Court Rules on Classification of Concentrated Flavorings

(World Trade Interactive)

In an Aug. 12 decision in Aromont USA Inc. v. U.S., the Court of International Trade ruled that certain flavorings derived from veal, chicken, duck, lamb, beef, fish, lobster, mushroom or vegetable stock are properly classified as other food preparations not elsewhere specified or included under HTSUS 2106.90.99. U.S. Customs and Border Protection had classified these goods as other soups and broths under HTSUS 2104.10.00.

The CIT explains that while CBP relies on a dictionary definition of broth – i.e., a liquid in which meat, fish, cereal grains or vegetables have been cooked – this definition does not capture the essence of the concentrated products at issue, the processing of which results in a rich honey-like consistency that differs from the degree of liquidity or fluidity expected of a broth. The court also states that proper classification turns on the principal use of the flavorings, which are primarily sold through large ingredient customers, food service distributors and retail distributors and retail stores that use them in gravies, sauces and salad dressings.

Webinar: “Isn’t a Part of a Part Still a Part?!” The Challenges of Classifying Parts and Accessories under the HTSUS – August 17

(STR Trade News)

Webinar – Ref#1114
Tuesday, August 17, 2010
1:00pm - 2:00pm EST

When it comes to classifying goods as "parts" or "parts and accessories," it's not enough to know the General Rules of Interpretation. Importers are expected to weave through a web of court decisions (among them the recent decision by the Court of Appeals for the Federal Circuit in Honda of America Mfg. Inc. v. U.S. finding that oil bolts having a specific function are still considered "parts of general use") and Customs rulings, many of which seem to be conflicting, in order to determine whether their component is classified as a part, an accessory, by its constituent material, or as something else.

This webinar will provide user-friendly rules and reference tools on the following topics to help you weave through that classification web, and will include interactive Q&A:

• "Parts" and "Accessories" Definitions and Distinctions
• Applying Additional US Rule 1(c)
• Common "Parts and Accessories" Pitfalls and How to Avoid Them
• Quick Reference Guide to Classifying Parts, Accessories, and Everything Else

This webinar will be presented by Deborah B. Stern, Esq., who advises domestic and multinational clients on both U.S. and foreign customs compliance and other trade matters. Ms. Stern concentrates her practice in traditional customs areas, such as tariff classification, seizures and penalties, country of origin, valuation, trademark infringement, broker compliance, and preferential duty programs. Formerly an attorney with US Customs and Border Protection, she authored numerous classification rulings and served as delegate to the World Customs Organization's Harmonized System Committee, where she was involved with international classification disputes and amendments to the international tariff system. With special emphasis in the high-tech sector, she has substantial experience in almost every product area of the tariff schedule.

Cost: $75.00

PayPal is one of our offered credit card options. We also offer direct payment via credit card. Please be sure to have your full billing address or your card will be declined.

Payment or payment information must be received prior to the webinar in order to receive login details.

Register online at STR Trade here.

Tariff Classification of “Oil Bolts”

(Leagle.com)

HONDA OF AMERICA MFG., INC., Plaintiff-Appellant,
v. UNITED STATES, Defendant-Appellee
No. 2009-1493
United States Court of Appeals, Federal Circuit
Decided: June 2, 2010

In 2002-2004, Honda imported “oil bolts” used in its cars and motorcycles. Pl.’s Compl. 2. These oil bolts feature a smooth upper portion with a hollow, threaded body, some of which have extended stems. The oil bolts connect fluid lines to brake master cylinders or transmission cases, allowing fluid to flow through without leaking. Honda’s Principal Br. 5-8. Customs classified the oil bolts under Schedule subheading 7318.15.80: “Screws, bolts, nuts, . . . and similar articles, of iron or steel . . . [t]hreaded articles . . . [h]aving shanks or threads with a diameter of 6 mm or more.” Customs Headquarters Ruling No. 966412 (Sept. 3, 2003), aff’d, Customs Head-quarters Ruling No. 966789 (June 21, 2004). Customs liquidated at the corresponding 8.5% duty.

Honda appealed to the CIT, arguing that the proper classification is one of three subheadings in Schedule Chapter 87, “Vehicles . . . and Parts and Accessories Thereof.” On Honda’s motion, the CIT designated this case a test case for four others. Both parties cross-moved for summary judgment. The CIT granted the government’s motion, holding that Customs correctly classified the oil bolts as “parts of general use,” even though the bolts have specialized features, because the Schedule “does not generally make an exception for specialized parts.” Honda, 625 F. Supp. 2d at 1327. Honda appeals, and we have jurisdiction under 28 U.S.C. § 1295(a)(5).

