Customs Law

I am often amused when someone says "It goes without saying . . ." and then goes ahead and says it anyway. Nevertheless, I am going to do that very thing. It goes without saying that 2020 was a strange year. For many, it was tragic and sad. The world had to cope with COVID-19 and the resulting deaths, illnesses, isolation, and economic fallout. Some also experienced terrible property loss and environmental damage from wildfires and other natural disasters. All of that happened during the least civil time in American politics in my memory and ongoing culture clashes along the seams in the American population including education levels, rural versus urban, and racial and religious groups. For the trade community, the last four years have been unlike any we can remember. You have faced threats for a unilateral withdrawal from NAFTA, Section 232 duties on steel and aluminum, Section 301 duties on products from China, and the too-fast transition to the the U.S.-Mexico-United State

In TransPacific Steel v. United States , the United States Court of International handed the Commerce Department and the President a defeat with respect to the Section 232 duties imposed on aluminum and steel products from Turkey. This case is narrow in scope but important. The specific issue before the Court was whether Presidential Proclamation 9772  which made aluminum and steel products from Turkey subject to twice the rate of Section 232 duty than has been applied to products of other countries. Plaintiffs in this case raised several arguments seeking to overturn the proclamation and recover the excess duties paid. The first argument is statutory and procedural. Section 232 duties are the result of a process that begins when the Commerce Department initiates an investigation. The results of that investigation are then communicated to the President who can chose to take action. The President only has 90 days in which to decide whether he (in this case) is going to act and what that

Once again , the Court of International Trade has been asked to consider the status of apparel made from a synthetic yarn that includes zinc nanoparticles. This time, the decision is Lockhart Textiles Inc. v. United States . The decision ultimately turns on whether the yarn from which the apparel was made is of synthetic fibers or whether the addition of the zinc in the yarn production process makes it "metalized" and, therefore, an "other yarn." The result is significant. If the plaintiff's contention is correct, the apparel is classified in HTSUS item 6104.69.80, which carrier a rate of duty of 5.6%. If the United States is correct, the proper classification is 6104.63.20, which carries a rate of duty of 28.2%.  I know this is not true, but I can't read about clothing made of metalized yarn without assuming it looks like something from the closet of a Star Trek alien or the original Robinson family from Lost in Space. Reading this case, I was left with the

Last year, the Court of International Trade decided that plastic iPad Smart Cases, which function as both protective covers and stands are properly classified in HTSUS Heading 3926. Apple, on the other hand, wanted these covers classified in the duty-free provision covering accessories of computers in Heading 8473. We discussed the CIT decision here . Apple appealed and now the Court of Appeals for the Federal Circuit has affirmed the CIT . There is not a lot new in the CAFC decision, but it does a really good job of setting out the legal process of tariff classification and the analysis that produced the result. So, if you are new to this stuff, read the decision. The nub of the issue is what to do with the Explanatory Notes of Heading 8473 and how to interpret the relevant note. The heading covers "Parts and accessories ( other than covers , carrying cases and the like) suitable for use solely or principally with the machines of headings 8470 to 8472." The relevant language

Customs and Border Protection has issued ruling HQ H308234 (Jun. 3, 2020) which covers the classification, valuation, NAFTA status, and 301 status of a USB drive with software on it. Given that a large portion of the trade community is still keenly following origin and 301 issues, it is a good ruling to review. The products involved are the Start Me Stick and the Fix Me Stick . Both of these devices are USB stick drives containing software. The point of the Start Me Stick appears to be to access the internet while bypassing the computer to which the stick is attached. I guess the use case for that is if you use a public terminal (at a library, for example), if your current computer too slow, or if for some reason you need a wholly private browser experience that is not run through the browser on your computer. That latter might help if, say, you are looking for a new job or Tinder date via your office computer. I am not clear how this thing gets and IP address and whether activity ru

The difference between crude or roughly trimmed stone and polished stone may seem pretty obvious in the colloquial sense. But, in the world of tariff classification, it is always possible for facts to complicate matters.  Such is the case in HQ H306644 (Feb. 3, 2020) , our Ruling of the Week. The imported merchandise was identified as Blue Pearl, India (or Jet) Black and India Red in roughly five to seven foot lengths and three to four foot widths. The importer originally classified the merchandise in Heading 2516 as crude or roughly trimmed granite. CBP's lab looked at the merchandise and determined that it was polished on two opposite faces or on one face. The importer disputed that the surfaces were polished and CBP looked again. The lab came back with a determination that the top surface is highly reflective of light and smooth to the touch. According to the lab, that is sufficient grounds to find it is polished. As an aside, it also turns out that the stones are not granite, b

