Customs Law

I tweeted this story (see my problem?) but it was recently tipped to me from another lawyer, so I'll give it some coverage here. It seems that Jesus Argandona has been sentenced to a year in prison and a $200,000 fine. His offense: arranging the illegal export of $600,000 in blank CDs into Mexico. Two others received lesser sentences for similar offenses involving the use of a bonded warehouse to illegally export CDs from China to Mexico. This raises a question that I'm not willing to investigate. Maybe one of you has the info handy. What's the duty on blank CDs going into Mexico? It must be pretty big to justify this level of criminal enterprise. Is the problem that there is an antidumping duty order in Mexico? This whole thing seems kind of crazy to me. Maybe In Mexico, Philips brand CDs are particularly desirable.

I'm starting to wonder about what belongs on this blog. For that, you can blame Twitter. I find I am posting the odd bits of customs related news here because I can toss off a tweet about it just as efficiently. If you're not following me, I'm at www.twitter.com/customslawblog. I'm also more likely to tweet random bits of nonsense over there. That means this blog is starting to look more like a place to find reviews of Court of International Trade and Court of Appeals for the Federal Circuit decisions. That's not my intention. I want this to be more broadly focused on compliance as well serve as a spot for the occasional off topic musing. I'm not sure where this leads (that makes it a MonsterQuest). I have recently registered two new domains: www.customslitigation.com and www.naftacompliance.com. Those represent two of the more substantial parts of my practice and interests. Maybe I'll start narrowing the focus here. For now, those URL's redirect...

Gilda Industries v. U.S. has been going on for a while now. The underlying issue is whether the U.S. properly assessed retaliatory duties on Gilda's imported toasted breads as part of the EC-Beef Hormones dispute. In this version of the case, Gilda is claiming that the authority to impose those duties expired in 2007 and it wants a refund of duties it improperly paid. The genesis for this case is a dispute between the U.S. and the European Commission over a rule prohibiting the importation of hormone treated beef into Europe. The WTO found the ban to lack a scientific basis and authorized U.S. retaliation. The U.S. implemented that retaliation in the form of 100% duties on a number of products including toast (which, by the way, I find an odd product to import). Under the law (specifically 19 USC sec. 2417(c)) any retaliation in effect will automatically expire after four years unless the affected domestic industry requests an extension. In an earlier effort to get out from ...

At the moment, I am continuing my tour of places called St. John. St. John, USVI , is one of my very favorite places on the planet. A few years ago, I was thrilled to get an invitation from the CBA to speak in Saint John's and only slighted disappointed to discover it was not the Caribbean Bar but the Canadian Bar talking about a meeting in St. John's Newfoundland . St. John's turned out to be a lovely seaside town with good fish & chips. Today, I am in Saint John, New Brunswick , which is an entirely different seaside town in Canada. This one is famously on the Bay of Fundy, home of 28 foot tidal swings. I was slightly worried that I would make the wrong connection in Toronto and end up in the wrong John. I am thinking of making a swing through San Juan, Puerto Rico on the way home. On to the news of the day: Speaking of Canada, at long last, Canada Border Services Agency is starting to post summaries of its classification ruling decisions. You can see the dozen ...

Value Vinyls, Inc . is an interesting classification case in that it all turns on the meaning of one word. As Groucho might say, it's a simple word you hear every day (well maybe not every day). The word in question is "predominate." Specifically, item 3921.90.11 of the Harmonized Tariff Schedule of the United states covers products "with textile components in which man-made fibers predominate by weight over any other single textile fiber." The problem for the Court of Appeals for the Federal Circuit is that the merchandise contains only man-made fibers. Can man-made fibers predominate in a sea of man-made fibers? Is there a majority where there is no minority? A split Federal Circuit held that there is. The Court focused much of its attention on the conversion from the old TSUS to the current HTSUS. Apparently, the corresponding TSUS provision (355.81) included products made wholly of man-made fibers. The TSUS provision covered articles that were ...

While I hate to do this, I also know that I don't have time to blog all these stories. Plus, there is no reason for me to summarize what is easily digested. So, here is a page slap. Feel free to complain in the comments. The fight to bear knives continues. Qat (khat) seized in hard drives. FOIA requests data on CBP laptop searches and here too. U.S. wins NAFTA Chapter 11 dispute. Enjoy.

