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.

U.S. Appeals Court Ruling Against Sanctions on EU Goods

(World Trade Interactive)

The U.S. government has appealed a June 16 ruling by the Court of International Trade that the government’s authority to impose 100% duties against goods imported from the European Union in retaliation for its ban on U.S. hormone-treated beef expired on July 29, 2007, because the beef industry did not file for an extension of the sanctions.

Pursuant to its decision, the CIT ordered a refund of all punitive duties paid on affected goods imported after July 29, 2007. Although the ruling explicitly applied to only one product (rusks and toasted breads from Spain), the implication is that any product subject to the 100% retaliatory duties would be eligible for refunds of such duties paid after July 29, 2007, as well.

As a result, dozens of companies have already filed cases seeking refunds of the retaliatory duties they have paid since that date. Importers who are not already pursuing refunds in this manner should do so as quickly as possible, as the court only has jurisdiction to refund duties paid within two years from the date the cause of action arose. Read more here.

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.