Articles imported within sets may be eligible for duty-free treatment under the Generalized System of Preferences, even if other components of the set are not, the Court of International Trade said in a decision issued Aug. 23. In a test case on whether sets of Thai pots and Chinese lids imported by Meyer Corp. qualify for GSP, CIT held that the pots are GSP-eligible, and that the lids are not, despite the entire sets being classified in a single tariff provision for kitchen articles of stainless steel.
Court of International Trade
The United States Court of International Trade is a federal court which has national jurisdiction over civil actions regarding the customs and international trade laws of the United States. The Court was established under Article III of the Constitution by the Customs Courts Act of 1980. The Court consists of nine judges appointed by the President and confirmed by the Senate and is located in New York City. The Court has jurisdiction throughout the United States and has exclusive jurisdictional authority to decide civil action pertaining to international trade against the United States or entities representing the United States.
The following lawsuits were filed at the Court of International Trade during the week of Aug. 14-20:
The addition of seats to a cargo van and their removal immediately after importation constitutes “legitimate tariff engineering” to obtain a lower duty rate applicable to passenger vehicles, said the Court of International Trade in an Aug. 9 decision that was released the evening of Aug. 16. Tariff classification is determined based on an article’s condition at the time of importation, and the steps Ford took to manufacture its Ford Transit Connect vans after importation are irrelevant to the classification analysis, CIT said.
A recent Court of International Trade decision reaffirms the right of importers to use tariff engineering to obtain lower duty rates, customs lawyers said after the Aug. 9 decision was released publicly on Aug. 16. The addition of stripped-down seats to a Ford Transit Connect cargo van and their removal immediately after importation constitutes “legitimate tariff engineering” to obtain a lower duty rate applicable to passenger vehicles, CIT said.
The following lawsuits were filed at the Court of International Trade during the week of Aug. 7-13:
A surety is on the hook for $2.2 million in uncollected duties even though the underlying bonds had missing information and errors, the Court of International Trade said in a decision issued Aug. 10. Hartford Fire Insurance argued the bonds violated customs regulations and were not enforceable contracts, but the court found those errors didn’t invalidate them, especially given that Hartford accepted premiums and submitted the bonds to CBP.
Chapter 11 bankruptcy does not protect importers from Section 592 penalty claims filed by the government at the Court of International Trade, CIT said in a decision issued Aug. 10. While judicial claims are generally paused during bankruptcy to give the debtor a chance to repay debts or reorganize, Section 592 penalty claims are exempt from those protections because they are meant to protect public welfare and serve a public policy purpose, CIT said.
The following lawsuits were filed at the Court of International Trade during the week of July 31 - Aug. 6:
The Court of International Trade granted an importer’s motion to reclassify parts used to manufacture subassemblies for pacemakers in a special duty-free tariff provision, in three separate decisions issued Aug. 7 (here) (here) and (here). CBP had originally classified the components, including substrates, cap sensors, coils and “AOTs,” in various tariff subheadings throughout the tariff schedule. But the importer, Micro Systems Engineering, protested, and the government subsequently agreed, that the parts are specially designed or adapted for use in heart pacemakers and should have been classified in a special subheading in Chapter 98 for goods that fall under the Nairobi Protocol to the Florence Agreement on the Importation of Educational, Scientific and Cultural Materials. That subheading 9817.90.96, is duty free and exempt from the Merchandise Processing Fee. With the parties in agreement, CIT ordered CBP to reliquidate and issue duty refunds with interest.
International Trade Today is providing readers with some of the top stories for July 31 - Aug. 4 in case they were missed.