Customs Law

UPDATE: In a judgment dated February 18, 2020, the CIT ordered Customs to process claims that would have been denied as a result of CBP's redefinition of "drawback." Expect the government to seek a stay of the order pending its inevitable appeal. Duty drawback is complicated enough without Customs and Border Protection  trying to bend it to its own will. National Association of Manufacturers v. United States involves an effort by Customs to redefine “drawback” in a way that prevents wine exporters from claiming substitution drawback on exports of domestic wine to recover excise taxes paid on imported wines. Got that? The starting point for this is understanding that the government collects excise taxes on domestic wines consumed in the U.S. Excise taxes are not collected on wines exported from a bonded facility or, if paid, may be refunded on export. 26 U.S.C 5214(a)(4) and 5062(b) . Drawback is defined as the refund of 99% of customs duties, fees, and internal

This is going to be a quick summary. Janseen Ortho LLC v. United States is a fairly complicated decision on the classification and rate of duty applicable to darunavir ethanolate, which is an  HIV medicine sold under the brand name Prezista. There are two issues. The first is the classification and the second is whether the product, once properly classified, is entitled to duty-free entry under the Pharmaceutical Appendix. In terms of classification, I am going to cut to the chase and tell you the product is classified under HTSUS item 2935.00.60 (which no longer exists). Getting there required an analysis of whether the compound has a molecular species corresponding to a repeating unit cell, whether the structure is defined by a constant ratio of elements, and whether darunavir hydrate is an impurity the presence of which does not change the classification. The Court of International Trade reviewed all those questions and concluded that the proper classification is in 2935.00.6