Customs Duty

International Trade Today is providing readers with some of the top stories for Sept. 11-15 in case they were missed.

The "strong divisions” on how to approach NAFTA between the deal’s three parties are increasing the possibility that a deal can’t be reached in the near term, and companies should start making contingency plans, said Russ Crawford, partner at KPMG in Canada, in a Sept. 18 press release. Businesses should put together a “Survival Guide” for the next six months to prepare for an “uncertain outcome,” Crawford recommended. Crawford is advising firms to become scenario planners if they are not already, and to develop contingency plans for any business and supply chains, should the U.S. withdraw from the deal, “however unlikely.” He added: “An example may be to have a back-up plan mapped out to the extent possible if there was an X percent increase in tariffs, or a Y percent change in regional (or even country specific) content.”

A Chinese aluminum company and its owner evaded more than $1.5 billion in antidumping and countervailing duties by importing aluminum extrusions masked as pallets, according to allegations in a complaint filed by the government on Sept. 14 in Central California U.S. District Court. The complaint seeks the forfeiture of 549 containers of extruded aluminum pallets imported by Perfectus Aluminum and detained by CBP at the Port of Los Angeles-Long Beach in 2016.

A European Union task force recently issued a position paper on customs procedures in the days surrounding the United Kingdom’s exit from the EU in March 2019. The paper, which was set for internal discussions on Sept. 7, “contains the main principles of the EU position” on “Customs related matters needed for an orderly withdrawal of the UK from the Union." It says customs procedures begun before the withdrawal date should generally continue to receive EU treatment if completed after the UK withdraws from the customs union.

CBP is aiming to release rules for entry filings of goods valued under the $800 de minimis threshold "before the end of the calendar year," said Brenda Smith, executive assistant commissioner for the CBP Office of Trade, on Sept. 12 during the National Customs Brokers & Forwarders Association of America conference in Washington. CBP knows "it's a big deal" to customs brokers "whether we require the classification on all small packages," she said. It's a "thorny issue," but "I think we are close to having kind of the final conversations," so "look forward to that in the next couple months."

An importer’s lawsuit on the tariff classification of child bicycle seats will proceed unchecked, after the Court of International Trade on Sept. 8 denied the government’s bid to dismiss portions of the case. Kent International says CBP defied its own established practice and did not afford Kent the same treatment given to other importers when it classified entries of Kent’s WeeRide Kangaroo child bicycle seats in heading 8417, dutiable at 10 percent, rather than a duty-free provision of subheading 9401.80. Though CBP had issued Kent a ruling in 2005 that the merchandise was dutiable at the higher rate, it had subsequently granted two of Kent’s protests and issued several rulings to other importers finding similar merchandise duty-free. The trade court found Kent’s complaint adequately raised questions of whether CBP’s decision to reliquidate subsequent entries at the 10% rate, before its eventual revocation of the other importers’ rulings through Customs Bulletin notices and comment, may have run against the agency’s own established practice and treatment.

International Trade Today is providing readers with some of the top stories for Sept. 5-8 in case they were missed.

Members of the National Customs Brokers & Forwarders Association of America (NCBFAA) were set to lobby this week for legislation that would prevent brokers from absorbing certain financial liability when importer clients file for bankruptcy, NCBFAA Legislative Representative Jon Kent said during the group’s Sept. 11 Government Affairs Conference in Washington. Importers that file for bankruptcy sometimes retroactively try to recover payments made to customs brokers, or through them to CBP, that were made within 90 days prior to the filing, according to an NCBFAA position paper. This scenario poses an “immediate and troublesome threat” to brokers in terms of financial liability, sometimes totaling well into the “six-figure range,” according to the position paper.

The Justice Department’s recent intervention in a whistleblower case against a UK retailer that allegedly split shipments on its U.S. imports to avoid duties “sends a clear message that this behavior will not be tolerated,” said the law firm Constantine Cannon, which represents the whistleblower, in a Sept. 8 press release. The July complaint alleges that Pure Collection and its executive Samantha Harrison deliberately split large orders so their shipments to the U.S. would fall under the $200 de minimis threshold, later raised to $800, despite knowing the practice violated customs rules.

The Commerce Department issued Federal Register notices on its recently initiated antidumping and countervailing duty investigations on stainless steel flanges from India and China (A-533-877/C-533-878, A-570-064/C-570-065).