CIT Grants Duty-Free Treatment for Reimported Swimsuits

The Court of International Trade on Jan. 19 granted a joint motion that results in duty-free treatment for swimsuits reimported by SGS Sports under Harmonized Tariff Schedule subheading 9801.00.20. The ruling avoids a bench trial over whether the swimsuits qualify for the subheading as U.S. goods returned to the country.

SGS Sports entered the swimsuits under the subheading after first shipping them to Canada for warehousing at related firm Canada 147483's warehouse. CBP initially rejected the classification in 2018, finding that SGS and the warehouse operator were actually the same entity under the same ownership and couldn't have executed any "agreement" as required by the subheading.

The trade court first resolved phase one of the case, in which Judge Jennifer Choe-Groves ruled on whether a warehousing agreement between two related companies was valid under Canadian corporate law since the companies were allegedly the same entity. The judge said the companies are different and so the warehousing agreement amounts to a lease or similar use agreement (see 2302170060).

This judgment sent the case to phase two, in which the court was to rule on whether the goods were previously imported into the U.S., whether the duties were paid on the goods and whether the goods were not advanced in value or improved in condition when outside the U.S.

Both parties met and agreed via the stipulation of facts that the imports were previously entered into the U.S., the importer paid all applicable duties, the goods weren't advanced in value outside the U.S. and the imports were "reimported by or for the account of the person who imported it into" the U.S.

The U.S. said the judgment from the court that will resolve the case "does not waive or in any way prejudice the Government's ability to appeal any findings of fact or conclusions of law" in the case (see 2401080057). The trade court granted the stipulation of facts and ordered CBP to reliquidate the entries at the duty-free rate.

(SGS Sports v. United States, Slip Op. 24-5, CIT # 18-00128, dated 01/19/24; Judge: Jennifer Choe-Groves; Attorneys: John Peterson of Neville Peterson for plaintiff SGS Sports; Justin Miller for defendant U.S. government)