I keep an eye on rulings from CBP with a focus on those that are slightly off kilter or entertaining to the 12-year old boy that still lives in my head. Cruising the most recent Customs Record, I saw that Customs and Border Protection had issued a ruling concerning the classification of a Giant Inflatable Weasel. Alas, when I sat down to read the ruling, I found it actually concerned a giant inflatable easel. That is far less silly, but equally as illustrative. So, here is what we can learn from HQ H301988 (May 14, 2020) . The merchandise is a PVC inflatable easel. I do not know for certain that this is the same product, but based on the description, it seems to be. The image comes from Heathsong.com, which is mysteriously close to Plow & Hearth, the party that requested the ruling, so I am going with this being it. The product comes with four cans of paint, one brush, and four sponges. Custom initially classified this item as furniture in 9403.70.4015 or 9403.70.8015, depending on

This is the second decision involving whether the United States properly served a summons and complaint on Chu-Chiang "Kevin" Ho, one of the defendants in a penalty case. The alleged violation  is the false description of imported HID headlight kits. The kits are not admissible merchandise because they violate U.S. Department of Transportation safety rules. On the entry documents, the merchandise was described as ballasts for interior track lights.  Assuming the truth of that allegation, the question remains whether Mr. Ho was properly served. Without proper service the Court of International Trade does not have person jurisdiction over him and the case cannot proceed. The rules related to this are covered in the prior post . Here, we are dealing with an opinion involving a separate but related case. This decision is slip opinion 20-66 . The principal question presented is whether the process server hired by the government successfully served Mr. Ho at his home. The facts are

In two recent decisions of the Court of International Trade, Judge Reif has used a number of movie and television references in the course of deciding, among other things, whether a defendant had been properly served. This post will cover the first of those decisions. Service of the summons and complaint is a necessary step because it alerts the a party of the filing of a law suit and allows defendant to  properly respond. If service is not properly accomplished, the case may be dismissed. In the Court of International Trade, service is controlled by Rule 4 .  Relevant here is Rule 4(b), which states that in cases commenced by the concurrent filing of a summons and complaint, the plaintiff is required to serve the defendant. Furthermore, Rule 4(l) dictates that: If a defendant is not served within 90 days after the complaint is filed, the   court – on motion or on its own after notice to the plaintiff – must dismiss the action without prejudice against that defendant or order that serv

Frankly, I am not the most thoughtful person in the world. I know that. I try my best to make up for it. Rarely does that effort include a greeting card. When forced by circumstances, I stand at the local Walgreen's card racks staring into an abyss of cards that are never quite right. Finding something in the sweet spot between excessively sappy and an infantile effort at humor is incredibly frustrating. Often, I end up with a call, email or the dreaded Facebook message. So, it surprises me to learn that people still buy boxes of pre-printed cards as ready-at-hand supplies should the need for a card materialize. Apparently, this happens. This all comes to mind in the context of HQ H305186 (May 8, 2020)  in which Customs and Border Protection classified a set of 60 note cards for Michaels Stores.  The actual cards in the set fell into distinct categories, which will be important for classification purposes. Three styles of cards were printed with an exterior design. Three styles had

Under any circumstances, if the Court of International Trade mentions Iron Man and Thor in a decision, it has my attention. Even more so as I sit here today, working from home, wearing a Captain America t-shirt and a quarantine beard. For those who care, the Court also mentioned Care Bears, Ariel, and Sponge Bob. Pick your own fandom. The cause for all this pop culture excitement is the decision in In Zone Brands, Inc. and Good2Grow, Inc. v. United States , which involves the classification of plastic bottle toppers molded into the forms of licensed characters and sold connected to a bottle of juice. In life, the products look like this: The plaintiffs claimed that the toppers, imported separate from the bottles of juice, should be classified as toys in Heading 9503. Customs & Border Protection classified the merchandise in Heading 3923 as stoppers, lids and other closures of plastic. Those of you who have been around for a while might think this question was resolved in 2000 in a

I had a long run of covering at least one CBP ruling every week. I enjoyed doing that as it allowed me to find an odd ruling and use it as a tool to illustrate some point. That fell by the wayside, mainly because of the time commitment it takes to do actual work and also write other content for the blog. On the other hand, I kind of miss it. Others have tried to fill that space. I am looking at you, Crowell & Moring.  Today, I am inspired to jump back in. That inspiration came in the form of the printed New York Times. In today's Science Times, there was an interesting and entertaining discussion of whether a reasonably functional traffic barrier could be made of Rice Krispies Treats. In the course of that discussion , the author quotes Customs & Border Protection for what seems to be an "official" description of a Rice Krispies Treat. According to the Article: "[T]he Tariff Classification and Marking Branch, a part of U.S. Customs and Border Protection, desc

