Customs Overviews


September 1, 2010

In this Issue:

Prepared by John B. Pellegrini, McGUIREWOODS, LLP



April 6, 2010

In this issue:

Prepared by John B. Pellegrini, McGUIREWOODS, LLP


Section 103.31(c) of the Customs Regulations provides that an importer or consignee may request confidential treatment of its name and address as shown on the inbound manifest, including identifying marks and numbers. An importer may also request confidential treatment of the name and address of the shipper or shippers.

The request is made by submitting a certification that includes the importers EIN. There is no requirement to provide facts supporting the conclusion that the disclosure of the names and addresses of the importer and the shipper(s) likely would cost substantial harm to the competitive position of the importer. The certification is submitted to the Disclosure Law Officer at Customs and Border Protection ("CBP") Headquarters.

CBP has developed a manifest confidentiality request form, which is found online here. The form may be completed and submitted online.

It is important to keep in mind that the certification is good for two years from the date of receipt, unless renewed. The renewal should be sent at least 60 days prior to the expiration of the existing certification.

Information covered by the certification may be copied by the press but may not be published.


The following is a summary of recent value decisions.

HQ H095412 (March 8, 2010) addresses the dutiability of surcharges paid by an apparel producer to a mill when it ordered less-than-minimum quantities of fabric. The importer specified the mill and negotiated prices and minimum quantity requirements with the mill. The garment producer bills the surcharge to the importer. The surcharge is shown on the commercial invoice as an additional line item.

The Headquarters Office ruled that the surcharge was dutiable. The primary reason for this determination was that the importer made the payment to seller of the imported merchandise. The Headquarters Office discounted the argument that because the surcharge payments were made only occasionally they should not be considered dutiable.

The method of apportioning assists is discussed in HQ H086246 (March 2, 2010). The importer provides bulk fabric and leather to foreign furniture producers. The importer tracks these assist costs in a single general ledge account. Once the account is closed each month, the importer reports and applies the total assist cost to the first shipment from each producer received after the prior month is closed. This approach relieved the importer from reporting the assists on a product or entry basis. The Headquarters Office approved the approach.

This ruling illustrates that CBP can be flexible in allowing assists to be reported on a basis other than by product or by entry.


We expect that the Consumer Product Safety Commission ("CPSC") will publish a proposal addressing the interpretation of the term "children's product" as set forth in the Consumer Product Safety Improvement Act ("CPSIA"). Publication could come as early as this week. A preliminary draft of the proposal is available on the CPSC website and the following is based on the draft.

The proposal attempts to flesh out the children's product definition. The CPSIA defines children's product as "a consumer product designed or intended primarily for children 12 years of age or younger." The proposal states that term "designed or intended primarily" applies to those products designed and commonly recognized as intended for use by a population of consumers if a significant portion which is made up of children 12 years old or younger. The fact that a product may be attractive to and used by adults does not necessarily remove it from the class of children's products. On the other hand, products intended for general use (products not marketed to children) are not usually considered children's products.

The proposal includes suggested interpretation of the factors cited in the CPSIA.

Manufacturer (importer) statement. A manufacturer's statement about intended use, including any product label, should be reasonably consistent with the expected use patterns for a product. A manufacturer's statement that the product is not intended for children would not preclude a product from being a children's product if consumers would commonly use that product for children 12 years of age or younger.

Product presentation. Intent for use by children can be obvious (e.g. advertising depicting use by children under 12) or implied (e.g. instruction manuals showing the product being used by toddlers). Placement at retail or in a catalogues could imply intended use by children.

Recognition by consumers. Manufacturers should evaluate the actual use and reasonably foreseeable uses and misuses of a product to determine how the product will be perceived and used by consumers. Manufacturers may rely on market analyses, focus groups, or other marketing studies for the determination of the likely ages of consumers of their products. (See draft for details of common features of children's products such as small sizes, childhood motifs, lower costs, etc.)

Consumer Reaction. Whether the product exhibits features or characteristics of children's products (e.g., small size uncomfortable for adults, safety features not found on adult products, children’s colors and decorative motifs, play value, cost).

Age Determination Guidelines. The proposal would consider actions that children of certain ages and perform successfully when making determinations in this area.

* * *

The CPSC announced the recall of certain heated jackets and vests. The electrical conductors in the warming components in the garments can overheat, posing a burn hazard. The CPSC also announced eleven recalls of children’s garments because of the presence of drawstrings at the neck or waist.


