Customs Law

Here is a video recording of the presentation I had planned to do at ICPA in San Diego and that I recently did as a remote webinar for the International Trade Club of Chicago. If you are a trade nerd stuck in the house, you may find this interesting and useful. If there are family members stuck there with you, this may be a useful tool to get them out of the room. Note, this session is two hours long. Grab some snacks. Click the image.

The U.S. Court of Appeals for the Federal Circuit has issued the much-anticipated decision in Ford Motor Company v. United States . For many who have been watching this case closely, the most important takeaway is what the Court did not do. This decision does not in any way question the ongoing validity of tariff engineering for duty savings. Tariff engineering is the practice of designing products to meet the requirements for classification in a tariff provision with a beneficial rate of duty. The law on that is unchanged. So, what did just happen? First, I recommend you go back and look at the prior blog posts on this case. There is a lot of background I do not want to reiterate here. In particular, read this and this . The short version of the story is that Ford Motor Company sells a vehicle in the U.S. known as the Transit Connect. The vehicle meets all U.S. safety requirements for passenger vehicles and is built off the Ford Focus passenger vehicle platform. When imported...

We have discussed the classification of so-called festive articles many times on this blog. See, for example here , here , and here . The last of those links goes to my analysis of the Court of International Trade's decision to classify a well-made Santa suit as articles of apparel rather as duty-free festive articles. The Federal Circuit has now affirmed that decision in Rubie Costume Company v. United States . In terms of law, there is not much new in Rubies. The issue turns on whether a particularly well-made Santa suit is "fancy dress." If so, it is excluded from Chapter 95, which covers festive articles, by the action of Chapter 95, Note 1(e). "Fancy dress" is not defined in the tariff. The Federal Circuit did define it in a previous Rubies' case as encompassing costumes that are classifiable as wearing apparel. A costume is wearing apparel if it is not flimsy and poorly constructed. A costume is not flimsy if it has features like finished edges, zipp...

Last week, the Federal Circuit hear arguments in the classification case involving tariff engineering and the classification of the Ford Transit. You can read my prior takes on this fascinating case here and here . An audio recording of the argument is available here . Listen to the argument and let me know what you think. The Court focused on the interesting question of whether the use of the vehicle after importation is relevant to its classification. This was not a general question of whether Ford was improperly skirting the chicken tax by disguising a cargo van as a passenger wagon. Rather, the question goes to the heart of interpreting tariff language. The Court’s inquiry boils down to this: Is Heading 8703 (motor vehicles principally designed for the transport of persons) an eo nomine provision that describes merchandises solely on the basis of physical characteristics? Or, is it an eo nomine classification that also suggests a specific use? If either is true, the us...

Since I promised and because it is important, here is my more detailed analysis of the Court of International Trade decision in Ford Motor Co. v. United States, Slip Op. 17-102 . The background is pretty well known at this point; here is the short version. Since the 1960's there has been a 25% duty assessed on motor vehicles for the transport of goods (i.e., trucks). This is the result of U.S. retaliation in a trade spat over European duties on U.S. chicken. As a result, the 25% duty on trucks is known as the "chicken tax." The rate generally applicable to motor vehicles for the transport of people (i.e., cars, passenger vans, and SUVs) is 2.5%. That difference creates an opportunity, which Ford has tried (so far successfully) to exploit. What if you were to import a passenger van, pay 2.5% duty, and then convert it to a cargo vehicle prior to delivery to the dealer or customer? Would that be legal? That is the question addressed and decided by the Court of Internatio...

Turns out that I am still alive and still consider this to be an active blog. I have been working very hard on a number of fronts and simply have not had the time to keep you all up to date. I'll be back soon. I know I will be back soon, because this showed up on the docket at the Court of International Trade in Ford Motor Co. v. United States: Order entered on 8/9/2017 Judgment: ORDERED that Plaintiff's motion for summary judgment is GRANTED; it is further ORDERED that Defendant's cross- motion for summary judgment is DENIED; it is further ORDERED that judgment is entered for Plaintiff; it is further ORDERED that the subject merchandise is correctly classifiable pursuant to subheading 8703.23.00 of the Harmonized Tariff Schedule of the United States ("HTSUS"); it is further ORDERED that Customs and Border Protection, United States Department of Homeland Security ("Customs"), reliquidate the entry which is the basis of this case under the aforesaid ...

I've been waiting for a potentially block-buster decision in Ford Motor Co. v. United States , which is pending before the U.S. Court of International Trade. We now have a preliminary decision which is interesting, but is not yet in a position to bust any blocks. This case is about the tariff classification of imported Ford Transit Connect vehicles made in Turkey. At the time of entry, all Transits have swing-out front doors with windows, second-row sliding doors with windows, and swing-out rear doors, some of which have windows. The imported vehicles also have two rows of seats, rear passenger windows, rear passenger seat belts, child-locks on the rear sliding doors, a rear cup holders in the front console, a full length cloth headliner, coat hooks, and a map pocket in the second row. Starting in 2010, Ford created a "cost reduced" second row seat for use in Transit vans. The second row seats lack headrests, "comfort wires," a tumble lock mechanism and labels...