Customs Law

The Court of Appeals for the Federal Circuit has pedaled into the controversy over the classification of children's bicycle seats. In this context, that means extra seats that can be attached to a bicycle to carry a child as a passenger, as opposed to seats (or "saddles" for children's bicycles). The underlying dispute is whether such seats are classifiable as seats of Heading 9401 (duty free) or as bicycle accessories of 8714.99.8000, which are subject to a 10% rate of duty. The CAFC opinion in Kent International, Inc. v. United States is, however, not about the classification itself. Rather, it is about what to make of Customs' handling of entries of this merchandise and whether that handling constitutes a legally enforceable "treatment." Kent, it appears, is an importer trying to do this right. In 2005 it received a binding ruling from CBP stating that the seats should be classified as bike accessories in Heading 8714. After that, including between A

The Court of International Trade has exclusive jurisdiction to review Customs & Border Protection's denial of a valid protest, including a protest of the exclusion of merchandise. 28 USC 1581(a) (CIT jurisdiction) and 19 USC 1514(a)(4) (exclusions are protestable). An exclusion can happen in two ways. First, CBP can make an affirmative decision on admissibility within 30 days of the merchandise being presented for examination.  After those 30 days and if the merchandise has still not been released, the goods are "deemed excluded." 19 USC 1499(c)(5)(A). Deemed exclusions are as protestable as affirmative exclusions. A seizure, on the other hand, is subject to the exclusive jurisdiction of the U.S. District Court in the district where the merchandise is located. 28 U.S.C. 1356 . A seizure is not an exclusion and is not protestable. In other words, seizure and exclusion are two distinct legal actions subject to two distinct avenues of review.  The process CBP must follo

Back in 2020, we covered National Association of Manufacturers v. Department of Treasury  in which the Court of International Trade invalidated a CBP regulatory amendment that prohibited drawback of certain excise taxes based on the export of domestically-produced wine that was exempt from the export tax. The Federal Circuit has now affirmed that decision, along much the same lines of reasoning as applied by the CIT, so go read that post for more details. In brief, Customs and Border Protection (but apparently not Congress) perceived there to be a problem in the way drawback law has been applied to wines with respect to excise taxes. Prior to CBP amending the regulations, drawback could be claimed for the recovery of excise taxes paid on imported wine where the corresponding exported wine was a domestic product that was exempt from the excise tax. The exemption might apply because the wine was exported from a bonded warehouse without being offered for sale in the U.S. The apparent conc

Way back in 2016, the Federal Circuit affirmed a Court of International Trade Decision finding that certain Otter Products device cases were not "similar to" the items listed in HTSUS Heading 4202, which covers various containers for personal effects including suitcases, camera cases, handbags, bottle cases, jewelry boxes and similar containers. Instead, the phone cases were properly classified as articles of plastic in Chapter 39. You can read my riveting coverage of that decision here .  In a new(ish) Otter Products decision , the plaintiff asked the Court of International Trade to extend the favorable tariff treatment to entries that had been part of a voluntary prior disclosure to Customs and Border Protection. My guess is that if you have found your way to this post, you are familiar with voluntary prior disclosures; but lets get that context on the table. An importer has an obligation to exercise reasonable care when reporting information to Customs concerning the merch

Still catching up. This time, I look at PrimeSource Building Products, Inc. v. United States , which is another piece of litigation spinning out of President Trump’s Section 232 duties on steel and aluminum products. I posted about the merits decision in this case here . In that decision, the Court found that the extension of the duties to derivative products occurred beyond the 105-days in which the President is authorized to act. At an earlier stage, the Court enjoined CBP from collecting the duties and required the importer to maintain a sufficient bond to ensure payment to CBP should the decision be reversed on appeal. That injunction dissolved on the issuance of the judgment by the Court of International Trade. This new decision arises out of a request from the United States to stay the enforcement of the judgment and reinstate the terms of the injunction while the government appeals to the Federal Circuit on the merits. A stay pending appeal is not uncommon. It is a tool that

Exactly how to go about getting refunds of incorrectly collected Section 232 duties on steel and aluminum products is a complicated issue. The result, it seems, turns on what caused the incorrect collection. And it is important to act quickly to preserve the right to collect a refund because it turns out that failing to act can result in the loss of the refund. This all comes up in the context of Voestalpine USA Corp and Bilstein Cold Rolled Steel LP v. US . The underlying facts in this case are not terribly complicated. In July of 2018, Bilstein submitted to Commerce a Section 232 exclusion request. The request contained a non-existent 10-digit HTSUS code. Despite the error, and the fact that requests are supposed to be reviewed by CBP for “administrability,” Commerce granted the request with the invalid HTSUS code. VoestAlpine, the importer, entered steel that should have been covered by the exclusion and, noting that the correct HTSUS code on the entry would not match the exclus