The following is a summary analysis of Headquarters Office classification decisions published recently by CBP.

Ruling Merchandise Classification
HQ H076796 (December 17, 2009) Hats in the shape of Christmas trees, Santa and elves 9505.10.00 (Free) as festive articles. The ruling held that heading 9505 was more specific than heading 6505, covering headwear
HQ H080601 (January 14, 2010) Women’s mid-hip length woven outerwear garment of MMF with a water-resistant coating. The garment has a detachable hood but no tightening at the sleeves or bottom. 6202.13.40 (27.7%). Classification as anorak (which would have meant eligibility for the lower water resistant rate) denied.
HQ H030421 (Proposed) Men’s woven and knit sleep pants in chief weight cotton. Both the knit and woven garments have an elasticized waistband with outside drawstring, side seam pockets and a 5.5” fly-front opening with no means of closure. 6107.91.00 (8.7%), knit, 6207.91.30 (6.1%), woven, as sleepwear. Revokes NY N025623 (May 2, 2008), which found classification as outerwear on the grounds that the open fly did not compromise modesty.


The Animal and Plant Health Inspection Service, ("APHIS") implementation of Lacey Act requirements reached phase IV as of April 1, 2010. Under Phase IV, articles classified in the following headings and subheadings of the Harmonized Tariff Schedule of the United States are added to the products subject to the declaration requests. The articles are: heading 4421 (other articles of wood); heading 6602 (walking sticks, whips and crops); heading 8201 (hand tools); heading 9201 (pianos); heading 9202 (other stringed instruments); subheading 9401.69 (seats with wood frames); subheading 9504.20 (articles and accessories for billiards) and heading 9703 (sculptures) are subject to the declaration requirement. This is the first phase that includes articles classified outside Chapter 44.

At this time a Phase V has not bee announced. A new phase will not be implemented without six months prior notice. At this point, it appears that the impact of the Lacey Act requirements on importers of textiles and apparel will remain minimal for the foreseeable future.

The Customs Overview is a newsletter of Customs legal, administrative and other developments affecting importers of textiles and wearing apparel prepared as a service for USA-ITA members and other interested parties. Matters reported on or summarized herein should not be construed as legal advice on specific situations.


August 9, 2010

In this Issue:

  1. Festive Articles
  2. First Sale
  3. CBP Developments
  4. CPSC Developments

Prepared by John B. Pellegrini, McGUIREWOODS, LLP



March 3, 2010

In this issue:

Prepared by John B. Pellegrini, McGUIREWOODS, LLP

10 + 2 UPDATE

In January, United States Customs and Border Protection ("CBP") announced that during the first quarter of its enforcement of the 10 + 2 rules (the quarter began January 26, 2010), it would issue warning letters and talk to filers in lieu of issuing liquidated damage claims. We understand that CBP has not started issuing warning letters.

However, some ports have indicated that at the start of the second quarter of full enforcement, C-TPAT importers that demonstrate low ISF compliance rates will be notified by CBP that they risk establishing a pattern of non-compliance that could jeopardize their C-TPAT status. Further, as CBP moves into a more robust enforcement phase, it is possible that CBP will consider revoking, suspending or downgrading the status of C-TPAT importers that remain non-compliant.

CBP is sending out ISF progress reports on a monthly basis. If you have not received a monthly progress report, you should consider contacting your ISF filer to see whether they have a report showing your progress as seen by CBP.


The Court of Appeals for the Federal Circuit ("CAFC") has dismissed the claim by Totes – Isotoner that the higher duties paid on men's leather gloves, as compared to similar women's gloves, was unlawful discrimination. Appeal No. 2009-1113 (February 5, 2010).

On appeal, the government argued that plaintiff lacked standing, that the controversy was not justiciable and that the Court of International Trade ("CIT") did not have jurisdiction to entertain an action of this nature.

The CAFC held that the CIT had jurisdiction and that Totes had standing to pursue the discrimination claim. The Court also held that consideration of the case by the courts was not barred by the political question doctrine.

Essentially, the appellate court held that Totes did not state a claim because there was no showing that in an enacting different tariffs, Congress intended to discriminate against men. The Court stated that Totes is required to allege facts sufficient to establish government intent to discriminate between male and female users. Simply showing disparate treatment, it is not sufficient to satisfy this requirement. Accordingly, the court dismissed the claim. The concurring opinion states a somewhat different rationale. The concurring opinion held that the tariff classification does not discriminate because the difference in duty imposes a burden on importers, not gender-based or age-based classes of people. The tariff distinction is based upon the nature of the imported products not natural people.

