Kelley Drye

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The Court of International Trade was not in the holiday spirit when it issued the decision in Rubie’s Costume Co. v. United States, Slip Op 17-147, which held that the imported Santa Claus suit cannot be considered a “festive article,” but must be considered wearing apparel.  Festive articles, imported into the U.S. under heading 9505 of the Harmonized Tariff Schedule, enter the U.S. free of duty.  The Court held that Santa’s man-made fiber jacket and pants would enter as wearing apparel under Chapter 61 and specifically under 6110.30.30 at 32% duty for the jacket and 6103.43.15 at 28.2% duty for the trousers. …
Continue Reading Say It Ain’t So Santa:  Court of International Trade Decision Increases Import Duties on Santa Claus Costume

Since the advent of the Centers of Excellence and Expertise (CEE’s), US Customs and Border Protection (CBP) has moved its audit function to the Centers and is focusing on single issue audits rather than the focused assessments previously conducted by regulatory audit.

Targeted single issue audits can be misleading.  CBP typically sends an audit questionnaire…

The AP recently reported that North Koreans are working in China as forced labor and their products are being imported into the U.S.  The AP followed the production of seafood from Chinese facilities to U.S. retailers, but stated that there other affected product categories, including apparel and wood flooring.

While it has been known that North Korea sends workers abroad, this report is the first time the supply chain has been documented to show North Korean forced labor products entering the U.S., which is a federal crime.  It has been reported that North Korea sends tens of thousands abroad, bringing in revenue estimated at $200-$500 million per year as Kim Jong Un keeps a large percentage of the salaries.  According to the AP, the North Korean workers in China remain under constant surveillance and live in forced labor conditions.
Continue Reading Importers Beware: U.S. Customs Targets Imports Made in China by North Korean Workers

The Comprehensive Economic and Trade Agreement (“CETA”), the much anticipated free trade agreement between the European Union and Canada went into effect on September 21st.  CETA is a terrific opportunity for global companies to take advantage of duty savings offered by the FTA as it  expands market access for the EU and Canada through comprehensive tariff elimination across all sectors of the economy.

Under CETA, Canada and the EU have committed to eliminate or reduce tariffs on goods imported from the other party, provided they qualify under the CETA rules of origin. Tariffs on 98% of goods including apparel and footwear, industrial products, and fish and seafood and over 93% of food and agriculture goods were eliminated immediately upon entry into force of the agreement.  Tariffs on the additional tariff lines will be eliminated gradually within seven years. …
Continue Reading EU-Canada Free Trade Agreement (CETA)

Post 9/11 U.S. Customs initiated numerous anti-terrorism measures in response to the new need to secure imported cargo and the ports.  In fact, the agency’s name changed from the U.S. Customs Service under the Treasury Department to eventually becoming U.S. Customs and Border Protection under the newly formed Department of Homeland Security.  Post 9/11 Customs advises importers to have control over their supply chains including the security and safety of the imported products.  Each importer has a “profile” with Customs and the agency does a risk analysis when targeting shipments.  Part of that risk analysis is an importer’s compliance with anti-terrorism regulations.

Below is a listing of Customs security initiatives:…
Continue Reading Post-9/11 U.S. Customs and Border Protection Safety and Security

On September 6th Customs and Border Protection (“CBP”) released a statement regarding cargo processing during the upcoming hurricane.   In the wake of Hurricane Harvey, diversion of cargo to open ports was a key factor in allowing trade to continue to operate in the face of the closures of Texas and Louisiana seaports.

CBP will permit ocean vessels to divert from their intended port to another port for discharge. CBP requests that ocean manifests be amended and new destination ports be alerted.  CBP will not issue penalties for violations arising from port diversions during the hurricane.
Continue Reading Customs and Border Protection Readies for Hurricane Irma

“Drawback” is U.S. Customs program that allows importers to get their duty payments refunded by Customs if they export the same or a similar product.  There are lots of permutations and it’s quite a bit of “paperwork” to qualify, but the upside is significant.

Under the recently enacted Trade Facilitation and Trade Enforcement Act (TFTEA), drawback is being simplified and will be effective Feb 24, 2018.  The importing community is still waiting for certain Customs regulations on this, including whether distilled spirits will be eligible for “substitution” drawback.  Customs has historically denied substitution drawback to distilled spirits.
Continue Reading Potential Drawback Opportunity for Distilled Spirits

Canada and the European Union have announced that September 21st will be the date that the provisional application of Comprehensive and Economic and Trade Agreement (“CETA”) will come into effect.

Canadian Prime Minister Justin Trudeau and EU president Jean-Claude Juncker issued the statement after the G20 Summit on July 8th.  The agreement…

The much anticipated free trade agreement between the European Union and Canada going into effect this summer is a terrific opportunity for importers to take advantage of duty savings.  The Comprehensive Economic and Trade Agreement (“CETA”) expands market access for the EU and Canada through comprehensive tariff elimination across all sectors of the economy.

Under CETA, Canada and the EU have committed to eliminate or reduce tariffs on goods imported from the other party, provided they qualify under the CETA rules of origin. Tariffs on 98% of goods including apparel and footwear, industrial products, and fish and seafood and over 93% of food and agriculture goods will be eliminated immediately upon entry into force of the agreement.  Tariffs on the additional tariff lines will be eliminated gradually within seven years.  The EU and Canada have both signed and ratified the agreement and we expect an announcement prior to July 1, 2017.  At that time, tariff reductions/elimination will go into effect.
Continue Reading Do You Qualify For Duty Savings Under the EU-Canada Free Trade Agreement?

The much anticipated free trade agreement between the European Union and Canada going into effect this summer is a terrific opportunity for importers to take advantage of duty savings.  The Comprehensive Economic and Trade Agreement (“CETA”) expands market access for the EU and Canada through comprehensive tariff elimination across all sectors of the economy.

Under CETA, Canada and the EU have committed to eliminate or reduce tariffs on goods imported from the other party, provided they qualify under the CETA rules of origin. Tariffs on 98% of goods including apparel and footwear, industrial products, and fish and seafood and over 93% of food and agriculture goods will be eliminated immediately upon entry into force of the agreement.  Tariffs on the additional tariff lines will be eliminated gradually within seven years.  The EU and Canada have both signed and ratified the agreement and we expect an announcement prior to July 1, 2017.  At that time, tariff reductions/elimination will go into effect.
Continue Reading EU-Canada Free Trade Agreement Goes Into Effect