Customs Law

I will again be moderating a panel at the annual Georgetown CLE International Trade Update in February. This is one of the premier trade-related educational events of the year and well worth the time and expense to attend. Other than my panel, which is a survey of recent developments in customs law, highlights include an always lively discussions with Court of International Trade and Court of Appeals for the Federal Circuit judges and a panel covering legislative issues. As a bonus, there will be ethics credit available. Click here to read the program brochure .

Those who are responsible for NAFTA compliance are very familiar with the NAFTA Certificate of Origin and the Preference Criteria to be recorded in Field 7.  The criteria are used to indicate to the importer as well as to the customs authorities in the country of importation exactly how the goods qualify as originating. Under the NAFTA, there are six possible preference criteria with preference criterion B being the most common. When Customs sees a B in Field 7, it knows that the finished good contains non-originating material and that the good qualifies as originating because the non-originating materials made a qualifying change in tariff classification as a result of production in North America and, if applicable, the finished good satisfies the Regional Value Content requirement. That is all simple enough under NAFTA. But, under the subsequent free trade agreements, no one ever specified a coding system for the preference criteria. As far as I am concerned, the lack of a unif...

Remember the Wilton case on hand-actuated paper punches? The United States Court of Appeals for the Federal Circuit has affirmed the decision of the Court of International Trade that the punches are properly classified in HTSUS Heading 8203 as perforating punches and similar hand tools. The importer had argued for classification in Heading 8441 as "Other machinery for making up paper pulp, paper or paperboard, including cutting machines of all kinds . . . ." Wilton got hung up on the "for making up" part of that heading. The Court of Appeals held that term to refer to the industrial manufacture of paper and paper products. These punches, which are used for craft projects, are not industrial machines for making up paper products. Thus, under General Rule of Interpretation 1, the correct classification is in 8203. If you want to read it, the opinion is here . An interesting procedural note here is that the plaintiff had actually convinced U.S. Customs and Borde...

Typically, I don't cover trade remedies cases here on the Customs Law Blog. But, now and then, something interesting happens on the trade side and it is worth a mention. That just happened. A little background is necessary. The Court of International Trade has exclusive jurisdiction to review certain decisions of the Department of Commerce and the International Trade Commission relating to the imposition of antidumping and countervailing duties. When it does that, the CIT acts pretty much like a court of appeals; there is no trial, no witnesses, no objections and no findings of fact as there might be in a customs case. Rather, the CIT reviews the decision on the basis of the administrative record compiled at the agency. Generally speaking, if the agency decision is supported by substantial evidence and otherwise in accordance with law, the CIT will uphold the agency. When a party appeals one of these cases from the CIT to the Court of Appeals for the Federal Circuit, the CAFC d...

E&S Express Inc. and Simon Ying v. United States , is another of those exasperating cases where a technicality prevents a judgment on the merits. That said, let me absolutely clear that the technicality involved is unquestionably the law and not something the Court could or should have ignored. Nevertheless, the result stinks for the importer. Much like the most recent International Custom Products case involving imported white sauce, the sole question here is whether E&S has taken all the steps necessary to secure jurisdiction for the U.S. Court of International Trade to review a protest U.S. Customs and Border Protection denied. The two necessary steps are (1) a timely summons and (2) payment to Customs of all liquidated duties, fees, and taxes. It is the second prong that is the problem here. E&S imported wooden bedroom furniture from China, which is subject to an antidumping duty order. At the time of entry, E&S deposited the estimated antidumping duties. Subse...

I am not sure how often readers of this blog might use the suggested links on the right margin. I have noticed that a few of the blogs listed there have gone dormant and other URLs have been co-opted by other sites. So, I have done a little curating and removed dead or bad links. I also added a link to the Cultural Heritage Lawyer blog , which I recommend you visit. Cultural heritage law is focused on the restrictions on the trade in antiquities and important artifacts of cultures and ethnic groups. Often, the primary enforcement agencies are Department of Homeland Security Investigations (of ICE for us old timers) and U.S. Customs and Border Protection. As a result, these issues often become issues of customs law, and something I try to follow. You should too, it is interesting stuff. Also, while I do not tweet often, I remind readers to subscribe to my Twitter feed to catch short updates and links to interesting articles.

The U.S. Court of Appeals for the Federal Circuit has affirmed the decision of the Court of International Trade in Del Monte Corporation v. United States. For my post on the underlying case, see here. The decision is here . You may recall that the classification issue in this case boiled down to whether tuna meats packed in pouches with sauces containing small amounts of oil are deemed to be "in oil" for purposes of tariff classification. Two prior decisions are at play in this argument. A 1915 case called Strohmeyer & Arpe holds that fish cooked in oil then partially drained and packed in another liquid, which subsequently absored a portion of the cooking oil remaining in the fish, is fish packed in oil. A subsequent case called Richter Bros. found that fish that had been fried in oil, drained, and then packed in in a non-oil liquid, was not "packed in oil" because the oil was not used in the packing process. While these cases appear to be somewhat at odds, ...