Totes have the right to seek certiorari in the United States Supreme Court and we expect that they will do so. The Supreme Court has accepted tariff cases for review on very few occasions.


A Long Island customs broker has been found guilty of fraud and sentenced to prison. The broker was charged with defrauding an importer of over $1 million in duties.

The broker had served the importer as a broker since 1980. In 1996, the HTS subheading under which the importer's goods were classified became duty-free. The broker did not advise the importer of the charge and continued to charge the importer for duties. In order to disguise the fraud, the broker mailed bogus customs forms which showed duty owing and paid on the imported merchandise. The broker, thereby, induced the importer to reimburse it for duties that were never actually paid. By the time the importer discovered the fraud, the broker had overcharged it for duties of approximately $1.2 million.


On February 18, 2010, the Consumer Product Safety Commission ("CPSC") announced four separate voluntary recalls of children’s hooded sweatshirts and garments with drawstrings. All of the garments have a drawstring through the hood that can pose a strangulation hazard to children. The garments violated the voluntary industry standard which has been in place since 1997.

The CPSC previously has expressed surprise that some importers still do not understand that children's clothing with a hood with a drawstring is considered a strangulation risk to children. Because of this continued flaunting of the voluntary standard, the CPSC is working on a rulemaking that would allow it to stop and destroy products with drawstring hazards at ports of entry.


The CIT recently issued a ruling on the classification of motorcross jerseys, pants and motorcycle jackets. Lemans Corp. v. United States, Slip Op. 10-14 (February 8, 2010). The importer argued that the apparel was classified as sports equipment in Chapter 95. CBP had classified the garments at liquidation in the appropriate provision in Chapters 61 and 62, HTS.

The opinion describes the merchandise as highly specialized garments "designed, engineered, and produced exclusively for use while participating in motocross activities and other power sports riding." The garments were described as intended to "prevent injury to the rider from abrasion and impacts with motorcycle parts and the surrounding elements." The opinion goes on to state that the subject garments are readily recognizable as articles of clothing albeit with certain specialized protective features, some of which were considered minimal.

Nevertheless, the court was not persuaded that the garments properly were classified as sports equipment. According to the opinion, in order to qualify as "sports equipment," goods generally should provide what is necessary, useful or appropriate for participation in the sport. While the subject merchandise arguably constitutes useful, if not necessary, articles for motocross and motorcycle riding, it is not like the articles described in the Explanatory Notes as being classified as sports equipment. According to the opinion, the examples listed in the Explanatory Notes are primarily non-clothing articles and do not include apparel like the subject merchandise. The apparel-like items listed in the Explanatory Notes that might be considered sports equipment are almost entirely internal guards or pads pieced together by minimal textile components. Therefore, the court held that the garments were not classified as sports equipment.

This decision illustrates how difficult it is to convince either CBP or the courts that apparel items are properly classified as sports equipment.


The following is a summary analysis of Headquarters Office classification decisions published recently by CBP.

Ruling Merchandise Classification
HQ H022665
(September 17, 2009)
Boy's shirt packaged with a tie. The shirt was cut and sewn in El Salvador and was eligible for CAFTA. The tie was not eligible. The entire set was deemed ineligible for CAFTA. The tie was not made of regional or short supply fabric.
HQ H044561
(October 28, 2009)
Cotton knit garments with a hood with a drawstring closure, and full-front zipper opening. The garment is mid-thigh length. 6110.20.20 (16.5%) as sweatshirts. The importer argued for classification as nightwear or as dresses.
HQ H009365
(January 21, 2010)
Coated MMF knit mittens, lined and insulated with removable inner gloves. The mitten has a waterproof barrier, a hook and clasp, foam padding and tightening at the wrist. 6116.10.08 (2.8%). Classification as gloves designed for use in skiing was found despite the absence of a reinforcement along the thumb. The ruling revokes NY N003928 (December 29, 2006) which found classification in 6116.40.44 (9.9%). The liners were classified separately in 6116.93.90 (18.6%).

The Customs Overview is a newsletter of Customs legal, administrative and other developments affecting importers of textiles and wearing apparel prepared as a service for USA-ITA members and other interested parties. Matters reported on or summarized herein should not be construed as legal advice on specific situations.