Court Rejects Customs' Interpretation of "Accessories and Reinforcements" under Chapter 64 Note 4
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP - Eric D. Smithwiess / http://www.gdlsk.com/firm-news/291-court-rejects-customs-interpretation-of-accessories-and-reinforcements-under-chapter-64-note-4.html
On August 2, 2013, the U.S. Court of International Trade (“CIT”) issued a decision in Alpinestars SpA v. United States, Slip Op. 13-98, granting judgment for the importer. In the decision, the court rejected U.S. Customs’ interpretation of the term “accessories or reinforcements” under Chapter 64 Note 4(a), which the agency had used to classify the motocross boots as footwear with uppers predominantly of plastic, dutiable at 20% ad valorem. In reversing Customs’ decision, the CIT found that the boots had uppers predominately of leather and were therefore subject to a substantially lower duty rate of 8.5% ad valorem. Alpinestars was represented by the following lawyers at our firm: Erik D. Smithweiss, Heather C. Litman, and Robert B. Silverman.
The pivotal issue in the case was the proper method for calculating the material that constituted the greatest external surface area of the upper (“ESAU”). The boot was constructed with a substantial external shell constructed of reinforced leather and hard plastic that was designed to protect a motocross rider’s foot and lower leg. In calculating the ESAU, the dispute centered on how to treat several plastic attachments supporting the buckle closure system that were stitched over the leather upper. Together these plastic overlays covered approximately 22 percent of the total outer surface of the upper. Under Chapter 64 Note 4(a), “accessories and reinforcements such as ankle patches, edging, ornamentation, buckles, tabs, eyelet stays or similar attachments” are disregarded (i.e., removed) in calculating the ESAU. In a 2007 ruling, Customs asserted that the plastic overlays were not excludable as “accessories or reinforcements” but must be calculated as part of the ESAU. Based upon that determination, Customs classified the Tech 8 under a tariff subheading for footwear with uppers of plastic.
The court rejected Customs’ interpretation and confirmed that for purposes of Note 4(a), “an ‘accessory’ refers to a nonessential article that adds to the aesthetics, convenience, or effectiveness of the footwear, [and] ‘reinforcement’ refer[s] to a nonessential article that strengthens, provides additional assistance, or support to the footwear.” Applying this interpretation, the CIT found that the two largest plastic overlays, which together covered 16.7% of the external surface of the Tech 8 upper, fell within definition of “accessories” and should have been disregarded in calculating the ESAU. Excluding these two components, the CIT found that the ESAU was predominantly leather.
The Alpinestars decision may present an opportunity for more favorable tariff treatment for footwear with features that might be considered “accessories or reinforcements.” Importers are encouraged to contact our office to explore this issue further.
Generalized System of Preferences: Initiation of the 2013 Annual GSP Product and Country Practices Review; Deadlines for Filing Petition
Office of the U.S. Trade Representaive / http://www.regulations.gov/#!documentDetail;D=USTR-2013-0024-0001
Action
Notice of procedures for submission of petitions from the public.
Summary
This notice announces that the Office of the United States Trade Representative (USTR) is prepared to receive petitions to modify the list of products that are eligible for duty-free treatment under the GSP program and to modify the GSP status of certain GSP beneficiary developing countries because of country practices. USTR is also prepared to receive petitions requesting waivers of competitive need limitations (CNLs).
Dates
The GSP regulations (15 CFR part 2007) provide the timetable for conducting an annual review, unless otherwise specified by notice in theFederal Register. Notice is hereby given that, in order to be considered in the 2013 Annual GSP Review, relevant petitions must be received by the GSP Subcommittee of the Trade Policy Staff Committee by the following deadlines:
October 4, 2013: Petitions to modify the list of articles eligible for duty-free treatment under GSP or to review the GSP status of any beneficiary developing country must be received by 5:00 p.m.
November 22, 2013: Petitions requesting waivers of CNLs must be received by no later than 5:00 p.m.
Petitions submitted after the above listed deadlines will not be considered for review. Decisions on which petitions are accepted for review, along with a schedule for any related public hearings and the opportunity for the public to provide comments will be announced at a later date.
