Customs Law

On May 20, the House Foreign Affairs Committee passed legislation that, in part, would modernize U.S. export control policy.  The bill seeks to both improve national security and also permit more defense-related foreign sales.  The bill also seeks to eliminate the backlog of pending State Department license applications. Under the bill: DDTC (the Directorate of Defense Trade Controls) would be required to have 1 licensing officer for every 1,250 applications by fiscal 2011; DDTC would be required to have three people to review commodity jurisdiction requests; Commodity jurisdiction decisions would need to be published on the internet; A performance goal of 60 days to process license applications, and 30 days to process applications for close allies would be established. These, and the other changes included in the bill, are valuable efforts at facilitating export trade in defense articles.  In particular, the publication of commodity jurisdiction determinations will give exporters a f

I road my bike to work today.  It was a nice ride in, even though I am still not going from garage to garage.  Here's what today's route looks like according to the cool tools at Bicycling.com .  The numbers are mile markers. Everything went smoothly until I got to the actual bike room in my building.  As I walked past other bikes to find a spot to lock up, I scraped my shin on an apparently razor sharp pedal on another bike.  I now have a 3-inch gash in my leg, which bled enough to create a sock that looks like it was taken from a crime scene.  It's certainly not an epic disaster but it is further proof that accidents are most likely to happen at the beginning or end of your trip.  At least that is what I have heard.

This is sort of a follow up to the American Petroleum Institute meeting at which I covered case law developments of note to the industry.  At the meeting Bobby (and you all know Bobby who) talked about the then-pending in the Federal Circuit case Aectra Refining & Marketing v. U.S.   For those of you who might be wondering, the news is unfortunately not good. The issue involved a somewhat unique set of facts.  The plaintiff had made drawback claims at the time when most people thought that Merchandise Processing Fee and Harbor Maintenance Tax were not subject to drawback.  So Aectra did not seek a refund of it.  But, unfortunately for Aecrta, some companies were pursuing court cases that eventually led to a court decision confirming that MPF was subject to drawback but HMT was not.  That decision, resulted in congressional action making HMT recoverable under drawback. Great, thought Aectra, we'll go back and get MPF and HMT on our old claims.  The problem for the plaintiff was

The effort to force Customs and Border Protection to enforce the requirements of the Endangered Species Act with respect to certain salmon imported from Canada has been a tough swim upstream against a swift procedural current.  [Note to self: no more extended metaphors.]  Here , I reported on the Federal Circuit decision requiring the Court of International Trade to determine whether it had subject-matter jurisdiction over the issue. The CIT has now done that.  The question presented is whether the Endangered Species Act prohibition on the importation of these fish constitutes an embargo for purposes of engaging the Court's jurisdiction.  An embargo is a government-imposed cap of zero on the importation of some merchandise.  But, an embargo is not based on a private party's right to prohibit importation (e.g., where Customs seizes counterfeit trademarks to enforce a private right). Section 7(a)(2) of the Endangered Species Act does not create an embargo.  Rather, it creates an

This for for all you carriers, ship owners, and yachters out there. General practice and business lawyers often overlook customs and trade law as a practice area. Even those in the practice think of it as a narrow field.  But, an odd thing about customs and trade law is that even within the narrow confines of the practice, there are sub-specialties.  Some folks do more import than export, some people spend a lot of time on free trade agreements, others are computed value mavens.  Of course, we all do all those things, but it is fair to say that becoming a real expert in one or two things takes a certain amount of focus.   One of the more obscure issues in customs law is the dutiability of the value of repairs done on vessels.  A similarly obscure issue is whether certain voyages do or do not violate the coastwise shipping laws.  These issues generate a lot of Customs and Border Protection rulings, but not many court cases. Which is all by way of introduction to Cormorant Shipholding Co

