Customs Law

News out of Sault Ste Marie: The river is thawing and it is no longer an appropriate way to enter the United States on snowmobile via Drummond Island . And I though that only happened in the movies .

The Federal Circuit has issued a decision on the merits in United States v. Inn Foods, Inc.  There had been a previous decision on jurisdiction, which was followed by a trial at the Court of International Trade and then this appeal on the substance. The initial issue is whether Inn Foods' invoicing practice amounts to fraud.  Inn Foods had been receiving an invoice from growers in Mexico that had a relatively low sales prices on it.  Subsequent to entry, Inn Foods created a second invoice at something more similar to market value, retaining the original invoice number, and paid at that higher amount.   Superficially, this looks like a standard-issue double-invoicing scheme.  But, in the age of reconciliation, is it really more like a provisional pricing mechanism?  It might have been possible to make that argument had Inn Foods adjusted its entries accordingly.  It didn't and the loss of revenue was approximately $624,000.  Based on testimony and evidence indicating both knowl...

In law school, my Torts professor told me that "He who fails to toot his own horn will go untooted." I can't remember the context, but it applies to what follows. The Federal Circuit has decided Archer Daniels Midland v. U.S. and reversed the Court of International Trade on the classification of a material known as deodorizer distillate or DOD. The merchandise is what remains after raw soybean oil is distilled to make it suitable for consumption and sale. If you make soybean oil, you cannot avoid producing some of this as a residue. There were four classifications in play: Vegetable pitch Other products of the chemical or allied industries Residual products of the chemical or allied industries Waste of the chemical or allied industries Personally, I am a big fan of the "pitch" argument. Pitch is the the sticky junk left after distilling vegetable matter. So is DOD. According to the Explanatory Notes, pitch is used in applications like waterproofing fabric...

FYI, the Senate has confirmed former Washington governor Gary Locke to be the new Secretary of Commerce.   Antidumping lawyers, please update your pleading templates.   Here is the official notice .

Someone in Cincinnati is peeved.  Customs and Border Protection has seized a shipment of guns improperly labeled as "toys."  The shipment contained 60 functional shot guns and 177 pistols that are capable of only firing blanks.  If those pass for toys in Cincinnati, that town is far rougher than I had thought.   Note to Adam and Andi in the land of not-particularly-special chili but surprisingly good ice cream : you might want to go into the business of selling bullet proof vests. And, while we are on seizures, how did I miss this story , which includes a frozen monkey head?

When I go sailing, the only border I cross is between Illinois and Wisconsin.  Sailors in Florida have far more options that require worrying about customs and trade issue.   Yesterday, I was quoted in the Sarasota Herald Tribune about the prospects for U.S. sailors who want to sail to Cuba to participate in a regatta.  As I told the reporter, its entirely possible to do.  But, and its an important point, anyone who wants to do that needs to go through the right process and seek a specific license from the Office of Foreign Assets Control .  What's involved is an application under 31 CFR 515.567 involving public performances, athletic, and other competitions.   I know some are probably thinking that rich yachtsmen and women in ascots and Henri Lloyd foulies  don't qualify as "athletes."  Two things: First the definition is not all that strict.  Second, watch this:

I'm talking at the International Trade Club of Chicago this Friday.   More info is here .  The topic will be free trade agreement compliance.  Rather than the now fairly standard NAFTA presentation, I am going to focus on Chile and Morocco as models for discussion.  That should make things more interesting.  I'm also going to spend some time on verifications, just to make it as scary as possible. Today I was interviewed by a reporter from the Sarasota Herald Tribune.  So, I guess you can look for me there as well.

I have absolutely no doubt that C-TPAT, the Customs-Trade Partnership Against Terrorism, makes America a safer place. Every participating importer, carrier, warehouse, foreign manufacturer, etc. agrees to take reasonable steps to insure the safety of the supply chain. This means, for example, limiting the access to shipping containers, using secure container seals, and vetting truck drivers. Logic dictates that C-TPAT makes it more difficult for a terrorist organization to slip weapons, components of weapons, or even people into the supply chain of an unknowing importer. I am glad that Customs has this program and I appreciate the efforts of the voluntary participants. My problem is the way Customs sells the program. I've had the opportunity to sit through lots of C-TPAT recruitment sessions and they all proceed along the same lines. First and foremost, there is the reminder that the horrors of September 11 are the origin of C-TPAT. This, of course, puts the audience into a s...

