weeks of riding to work, so I better take advantage of them. In the meantime, I totally want to figure out how to take a month off and do the Grand Illinois Trail . It's 535 miles, so in theory I could do it comfortably in 10 days and probably in a week. I bet it is hilly out west. I'm not used to that. To add insult to injury, the boat gets hauled out soon. I hate this time of year.

First Sale Alive for Now In yesterday's Federal Register notice regarding the data reporting requirements for first sale valuation, Customs and Border Protection tossed in the following statement with little fanfare: "CBP is withdrawing the notice of proposed interpretation." In other words, the effort to eliminate first sale valuation is dead for now. Despite that, Congress has mandated data collection, so that will go on. It is kind of like a movie I remover seeing as a kid in which a hand is separated from a dead body and continues on its merry way. Without a proposal to change the interpretation of "sold for export," this data is the tale wagging a dead dog. But, unless Congress acts, it seems CBP is stuck with the requirement. Frankly, this doesn't seem like a very big burden for importers. Let me know if I am wrong. Farm Bill Lacey Act Amendment I guess I should mention the other big data collection program. Under Farm Bill Amendments to the Lacey Act,...

My open thread on rules of origin got a nice hat tip from the Administrative Law Prof Blog , which I have added to my blog roll. I'll also tip you to Professor Nathan Cortez 's blog for his Administrative Law class , which is just getting rolling. Maybe we can all follow along a pick up a few tidbits here and there. For anyone in the Chicago area, my NAFTA and Free Trade Agreements class at the John Marshall Law School Center for International Law gets started September 12. It runs in a four-day seminar format. I run a very practical course that is long on compliance and short on theory. There's still room.

I know my open thread experiments never work. Nevertheless, I will soldier on once again. I have been having a lot of discussions about Customs and Border Protection's proposal to implement tariff-shift based rules of origin and do away with the old substantial transformation approach. For background, see here . Here is what I want to know? Do we think this is legal? One argument goes that CBP has the authority to implement the marking requirements through regulations and that agencies have the ability to change their policies by changing regulations. They just need to go through the proper notice and comment steps and explain the change rationally. So this is routine and permissible. Another argument goes that agencies can only regulate when given express authority or to fill gaps in ambiguous statutes. When the Supreme Court decided that an origin determination is made by finding the last substantial transformation, it removed the ambiguity in the statute leaving the agency...

In the past, customs news of the weird has usually focused on people smuggling live animals or dead humans into the country. This story has none of that exotica, but it is truly weird. It seems that a customs broker on the southern border has been going to banks--including the Federal Reserve Bank--and directly to the Bureau of Engraving with large amounts of dirty old cash to exchange for crisp new bills. By "large amounts," I mean around $20 million in $100 bills from the 1970s and 1980s. The story as to the origin of the money seems to be somewhat fluid and a criminal investigation is underway. We do know the money came from Mexico. Oops, that's a problem. While finding money and exchanging old for new currency is perfectly legal, importing it from Mexico without the proper disclosures is illegal. It appears this customs broker overlooked that legal requirement. It's a crazy story. I know I have readers in the brokerage community in Texas. Does anyone hav...

Here are some of the results of my web poll about this blog. 56% of you visit one to five times per month and 21% visit one to seven times per week. 65% of you get here via a saved shortcut, favorite, or similar method. 93% of you are customs compliance professionals. The remainder must be my family and the occasional visitor wondering about bike panniers. 53% of respondents are in industry, 18% in law firms, and 15% in in-house law departments. The top three areas of interest are customs law, trade law, and related litigation. While a large majority find my off-topic posts to be "not a problem," a vocal minority find them annoying and a slightly larger minority apparently find them witty and charming. A number of you had helpful suggestions for the Blog Roll on other useful web sites. I'll get around to adding some links. I'll admit to some hesitation to post links to direct competitors, especially without a reciprocal link. I need to work that out in my own head. Ha...

On July 31, the Securing Our Borders and Our Data Act was introduced by Representative Eliot Engel with Representative Ron Paul on as a co-sponsor. Here is a press release on the bill, which is intended to limit Customs & Border Protection's authority to search digital data without reasonable suspicion that the data holds evidence of a crime. Here is the full text of HR 6702. This is an interesting issue that seems likely to dog CBP for a while. I think it is safe to say that your average American does not understand the current law on border searches. I also suspect that many would be outraged if they did. That said, the Supreme Court has been clear in stating that border searches are reasonable because they are border searches. Unless Congress acts, people better be prepared to turn over their data when they arrive in the U.S. As the wise man once said, if you would not want the information on the front page of the Chicago Tribune, you should not carry it across the b...

Well, I should say "a" desk. Due to the dearth of comments, I gather nothing of particular importance happened while I was gone. I guess that is good. I started my week away with the move of our office to new space within the building. The sad part of that story is that even when you move within a building, you still need to pack. The new space is a much better configuration than what we had and represents a more modern view of office design. By that, I mean it more closely represents my view of office design. As a result, I have a very nice office with a view of the Chicago River. I also have about 30% less floor space than I had. At the same time, I claimed a desk that is about 50% larger than my previous desk. Can you do that math? Apparently, I could not. I am now sitting with my back to the long wall and my right side to the window. This is not an ideal arrangement. I am looking at a wall and would rather look toward the door. The desk takes up an inordinate amount of r...

I'll be off line for a week or so. If anything of interest to readers of this blog happens, feel free to post it in the comments. I'll do my best to catch up on my return. In the meantime, here is a topic for discussion: SSAB v. United States : Another case of good law making for a bad result? One other note, as of tomorrow, my office is relocating to another floor of the same building. If you need to send me anything, the new suite number is 1020. All other contact info is the same as it has been for the past nine years. And, just to gratuitously vent about moving a law firm: What a hassle! Thanks for listening.

Customs and Border Protection has published a Notice of Proposed Rule Making today proposing to do away with the time-honored substantial transformation test for determining country of origin. I'm sad. I like this rule. I like it for precisely the reasons that CBP wants to do away with it. The substantial transformation rule states that merchandise originates from the country in which it last changed its name, character, or use. The first articulation of this test was in a 1908 Supreme Court decision involving Anheuser-Busch. The question was whether cleaning and coating beer bottle corks (!) produced U.S.-origin corks. The Court held that the corks remain foreign because no new product emerged from the operations in the U.S. The most famous substantial transformation case is U.S. v. Gibson-Thomsen (1940) in which the Court of Customs and Patent Appeals found that wooden brush blocks and toothbrush handles without bristles became articles of the U.S. when bristles were adde...