It has been a while, which makes me unhappy. It also means that I have been very busy at work and a lot of what I have been doing is interesting. Some of it will end up getting explained here (eventually). In the meantime, I am squeezing in a few quick updates. The first is about  Logitech, Inc. v. United States  in which the Court of International Trade decided the classification of regular webcams and better webcams used for video conferencing. The legal question comes down to whether they are television cameras of HTSUS Heading 8525 or apparatus for transmitting (or receiving) voice, images or other data for communication in a network (wired or wireless) of 8517. I suspect we instinctively know the answer to this. 8517 is for network-connected communications devices for sending voice, images, and data. Meetings in Teams, Zoom, and other platforms are communications involving voice, images, and other data sent via the internet, which is a network. No matter how devoid of content (and

Reposted from the swanky new website of Barnes, Richardson & Colburn (but still my work). The Court of Appeals for the Federal Circuit today reversed the Court of International Trade’s decision in Transpacific Steel. The CIT had held that the President lacked authority to increase Section 232 duties on steel from Turkey to 50% while imposing a 25% on imports from other countries. The CIT’s decision was based on the fact that President Trump did not impose the additional duties on products from Turkey within the statutory 105-day time limit imposed by § 1862(c) or without relying on a new Section 232 report from the Secretary of Commerce. The CIT also found that singling out Turkish imports violated the equal protection guaranteed by the Fifth Amendment. Regarding the statutory time limit, the Federal Circuit opinion by Circuit Judge Taranto (with Circuit Judge Chen in agreement) framed the question as whether the law “permits the President to announce a continuing course of actio

I feel lousy today. We all spent the last 15 months is varying levels of quarantine. Now, we are emerging. I am fully vaccinated. My family is fully vaccinated. So, we are letting down our collective guard. That seems to have been a mistake. Following a family gathering last weekend and a couple restaurant outings, I have a terrible head cold. My unscientific theory is that my immune system got bored during the pandemic and basically quit or at least went on vacation. Nevertheless, I am reading customs cases. Related the 301 duties is a recent decision of the CIT in ARP Materials, Inc. and Harrison Steel Casting Co.   The issue here was whether the Court had jurisdiction of review the collection of Section 301 duties. This case is different than the Section 301 litigation discussed above in that the underlying issue was whether the merchandise was properly subject to an exclusion added to the HTSUS as the classification of the merchandise. Using just one of the plaintiff's facts fo

I live near Chicago and spent a significant portion of my adult life living or working in the city. There is an increasingly rare kind of Chicagoan that represents the accent many Americans associate with the city. That accent is often, and incorrectly, summarized as the "Dees and dems and dose." It has been used as a tool of sketch comedy for ages. Including in Bill Swerski's Super Fans. I am reminded of the Super Fans because I just re-read DIS Vantage LLC v. United States . Every time I see "DIS Vintage," the 12-year old idiot that inhabits a portion of my brain insists on saying "Dat's not vintage, Dis vintage."  The serious question presented in this case is the classification of bales of used apparel. We initially discussed this case last year in this post . The question left to be decided is whether the merchandise is commingled and, therefore, subject to the highest rate of duty applicable to merchandise present in the mixture.  It is worth

 As we discussed in the last post , not a lot happens in Customs Law Land that has a direct impact on the livelihood of individuals. Usually, we are dealing with refunds or duties owed by companies. One area that does impact individuals is appeals of denied Trade Adjustment Assistance, which is the federal program that provides financial and other assistance to workers who are "separated from employment" due to trade. In other words, TAA addresses those who are on the short end of the globalization stick. TAA goes back to the Kennedy Administration and is the bargain we make with workers. Economists (notwithstanding Peter Navarro) largely agree that globalization leverages local comparative advantages to generate a net economic benefit. But, everyone can also see that not every individual within the economy realizes benefits from globalization. TAA helps those individuals "adjust" through enhanced unemployment benefits, training, and relocation. It is not a perfect

