Customs Law

Remember Meyer Corp. v. United States ? We discussed the original CIT decision in this post from 2021. That decision caused many quizzical discussions among trade nerds about whether the fact that a multi-tiered sale starts in China, a non-market economy, undermines an importer's ability to claim valuation for duty on the basis of the first sale. The Court of International Trade suggested that the Court of Appeals for the Federal Circuit might have to clarify. If none of this seems familiar to you, go back and read the earlier post. In August of 2022, the Federal Circuit provided that clarification . That must have happened while I was in the "Blog Black Hole" of 2021-2022, which I am trying to dig out of now (you may have noticed). The decisive part of that decision states: The trial court misinterpreted our decision in Nissho Iwai to require any party to show the absence of all “distortive nonmarket influences.” There is no basis in the statute for Customs or the cour...

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...

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 ...

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...

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...

Apects Furniture International v. United States is such a painful example of customs litigation, that I have started and deleted draft posts a number of time. So, I am just going to bottom line it and move on my life. The issue here is whether Aspects properly protested multiple liquidations on a single protest filed in the Automated Commercial Environment. The protests relate to a rate advance to collect antidumping duties on wooden bedroom furniture. There are nine entries at issue. Apsects protests [spoiler] all nine in the system that Customs and Border Protection designed and made available to the trade. The narrative section identified a single relevant entry number, which was used as the "lead entry." The government asserted that the remaining eight entries were not properly subject to the protest. However, the Court pointed out, when Apects filed the protest, it (or its representative) used the function of the system that allows the user to "Add Additional E...

Getting a refund from the United States Federal Government is never easy. In the case of customs duty drawback, it can also be aggravating. That is one of the lessons of EchoStar Technologies, LLC v. United States , a recent decision of the U.S. Court of International Trade. As background, duty drawback is a statutory program under which a party can claim a refund of 99% of the duties paid on imported merchandise after that merchandise has been exported, destroyed, or used to manufacture something that was exported. It is also possible to claim drawback for duties paid on something that was imported where a commercially equivalent item was subsequently exported or destroyed. The details of drawback law are set out in 19 USC 1313 and 19 CFR Part 191 and there are many details regarding how to make a successful claim. Note also that drawback has undergone a recent and significant change pursuant to the  Trade Facilitation and Trade Enforcement Act of 2015 , which I discussed h...

Lately, more customs penalty cases (at least among those making it to the Court of International Trade) seem to be ending in defaults. Such is the case with United States v. Selecta Corporation, LLC and also United States v. Six Star Wholesale, Inc. In Selecta , the United States sought a $51,102 penalty (plus interest). The defendant failed to respond to the complaint. Under the Court's Rule 55, a plaintiff can expedite a default judgment by showing through an affidavit (or otherwise) that the defendant failed to defend itself. When such a showing is made, the Clerk of the Court must enter the default. After the default is entered, the remaining party (typically the plaintiff) may apply to the Court for the entry of a default judgment. That's an interesting piece of rules trivia. Here, plaintiff did not do that and the Court (i.e., the judge) ordered the default. To secure a default judgment, against which the United States can try to collect, the Court is to consider thr...

This is part 2 of the Univar discussion. For the evidence issues, see part 1 . If you know me or have ever heard me speak about customs penalty cases, you may know that I am forever frustrated by the disconnect between exporter dishonestly and importer liability. In my personal view, there are many cases in which a naïve or careless importer is left holding the penalty bag when an unscrupulous exporter lies about the true nature of the product or the relevant law. How many times does an importer need to ask the exporter to confirm the country of origin, composition, or other relevant fact before the importer can legally rely on those representations? In an age of on-line e-commerce transactions in which seller and buyer may never meet IRL, what is the responsibility of the importer? Those are rhetorical questions because the law is clear on this. My frustration with the law is real, not rhetorical. Let’s look at the facts of United States v. Univar USA, Inc. (Slip Op. 18-157) to ...

As of July 1, 2018, importers of archaeological pieces have to report their merchandise to U.S. Customs and Border Protection with new detail. That is because the U.S. has added a new statistical breakout for these items and two related statistical notes. Prior to January of 2018, Heading 9705 provided, in its entirety: Click Image for Better View For people who trade in these items, those who study the legal and illegal trade in antiquities, and (presumably) enforcement agencies, lumping archaeological, historical, and ethnographic pieces together did not provide adequate detail about what is entering the country. As previously drafted, 9705.00.0070 covered items as diverse as a 1936 Bugatti race car and an Egyptian Stone Ushabti  from the 18th Dynasty . Working on behalf of the U.S. Committee of the Blue Shield and with the support of several interested not-for-profit entities, we asked the 484(f) Committee to further divide this provision to separately identify, ...

The United States Department of Agriculture has the important obligation to protect American farms, orchards, forests, parks and backyards against the damage that can be caused by plant diseases and pests that enter the United States through our ports of entry. This is derived from the Plant Protection Act, 7 USC 7701 . For commercial importers, the most common pest vector is the humble wooden pallet, which can house and transport a number of pests including horntails (AKA wood wasps). From http://mobugs.blogspot.com/ The problem with these critters and many like them is that they bore into trees to lay eggs. That can result in bugs emerging from processed lumber or even from completed structures. When pests are discovered by Agriculture Inspectors at port of entry, the USDA will issue an Emergency Action Notice. Generally, the EAN requires that the offending shipment be turned around and exported from the U.S. 7 CFR 319.40-3 . To prevent that from happening, the USDA ha...

This has nothing to do with Michael Burnham or tardigrades . Discovery disputes are pretty uncommon in the Court of International Trade, and for good reason. Most CIT cases, these days, are “on the record” reviews of antidumping and countervailing duty decisions from the Department of Commerce or International Trade Commission. Those cases do not involve discovery about which to have a dispute. Most customs cases are tariff classification cases in which there is not often a real dispute about the nature of the imported product. That means the cases turn on questions of law, not fact, thereby limiting the genuine (if not perceived) need for discovery. Penalty cases area a whole different world. In penalty cases, the Department of Justice is often trying to figure out what happened and, more important, what it can prove. That means penalty cases often involve a lot of discovery requests from the government directed at the defendant and its personnel. For its part, the defendant oft...