I have been sitting on the latest decision in International Custom Products v. United States for a while now. This stems from a combination of being busy and also some white sauce fatigue. It appears that we are nearing the end of this very long-running dispute. If you need background, start with this post . Also, the background section of this latest opinion from the Court of International Trade does a good job of setting the stage. The entirety of the dispute revolves around U.S. Customs and border Protection's classification of white sauce in 99 entries. CBP suspended the liquidation of most of those entries pending the results of the litigation. However, Customs liquidated 13 entries and denied the resulting protests. As a result of that denied protest, International Custom Products owes the United States $28,000,000 (I'll pause to let that sink in.) The interesting thing about this decision is that it is purely procedural but entirely important. Usually, before an impo...

Remember when I said I was trying to catch up? I know it looks like a lie. It's not. I'm just running around on a real work for real people and on real end-of summer efforts to not waste good weather. That said, I am still reading court cases. I'm going to make short work of Spring Creative Products Group v. United States , a decision of the U.S. Court of International Trade. The case involved the proper tariff classification of a craft kit for the making of a fleece throw. The kit contained two 48 by 60-inch fabric panels and materials used to knot them together into a single throw. Most of the kits included a panel printed with a character from a popular cartoon, comic book, or children's movie. Customs and Border Protection classified it as pile fabric of man- made fibers in 6001.22.00. The importer challenged that classification and asserted that the correct classification was as a toy in Heading 9503. The Court of International Trade made a lot of findings of f...

I don't usually do this, but here it is expedient. Rather than summarize Customs and Border Protection's guidance on imports from Burma, I'll just repeat it. I cannot quite figure out where this is placed on the CBP website, but it is called " burma_august2013.doc ." Certain Burmese Rubies, Jadeite and Articles Containing Burmese Rubies or Jadeite Are Prohibited from Importation into the United States In light of the expiration of the Burmese Freedom and Democracy Act of 2003 (the “BFDA”) (Public Law 108-61), as amended by the Tom Lantos Block Burmese JADE (Junta’s Anti-Democratic Efforts) Act of 2008 (the “JADE Act”) (Public Law 110-286), on August 7, 2013, the President issued an Executive Order (“EO”) that prohibits the importation of “any jadeite or rubies mined or extracted from Burma and any articles of jewelry containing jadeite or rubies mined or extracted from Burma.”  This EO amends Executive Order 13310 (July 28, 2003), in relevant part, by revok...

Let me know if this works and what you think. And, as always, it is not legal advice.

About this time in the summer, I am thinking I gotta fly to St. Somewhere for some boat drinks. Unfortunately, that is not in the cards. I'll make due with homemade margaritas and reading Latitudes International Fragrances, Inc. v. United States so that you don't have to go insane. [My apologies to Jimmy Buffett for those five references.] This case has to do with the proper tariff classification of glass bottles imported empty. In the U.S., the bottles were combined with other merchandise to form a scented oil diffuser kit. U.S. Customs and Border Protection classified the bottles in HTSUS item 7013.99.50 as glassware for indoor decoration. That resulted in a still rate of duty of 30%. Plaintiff believes that the correct classification is in 7010.90.50 as bottles for the conveyance of oils, which has a rate of duty of free. Note that both of these provisions are principal use provisions. Consequently, it is the use of the class or kind of merchandise that controls the cl...

When we last left Oscar Outlook, mascot of La Crosse Technology, the United States Court of International Trade determined that several combinations of meteorological instruments and clocks had the essential character of clocks or various weather related instruments for purposes of tariff classification and were not properly classifiable as meteorological instruments. Now we have the Court of Appeals for the Federal Circuit  stating its disagreement with that determination. As background, the Federal Circuit stated that all of the devices at issue in the appeal include  wireless instruments to measure outdoor conditions and a base unit to measure indoor conditions. The devices have an LCD display, a barometer, and a microprocessor. The processor is programmed to analyze historical barometric readings and predict the weather. The forecast shows up on our friend Oscar Outlook in the form of his clothing. And, it is important to note, they all include a clock. The first issu...

I am sorry to report that I have a backlog of decisions to review. So, let's get started. Do you remember United States v. Trek Leather, Inc. ? No? I'm not surprised as I appear not to have bothered to cover the decision from the Court of International Trade. You might want to go back and read that for context. Here, we will discuss the decision from the Court of Appeals for the Federal Circuit. The question presented in Trek Leather is whether a corporate officer, in this case Harish Shadadpuri, can be held personally liable for negligence in relation to a customs entry for which the corporation was the importer of record. In this case, Shadadpuri was the president and sole shareholder of the importer of record and also a 40% shareholder of the consignee for 72 entries of men's suits. Upon entry, Trek Leather (which I will call Trek Leather to distinguish it from the fine people at Trek Bicycle Corp. ) failed to properly declare the value of fabric provided to the fore...