One thing you learn as a customs and trade professional is that there is international trade in just about any commodity you can imagine. Today, we are dealing with the inbound trade in used clothing. I was aware that there is a lot of exporting of this product from the U.S. both for resale and also for recycling. The NPR podcast Planet Money did a great episode on the afterlife of U.S. clothing in Africa and then tracked down the original owner of a bat mitzvah t-shirt that ended up in Africa. Here is a report on that story from Haaretz  and here is the original podcast . But, Dis Vintage LLC v. United States is a case about the classification of used clothing coming into the United States. The plaintiff imported bales of used clothing and classified the merchandise in HTSUS item 6309.00.00 as "worn clothing," which is a duty free. CBP sampled the merchandise and found that the clothing did not show "appreciable wear." CBP has long used "appreciable wear&quo

On April 21, 2020, Barnes, Richardson & Colburn LLP opened a new line in the challenges to certain Section 232 imposed duties on steel and aluminum products. In this case, brought on behalf of a Michigan-based metals importer, the challenge is directed at the exclusion process implemented by the Commerce Department. Specifically, because Section 232 exclusions are not applicable to all importers of the same product and are not implemented by changes to the Harmonized Tariff Schedule, the exclusions result in the HTS items being non-uniform in their application to importers of merchandise classified under the same tariff item. This system is contrary to the constitutional requirement that “all Duties, Imposts and Excises shall be uniform throughout the United States . . . .” We believe that companies that continue to pay 232 duties for merchandise classified in an HTSUS item for which another entity has received an exclusion are at a competitive disadvantage and may be entitled to

The Court of International Trade has issued an order lifting an injunction aimed at protecting the vaquita from illegal fishing by banning the importation of certain fisheries products from Mexico. The vaquita is a critically endangered porpoise that is endemic to the Gulf of California. The order is the result of a favorable settlement between the government and several environmental organizations. That is a good thing. For background on this case, read this post . The Court approved the settlement stating that the Government has changed course, announcing an embargo that embraces the one sought by Plaintiffs in their complaint and preliminarily issued by the court; indeed, it expands its reach. In short, Plaintiffs have achieved the outcome they sought before the court in the suit they filed. Presented for the court’s review is the settlement of the instant litigation as set forth in the Stipulation and Proposed Order of Voluntary Dismissal Under CIT Rule 41(a)(2), Apr. 10

Customs & Border Protection has issued a CSMS notice alerting the trade to an emergency order from the White House to defer the collection of some duties for goods entered between March 1 and April 30, 2020. The text of the summary of the corresponding Federal Register Notice is as follows: SUMMARY: In light of the President’s Proclamation Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) (Presidential Proclamation 9994) under the National Emergencies Act on March 13, 2020, and the President’s Executive Order entitled “National Emergency Authority to Postpone The Time to Deposit Certain Estimated Duties, Taxes, and Fees” authorizing the Secretary of the Treasury to exercise the authority under section 318(a) of the Tariff Act of 1930, issued on April 18, 2020, the Secretary of the Treasury, in consultation with the designee of the Secretary of Homeland Security (U.S. Customs and Border Protection (CBP)), is amending the CBP regulations to temp

While we are mostly working from home or other locations that keep us away from groups of people, it is a good time to reconsider the tariff classification of door locks. Happily, the Court of International Trade has given us another chapter in the Home Depot USA Inc v. United States dispute. In a previous chapter, the Court of International Trade classified keyed door knob assemblies in Heading 8301 as locks. Read about that opinion here . The Court of Appeals for the Federal Circuit took a different approach and held that the merchandise is a composite good consisting of a lock of Heading 8301 and knobs, which are base metal mountings or fittings of Heading 8302. Read about that here . The correct classification of the whole assembly, therefore, depends on the element that imparts the essential character. See General Rule of Interpretation 3(b). Determining essential character requires that the Court make findings of fact, which is not something that Courts of Appeals ever want

Here is a video recording of the presentation I had planned to do at ICPA in San Diego and that I recently did as a remote webinar for the International Trade Club of Chicago. If you are a trade nerd stuck in the house, you may find this interesting and useful. If there are family members stuck there with you, this may be a useful tool to get them out of the room. Note, this session is two hours long. Grab some snacks. Click the image.

Country of origin continues to be in the spotlight as Customs & Border Protection exercises its enforcement authority for Section 301 duties on products from China and also on products subject to antidumping and countervailing duties. A lot of the discussion has been around China and what needs to be done to a product to legally establish another country as the origin. This is useful to avoid the up to 25% duties imposed on these products. But, the same considerations apply in the antidumping and countervailing duty context except that the stakes can be much, MUCH greater. It is not uncommon to see deposit rates and assessments rates in excess of 100%. In one case, as much as 1300% (I'm look at you, mattresses). The recent Court of International Trade case TR International Trading Company v. United States , looked like a vehicle to address some of these cases but ended up focusing more on CIT practice than on origin. The case involves citric acid imported from India, where it