Customs Law

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...

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...

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 previou...

Once again , the Court of International Trade has been asked to consider the status of apparel made from a synthetic yarn that includes zinc nanoparticles. This time, the decision is Lockhart Textiles Inc. v. United States . The decision ultimately turns on whether the yarn from which the apparel was made is of synthetic fibers or whether the addition of the zinc in the yarn production process makes it "metalized" and, therefore, an "other yarn." The result is significant. If the plaintiff's contention is correct, the apparel is classified in HTSUS item 6104.69.80, which carrier a rate of duty of 5.6%. If the United States is correct, the proper classification is 6104.63.20, which carries a rate of duty of 28.2%.  I know this is not true, but I can't read about clothing made of metalized yarn without assuming it looks like something from the closet of a Star Trek alien or the original Robinson family from Lost in Space. Reading this case, I was left with the...

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...

Who doesn't like a good value case now and again? Value cases are kind of like Star Wars movies; they pop up once every few years and move the story along a little bit at a time. Sometimes, we get a new perspective from an upstart judge and sometimes a veteran steps back in to right the ship until the inevitable reboot. It seems like it is have been a while since the Court of International Trade weighed in on what constitutes a dutiable addition to value. So, it is a good time for us to catch up on Trimil, S.A. v. United States and see what is truly cannon and what it part of the expanded universe of valuation legends (AKA CBP rulings). And, always remember that the Star Wars saga begins with a trade war . This needs to be quick, as I am going to the movies soon (as you might have guessed). Trimil (who, with no judgment, I picture as an individual looking like Watto ) is an importer of Armani branded clothing. At the time of entry (including the subsequent reconciliation), Tri...

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...

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 far less interesting than the life and death fight over the vaquita , but nevertheless an interesting illustration of how tariff language is to be interpreted. You may recall Sigvaris , the classification case involving graduated compression hosiery. These items exert 15 to 20 mmHg of compression on the wearer to force pooled blood to circulate out of the leg and throughout the body. Customs and Border Protection classified these products as graduated compression hosiery in Heading 6115, subject to a 14.6%rate of duty. Plaintiff protested, claiming that they should qualify for duty-free treatment as articles specially designed or adapted for the use or benefit of the physically handicapped in Heading 9817. These articles are duty-free. Customs denied the protests and the U.S. Court of International Trade agreed with Customs. The basic rationale for that decision was that these products are designed to help patients with early stage conditions that do not yet interfere with ge...

I often say that tariff classification cases rarely depend on disputed facts and, in my view, generally do not turn on facts not clear from an examination of the imported product. In other words, I often think these cases present fewer issues and can be more easily resolved than is the common view.  That said, there are obvious examples of where this is not the case. One example is Swimways Corp. v. United States , in which the Court of International had to undertake a fairly detailed factual analysis to determine the essential character of recreational floatation devices made of plastic inflatable floatation bladders, textiles mesh, and a metal spring that permits the deflated device to be compacted and then snap back to shape for use. The case involves two groups of floaties, the first are designed for adults . The second are designed for young children to help acclimate them to water as the first part of a learn to swim program. U.S. Customs and Border Protection class...

Back when I was a young law clerk at the U.S. Court of International Trade, I was occasionally inspired to lobby my judge to insert a clever phrase or literary allusion into an otherwise dry opinion. I specifically recall trying to insert the phrase " second thwack at the piñata " where "second bite at the apple" would have been the more common usage. In a case involving the tariff classification of fruit preserves, I tried to convince the judge to use phrases like "the defendant is in a jam," "Customs squeezed the importer," "the fruits of this effort," etc. None of that made it into the published opinion. It appears that Judge Katzmann of the U.S. Court of International Trade has a much more liberal view of drafting, or possibly a much more persuasive law clerk. I gather that from reading Quaker Pet Group, LLC v. United States . The decision opens with this scene: Catching sight of three tiny orphaned kittens wandering in a battl...

Continuing my effort to catch up on 2017 customs decision from the Court of International Trade, we come to Kalle USA, Inc. v. United States. For lots of reasons, I am going to treat this carefully. First and foremost, this is a case litigated by my law firm. As far as I know, this is not final, and I will not say anything about the matter that is not consistent with the position we advanced in the CIT. On top of that, I have a case pending before the Court that raises similar issues. Therefore, this post is just the facts and just the conclusions of law. Kalle imports lay-flat tubes that are layers of plastic and textile materials. The long edge of the tube is sealed with glue. These tubes are used as casings for sausages and sometimes cheese. There are two versions of the casing at issue. For the majority of the merchandise, the textile is about 140 micrometers compared to 20 micrometers for the plastic. The textile value is € 0.96/165 cm compared to € 0.73/165 cm for the plastic. ...

It is Christmas Eve as I write this while on my way to warmer climes. This short vacation is a good opportunity to catch up on court decisions and blog posts. The fact that it is Christmas makes a discussion, however brief, of Rubies Costume Co. v. United States timely. This particular Rubies case involves a Santa jacket and pants. Apparently, it is a particularly well-made Santa costume. Among other characteristics, it features a zippered jacket with lining and finished sleeve cuffs. The pant legs are unfinished, but are designed to be tucked into black shoe covers, meaning they do not show. The costume sells for about $100 and includes a fabric-care label specifying that it be dry cleaned. I think this is an image of the item in question: We have been over some of this ground in previous posts. See here and here for example. The basic question is whether these garments are wearing apparel of Chapter 61 of the HTSUS or whether they are festive articles of Chapter 95. Ther...

[UPDATED TO ADD LINK TO THE DECISION] Remember Snuggies? A few years back, they were part of the zeitgeist. Here is a reminder of exactly what is a Snuggie. According to the commercial, Snuggies are wearable blankets with sleeves-like tubes. That raises an interesting classification question. Is it a blanket of HTSUS item 6301.40.00 (8.5%) or is it a garment classifiable in 6114.30.30 (14.9%)? Or, if it is neither, is it an "other made up article?" The Court of International Trade had to decide that question in Allstar Marketing Group v. U.S. These are important questions in my world. I get that there is a lot going on in the larger world. Lately, I have been inspired and a little shamed watching lawyers who practice in areas affecting the actual lives and liberty of people, particularly refugees and others trying to entry the country. It made me proud to be a lawyer to see my colleagues set up shop at airports to provide assistance. Yesterday, I was at a meeting sp...

One of the things I find interesting about my job as that I have the opportunity to learn about all sorts of products that I might not ever see in my real life. One such product is the avalanche airbag. It never occurred to me that such a thing existed, but as soon as I read the words "avalanche" and "airbag" together, the concept made perfect sense. This is the item in question: It is designed to keep the wearer "afloat" in the event of an avalanche. More information about the product is available here . Basically, it is a backpack that incorporates a sturdy balloon and an electrically powered fan to inflate it. Once inflated, the balloon prevents the wearer from being buried in snow. In NY N274983 , Customs was asked to classify this airbag enhanced backpack. My first thought was, "Oh no, this is going in Heading 4202 as a backpack." To me, that seems to undervalue the safety features. Moreover, none of the exemplars in 4202 have safet...

[UPDATE: It turns out that there is a reason for the ambiguity in the ruling discussed below. The ruling was not written for publication. It was inadvertently posted to CROSS. The "ruling" has now been removed. Hence, you should treat what follows as an interesting hypothetical discussion and nothing more.] Heading 4202 of the Harmonized Tariff Schedule of the United States sees lots of legal action for two reasons. First, the duty rates are very high; some as high as 20%. Second, U.S. Customs and Border Protection seems to find that many items go in these high-duty provisions. For context, Heading 4202 covers: Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco po...