Customs Law

Over the years, I have seen many importers in trouble with the government because of inaccurate or possibly fraudulent information provided by a supplier. Many of those importers have performed layers of due diligence and sometimes still end up on the wrong side of a Customs penalty or seizure. While importers are and should be responsible for the goods they import and the representations they make to the government, it is frustrating for importers who tried to comply with the law at least in part relying on supplier representations. After ruminating on that, I wrote this musing on the burdens of international trade, which Law360 was kind enough to publish. You can access Law360 on a trial subscription.  Here is a link to the article . Or (consistent with the Law360 agreement), there is a PDF you can read here . 

 Hello. Yes, it has been a while. All is good here. Hope you are doing well too.  The reality is that for the last 2 years, the thought of writing for my own pleasure (which is 80% of why this blog exists) has been swamped by actual client, firm, and other commitments. But, I am coming up for air (at least for the moment) and want to address an important decision from the Court of International Trade. The case is Eteros Technologies USA, Inc. v. United States , which addresses the interplay between federal drug paraphernalia laws and state laws permitting the commercial exploitation of cannabis. This is important partly because of the explosive growth of the cannabis industry and also as an illustration of the way in which the details matter in the application of laws. Photo by Avery Meeker on Unsplash We have discussed CBP's role in interdicting drug paraphernalia before. See, for example, here  and here . A lot has changed since I wrote those posts in 2017. Under the federal Con

Looking to read a judicial opinion that is not a leaked draft?  U.S. v. Katana Racing is a fascinating look into how Customs and Border Protection tried to hold a company responsible for entries someone else made fraudulently and the risk of making a prior disclosure while also maintaining that no violation has occurred.  The facts are that Katana had been importing passenger and light truck tires from China. After the U.S. began assessing safeguard duties on these tires, Katana sought to find new suppliers. Rather than lose the business, one of its existing suppliers proposed that it would assume the responsibilities of importing the goods and the parties negotiated a new price for the tires. This is a Delivered Duty Paid arrangement and makes the seller responsible for customs clearance and the payment of duties, taxes, and fees. Shortly thereafter, the supplier asked Katana to execute a Power of Attorney with the stated reason that it was necessary to allow the supplier to move the

There is a saying among lawyers that a prosecutor can get a NY grand jury to indict a ham sandwich . Apparently, it is harder to classify a tuna sandwich, or at least the tuna in the sandwich. This deep thought relates to the dispute between U.S. Customs and Border Protection and StarKist Co. over the tariff classification of tuna salad imported ready-to-eat in pouches. We first addressed this debate in the post  No Mincing Words on Tuna Classification (customslaw.blogspot.com) . After being caught, the tuna is processed in Ecuador where it is cooked, machine chopped, then hand-folded with a mayonnaise base comprising more than 12% soybean oil. Customs classified the prepared tuna in HTSUS item 1604.14.10 as Prepared or preserved fish; Tunas; In airtight containers: In oil, which carries a duty rate of 35%. The importer argued that the proper classification is in three alternative tariff items: 1604.20.05 (10%), which covers minced fish prepared or preserved including "products co

We sometimes hear from a domestic party that someone is allegedly importing merchandise using an incorrect tariff classification or understating value in a way that both violates the law and creates an unfair commercial advantage for the importer. Often, the domestic party has spent considerable time and effort securing an order imposing antidumping or countervailing duties and has reason to believe someone is improperly avoiding the payment of those duties. The question is what tools exist to allow that domestic producer to ensure the law is being properly enforced and also to offset the unfair advantage.  One thought that often comes up is the Domestic Interested Party Petition under 19 USC § 1516 , which is a little used but potentially useful tool. But, as we will see, it has limitations. This section of the customs law allows an "interested party" to submit a written request for Customs to furnish to it the classification and rate of duty imposed on "designated impo

Would you buy a "used" swimsuit? The answer to that question probably depends on exactly what "used" means. In at least one narrow application of the term, the Court of International Trade has determined that a swimsuit is "used" when it is stored in a warehouse, entered into inventory, picked off the shelf for packing, and shipped to a customer. This comes from SGS Sports Inc. v. United States , a recent decision from the CIT. The issue came up in the context of swimwear that was imported into the United States and then sent to a warehouse in Canada to be held in inventory until sold. Upon its return to the U.S., the importer asserted that the goods were entitled to duty free entry under HTSUS item 9801.00.2000, which covers: Articles, previously imported, with respect to which the duty was paid upon such previous importation . . .  if (1) reimported, without having been advanced in value or improved in condition by any process of manufacture or other mea

The Court of International Trade issued its first decision on the merits of the claim that the United States collected Section 301 duties on List 3 and List 4A products collected illegally. The decision is available from the Court . In short, the Court affirmed that the President and USTR had legal authority to impose the duties. However, the Court also found that USTR failed to follow the required notice and comment procedures. Thus, the Court ordered that USTR provide a fuller response to the comments it received relating to List 3 and List 4A. The Court first had to determine whether it has the authority to review the USTR’s action at all. The government argued that the decision to impose the additional duties was immune from judicial review because it is a presidential (rather than agency) action or is a political decision, which is an area left to the President. The Court found that the issues before it do not relate to presidential discretion or policy questions but to whether US

What is the correct tariff classification for an aluminum foil laminated with plastic that is used as packaging material for pharmaceutical products and medical devices? More to the point of Amcord Flexibles Kreuzlingen v. United States , does it matter if there are words printed on the material? The merchandise at issue in this case looks like this: The Court of International Trade previously addressed the classification of this material without the printing  in a case called Amcor Flexibles Singen Gmbh v. United States . In that case, the Court determined that the flexible aluminum foil and plastic material was properly classified in Heading 7607 as a product of aluminum.  The new question presented to the Court is whether the same material, when printed, is transformed into "printed matter" of Heading 4911. If your first reaction to that theory is "come on, that's crazy," just remember that the difference between paper "of a kind used for printing"

The Court of International Trade today issued a decision in the closely-watched CyberPower country of origin case. I have had high hopes that this case will be the vehicle to clarify the substantial transformation test used by Customs and Border Protection and the Courts to determine country of origin for purposes of marking and of assessing non-preferential duties (including Section 301 duties on goods originating in China). As discussed below, the language in the decision is generally favorable for a simplified and more reasonable approach to origin. But, the Court found open questions of fact and ordered the parties to prepare for a trial.   The issue is the country of origin for Section 301 purposes of power supplies. The plaintiff had moved assembly from China to the Philippines, but retained many significant parts from China including a populated printed circuit board assembly. U.S. Customs found the item to originate in China and be subject to the 301 duties. Both parties mov

This is the last post covering cases from 2021. I can't say I am sad about seeing the end of 2021. Thank you all for reading my posts here and following me on  Twitter . Here’s hoping all of you have a happy, safe, and professionally satisfying new year.  The case of the day is  Porsche Motorsport North America, Inc. v. United States , in which the plaintiff sought to secure duty-free entry for certain merchandise under HTSUS item 9801.00.85, which covers “[p]rofessional books, implements, instruments, and tools of trade, occupation, or employment, when returned to the United States after having been exported for use temporarily abroad, if imported by or for the account of the person who exported such items.” The items in question were vehicle parts exported from the U.S. to Canada by Porsche in a trailer to be stationed at Porsche team racing events in Canada. According to Porsche, it exported the trailer to "promote the Porsche brand" by providing parts to participants