I realize that I have been light on substance of late.  I blame a lack of particularly interesting news. I do have a court case or two to blog.  Plus, I am mulling over whether I think it is a good idea to set up a prior disclosure process for importers of goods violating U.S. trademark and copyright laws. While those things percolate in my under-caffeinated brain, I am fascinated by this Miami Herald story .  First, it is in keeping with my ongoing interest in animal smuggling.  Second, there is a certain level of James Bond-style intrigue involved.  The offending (and offensive) vessel is registered to a corporation in the Cayman Islands.  The sole function of the corporation is to own the yacht as an asset and the sole director named in the article is a Russian billionaire.  The captain, when questioned by authorities, did not know the name of the owner.  Also odd is that the yacht seems to have traveled fairly freely in Europe without anyone noticing the elephant hide humidor, stuf

Times are tough.  If you are lucky enough to be starting a new job, a really bad way to make a first impression is to get arrested on the way to work.  It's worse if you are arrested allegedly trying to smuggle business-related material into the United States.  It's even worse if the material consists of "vectors of human disease."   That's what happened to this guy. Just another day at the office for the CBP folks in Pembina. And in more smuggling news, cocaine queso has been found at Dulles.

Here is every honest importer's nightmare: indictments for trade related activities. While we owe these soon-to-be defendants the presumption of innocence, let's be clear about the fact that these were not your work-a-day importers. Qi Gui Nie of Charlotte, North Carolina is the winner of the most recent indictment under the Lacey Act. He is charged with importing endangered Asian Boneytongue fish (or Asian Arowana ) allegedly valued at $25,000 by means of a container stocked with legally imported fish and a false bottom compartment containing the illegal fish. If convicted, Nie faces up to 30 years in prison and $25,000 in fines for each count in the indictment. The press release includes a quote from James Gale of U.S. Fish & Wildlife. I may be imagining it, but the name sounds familiar. I think he was mentioned in the book The Lizard King , which is about reptile smuggling and worth a read. Indictment number two is really a series of indictments. The cases relate

This really does not belong on this blog.  However, I previously blogged about the core administrative analysis in the Third Circuit's decision tossing out the FCC penalty against CBS for the famous wardrobe malfunction.  Well, by way of update, the Supreme Court has ruled that the Third Circuit is wrong and that the FCC acted within its power when it changed its enforcement policy.   Here is an article from Variety.   The decision is narrow in that it is based on the procedural and administrative aspects.  It does not address Bono's first amendment right to drop the f-bomb on network TV. According to Reuters , this means that the lower court is going to have to take a second look at Janet Jackson's breast.  Well, so to speak. Here is the opinion by Justice Scalia .  There are six separate opinions.  I might read it if I have time.  Right now, I do not.  I am not making any promise to report back.

Sorry, I feel like I am on a stupid-title roll. Here is another classification decision form the CIT.  It's one of those cases where there is a lot of history that makes the decision more complicated than it really should have been.  The case is Global Sourcing Group v. United States  and it involves the classification of ring binders.  These were somewhat unusual binders in that they had six or seven rings, pen loops, slots for business card, and pockets.  They are composed of stiff paperboard covered with either plastic or textile. Customs classified the binders based on their outer material as either articles of plastic or of textile. Showing a complete lack of creativity, the importer argued that the binder should be classified in heading 4820 as "binders." The plaintiff had an initial problem with the jurisdiction of the Court to decide the issue on certain entries.  The bottom line is that importers wishing to take a classification up to the Court of International T

No.  I just say that to amuse the 12-year old boy inside me.   In reality, the Court did issue an opinion on the classification of Mrs. May's All Natural Almond Crunch , which is made in China from California almonds.  The almonds are sent to China for various processes including sorting, roasting, and combining with other ingredients for make the crunch.   Whenever anyone sends U.S. products abroad for processing and return, it is worth considering whether a Chapter 98 provision provides a partial duty exemption for the value of the U.S. origin components.  Unfortunately, there are strings attached to those provisions. The tariff item at issue in this case was 9802.00.50, which provides for "Articles returned to the United States after having been exported to be advanced in value or improved in condition by any process of manufacture or other means . . . Articles exported for repairs or alterations: . . . 9802.00.50 Other . . . ."  The tricky part is that for this to wo