Customs Law

Cutter & Buck, Inc. v. United States is one of those increasingly rare cases in which the Court of International Trade had to determine the value of imported merchandise. In this case, the question was whether Customs and Border Protection should have deducted international freight charges from the transaction value of imported merchandise. The normal process for this importer was to have the goods shipped FOB, which means that the buyer takes delivery when the goods are delivered on the ship (the old phrase was across the rail). Under FOB shipping terms, the purchaser is responsible for the cost of international freight. As a result, the invoice price does not include international transportation. The shipments at issue were not shipped in the ordinary course. Instead, they were late shipments under which the seller agreed to cover the cost of international freight. The relevant INCOTERM was CFR. Under this term, the seller is responsible for contracting for the freight neces...

The Office of the United States Trade Representative announced that it is initiating a review of Laos and Burma for possible designation as Beneficiary Developing Countries under the Generalized System of Preferences. The notice is here.  Comments are due May 17 and there is a hearing scheduled for June 4. If successful, both countries would be designated as least developed countries and would be entitled to duty-free access to the U.S. market for designated products. If you are looking strategically at your supply chain and wondering about increasing costs associated with production in China, this may be welcome news.

There is an interesting piece by Tim Warren in yesterday's International Trade Today (subscription required). The article talks about Customs and Border Protection's plans to expand the Centers of Excellence and Expertise concept beyond trusted traders. Currently, trusted traders are importers participating in C-TPAT and ISA. The CEE's are envisioned as covering entire industries regardless of whether individual companies in the industry are trusted traders. To me, that makes a lot of sense and is consistent with calling these Centers of Excellence and Expertise. The issue for CBP will be finding incentives to get importers to participate in ISA and, to a lesser degree, C-TPAT.

This blog is now eight years old. That is surprising even to me. As always, I feel guilty that things do not get here as quickly as they should. That is life with a job and a family. I'll do my best to keep up. I just printed three CIT cases to review. My thanks for your continued readership. Watch this space for developments. Larry

The scope of Customs and Border Protection's authority to search and seize digital devices including laptops and phones has been a matter of controversy for several years. The most recent detailed discussion of this from a federal court is in United States v. Howard Cotterman . As with many of these cases, the facts are unpleasant. Mr. Cotterman drove from Mexico into the United States via the Lukeville, Arizona port of entry (formerly known as Gringo Pass ). Lukeville has a population of 35. Cotterman is a registered sex offender who was previously convicted of several child-sex related offenses. Because of that history, Cotterman's name was in Customs and Border Protection's database as someone who may be carrying child pornography into the country. A secondary inspection located two laptop computers and three digital cameras. The laptop contained many password protected files. After approximately six hours, Immigration and Customs Enforcement Agents took the laptops ...

The Court of Appeals for the Federal Circuit has affirmed the Court of International Trade's decision in Kahrs International, Inc. v. United States . This case involves the tariff classification of engineered wood flooring designed to be installed in to form a pattern of parallel planks. If you are interested in the legal process of tariff classification, this case is a textbook example of how to do it. Customs classified the merchandise as plywood of Heading 4412. Kahrs sought classification as "builders' joinery" (including assembled parquet panels) of Heading 4418. The Federal Circuit's first step was to define "plywood" based on reliable sources and also on prior decisions of the Court. In the end, the Court found that plywood has three important characteristic. First, it consists of at least three layers. Second, the layers are arranged with the grains at right angles. Third, the layers are bonded together. There does not appear to have been m...