Note
The specified deadlines for petitions will remain valid, and USTR will continue to receive submitted petitions, even if authorization of the GSP program lapses on July 31, 2013. However, no further action will be taken on any petition that is submitted as long as the GSP program is not in effect.
Addresses
Public comments should be submitted electronically to www.regulations.gov in docket number USTR-2013-0024.
For Further Information Contact
Tameka Cooper, GSP Program, Office of the United States Trade Representative, 600 17th Street NW., Washington, DC 20508. The telephone number is (202) 395-6971, the fax number is (202) 395-9674, and the email address is Tameka_Cooper@ustr.eop.gov.
Supplementary Information
The 2013 Annual GSP Review
GSP Product Review Petitions: Interested parties, including foreign governments, may submit petitions to: (1) Designate additional articles as eligible for GSP benefits, including to designate articles as eligible for GSP benefits only if imported from countries designated as least-developed beneficiary developing countries, or only from countries designated as beneficiary sub-Saharan African countries under the African Growth and Opportunity Act (AGOA); (2) withdraw, suspend or limit the application of duty-free treatment accorded under the GSP with respect to any article; (3) waive the CNL for individual beneficiary developing countries with respect to specific GSP-eligible articles (these limits do not apply to least-developed beneficiary developing countries or AGOA beneficiary countries); and (4) otherwise modify GSP coverage.
As specified in 15 CFR 2007.1, all product petitions must include, inter alia, a detailed description of the product and the eight-digit subheading of the Harmonized Tariff Schedule of the United States (HTSUS) under which the product is classified. Before submitting petitions for CNL waivers, prospective petitioners may wish to review the year-to-date import trade data for products of interest. This data is available via the U.S. International Trade Commission's “Dataweb” database at http://dataweb.usitc.gov/.
Country Practices Review Petitions: Any interested party may submit apetition to review the GSP eligibility of any beneficiary developing country with respect to any of the designation criteria listed in sections 502(b) or 502(c) of the Trade Act (19 U.S.C. 2462(b) and (c)).
Requirements for Submissions
All submissions for the GSP Annual Review must conform to the GSP regulations set forth at 15 CFR part 2007, except as modified below. These regulations are available on the USTR Web site at http://www.ustr.gov/trade-topics/trade-development/preference-programs/generalized-system-preference-gsp/gsp-program-inf.
All submissions in response to this notice must be in English and must be submitted electronically via http://www.regulations.gov, using docket number USTR-2013-0024. Hand-delivered submissions will not be accepted. Submissions that do not provide the information required by sections 2007.0 and 2007.1 of the GSP regulations will not be accepted for review, except upon a detailed showing in the submission that the petitioner made a good faith effort to obtain the information required.
To make a submission via http://www.regulations.gov, enter docket number USTR-2013-0024 on the home page and click “Search.” The site will provide a search-results page listing all documents associated with this docket. Find a reference to this notice by selecting “Notice” under “Document Type” on the left side of the screen and click on the link entitled “Submit a Comment.” (For further information on using the www.regulations.gov Web site, please consult the resources provided on the Web site by clicking on “How to Use This Site” on the left side of the home page.)
The http://www.regulations.gov Web site allows users to provide comments by filling in a “Type Comment” field or by attaching a document using the “Upload file(s)” field. The GSP Subcommittee prefers that submissions be provided in an attached document. Submissions must include, at the beginning of the submission, or on the first page (if an attachment), the following text (in bold and underlined): (1) “2013 GSP Annual Review”; and (2) the eight-digit HTSUS subheading number in which the product is classified (for product petitions) or the name of the country (for country practice petitions). Furthermore, interested parties submitting petitions that request action with respect to specific products should also list at the beginning of the submission, or on the first page (if an attachment) the following information: (1) The requested action; and (2) if applicable, the beneficiary developing country. Submissions should not exceed 30 single-spaced, standard letter-size pages in 12-point type, including attachments. Any data attachments to the submission should be included in the same file as the submission itself, and not as separate files.
