Field of law

Trade & Customs

Tariff classification and rulings, rules of origin, customs valuation, duty drawback, antidumping and countervailing duties, forced labor exclusions, and seizure and penalty practice.

Trade & Customs

Substantial Transformation and Non-Preferential Origin

For most purposes the origin of an imported article is determined by the substantial transformation test: whether processing in a country produced a new and different article of commerce with a name, character or use distinct from that of the materials it came from. Codified tariff-shift rules in 19 CFR Part 102 govern marking for certain agreement partners and all textile goods, and preferential origin is governed by the rule of origin in the agreement itself.

6 min readFederal law

Trade & Customs

First Sale Valuation and Whether It Survives Audit

In a series of sales culminating in importation, the earlier sale may be used as the basis of transaction value where the importer establishes that the sale was a bona fide sale, that the goods were clearly destined for export to the United States at the time of that sale, and that the parties dealt at arm's length free of any nonmarket influences. The burden rests on the importer and is met with contemporaneous documents rather than with assertions.

6 min readFederal law

Trade & Customs

Scope Rulings and Circumvention in Trade Remedy Cases

Scope questions under an antidumping or countervailing duty order are decided by the Department of Commerce, which reads the order's language with the petition, the investigation and the determinations of Commerce and the International Trade Commission. Where those sources are not dispositive it applies criteria on physical characteristics, purchaser expectations, use, channels of trade and advertising. Circumvention proceedings extend an order to goods assembled elsewhere or slightly altered.

6 min readFederal law

Trade & Customs

Customs Penalties and the Value of Prior Disclosure

Section 592 of the Tariff Act penalizes entering or attempting to enter merchandise by means of a material false statement or omission, at three levels of culpability. Maximum penalties run from the domestic value of the merchandise for fraud down to twice the duty loss for negligence. Where a person discloses the circumstances of a violation before, or without knowledge of, the commencement of a formal investigation, the penalty is limited by statute to a far smaller figure.

6 min readFederal law

Trade & Customs

Asking Customs to Rule Before the Goods Arrive

Under 19 U.S.C. 1625 and 19 CFR Part 177, Customs and Border Protection issues written ruling letters interpreting the customs laws as applied to a prospective transaction. A ruling binds every port and every officer for the transaction described, but only for that transaction and only until it is modified or revoked. A ruling in effect for at least sixty days may be changed only after notice in the Customs Bulletin and an opportunity to comment.

6 min readFederal law

Trade & Customs

Foreign Trade Zones and Bonded Warehouses Compared

A foreign trade zone is treated as outside the customs territory of the United States for duty purposes, has no time limit on storage, and permits production where the Foreign-Trade Zones Board has granted authority. A bonded warehouse holds merchandise for up to five years from importation, permits manipulation but not manufacture except in a class of warehouse dedicated to production for export, and applies the rate in effect at withdrawal.

6 min readFederal law

Trade & Customs

Section 232 and Section 301 Tariffs and Their Exclusions

Section 232 of the Trade Expansion Act of 1962 authorizes the President to adjust imports of an article found to threaten to impair national security, after an investigation and report by the Department of Commerce. Section 301 of the Trade Act of 1974 authorizes the Trade Representative to respond to a foreign country's acts, policies or practices that violate a trade agreement or are unreasonable and burden American commerce. The procedures and exclusions differ throughout.

6 min readFederal law

Trade & Customs

Transaction Value and the Additions Customs Requires

Under 19 U.S.C. 1401a, imported merchandise is appraised at transaction value: the price actually paid or payable for the goods when sold for exportation to the United States, plus packing costs, selling commissions, the apportioned value of assists, royalties and license fees paid as a condition of sale, and any resale proceeds accruing to the seller. Where the conditions for transaction value are not met, the statute prescribes a fixed hierarchy of alternative methods.

6 min readFederal law

Trade & Customs

Marking Imported Goods With Their Country of Origin

Section 304 of the Tariff Act requires every article of foreign origin imported into the United States to be marked conspicuously, legibly, indelibly and as permanently as the article permits, in English, with the country of origin, so that the ultimate purchaser is informed. Exceptions in the regulations cover articles that cannot be marked, containers marked instead of contents, and goods the importer will further process. Unmarked goods attract an additional duty of ten percent of value.

6 min readFederal law

Trade & Customs

Forced Labor Detentions and How a Shipment Is Released

Section 307 of the Tariff Act prohibits the importation of goods mined, produced or manufactured wholly or in part by convict, forced or indentured labor. Customs enforces it through withhold release orders issued where information reasonably but not conclusively indicates such goods are being imported, through published findings, and through a statutory presumption applied to goods from specified regions and entities. Release turns on documentary tracing rather than on assurances.

6 min readFederal law

Trade & Customs

The General Rules of Interpretation and Where Classification Is Won

The General Rules of Interpretation govern classification under the Harmonized Tariff Schedule and are applied in order, so a later rule is reached only when every earlier one fails. Rule 1 gives controlling force to the terms of the headings and to the section and chapter notes. Rules 2 and 3 deal with incomplete, unassembled and composite goods. Rules 4, 5 and 6 handle residual cases, containers and subheadings.

6 min readTreaty and international

Trade & Customs

Duty Drawback: What Comes Back and What Does Not

Section 313 of the Tariff Act allows a refund of ninety-nine percent of duties, taxes and fees paid on imported merchandise that is later exported or destroyed, either unused or after being used in manufacture. Substitution claims permit other merchandise classified in the same eight-digit tariff subheading to stand in for the imported goods. The claim must be filed within five years of the date of importation of the designated merchandise.

6 min readFederal law

Fields of law

This journal

Trade & Customs

Substantial Transformation and Non-Preferential Origin

First Sale Valuation and Whether It Survives Audit

Scope Rulings and Circumvention in Trade Remedy Cases

Customs Penalties and the Value of Prior Disclosure

Asking Customs to Rule Before the Goods Arrive

Foreign Trade Zones and Bonded Warehouses Compared

Section 232 and Section 301 Tariffs and Their Exclusions

Transaction Value and the Additions Customs Requires

Marking Imported Goods With Their Country of Origin

Forced Labor Detentions and How a Shipment Is Released

The General Rules of Interpretation and Where Classification Is Won

Duty Drawback: What Comes Back and What Does Not