Ruling of the Week 15: A Honey of a Problem
There is an antidumping duty order covering honey from China. That means that exporters and importers will look for clever ways to stay outside the scope of the order. Some of those will be legal; finding a new supplier in Vietnam, for example. Others will be decidedly illegal; like labeling honey as rice syrup. One interesting possibility is diluting honey until it is no longer 50% honey by weight. At that point, it is outside the scope of the antidumping duty order.
In this game of cat and mouse, Customs and Border Protection needs to continually find ways to identify the presence of honey and its origin. HQ H187175 (May 14, 2012) illustrates part of that problem.
The imported merchandise was reported as "honey and rice syrup mixture" from China. If the mixture is 50% by weight or honey, it is subject to antidumping duties. As entered, the goods were classified in HTSUS item 1702.40.40 as glucose and glucose syrup, containing in the dry state at least 20 percent but less than 50% by weight of fructose, excluding invert sugar: Blended syrups described in additional U.S. note 4 to chapter 17: other . . . other.
Custom sent a sample to its lab to determine the honey content of the mixture. The lab tested for the presence of C-4 plant sugar, which is derived from corn. Apparently, this makes sense as corn syrup is commonly used to dilute honey. Customs also applied Isotope Ration Mass Spectrometry. The report showed the presence of C-3 sugars. Honey is a C-3 sugar. The test also showed that the sample was not "adulterated" with C-4 (i.e., "corn based") sugars. Due to the absence of corn syrup, the lab concluded that the sample was more than 50% honey.
The problem for Customs is that rice sugar is a C-3 sugar, just like honey. That means that tests showing an absence of C-4 corn syrup does not automatically lead to the conclusion that the sample was mostly honey. Furthermore, the tests for C-3 sugar do not differentiate between rice syrup and honey. In fact, the importer claimed that the merchandise was more than 50% by weight rice syrup and, therefore, outside the scope of the antidumping duty order.
Customs took a second look at the sample. This time, Customs looked at it under a microscope to determine the amount of pollen and bee parts in the sample. Finding that the sample contained more pollen and bee parts than a reference sample of only 50% honey, Customs again found the merchandise to be within the scope of the antidumping duty order. The importer protested the conclusion.
In the ruling, Customs had to determine whether the lab tests were sufficiently reliable to support applying the antidumping duty order. The starting point for that analysis is that Customs is presumed to be correct. The importer has the burden of showing either that the results are wrong or that the methodology is unreliable. Here, the importer had an independent lab confirm that the chemical test does not distinguish between honey and rice syrup. Customs agreed to reject that methodology, leaving the question of the microscopy analysis.
Subsequent to Customs' laboratory analysis, a federal court in Florida addressed the same question under the Supreme Court's direction from a case called Daubert. Generally, Daubert requires district court judges to vet scientific testimony to ensure that it is based on the generally accepted scientific consensus. To do that, the judge is to look at criteria such as whether the methodology has been subject to peer review and is based on a falsifiable premise. In other words, is it scientifically rigorous?
In the Florida case, the district court determined that CBP's methodology did not satisfy the Daubert requirement for reliability. Furthermore, the Commerce Department had also previously recognized that it could not distinguish between honey and rice syrup, making the 50% by weight test "without meaning."
Consequently, Customs was left with no real choice other than to admit that it could not properly determine the amount of honey in the sample. Consequently, the protest was granted.
In this game of cat and mouse, Customs and Border Protection needs to continually find ways to identify the presence of honey and its origin. HQ H187175 (May 14, 2012) illustrates part of that problem.
The imported merchandise was reported as "honey and rice syrup mixture" from China. If the mixture is 50% by weight or honey, it is subject to antidumping duties. As entered, the goods were classified in HTSUS item 1702.40.40 as glucose and glucose syrup, containing in the dry state at least 20 percent but less than 50% by weight of fructose, excluding invert sugar: Blended syrups described in additional U.S. note 4 to chapter 17: other . . . other.
Custom sent a sample to its lab to determine the honey content of the mixture. The lab tested for the presence of C-4 plant sugar, which is derived from corn. Apparently, this makes sense as corn syrup is commonly used to dilute honey. Customs also applied Isotope Ration Mass Spectrometry. The report showed the presence of C-3 sugars. Honey is a C-3 sugar. The test also showed that the sample was not "adulterated" with C-4 (i.e., "corn based") sugars. Due to the absence of corn syrup, the lab concluded that the sample was more than 50% honey.
The problem for Customs is that rice sugar is a C-3 sugar, just like honey. That means that tests showing an absence of C-4 corn syrup does not automatically lead to the conclusion that the sample was mostly honey. Furthermore, the tests for C-3 sugar do not differentiate between rice syrup and honey. In fact, the importer claimed that the merchandise was more than 50% by weight rice syrup and, therefore, outside the scope of the antidumping duty order.
Customs took a second look at the sample. This time, Customs looked at it under a microscope to determine the amount of pollen and bee parts in the sample. Finding that the sample contained more pollen and bee parts than a reference sample of only 50% honey, Customs again found the merchandise to be within the scope of the antidumping duty order. The importer protested the conclusion.
In the ruling, Customs had to determine whether the lab tests were sufficiently reliable to support applying the antidumping duty order. The starting point for that analysis is that Customs is presumed to be correct. The importer has the burden of showing either that the results are wrong or that the methodology is unreliable. Here, the importer had an independent lab confirm that the chemical test does not distinguish between honey and rice syrup. Customs agreed to reject that methodology, leaving the question of the microscopy analysis.
Subsequent to Customs' laboratory analysis, a federal court in Florida addressed the same question under the Supreme Court's direction from a case called Daubert. Generally, Daubert requires district court judges to vet scientific testimony to ensure that it is based on the generally accepted scientific consensus. To do that, the judge is to look at criteria such as whether the methodology has been subject to peer review and is based on a falsifiable premise. In other words, is it scientifically rigorous?
In the Florida case, the district court determined that CBP's methodology did not satisfy the Daubert requirement for reliability. Furthermore, the Commerce Department had also previously recognized that it could not distinguish between honey and rice syrup, making the 50% by weight test "without meaning."
Consequently, Customs was left with no real choice other than to admit that it could not properly determine the amount of honey in the sample. Consequently, the protest was granted.
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