International Trade Today is providing readers with the top stories from Sept. 20-24 in case they were missed. All articles can be found by searching on the titles or by clicking on the hyperlinked reference number.
Customs Duty
A Customs Duty is a tariff or tax which a country imposes on goods when they are transported across international borders. Customs Duties are used to protect countries' economies, residents, jobs, and environments, by limiting the flow of imported merchandise, especially restricted and prohibited goods, into the country. The Customs Duty Rate is a percentage determined by the value of the article purchased in the foreign country and not based on quality, size, or weight.
CBP published the quarterly Internal Revenue Service interest rates used to calculate interest on overdue accounts (underpayments) and refunds (overpayments) of customs duties. For the quarter that begins Oct. 1, the interest rates for overpayments remains 2% for corporations and 3% for non-corporations, and the interest rate for underpayments will be 3% for both corporations and non-corporations. These interest rates are subject to change for the following quarter, CBP said.
George Iloulian, CEO of apparel company Delta Uniforms of New York, skimped on import duties by understating the true value of his company's imports, the U.S. Attorney's Office for the Southern District of New York said. Arrested on Sept. 23, Iloulian was then presented in Manhattan federal court where the civil fraud lawsuit was unsealed. Iloulian is accused of violating the False Claims Act by lying on entry documents submitted to CBP.
CBP field officers were instructed to allow for foreign-trade zone storage of goods stopped under a withhold release order while an admissibility decision is made, said Jim Swanson, CBP director-cargo and conveyance security and controls, speaking at the National Association of Foreign-Trade Zones virtual conference Sept. 21. He said the agency told the “field folks to allow those goods” to be put “in a foreign-trade zone under the very tight conditions that we outline.” While Swanson previously said a public guidance would come soon (see 2104290003), he said at the conference that “we're still working on getting it in writing, because there's a lot of legal stuff and there's some changes going on in the background.”
The Court of International Trade rejected an importer's bid for reconsideration of its challenge of the countervailing duty rate assessed on its tire imports. The court found for the second time that the importer lacked proper jurisdiction due to an untimely filed protest of a liquidation decision. “The lesson is both clear and stark: Don’t sit on your rights,” Judge Stephen Alexander Vaden said.
Importers should be reviewing existing tariff classifications for their products and planning ahead for major changes to the tariff schedule that will take effect Jan. 1 when the U.S. implements 2022 changes to the global Harmonized System, Flexport’s Adam Dambrov said during a Sept. 15 webinar. Particularly affected by the changes are goods of chapters 44, 84 and 85, with some changes to chapter notes also resulting in changes for textiles and apparel.
The Customs Rulings Online Search System (CROSS) was updated Sept. 14. The following headquarters rulings were modified recently, according to CBP:
Sept. 10 is the one-year anniversary of the first-filed Section 301 complaint alleging the lists 3 and 4A tariffs on Chinese goods are unlawful under the 1974 Trade Act and violate the 1946 Administrative Procedure Act. Virtually all the roughly 3,800 cases from 6,500 or more importers that have since inundated the Court of International Trade seek to vacate the lists 3 and 4A tariff rulemakings and get the duties refunded with interest. A court order Sept. 8 vacated components of its July 6 preliminary injunction order instructed the government to liquidate customs entries from China with lists 3 and 4A tariff exposure “in the ordinary course” and refund the money with interest if the tariffs are declared unlawful, once the litigation becomes “final and conclusive” (see 2107060077). The order also frees the litigation to return to arguments on the merits after a prolonged battle over many months over refund relief. Oct. 1 is the deadline for Department of Justice to file papers supporting its June 1 dispositive motion and response to the plaintiffs’ Aug. 2 cross-motion. Nov. 15, the last date listed on the court’s April 13 briefing schedule, is when the plaintiffs file their reply.
The American Association of Exporters and Importers, IBM and U.S. subsidiaries of the Foxconn Technology Group all disagree with CBP's proposed use of Part 102 rules of origin in non-preferential claims and procurement under USMCA (see 2107010045), they said in the comments recently posted in the docket for the proposal. Meanwhile, lithium-ion battery producer, Inventus Power, and the American Iron and Steel Institute voiced support for the changes in their comments. So far, the comments show a deep split between industries in support (see 2107270049) and against (see 2109010006) the proposal.
Operations including the oiling of a machine, the fitting of a transformer to adjust electrical voltage and the uploading of software patches to a machine tool do not constitute manufacturing or use, and do not render the machine tool ineligible for unused merchandise drawback, CBP said in a recent ruling. The operations do not transform the machine tools into a new product, but merely make them operational for the end customer, CBP told Knuth Machine in HQ H290897, issued July 28 and publicly released Aug. 26.