Read the complete decision and discussion here.

WTO: Interactive Service Gives Tariff Research New Sophistication

(WTO)

A new service was added to the WTO’s set of tools for finding out information on customs tariffs on 3 February 2010. The latest addition, “Tariff Analysis Online”, is the WTO’s most versatile so far. It includes the greatest available level of detail on the tariffs that WTO members have legally bound and the rates they are actually charging, summary import statistics, and the ability to analyse these interactively.

Tariff Analysis Online draws on two WTO databases: the Integrated Database (IDB) of tariff and import data, and the Consolidated Tariff Schedules, which contains WTO members’ commitments on tariffs and agricultural subsidies.

It provides users with flexible search criteria and produces a range of analytical reports – the results of the searches – covering both tariffs and imports, in detail and summary levels. Users can manipulate the analysis online and download and print the resulting reports.

The development of the new service is in line with the Market Access Committee’s decision of 13 July 2009 to make detailed information on tariffs available to the public.

The existing Tariff Download Facility is simpler and would be the service of choice for users looking for more basic information. It provides standardized statistical information on bound, applied and preferential tariffs on products defined in slightly less detail, by Harmonized System (HS) six-digit codes, with the ability to compare between countries swiftly.

A third service, the World Tariff Profiles, provides similar information to that of the Tariff Download Facility but for broader product categories.

CBP: New Informed Compliance Publication on Rulings

(World Trade Interactive)

U.S. Customs and Border Protection has posted to its Web site a new informed compliance publication that provides guidance on the administrative process involved in submitting requests for rulings, internal advice, protest reviews and reconsideration of previously issued ruling letters.

However, CBP cautions that the material in this publication is provided for general information purposes only. “Because many complicated factors can be involved in customs issues,” CBP states, “an importer may wish to obtain a ruling … or to obtain advice from an expert who specializes in customs matters, for example, a licensed customs broker, attorney or consultant.”

CBP summarizes the information in this publication as follows:

“If you plan on importing into the United States, you may wish to consider obtaining a binding ruling before the product arrives at the port so that you will know how CBP will treat the merchandise. Should you disagree with the ruling that you have received, you may appeal that letter by sending a request for reconsideration to the [Regulations and Rulings] RR Headquarters Office. In addition, if you have questions about how a port is handling your goods, you may request that the port seek internal advice from the RR Headquarters Office. Finally, if you disagree with the port’s decision regarding your merchandise you may protest that decision and request that the RR Headquarters Office review the port’s decision on the protest so long as certain requirements are met. By following the suggestions above in formulating your requests, you can make the process of obtaining a ruling or other decision from CBP as problem free as possible.”

The publication includes information on the following issues.

• who can request a prospective ruling and how this should be done

• what information must and should be included in prospective ruling requests

• who can rely on rulings issued by CBP

• protesting CBP rulings and requesting further review of protests

• filing requests for internal advice

• judicial review of CBP decisions

Tariff Schedule on NAFTA Rules of Origin, Israeli Farm Goods Amended

(White House via WTI)

President Obama has issued a proclamation amending the Harmonized Tariff Schedule of the U.S. to reflect numerous changes to the rules of origin under NAFTA as well as the duty-free treatment afforded to certain agricultural products from Israel.

Presidential proclamation 8097 of December 29, 2006, modified the HTSUS to reflect amendments to the International Convention on the Harmonized Commodity Description and Coding System and to ensure the continuation of the staged duty rate reductions under NAFTA for originating goods of Mexico in tariff categories that were affected by those amendments.

The U.S., Canada and Mexico have now agreed to modify certain NAFTA rules of origin to ensure that the tariff and certain other treatment accorded to originating goods will continue to be provided under the tariff categories that were modified in proclamation 8097. This proclamation will implement these changes, which are detailed in annexes I and II in the attached report from the International Trade Commission, with respect to goods entered, or withdrawn from warehouse for consumption, on or after October 2.

In addition, this proclamation makes certain technical amendments to the HTSUS, detailed in annex III of the attached ITC report, that are necessary to conform it to the Harmonized System.

