Customs Law

The Court of Appeals for the Federal Circuit has vacated and remanded the decision of the Court of International Trade concerning the tariff classification of video monitors that are most likely used with computers but have standard connections for use with other video sources. My post on the original decision is available here . This is one of those cases that makes tariff classification more than just checking a ruling or the index to the Harmonized Tariff Schedule. Classification is a lot like a Sudoku puzzled. In order to get to the right result, the classifier has to apply all the rules in the right order. Skip a step or misunderstand a rule, and you are likely to get the wrong result. That is what that Federal Circuit says happened at the Court of International Trade. The CIT appears to have focused on Note 5(E) to Chapter 84 to the exclusion of Note 5(B). Note 5(E) provides that "Machines incorporating or working in conjunction with an automatic data processing machine

This is not the trade law blog, but when push comes to shove it is usually Customs that enforces the trade laws. That means that trade issued often come up for importers who were never directly involved in an antidumping or countervailing duty case. Take, for example, the large number of companies that have discovered that the aluminum extrusions they purchase from China are three times as expensive as they had planned. Whether the commodity is an aluminum extrusion or anything else, importers are often caught off guard by dumping or CVD orders. First, some background. An antidumping case results when a domestic producer petitions the U.S. government for trade relief. The petition has to provide some basis for believing two things. First, that the product is being sold in the United States at a price (properly adjusted) that is below the cost that similar goods (properly adjusted) are being sold in the home market. Second, that the "below normal value" sales are causing (or

Graphite Sales v. United States  is a classification case involving electric heating resistors. These are metal elements connected by wires to a power source. When electricity flows, the element heats up. If you are having trouble picturing that, look inside your toaster when it is on. We are talking about the red things, except that the resistors at issue are more compact are are used in gas appliances like stoves and clothes dryers. They heat up and ignite the gas in the appliance and serve as an alternative to a pilot light. The classifications in play at the Court of International Trade were Heading 9613, "Cigarette lighters and other lighters, whether or not mechanical or electrical," and Heading 8516, "Electric heating resistors," among other things. The duty for 9613 is 3.9% and for 8516 is free. Now, please don't send me e-mails complaining that I am not dragging the classifications out to 10 digits. In this case, the headings are the only thing that m

In CBB Group Inc. v. United States , the underlying issue has to do with plush toys that Customs and Border Protection detained as piratical copies. "Piratical" in this sense has nothing to do with Jack Sparrow or Black Beard. Rather, it refers to products the production of which, if made in the U.S., would constitute copyright infringement. So, DVDs holding a copy of Pirates of the Caribbean: On Stranger Tides , produced in China without the express written consent of Disney, would be piratical (in two senses). This decision is entirely procedural. It involved another defense motion to stay discovery pending the Court's decision on a motion for judgment on the pleadings. Apparently, the government is so convinced that there is nothing to this case, that it does not want to bother with discovery. Rather, it thinks the Court of International Trade should dismiss. This is one of those cases where the decision is basically entirely up to the discretion of the judge. Here

I have another FOIA case to post. But, while I have been steadily (and happily) busy at work, the Courts have been busy too. Here is an update. United States v. American Home Assurance Co. is a penalty case that is in the early stages. The defendant, a surety, asked the court to grant summary judgment in its favor and to stay any further discovery until the court acts on the summary judgment motion. The United States has also asked for a stay, but it wants a stay of the summary judgment motion until discovery is complete. The basis for the defendant's motion is that Customs apparently suspended liquidation of the relevant entries but never notified the surety of that suspension. According to the surety, that means the suspension was ineffective. This case involves merchandise subject to an antidumping duty order. The importer's entries were, like all entries subject to the case, suspended when someone requested an administrative review. Customs should have notified the sur

A legal think tank known as The Constitution Project , has issued a report on the practice of searching digital devices carried by passengers at ports of entry. This has been a hot-button issue that has pitted privacy advocates against Customs and Border Protection's security and law enforcement mandate. Here is a link to the report . The report concludes with a recommendation that the Department of Homeland Security amend its existing policy to require a reasonable suspicion of wrongdoing before conducting a digital search. Further, the report recommends that DHS secure a warrant before it is able to retain copies of data or seize the device for further review beyond a reasonable period. There are other recommendations including some dealing with potential racial profiling, privileged information, and the possibility that other law enforcement agencies will piggy back on Customs border search authority to get information that would otherwise not be available without a warrant.

This blog has a history with spiders . And, with animal smuggling ( here  and here , for example). Thus, there is no way I was going to pass up this story . Yes, you can guess the gist of it. A German national has been found guilty of illegally importing spiders, tarantulas in particular, into the United States. Among his merchandise was the protected Mexican red-knee variety. I guess it is a good business, except for the part that involves six months in jail and a $4,000 fine.

There have been a couple of recent Freedom of Information Act cases that touch on trade issues and caught my attention. The first is Watkins v. Customs and Border Protection . This case involves an intellectual property lawyer who made a number of requests to several ports for copies of seizure notices issued to trademark owners when Customs seizes counterfeit goods. These notices include the name and address of the importer, the exporter, and the manufacturer (if known) and other information. Customs eventually provided some of the requested documents, but they had been highly redacted. The plaintiff appealed the limited release to the District Court and then to the Ninth Circuit. By way of background, the Freedom of Information Act creates a public right to access public documents that have been unnecessarily shielded from the public. The Supreme Court has said that the purpose of the act is "to ensure an informed citizenry, vital to the functioning of a democratic society,

The Federal Circuit has decided Dell Products v. United States , a case we previously discussed here . Not much changed in the analysis between the Court of International Trade and the Federal Circuit's decision affirming the CIT. The facts are simple. Dell imported a laptop computer kit (via a foreign trade zone) that contained an extra battery. The battery was added to the order by the customer and not by Dell. The bottom line is this: According to both courts, when General Rule of Interpretation 3(b) talks about articles "put up in sets for retail sale," they are referring to collections of goods selected by the seller rather than collections of goods selected by the buyer. In the former case, the goods have been "put up" for retail sale. In the latter case, they have simply been selected. This is a perfectly reasonable reading of the law, which will likely stand as the final word on this question. Divorced from the business of actually processing entri