Heartland By-Products is a case that has generated more controversy and new law than most. To make sense of what follows, you need to understand how appeals work at the Court of Appeals for the Federal Circuit. After all the briefing and oral arguments, the CAFC announces its decision, usually in a written opinion. After that, either side has a period of time in which to seek a rehearing. If no rehearing is requested, seven days after the last day a request might have been made, the Court issues a mandate. If a rehearing is requested, the mandate issues seven days after that process ends. So, basically, the mandate comes after the decision and is when the CAFC says it is officially done with a case. When last we discussed Heartland , the Court of International Trade had held that its decision in a 1581(h) declaratory judgment action was effective until finally and officially overturned on appeal. Consequently, Customs and Border Protection could not, while the case was not finall...

I started my career in as a customs lawyer under the old Tariff Schedule of the United States, before anything was Harmonized. Under the TSUS, it was a common and legally sound argument that merchandise could not be classified in a heading if it was "more than" what that heading describes. So, a screw that had been hollowed out and had holes drilled in it to allow oil to flow through it would probably not be a screw, because it was "more than" a screw. In the Harmonized Tariff Schedule era, the more than argument has been replaced by various aspects of the General Rules of Interpretation. Rather than say that this merchandise is more than a screw, today we would say that "screw" only partly describes the article so we need to look to whether it has the essential character of a screw. And that is the situation Honda of America found itself in at the Court of International Trade . The merchandise involved was oil bolts, which are essentially the merchandise ...

The   Chair of the Senate's Committee on Small Business has introduced the Small Business International Trade Enhancements Act of 2009 .  So far, I can't  find the text on line, but the link goes to the Committee press release.   This link should work when the text is available.   Among other things, the bill seeks to create an Assistant United States Trade Representative for small business issues.

See the update below on the Food Safety Enhancement Act and the FDA Globalization Act. There are a few things making their way through Congress that might be of interest. H.R. 2355 MOVEMENT Act First of all, how hard does Congress work to come up with these catchy acronyms? This one is the Making Opportunities Via Efficient and More Effective National Transportation Act of 2009. Seriously, even if this is the best law ever, we should use it as an example to stamp out bad bill names and tortured acronyms. The bill is intended to provide funding for projects to improve the movement of goods nationally, mitigate associated environmental damage, and provide supply chain security. The bill seeks to create the National Movement of Goods Improvement Fund. The funds for the fund come from moving about 71% of the presently collected Harbor Maintenance Taxes into the fund. That money can then be allocated to the Department of Transportation for certain projects to improve the transportation...

The 3 Geeks and a Law Blog put together an early list of "must read" blog posts of 2009.  I made the list twice, at number 40 and and number 64 for my musings on what to look for in a new Commission of Customs and Border Protection and on C-TPAT marketing.  Yes, I self nominated my work, but it's nice to make the cut.

Here's an involved story. It seems a ship arrived in Alaska with three containers of shoes from Hong Kong headed for Guatemala and Nicaragua via Mexico.  The shoes were not to be taken from the ship in the U.S., which makes them FROB (Freight Remaining on Board).  Consequently, U.S. Customs and Border Protection had little control over them. Immigration and Customs Enforcement, however, was able to determine that the shoes were counterfeits.  The brands involved include Nike and Adidas.  ICE worked with the American Embassy in Mexico City to ensure that the three 40-foot containers of almost 29,000 shoes were seized by Mexican customs authorities when the ship arrived at Manzanillo. There are so many quick cuts from one location to another, shady Hong Kong business dealings, and a freighter voyage involved in this story that I expect to hear that Jason Bourne jumped from one of the containers and is now making his way to Chiapas.

That's a rhetorical question, because I don't care.  Whatever box my family puts me in will be just fine.  And, just so you see where I am headed, it strikes me that the dearly departed is the ultimate consumer of the casket. In the May 29 Bulletin (see page 72) , Customs and Border Protection revoked prior rulings on the country of origin marking of burial caskets.  The caskets at issue were marked with their  China origin on the bottom panel.  All other surfaces of the caskets were finished.  In HQ H033598, Customs held this to be unacceptable marking because it fails to meet the requirement that the marking be conspicuous to the consumer.  The consumer (who is not the deceased but the person buying the casket for the deceased) could not easily find and read the marking on the bottom of the casket.   For all those casket makers out there, CBP wants to see the marking on a sticker or hangtag in a conspicuous place when the casket is normally displayed to consumers. Frankly, t...