Finally, this proclamation modifies the HTSUS, as detailed in annex IV of the attached ITC report, to reflect the duty-free treatment provided to specified quantities of certain agricultural products of Israel through Dec. 31, 2009, pursuant to the U.S.-Israel Free Trade Agreement and a 2004 bilateral agreement on trade in agricultural products.

WCO Recommended Tariff Schedule Changes Slated to Take Effect January 1, 2012

(World Trade Interactive)

The World Customs Organization has posted to its Web site a list of recommended amendments to the Harmonized System nomenclature that are scheduled to enter into force January 1, 2012. Affected goods include certain animals and animal products, foods and agricultural products (fruits, vegetables, grains, nuts, spices, etc.), chemical substances, wood products, textile products, machinery, furniture and video game consoles (see attached for the full list). These recommendations were adopted by the WCO Council in June and member countries now have six months to register any objections.

Read more here. Source document available here (PDF).

CBP: Changes to the 2008 Harmonized Tariff Schedule

(CBP)

Harmonized System Update (HSU) 0806 was created on December 9, 2008.

• This update contains 46,415 ABI records and 7,417 harmonized tariff records.

• This update includes changes made as a result of the Committee for Statistical Annotation of Tariff Schedules, the 484(F)Committee.

• In addition, this update contains the annual staged rate reductions for 2009.

• Cotton fee adjustments mandated by the Agricultural Marketing Service (AMS) are included as well.

• Finally, this update may also contain changes required by the verification of the 2008 Harmonized Tariff Schedule (HTS).

The updated records are currently available to all ABI participants and can be retrieved electronically via the procedures indicated in the CATAIR. For further information about this process, please contact your client representative. For all other questions regarding this message, please contact Jennifer Keeling at (703) 650-3391 or via email at Jennifer.Keeling@dhs.gov.

2009 Customs Tariff in MS Access: CBSA

(CBSA)

A downloadable Microsoft Access version of the 2009 Customs Tariff is available on the CBSA website here (zip file).

New HTS Online Reference Tool: CBP

(CBP)

At the September TSN, the ITC demonstrated their new HTS Online Reference Tool. The USITC is happy to announce that the new HTS Online Reference Tool now available online for preview viewing at here.

This new reference tool allows users to jump from an item to the related chapter 99 item showing temporary and seasonal rates when needed. It links to Customs Classification Rulings at the 10-digit level so users can see that directly, as well as trade data on the item. It allows searches, including by CAS numbers. It has a thesaurus feature which allows searches by modern terms for products.

You are invited to try out the HTS Online Reference Tool. The ITC is interested in your impressions. Please send comments or suggestions to David.lundy@usitc.gov.

Court of International Trade Dismisses Harmonized Tariff Schedule Gender Discrimination Case

(International Trade Law News)

On July 3, 2008, the U.S. Court of International Trade (CIT) denied Totes-Isotoner Corporation’s (“Totes”) claim alleging that the Harmonized Tariff Schedule of the United States (HTSUS) violated the equal protection and due process clauses of the U.S. Constitution by setting higher duty rates on men’s gloves than women’s gloves.

In its opinion, a three judge panel of the CIT held that the mere classification of men’s gloves under a separate tariff heading does not violate the equal protection clause without proof that the government intended to discriminate on the basis of gender. As a result, the CIT dismissed the case for failure to state a claim.

The U.S. Constitution prohibits the government from denying any person the equal protection of the laws. Totes’ complaint alleged that imported men’s gloves are subject to 14% duty rate, while imported gloves for “other persons” are subject to a duty rate of 12.6%. Because these provisions provide for a higher duty rate for men’s gloves, Totes alleged that the HTSUS “discriminates” on the basis of gender.

In its decision, the CIT noted that to properly state a claim for violation of the equal protection clause based on gender, a plaintiff must allege that the government has engaged in gender-based discrimination that is not substantially related to important governmental objectives. To establish the government’s intent, the discrimination must either be evident on its face, or must result in unequal treatment of persons or property within the same class.

The CIT held that Totes’ complaint failed on both grounds since Totes’ complaint failed to establish that the gloves will actually be purchased for these purposes or that men will necessarily pay the allegedly discriminatory tax. In addition, the CIT held that because the duty is paid by importers the complaint failed to show how the different duty rates resulted in a discriminatory application of the tax.

Read the complete article, with link to the opinion here.