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Ninestar and UFLPA Exhaustion

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Exhaustion is a key doctrine in administrative law. When applicable, it requires that a party unhappy with an agency’s determination complete the administrative appeal process before turning to the courts for judicial review. Requiring exhaustion typically promotes judicial efficiency by ensuring that disputes are resolved at the agency and, if they are not, that there is a complete record of the agency process. Exhaustion also ensures that the judiciary respects the executive agencies and their expertise.  There are, on the other hand, times when the courts will find that exhaustion is not necessary or appropriate. Such is the case in  Ninestar Corporation et al. v. United States  et al., a decision of the U.S. Court of International Trade.  Ninestar is also interesting because it is one of the first cases in the CIT involving the Uyghur Forced Labor Prevention Act, known as UFLPA. In my hiatus from active blogging, I missed the rise of UFLPA as a major compliance topic. So, let's
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Precious Tritium

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One thing I have learned as a customs lawyer who does a lot of classification work is that there are millions of odd items moving in international trade the existence of which I am completely ignorant. Such is the case of the gaseous tritium light sources used in, among other things, firearm sights. These things use tritium sealed in a glass that has been coated in phosphor. The radioactive tritium decays, releasing beta particles, which interact with the phosphor causing it to emit light. In other words, it creates light with no external power source. Pretty cool.  Tritium is, of course, a real thing. It is an isotope of hydrogen. We know this from the excellent documentary "Spider-Man." This comes up in relation to the Court of International Trade decision in Trijicon, Inc. v. United States  in which the importer challenged the tariff classification of several versions of the gaseous tritium light sources ("GTLS"). The plaintiff uses them to make gun sights. The
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HTSUS Snippets and Fragments

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 For the most part, the Harmonized Tariff Schedule of the United States has an internal logic and consistent format that eases navigation. Most of us who work with the HTSUS can easily communicate about Sections, Chapters, Headings, and Subheadings. There is, however, the occasional need to talk about the fragments of text that are neither subheadings, nor tariff items, nor statistical breakouts. They are the un-numbered lines. Take, for example, 8504.90, the subheading for parts of electrical transformers and similar products.  8504.90 is the subheading. The first tariff item below the subheading is 8504.90.20 covering printed circuit assemblies that fit within the scope of the un-numbered language between 8504.90 ("Parts") and 8504.90.20 ("Printed circuit assemblies"). There are two more of these un-numbered subdivisions below 8504.90.41. Normally, this oddity would not merit any discussion. For classification purposes, it is pretty clear that these un-numbered sn
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Liquidation Un-Deemed by CIT

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What happens when Customs decides that an entry was "deemed liquidated" while the entry is suspended by the Commerce Department? Apparently, nothing. That is the gist of the decision in Fraserview Remanufacturing Inc. v. United States , a (relatively) recent decision from the Court of International Trade.  The facts of this case are a bit complicated. The imported merchandise was softwood lumber from Canada, which is subject to an antidumping and countervailing duty order. As part of the administrative process, on March 19, 2020, Commerce ordered that CBP suspend the liquidation of the 80 entries subject to this case. Customs, however, mistakenly scheduled the entries for manual liquidation. Inexplicably, Customs, citing "system errors," failed to actually liquidate them. After noticing the failed (and incorrect) effort to liquidate the entries, CBP marked the entries as having been deemed liquidated by operation of law on August 7, 2020.  "Deemed liquidation&q
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Hybrid Sheep and the Lacey Act

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The Lacey Act , as you likely know, prohibits the international movement of plants and animals that were harvested illegally. Typically, a violation involves a company that imported wood or wood products for use in production or for resale. Less commonly, by which I mean never until just now, does the violation involve the importation of parts of wild mountain sheep from Kyrgyzstan as part of a plot to clone the sheep to produce breeding males to make hybrid giant sheep for private hunting in Montana. That real live plot, recently noted in a Department of Justice press release , sounds like the hobby or side hustle for the villain in a James Bond movie.  Thanks to Tom B. for the tip and the nudge to do this update. The crazy facts are that the owner of an "alternative livestock ranch" in Montana violated the Lacey Act when he conspired with others to import "parts" of Marco Polo argali sheep.  These are among the largest sheep in the world and are native to the Pam
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Counter-Counterclaim Decision

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This is a two-parter covering three decisions including  Second Nature Designs Ltd. v. United States . This part covers an interesting procedural question with implications for importers deciding whether to file a challenge to a customs decision in the Court of International Trade. In this case, that decision was the proper classification of decorative objects made from branches, wood, dried flowers, and other material. Customs classified these items in HTSUS item 0604.90.60 other foliage, branches and other parts of plants . . . dried . . . or otherwise prepared (7%). Plaintiff believes the merchandise is properly classifiable in 0604.90.30 covering the same merchandise except in "dried or bleached" form (free).  From Second Nature Designs This first decision does not resolve the classification. It goes to whether the United States properly asserted a counterclaim against the plaintiff. A counterclaim is a claim the defendant asserts against the plaintiff. Here, after Second
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Ellwood City Blues

Despite being judicial review of agency action, principles of administrative law do not always apply to customs law. That is because most decisions by Customs and Border Protection affecting the importation of merchandise are subject to administrative review in the protest process and then judicial review on a de novo standard. That means the judge will make a decision based on the evidence presented to the court rather than the administrative record on which the agency based its decision.  For comparison, in a trade case, the court will uphold a Commerce Department dumping margin calculation as long as the decision is based on substantial evidence in the record  and is otherwise in accordance with law. That means the agency can prevail even if the court would have reached a contrary conclusion. That is the opposite of, for example, a tariff classification case in which the court is required to reach the correct result based on the evidence before it with little regard for Customs'
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