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Showing posts from 2021

Trade Adjustment Assistance Remand

 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

Writ of Rachmones

 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

Email Subscriptions

 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. 

Depositions in the Time of COVID-19

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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

232 on Derivatives Invalid, Likely Headed for Court of Appeals

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

The Lowdown on the USMCA Roll Up

 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,

Judgments, Default and Otherwise

 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

Unpacking Meyer Corp. v. U.S.

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 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

Universal Steel Products' Challenge to 232 Duties Dismissed

[UPDATE: See this post  clarifying that there is an open issue in this case regarding the increase in duties on products of Turkey from 25% to 50%.]  A three-judge panel of the Court of International Trade has granted the government's motion to dismiss a challenge to Section 232 duties on steel on the grounds that Presidential Proclamation 9705 and subsequent proclamations did not violate the statute. The plaintiffs are several steel importers that claim an injury caused by the tariffs President Trump imposed on certain imported articles of steel after a Commerce Department report found that the imports threaten national security due to the correspondingly lower U.S. production capacity. Plaintiffs challenge the imposition of the duties on procedural arguments related to the requirements of Section 232 itself and the Administrative Procedure Act . To leverage the Court's opinion, Plaintiffs allege: (1) the Steel Report is a reviewable, final agency action, is procedurally defi

PrimeSource Moves Forward (In A Limited Way)

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UPDATED: On second look, my typing was atrocious in this post. My muscle memory typed "court" several times when my brain wanted "count." I fixed that and a few other things without changing the substance. Also, I am now kicking myself for not using the obvious pun: this case is a "nail biter."  On January 27, a three-judge panel of the U.S. Court of International Trade denied a government motion to dismiss PrimeSource Building Products, Inc. v. United States , which is the lead case challenging the extension of Section 232 duties to so-called derivative products.  PrimeSource's complaint contained five counts challenging the former President's imposition of duties on steel nails. As a general matter, the argument is that the initial 232 investigation and the resulting Proclamation did not cover nail and that the extension of the remedy to derivative product violates the law and is void. The question is exactly what law was violated and how? To cov

CIT Denies Domestics Intervention in 232 Case

 The ongoing litigation over whether the Section 232 duties were properly extended to cover certain downstream products of steel and aluminum took an interesting detour in Slip Opinion 21-6 , which covers multiple related cases with the lead case being Primesource Building Products v. United States. This opinion addresses the effort by the American Steel Nail Coalition to intervene in the case as a defendant in support of the United States and the continued application of the duties to imported steel nails. The Coalition is an ad hoc group that is not a formal entity as would be, for example, a trade association organized as an entity under state and federal law. Essentially, the Coalition wants a seat at the table in this litigation to protect its own economic interest in the continuation of the tariffs. Intervention is permitted in federal courts like the Court of International Trade either by right or by leave of the Court. Take a look at CIT Rule 24 for the details. To have a righ

Getting Smart on Classification

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  Plexus Corp. v. United States is a decision of the U.S. Court of International Trade in which the Court denied cross motions for summary judgment on the tariff classification of printed circuit board assemblies and chassis imported by Plexus for use in encoders, multiplexers, and remultiplexers. These devices are used to compress audio and video digital data, including voice so that it takes up less digital storage space and transmission bandwidth. While not technically required to successfully transmit data in networks, these devices make it cost effective to do so in a cost-effective manner, which is SMART . The compressed output can be viewed on computers, smartphones, television screens and other devices. The classification of the PCBA and chassis that are parts of the encoders, multiplexes, and remultiplexers are classified based on the classification of the devices of which they are parts. Henceforth, unless there is a reason to differentiate, I am going to refer to all three

No Mincing Words on Tuna Classification

 As mentioned in my last post, tariff classification is all about giving every word of the relevant heading, subheading, and tariff item its proper meaning. We do that by looking for definitions in the Section and Chapter Notes, commentary in the Explanatory Notes, and prior court decisions. In Starkist Co. v. United States , the first word in question was " minced ." The imported merchandise was prepared tuna fish salad. The tuna was classifiable in Heading 1604, which covers, among other things, prepared or preserved fish. Immediately under Heading 1604 is a subheading dividing the heading into "Fish, in whole or in pieces, but not minced" versus "Other prepared or preserved fish." Customs determined that the tuna in question was not mined and was packed in oil. As a result, the merchandise was subject to a 35% base rate of duty under 1604.14.10. Plaintiff argued that the tuna was minced and not packed in oil, making it classifiable as a prepared meal of

Another Update: SGS Sports

Sometimes I am forced to explain to non-customs and trade lawyers the basics of tariff classification and why it is an interesting area of law. I often use the metaphor of doing a complicated puzzle. There are rules to be followed (i.e., the General Rules of Interpretation, Section Notes, and Chapter Notes). Solving the puzzle requires properly applying the rules to the available facts. When you are lucky enough to have an issue that includes some ambiguity, you can use the rules and facts to advocate for the desired outcome. But, like all legal questions involving the interpretation of a statute, it is important that you focus on all the words. That is the main take away from SGS Sports, Inc. v. United States .  In a nutshell, this case is about whether swimwear imported from Canada could enter the U.S. duty free under HTSUS item 9801.00.20. That provision allows for duty-free entry for:  Articles, previously imported, with respect to which the duty was paid upon such previous importa

Litigation Highlights

 This is going to be my first catchup post and will hit the most salient points from some of the CIT and CAFC decision of the last six months. I may not cover everything, but as long as I am trying to read them, I may as well give you at least a blurb. You should read the full cases for details and keep in mind that the details matter. Vietnam Finewood Company Ltd.  involved a challenge to an ongoing enforcement action under the Enforce and Protect Act, 19 USC 1517 . Under this law, U.S. Customs and Border Protection is obligated to investigate allegations that an importer has avoided the payment of antidumping or countervailing duties through "evasion." In this context, evasion is the use of "any document or electronically transmitted data or information, written or oral statement, or act that is material and false, or any omission that is material, and that results in any cash deposit or other security or any amount of applicable antidumping or countervailing duties be