Each submitter will receive a submission tracking number upon completion of the submissions procedure at http://www.regulations.gov. The tracking number will be the submitter's confirmation that the submission was received into http://www.regulations.gov. The confirmation should be kept for the submitter's records. USTR is not able to provide technical assistance for the Web site. Documents not submitted in accordance with these instructions may not be considered in this review. If an interested party is unable to provide a submission at www.regulations.gov, please contact Tameka Cooper at (202) 395-6971 to arrange for an alternative method of transmission.
Business Confidential Petitions
An interested party requesting that information contained in a submission be treated as business confidential information must certify that such information is business confidential and would not customarily be released to the public by the submitter. Confidential business information must be clearly designated as such. The submission must be marked “BUSINESS CONFIDENTIAL” at the top and bottom of the cover page and each succeeding page, and the submission should indicate, via brackets, the specific information that is confidential. Additionally, “Business Confidential” must be included in the “Type Comment” field. For any submission containing business confidential information, a non-confidential version must be submitted separately (i.e., not as part of the same submission with the confidential version), indicating where confidential information has been redacted. The non-confidential version will be placed in the docket and open to public inspection.
Public Viewing of Review Submissions
Submissions in response to this notice, except for information granted “business confidential” status under 15 CFR 2003.6, will be available for public viewing pursuant to 15 CFR 2007.6 at http://www.regulations.gov upon completion of processing. Such submissions may be viewed by entering the docket number USTR-2013-0024 in the search field at http://www.regulations.gov.
FTC Approves Final Orders Settling Charges Against Retailers Accused of Marketing Real Fur Products as Fake Fur
U.S. Federal Trade Commission /
http://www.ftc.gov/opa/2013/08/neiman.shtm
The Federal Trade Commission has approved final orders settling charges that retailers
Neiman Marcus, DrJays.com and Eminent Inc. sold products containing real fur when they were advertised as containing “faux” fur, and that they did not identify the animal that produced the fur. Neiman Marcus also allegedly labeled a rabbit fur product as containing mink fur, and failed to disclose the country of origin for three fur products as required by the Fur Act and the Fur Rules (formally, the Fur Products Labeling Act and the Rules and Regulations Under the Fur Products Labeling Act).
Under the settlement orders [Neiman Marcus, DrJays.com, Eminent], the respondents are prohibited, for 20 years, from violating the Fur Act and the Fur Rules, including misrepresenting that real fur is fake or faux.
The Commission vote approving the final orders and letters to members of the public who commented was 4-0. (Neiman Marcus , FTC File No. 0823199; DrJays.com, FTC File No. 1223063; Eminent, FTC File No. 1223065; the staff contact is Matt Wilshire, 202-326-2976.)
Cocaine and Methamphetamine at Calexico Cargo Port
U.S. Customs & Border Protection/ http://www.cbp.gov/xp/cgov/newsroom/news_releases/local/08022013_16.xml
Calexico, Calif. — U.S. Customs and Border Protection officers arrested a 58-year-old male yesterday after intercepting narcotics valued at $3.2 million concealed in a false compartment hidden in the cargo truck he was driving.
The incident occurred on Thursday, August 1st, at about 2:15 p.m., when officers encountered a 2000 Volvo tractor and empty trailer that entered the Calexico East cargo facility. A CBP officer conducting inspections referred the tractor and trailer to the secondary dock area for further examination.
While conducting an intensive inspection of the conveyance, CBP officers utilized the port’s imaging system and detected anomalies in the trailer’s structure. Officers subsequently removed 77 packages of cocaine and 34 packages of methamphetamine hidden inside a specially-built compartment under the floor of the trailer.
Weights of the cocaine and methamphetamine were 198 pounds and 67 pounds, respectively, totaling a combined seizure weight of 265 pounds.
The driver, a Mexican citizen and resident of Mexicali, Baja California, was turned over to the custody of Homeland Security Investigation agents for further processing. The subject was later transported to the Imperial County Jail.
CBP placed an immigration hold on the Mexican citizen to initiate removal from the United States at the conclusion of his criminal proceedings.
CBP seized the narcotics and conveyance.
