Customs Law

These days, marketers describe everything as "smart." There are smart televisions , a smart toaster , and even a smart toothbrush . The question is, how smart do these devices (or their parts) have to be to turn them into automatic data processing machines, or as normal people call them, "computers?" That is the question presented, at least in this summary, in Fanuc Robotics America, Inc. v. United States . We have talked about the complexity that is ADP classifications a number of times. Go back and read this and this . The gist of this case is that Fanuc makes industrial robots (really robot arms) that do industrial robot tasks like spot welding, painting, and materials handling. The robot is not a general purpose device that can, if properly programmed, perform other tasks like playing ping pong , mixing cocktails , or doing your yard work . For that, you need a Class M-3 Model B-9 Non-Theorizing Environmental Control Robot . Personally, I like the u...

Tariff classification litigation sometimes takes a relatively long time to run through the system. To be clear right at the top, I am not complaining about that. The pace is usually set with the consent of the parties. Classification cases do not involve the loss of liberty or property, no families are at risk, no one is being deported. Many of the usual policies that encourage speedy action simply do not exist. No one wants cases to needlessly languish. If the plaintiff wins, the public does end up paying interest with the refunds. On the other hand, the United States had been holding that money improperly. Also, if either party has a reason to press for a quick resolution, or it is clear that the case is amendable to a quick resolution, there are tools to make that happen. Occasionally, the time it takes to litigate a case changes the facts on the ground. Moen, Inc. v. United States is an interesting example of that phenomenon. The case involves the classification of showerheads. ...

New Image Global, Inc. v. United States is the sort of case we do not often see from the Court of International Trade. For starters, it involves excise taxes on tobacco rather than customs duties. Second, the challenge relates to Customs and Border Protection’s laboratory methodology. In the end, there is nothing groundbreaking here. It is, however, a good reminder that there are remedies available in the Court of International Trade that go beyond refunds for incorrect classifications. It also illustrates that pleadings matter. Finally, the case gives me an opportunity to go on a rant about the importance of good science in the courtroom and elsewhere. The tax at issue is applicable to tobacco products and is assessed based on weight. The plaintiff imported tobacco “wraps,” which are tobacco products used to wrap other tobacco as cigarettes or cigars. The wraps as imported were packaged to retain moisture to let them be pliable enough to use as wrappers and also contained cert...

Lawyering is sometime a creative endeavor. As regulatory lawyers, that does not happen often enough. We rarely get the satisfaction of helping individuals resolve issues that impact their personal liberty or property. That’s OK. I am perfectly happy without a lot of human drama in my practice. On the other hand, I do enjoy stretching my creative lawyering skills. In Erwin Hymer Group North America, Inc. v. United States, counsel for the plaintiff probably had some fun dealing with the issue presented. A reasonable way of describing what happened is this: Customs erroneously approved a protest that should have been suspended. When it failed to pay a refund on the protested entries, Hymer sued. Hymer’s argument comes done to the ancient proposition of school-yard jurisprudence “No take backs.” As with all these procedural cases, the facts matter. When Hymers filed its protest, there was litigation already pending in the Court of International Trade on a similar question. Hymers...

Today, riders are tackling the 14th stage of the Tour du France, climbing the col du Tormalet in the Pyrenees toward the village of Bareges. Take a look at the photos at this link . See how Peter Sagan (green jersey) and Vincenzo Nibali look somewhat tired? The best I could hope to do on this route is flag down the SAG wagon for a ride to the next lunch stop. The graphic below shows the elevation profile. According to the commentators, the first time this hill was included in the Tour, the stage winner called the race organizers "murderers." Clipped from https://racecenter.letour.fr Do you know what these guys are missing? A way to carry a toddler up the col. If they wanted to bring the kids along for the ride, they could opt for the WeeRide Kangaroo Center-Mounted Bicycle-Child Carrier . From WeeRide.com This video shows the WeeRide in action and makes me think I did parenting all wrong: Which brings me to Kent International, Inc. v. United States , ...

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...

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...

When inexplicably up at 5:00 AM with no prospect of going back to sleep seems to be as good a time as any to catch up on blog posts. Aero Rubber Company v. United States has already had some coverage on the blog. The first time we discussed this case, it was as a Customs and Border Protection ruling . The second time was in connection with a Court of International Trade decision on the admissibility of evidence . Now, the CIT has issued a decision on the merits. The merchandise at issue is silicone bands with writing on them. These are larger than wrist size and are used to bind together or secure various items including brochures, video game accessories, aircraft parts, and restaurant menus. Customs classified the bands in Heading 3926 as articles of plastic. The plaintiff argues that the words on the bands require that they be classified in Heading 4911 as other printed matter. Key to this decision is Section VII, Note 2, which states that: Except for the goods of heading 3...

Being an importer is fraught with legal peril. It just is. Often, importers are unaware of legal requirements. In other cases, the importer doesn't care and assumes that its small or infrequent transactions are unlikely to get noticed. That might have been a viable (if not compliant) strategy 20 years ago. Back in the day, the biggest risk to the non-compliant importer was that a Customs Officer would actually open a container and find something amiss. Today, Customs and Border Protection operates in the era of big data. Using targeting algorithms, CBP computers can find discrepancies based on country of origin, country of export, classification, and value. A little data mining based on those factors can pluck the enforcement needled from the haystack of international trade. So, the baseline advice for importers is: know the law, be compliant, and don't assume you will not be caught. That would have been good advice for a company called Titan Metals Corporation , which is ...

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...

I really don't mind if you sit this one out . I'll make it quick. Although defendants in customs penalty cases are entitled to a jury trial on whether or not they are liable for a violation, the amount of the penalty is not a question for the jury. So says the Court of International Trade in United States v. Univar USA, Inc. That is the penalty case involving allegedly Chinese saccharine . The gist of this case is that 19 USC 1592(e)(1) state that all issues in the case, including the amount of the penalty are to be tried de novo before the Court of International Trade. But, that does not say anything about who is the finder of fact and on what issues. Nothing is easy , is it? For that answer, we turn to the Seventh Amendment to the Constitution, which preserves the right to a jury trial in common law actions where the amount in controversy exceeds $20. That means the question before the Court as whether the amount of a civil penalty in a case commenced by the United ...

Customs and Border Protection and the U.S. Department of Justice have strenuously defended the position that locking pliers should be classified as wrenches. They found support for this in a 1983 decision of the Court of International Trade in which the Court found that items (possibly incorrectly) described as "Vise Grips" were used to twist, or "wrench" items and, therefore, were classified as wrenches under the old Tariff Schedules of the United States. In Irwin Industrial Tool Co. v. United States , the Court of International Trade held that under the Harmonized System, pliers are versatile two-handled tools with jaws that pivot to squeeze an object. A wrench, on the other hand, is a tools with a head, jaw or socket that snugly fits around the head of a fastener and that provides leverage to turn the fastener. Applying these definitions, locking pliers like the ones below are not wrenches even though they can be used (or misused) to "wrench" a stuck...

Here is a quick take on the decision of the Court of International Trade in American Institute for International Steel v. United States . This is the case challenging the constitutionality of Section 232, under which President Trump imposed duties on steel and aluminum products in furtherance of national security. Plaintiff's theory of the case is that the statute is facially unconstitutional because it violates the constitutional requirement for separation of powers. The starting point for this that Congress, not the President has the power to regulate trade. In Section 232, Congress delegated some of that power to the President so that he may make adjustments to trade to protect the national security. AIIS argued that the powers given to the President are unbounded by an "intelligible principle," meaning he can exercise legislative powers that are reserved to Congress. That would be unconstitutional. If, on the other hand, the President can only act within a define...