 The Yiddish word rachmones  means compassion, mercy, or pity. It occasionally sneaks into legal discussions in cases where there is no clear legal right to relief but the applicant appears to be deserving of compassion or mercy. I remember first coming across this usage when reading Chutzpah , the memoire of the now troubling Alan Dershowitz in which he conveyed the story of working as a clerk for Judge David Bazelon of the U.S. Court of Appeals for the District of Columbia. According to Dershowitz, when a criminal defendant deserved compassion but had no strictly legal remedy, Judge Bazelon would request that his clerk find some basis on which to draft a "writ of rachmones." Dershowitz , Chutzpah , 58-59 (1992).  LEXIS tells me that Judge Berle Schiller of the U.S. District Court for the Eastern District of Pennsylvania used the same phrase in a 2020 opinion involving a criminal defendant who had been sentenced to prison for 15 years for securing home loans by fraudulent ap

 Hello Follow by Email subscribers. I am told that the FeedBurner service is going into maintenance mode soon. It appears it will stop sending emails of this glorious feed. I will look for another solution. In the meantime, the easiest way to see new posts is to follow me on Twitter @customslawblog. I almost always let the world know of new posts there. 

Can the United States Government compel a witness to appear in person for a deposition in the midst of a pandemic? Not according to the U.S. Court of International Trade in the ongoing tussle known as United States v. Greenlight Organics . We have previously addressed aspects of this case here , here , here , and even  here . After the Government demanded a deposition to be held at the U.S. Custom House in San Francisco and following appropriate COVID protocols, the witnesses objected. The objection resulted in a motion for a protective order, which is the vehicle by which a Court is asked to limit discovery. The Government argued that an in-person deposition was necessary so that the witness could be shown documents. Apparently, the DOJ lawyers have not spent the past year sharing screens in Teams meetings. Citing CDC guidance and common sense, the court found that requiring witnesses to travel to San Francisco would risk the health of the witnesses in an era when videoconferencing ha

The Court of International Trade on April 5 invalidated tariffs on derivate steel and aluminum products that the Trump Administration had imposed under Section 232 of the Trade Expansion Act of 1962. The  decision comes in PrimeSource Building Products, Inc. v. United States .  The tariffs followed the initial round of tariffs on steel and aluminum in primary forms that were imposed (allegedly) to protect the national security in light of excess global capacity and low capacity utilization in the U.S.  The issue in the case was whether the subsequent extension of the tariffs to nails, staples, and other “derivative” products was done consistent with the statutory requirements, specifically the 105-day time limit baked into Section 232. The Presidential Proclamation extending 232 duties to derivative products occurred outside that time without a new recommendation from Commerce to restart the clock. The Court had previously denied the Government’s motion to dismiss on this issue and al

 You may have seen recent press reports over the interpretation of the so-called "roll-up" provisions of the RVC calculation for certain motor vehicles under the USMCA. This is a complicated issue and there are varying interpretations of the law and the facts, so I figured I could provide some context. For this to make sense, you might want to have the current version of the Uniform Regulations on Rules of Origin handy.  The underlying issue is what counts toward the value of non-originating materials when calculating the Regional Value Content of a passenger vehicle or light truck. The starting point for that is Section 14 (p. 39721) of the aforementioned regulations. Section 14(1) begins with a clear and declarative statement: Roll-Up of Originating Materials (1) The value of non-originating materials used by the producer in the production of a passenger vehicle, light truck and parts thereof must not, for the purpose of calculating the regional value content of the good,

 The CIT has issued a few procedural decisions that are worth mentioning. First, in Universal Steel Products , which we discussed here , the three-judge panel issued an order granting partial judgment on those claims that have been decided. See the prior post for the details of those claims. Partial judgment is possible under CIT Rule 54(b) . In this case, the Court found that the previously decided claims were separate from any issues remaining before the Court and that there was no reason to delay entry of judgment. This is valuable for the plaintiff who is now able to file an appeal. There is a lingering issue of whether the increased tariffs on steel imported from Turkey to 50% from 25% was procedurally flawed because it occurred outside the the statutory timeframe for relief. That issue is stayed pending the final determination in Transpacific Steel .  Next, the CIT issued two default judgments in penalty cases. The first involved a company called E.G. Plastics, Inc. the second i

 There are many pages of text in Meyer Corporation v. United States , a recent decision of the U.S. Court of International. One hundred twenty, to be exact. I will try to give you the gist here. And, it turns out, the gist might matter. There are two issues in this case. First, whether imported cookware is entitled to duty-free entry under the Generalized System of Preferences. Second whether the importer legally claimed that the sale price from the related vendor to a related reseller represented the transaction value under the "first sale doctrine." The GSP issue is easier to explain, so let's start there. The clad cookware subject to this case was made in Thailand. At the time of entry, the merchandise was classifiable in 7326.93.0045 and qualifies for GSP duty-free entry if it satisfies the rule of origin. Under that rule, 35% of the value of the merchandise must originate in materials from or direct processing in Thailand. In this instance, a major input material was