The former Mayor of Dallas has been confirmed as the new United States Trade Representative. Mr. Kirk's resume includes stints as a legislative aid to Senator Lloyd Benson and Texas Secretary of State.

Thanks to a number of people who sent this list to me. Here is a link to the Spanish-only list.

I've been wondering when Mexico would finally take some action regarding the long-standing refusal of the U.S. to permit Mexican domiciled truck drivers to operate in the U.S. Well, that shoe has dropped . Apparently, 90 commodities are affected, but have not yest been listed. I'll pass that on when I have it. According to Reuters , the tariffs will not be imposed upon rice, corn, beans, or other products that are sensitive in the Mexican economy.

Today and tomorrow, I'll be tweeting updates from the American Petroleum Institute customs meeting. www.twitter.com/customslawblog Looked at materials from other speakers; need to change my presentation.

Customs and Border Protection is proposing to amend its regulations to create an incentive to use U.S.-origin parts in foreign repairs and alterations.   Currently, the customs regulations (at 19 CFR 10.8(d)) require the deposit of duties based on the full cost of the repair including the value of domestic and foreign components.  The proposed change will eliminate the reference to domestic components.  The intention is to allow an exclusion from dutiable value for the cost of U.S.-origin articles used in the repair or alteration and creates an incentive to seek out U.S.-origin parts for use in foreign repair and alteration operations. A similar change was proposed for 19 CFR 10.9 relating to foreign processing. This could be a boon to U.S. parts manufacturers where the finished article is dutiable when returned to the U.S.

I just got off the phone with a reporter asking about legal and technological strategies  the pharmaceutical industry can be using to fight counterfeits.  I talked about recording trademarks with Customs and Border Protection, educating the agency on what to look for, conducting investigations to find the source, etc.  On the technology front, we talked about taggants, holograms, and RFI ID.   What strategies does your company use?

I like swag.   I’m always happy to come out of a conference with a useful item like an umbrella, flash drive, or corkscrew.   My firm has swag of its own.   My favorite swag is a set of three beanbag balls that make up a juggling kit.   The idea here is that compliance professionals have lots of responsibilities and, therefore, need to be able to keep several balls in the air at the same time.   Rest assured that if I see any of our competitor firms jump on this bit of cleverness, I’ll make a public spectacle of them. Speaking of swag, I feel I may need to apologize to some of my friends out there.   But, as you will see, you have had your revenge. We have very nice pens with “Barnes/Richardson”, our tag line (which I hate), and web address printed on them.   These pens write extremely well and have a nice hefty feel.   They use a cartridge of liquid blue ink and a ball point.   I have given these pens to hundreds of people.   Sometimes, we include them with our very nice little note p...

Semi-live tweeting from ICPA today and tomorrow. Follow along at www.twitter.com/customslawblog.

Dear President Obama and Secretary Napolitano: We understand that this is a busy time for both of you.   Nevertheless, we would appreciate just a moment of your time to talk about one important decision you need to make: naming the next Commissioner of U.S. Customs and Border Protection. Customs and Border Protection can trace its roots to an act signed by President Washington on July 31, 1798 as a means of raising revenue for our new nation through the collection of customs duties.   After the Internal Revenue Code became the main source of tax income , Customs role evolved into one that included trade policy and consumer protection.   In 2003, still in the wake of the attacks of 9/11, the then- Customs Service was transferred to the Department of Homeland Security along with the U.S. Border Patrol and other border enforcement agencies.   Today, CBP is an important agency that plays a complicated role in both America ’s national security and its financial well being.   Consequent...

I've occasionally been quoted in newspapers and elsewhere.  I've never been as happy about that as this use of my prose .