FDA Defines “Gluten-Free” for Food Labeling
Food & Drug Administration / http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm363474.htm
New rule provides standard definition to protect the health of Americans with celiac disease
The U.S. Food and Drug Administration today published a new regulation defining the term "gluten-free" for voluntary food labeling. This will provide a uniform standard definition to help the up to 3 million Americans who have celiac disease, an autoimmune digestive condition that can be effectively managed only by eating a gluten free diet.
“Adherence to a gluten-free diet is the key to treating celiac disease, which can be very disruptive to everyday life,” said FDA Commissioner Margaret A. Hamburg, M.D. “The FDA’s new ‘gluten-free’ definition will help people with this condition make food choices with confidence and allow them to better manage their health.”
This new federal definition standardizes the meaning of “gluten-free” claims across the food industry. It requires that, in order to use the term "gluten-free" on its label, a food must meet all of the requirements of the definition, including that the food must contain less than 20 parts per million of gluten. The rule also requires foods with the claims “no gluten,” “free of gluten,” and “without gluten” to meet the definition for “gluten-free.”
The FDA recognizes that many foods currently labeled as “gluten-free” may be able to meet the new federal definition already. Food manufacturers will have a year after the rule is published to bring their labels into compliance with the new requirements.
“We encourage the food industry to come into compliance with the new definition as soon as possible and help us make it as easy as possible for people with celiac disease to identify foods that meet the federal definition of ‘gluten-free’” said Michael R. Taylor, the FDA’s deputy commissioner for foods and veterinary medicine.
The term "gluten" refers to proteins that occur naturally in wheat, rye, barley and cross-bred hybrids of these grains. In people with celiac disease, foods that contain gluten trigger production of antibodies that attack and damage the lining of the small intestine. Such damage limits the ability of celiac disease patients to absorb nutrients and puts them at risk of other very serious health problems, including nutritional deficiencies, osteoporosis, growth retardation, infertility, miscarriages, short stature, and intestinal cancers.
The FDA was directed to issue the new regulation by the Food Allergen Labeling and Consumer Protection Act (FALCPA), which directed FDA to set guidelines for the use of the term “gluten-free” to help people with celiac disease maintain a gluten-free diet.
The regulation was published today in the Federal Register.
Port of NY/NJ Port Truck Program
Port Newark Container Terminal / http://www.pnct.net/MessageUpdates.aspx#1
Port of NY/NJ Port Truck Pass Program
Trucks seeking entry to the container terminals in the Port will be required to have a duly-issued RFID tag.
It is anticipating that these RFID tags will be mandatory for terminal on August 19, 2013.
To receive your tag, you must be registered in www.PortTruckPass.com
CBP Releases Schedule for Completing its Modernized Trade Processing System in ACE
U.S. Customs & Border Protection / http://www.cbp.gov/xp/cgov/newsroom/news_releases/national/08082013_2.xml
Washington – U.S. Customs and Border Protection released a schedule for completing core trade processing capabilities in its Automated Commercial Environment (ACE) by the end of calendar year 2016. ACE consolidates, automates, and modernizes border processing and when complete, will provide a single access point to connect the trade community with CBP and Partner Government Agencies.
“This announcement marks a significant step forward for us,” said CBP Acting Commissioner Thomas S. Winkowski. “ACE is the backbone of CBP trade processing and risk management activities and the key to many of the agency’s trade transformation initiatives.”
CBP’s plan for completing core trade processing capabilities was developed after extensive consultation with internal and external stakeholders. The plan includes seven deployments of new features over the next three years. This approach is based on the Agile software development methodology, which produces smaller pieces of functionality more frequently.
CBP also announced three dates when certain functions will be mandatory:
•May 1, 2015: All electronic import and export manifest data must be transmitted via ACE.
•November 1, 2015: All data associated with the release of cargo, including PGA interactions, must be transmitted via ACE.
•October 1, 2016: Mandated use of ACE.
During the past 10 years, CBP has deployed key ACE capabilities which helped ease the transition to more web–based, paperless trade processing such as the Secure Data Portal, Periodic Monthly Statement and electronic manifest. The first deployment of new features using the Agile methodology is targeted for October 2013. ACE is the backbone of CBP trade processing and risk management activities and the key to many of the agency’s trade transformation initiatives. For additional information, visit CBP.gov/ACE.