Sometimes, tariff classification by the rules produces results that are completely inconsistent with what a normal, thinking person would expect to be correct. Case in point: HQ H237067 (June 20, 2013) . The ruling, apparently drafted by Ebinezer Grinch von Scroogeheimer of the Regulations and Rulings Unit, considered the tariff classification of a complete, adult sized, and apparently well-made Santa costume known as the Premier Plush Nine Piece Santa Suit. Look at this picture and tell me whether it is a festive article closely associated with a holiday: Of course it is. To the average person and, I might add, the average customs entry writer, the picture would be enough to resolve that issue. Plus, I personally apply the Bubbe and Zayde test. Under my test, if you are unlikely to find the item in the home of an elderly Jewish couple, it is probably a festive article associated with a Christian holiday. The problem is that Customs and Border Protection and importers do not ge...

I do a lot of training talks for lots of organizations and I am happy to do so. One of my go-to examples for tariff classification is a complete bicycle imported unassembled in a retail box. This is a good way to discuss General Rule of Interpretation 2(a), which tells us that goods imported in an unassembled or disassembled condition will be classified as the finished article if, when imported, it is complete or has the essential character of the complete article. In my bike example, that means that the unassembled bicycle is classified as if it were assembled. What I don't usually talk about in the context of that example is the marking of the disassembled bicycle in a retail box. I am, however, thinking about that because Customs and Border Protection recently published a proposal to revoke the ruling NY N015337 (Aug. 23, 2007) in which it addressed the marking of an unassembled child carrier/seat for a bicycle. The proposal is in the Customs Bulletin starting at page 39 . ...

If you know me professionally, you know I have recently been going on ad nauseam about how there is almost never a dispute as to the facts in a classification case before the Court of International Trade.  As a result, my world view is that parties at the CIT should tee up the legal questions early and get the case resolved without a lot of time and effort going into probing the facts. Now and then, I am reminded that this is not always the case. Today, my reminder comes in the form of Tyco Fire Products L.P. v. United States . Tyco involves glass liquid-filled bulbs used in fire sprinkler systems as triggers holding valves closed. When heated, the liquid expands and eventually breaks the glass bulb causing the valve to open and the sprinkler to activate. Similar bulbs are used in water heaters to keep vent doors open. When heated, the bulb breaks and the vent door closes. That chokes out fire in the water heater. What we are talking about is the red part of this Tyco sprinkler ...

As mentioned, the Federal Circuit has again dismissed efforts by importers to challenge separate and unequal rates of duty on  certain items of apparel. The cases were brought by Forever 21, Rack Room Shoes, and a company called Skiz, which was created for purposes of pursuing this case (more on that later). This has been a tough case all along and the plaintiffs seem to have made a solid effort at getting a successful result. On its face, it seems to be an obvious proposition that a higher tariff on men's apparel than on women's apparel would discriminate against men. Imagine a sales tax in which men paid a higher rate at the cash register than do women. That would never be constitutional and that is similar to how the plaintiffs see this case. Unfortunately, the Court of International and the Court of Appeals for the Federal Circuit have seen it differently. Rather than the tariff being a tax based on the gender or age of the buyer, the tariff is a tax on merchandise imp...

My goal here has never been to be a source of breaking news, but it happens occasionally. In this case, I want to let you know that the Court of Appeals for the Federal Circuit has dismissed appeals challenging the constitutionality of separate and unequal tariffs for certain items of apparel. The decisive utterance of the opinion is: Neither Rack Room nor Forever 21 has pleaded facts sufficient to make plausible their claim that Congress enacted the relevant provisions of the HTSUS with discriminatory intent, and we therefore affirm the dismissal of their claims [by the Court of International Trade]. Skiz's appeal is dismissed for lack of standing. A detailed analysis will follow. For now, you can read the opinion here .

Some of this is old-ish, but still may be of interest. Customs has opened the last three of its planned Centers of Excellence and Expertise . The new CEE are in Atlanta (Consumer Products and Mass Merchandise), Miami (Agriculture and Prepared Products), and San Francisco (Apparel, Textiles, and Footwear). If you are currently participating in a CEE, please post a comment as to how you think it is working and whether you see any benefits yet. President Obama Seeking to Strengthen Enforcement of ITC Exclusion Orders . According to a White House announcement, the Administration has taken a number of steps to improve the enforcement and administration of the patent laws. One such step involves asking the U.S. Intellectual Property Enforcement Coordinator to undertake a review of current Customs and Border Protection and International Trade Commission procedures used to evaluate the scope of an ITC exclusion order for enforcement purposes. This is an interesting issue as it is not alwa...