Customs Law

I do a lot of NAFTA work. For years, there have been unanswered questions concerning the ability of producers or exporters to allocate non-originating good to domestic customers and originating goods to customers in other NAFTA countries. That would maximize the benefit to the customers but might result in otherwise dutiable merchandise never being the subject to duty. The Canadian International Trade Tribunal recently got a crack at part of that question in Tara Materials, Inc. v. President of the Canada Border Services Agency , Appeal No. AP-2009-016 (Aug. 3, 2010). Tara exports artists’ canvases from the United States to Canada. Apparently, it dual sources fungible fabric used to make the canvases and some of it comes from outside of North America. In an on-site verification by CBSA, it was determined that Tara’s production resulted in goods that are originating 72% of the time and non-originating 28% of the time. In these circumstances, the NAFTA permits the producer to employ an...

There have been several recent customs-related decisions from the Court of International Trade recently. I have read them and generally don't find much in any that require comment. At the same time, I don't want you to think that I am slacking off. So, here are short summaries. Aromont USA, Inc. v. United States , involves the classification of a viscous "stock"  made from animal bones or vegetables. The issue was whether Customs and Border Protection properly classified the merchandise as soups and broths rather than as other food preparations. Initially, the Court had to hold that because the merchandise at issue in this case was not identical to merchandise that had been the subject of a previous Customs ruling, the ruling did not bind Customs and Border Protection. The primary difference seems to be the commercial designation of the merchandise. Here, the goods were called "stock," which is said to be equivalent to a "demiglace." I will check...

[Tip of the hat to my partner David Forgue , who has been thinking about this issue out loud longer than me.] At what point is compliance with a trade agreement so risky that it becomes unworkable? Do the powers that be know that the trade agreements they negotiate might be effectively nullified by the cost of compliance? These are questions raised by the Federal Register Notice Customs and Border Protection published today . Nominally, the notice finalizes changes to the regulations implementing the Dominican Republic-Central America-United States free trade agreement. However, the response to one comment is particularly telling. Here is the relevant text: Comment: The commenter asserted that Sec. 10.585(a)(1) and (a)(2) impose impossible obligations on the importer. These provisions state that an importer who makes a claim for preferential tariff treatment under the CAFTA-DR (1) will be deemed to have ``certified'' that the good is eligible for such treatment; and (2) i...

A few news items on note: Festive Articles Customs and Border Protection has asked the ITC to study a proposed tariff change to correct the tariff treatment of so-called festive articles that have utilitarian functions. This follows from successful litigation undertaken by my firm that showed that holiday-themed articles, even those that have utilitarian functions, can be entitled to duty-free entry under Chapter 95 of the tariff schedule. The problem is that in an effort to "correct" what Customs viewed as this erroneous classification decision, the modifications to the 2007 tariff schedule made non-revenue neutral changes, which is not a favored result. This tariff study is aimed at correcting that by changing the tariff classification but preserving the duty-free status of the goods. Should this happen, the change will be effective for goods entered on or after February 3, 2007. Lacey Act APHIS has published a proposed definition of "common cultivar"...

Am I the last person to see the new Federal Circuit web site ? It is a major improvement over the previous page. Thanks to whatever federal IT workers did the job. The main element of the new  home page is an attractive photograph of one of the Court's impressive courtrooms. There are navigation links above and below. The links at the top have scrolling submenus that appear when the cursor hovers over them. The links at the bottom are direct links to the referenced information. It is simple, but it works. On a quick look, it is not clear why the navigation tools are organized as they are. For example, "The Court" at the top has a submenu for "Judges," which is also a standalone item on the bottom right. Daily dispositions is also in two places, but that might just make the information easier to find. The Federal Circuit hears appeals from the Court of International Trade concerning decisions by Customs and Border Protection. Consequently, I visit this site r...