Customs Law

The Court of International Trade has handed down an interesting penalty decision in United States v. Nitek Electronics, Inc. concerning an importer who allegedly failed to properly deposit antidumping duties on malleable iron pipe from China. For our purposes, the interesting issue has to do with the scope of the administrative penalty case as compared with the court action. In the administrative process, Customs and Border Protection issued both a pre-penalty and a penalty notice that asserted a "tentative culpability" of gross negligence. This means that the potential penalty was four times the duties owed. It also means that, to collect, Customs would have to show evidence of gross negligence such as a willful disregard of the rules. However, when the case came to Court, the Justice Department asserted a claim based on simple negligence. This requires only evidence that the importer failed to act with the degree of care a similarly situated, reasonably prudent...

The U.S. Court of Appeals for the Federal Circuit, in a two to one decision, has denied Ford Motor Company additional HMT refunds for the pre-July 1, 1990 period and the so-called disputed claims after that date. This is a long and complicated story, and I am just back from a reunion of former judicial clerks at the Court of International Trade. That means you will not get the long version of this decision. What it comes down to is that Ford, like many other companies, paid Harbor Maintenance Tax on exports from the U.S. The Supreme Court eventually decided that the HMT, as applied to exports, was unconstitutional. As a result, a lot of companies received very healthy refund checks from the U.S. and several customs lawyers bought sports cars. But, there have been lingering issues over the evidence necessary to establish a right to a refund for HMT payments made prior to July 1, 1990 and for certain disputed claims thereafter. Normally, when the federal government has records of so...

On this day in 2005, I posed the question: Why a Customs Law Blog? I answered with this post, the first ever repeat in seven years. I am a customs lawyer. This is a rare breed of American lawyer that concentrates on issues relating to the regulation of imports by the United States Bureau of Customs and Border Protection (formerly known as the Customs Service). I say "concentrates" because rules of professional ethics prevent me from saying I "specialize" in customs matters, so don't for one moment think that I am saying that.  I suspect that if you collected every lawyer in America who was actively engaged in the practice of customs law, you would not exceed the needs of a large ballroom in a major metropolitan hotel. We tend to know one another. Also, the folks who work for the government tend to know us. That means I will not be tossing any virtual molotov cocktails at any of my colleagues in the field and especially not at those few judges before whom I...

Below is part of the text of a press release from my office. I am happy about this result so far and hope that Customs and Border Protection follows up with some public statement letting all Reservists know that they may become licensed customhouse brokers without having to give up their service in the Reserve. William A. Nusbaum, a member of the U.S. Army Reserve, was permitted to sit for the April 2, Customs Broker Licensing Examination administered by U.S. Customs and Border Protection, which has also agreed that his status as a member of Reserve will not prevent him from receiving a broker’s license. This is a direct result of a lawsuit filed on behalf of Mr. Nusbaum in the U.S. Court of International Trade by Barnes, Richardson & Colburn. Prior to filing the suit, Mr. Nusbaum had been informed that his status as a member of the Army Reserve disqualified him from taking the test or being granted a license because he is an employee of the United States government. Barnes, ...

The Court of International Trade does not actually preside over very many trials in classification cases. Most of those cases do not involve disputed facts and are resolved on motions and legal arguments without the need for witness testimony. There was, however, a trial in Target Stores v. United States , and I wish I had seen it. The issue in the case was the proper tariff classification of imported gazebos with textile coverings. Customs and Border Protection wanted them classified in HTSUS Heading 6306 as tents. The importer asserted that the proper classification was in Heading 7308 as structures of iron or steel. It appears that this case involved a couple side shows, which bear discussion. First, the United States attempted to give up on the case by proposing a stipulated judgment classifying much of the merchandise as proposed by plaintiff and some of it in Heading 4421 for wooden structures. But, in transmitting the proposed stipulation, the United States stated that it ha...

The Federal Circuit has refused to reconsider its earlier decision in Hitachi Home Electronics (America), Inc. v. United States . If you don't remember what this is about, go back and look at this earlier post . Without substantive comment, the majority refused to rehear the case. The original dissenter, Judge Reyna, was joined in his dissent by Judge Newman. The gist of the dissent is simple: Congress said that Customs must either approve or deny a protest within two years; there is no third alternative permitting continued consideration. The dissent is strongly worded and worth a read.