News of Limited Interest

I took a few days to go sailing. My crew and I went from our home port north of Chicago to Racine, WI and then on to Milwaukee. On the way back, we stopped in Kenosha. Just a bit of rain and one day of no wind. Other than that, a good trip.

Kenosha turned out to be a surprise. I was expecting a somewhat depressed factory town but found a vibrant lakefront community with new museums and plenty of restaurants. If you happen to be in the area, don't miss Frank's Diner for breakfast. Just get there early.

News of Interest

The Federal Circuit has done the importing community a favor by reversing a CIT decision that effectively undermined the value of a prior disclosure. Traditionally, importers have made prior disclosures to avoid penalties in excess of interest on the unpaid amounts. In U.S. v. National Semiconductor, the Court of International Trade held that the U.S. was also entitled to interest to compensate it for the loss of revenue, separate and apart from the penalty. The CIT based this decision on 19 USC 1505(c) which establishes the rate of duty applicable to underpayments of duties due on liquidation or reliquidation.

In short, the Federal Circuit held that 1505(c) was not an independent authorization for the U.S. to collect interest in a prior disclosure situation. The Court reversed and vacated this aspect of the decision and sent it back to the CIT for further consideration.

Prior disclosers may not breathe again.

Lobster Smuggling

I grew up in New England and spent many summers on the beaches of New Hampshire and Maine. I remember my parents or grandparents often sending a dazed and blueish lobster to an untimely and most likely very painful death in a large pot of boiling water. I feel guilty about that now. While some may argue that the tail produces the best meat and others may wax on about the delicate joys of the lobster's tomalley, every kid knows that nothing beats the claws; big claws, full of juicy meaty that is easy to get at.

Which brings me to this story in which Customs & Border Protection participated in the interception of illegal lobster smuggling in Miami. It is not entirely clear where the lobsters originated, but it would appear that they are from the Bahamas or the surrounding waters. CBP seized 37 tails and zero claws. Why no claws? Because only true lobsters (what we like to call "Maine lobsters") have the really yummy claws. Most likely, these creatures were not even what a New Englander would call a lobster. They were probably spiny lobsters (also known as "rock lobsters," cue The B-52's). According to Wikipedia:

Although they superficially resemble true lobsters in terms of overall shape and having a hard carapace and exoskeleton, the two groups are not closely related. Spiny lobsters can be easily distinguished from true lobsters by their very long, thick, spiny antennae, and by their complete lack of claws (chelae); true lobsters have much smaller antennae and claws on the first three pairs of legs, with the first being particularly enlarged.

And nothing beats a particularly enlarged lobster claw with a bit of melted butter, corn on the cob, a few recently deceased steamed clams, and a cold Bar Harbor Real Ale.

President Acts on Imported Product Safety

Based on this press release, it seems it takes a lot of high-ranking people to do something about unsafe imports. Roll call at the new task force includes:

• the Secretary of Health and Human Services, who shall serve as Chair;
• the Secretary of State;
• the Secretary of the Treasury;
• the Attorney General;
• the Secretary of Agriculture;
• the Secretary of Commerce;
• the Secretary of Transportation;
• the Secretary of Homeland Security;
• the Director of the Office of Management and Budget;
• the United States Trade Representative;
• the Administrator of the Environmental Protection Agency;
• the Chairman of the Consumer Product Safety Commission; and
• other officers or full-time or permanent part-time employees of the United States, as determined by the Chair, with the concurrence of the head of the department or agency concerned.

Funny, I thought there were already federal agencies charged with this job including CPSC, FDA, Agriculture, and Transportation.

Two from the Times

A couple Customs & Border Protection and trade law related stories made it into the New York Times today. Here is the short version of each.

Customs has implemented rules barring the importation of ancient Cypriot coins under the 1970 UNESCO Convention on the Means of Prohibiting and Preventing the Illicit Import, Export, and Transfer of Ownership of Cultural Property (see 19 USC secs. 2601-13 for the details). Under the Convention, the U.S. can enter into bilateral agreements to prohibit traffic in archaeological and ethnological artifacts. The interesting thing in this case is that coins are usually excluded because they were often widely circulated and proving provenance can be difficult. This restriction, according to the article, has the numismatic world all upset.

The second article has to do with the last ditch effort WTO boss Pascal Lamy is making to save the Doha round from collapse. The pitch simply involves floating a proposal wherein U.S. and other farm subsidies would go down a bit more than the U.S. planned and, in return, duties on manufactured goods would go down elsewhere. We'll see. This round of talks has been harder to finish off than an extra in a George Romero movie. Stay tuned.

Are Pascal Lamy and George Romero the two people least likely to be mentioned in the same blog post?

An Undeclared Apple A Day . . .

. . . will keep you out of the Dedicated Commuter Lane. At least according to this story from the El Paso Times. Apparently the Ag Inspectors have adopted a zero tolerance rule for registered international commuters. An undeclared apple resulted in a $500 fine and a loss of DCL privilege.

Courts vs. Panels and Justice O'Connor

This is the Customs Law Blog, so I don't often dip my toes into trade law. But, my firm practices trade law, I am interested in and teach NAFTA, and I teach trade law as an adjunct at the John Marshall Law School's Center for International Business and Trade Law. So, an article comparing NAFTA dispute resolution panels to U.S. judicial decisions is kind of a perfect storm of thing that interest me.

Generally, a party wishing to challenge a U.S. antidumping or countervailing duty agency determination files its claim in the U.S. Court of International Trade. The CIT is the fine institution where I spent the first two years of my legal career. Under NAFTA Chapter 19, however, an antidumping or countervailing duty dispute involving Canada or Mexico ends up being the subject of consideration by a bi-national panel of arbitrators. You can see some of the Chapter 19 results here courtesy World Trade Law.net.

NAFTA panels were designed to encourage results that are consistent with the law of the country that made the challenged determination. The two main structural elements that support that goal are that the panel is required to apply the standard of review applicable in the country of the determination and that the panelists should be--to the greatest extent possible--judges or retired judges. The standard of review for most ADD/CVD determination is that the decision will be upheld unless it is not supported by substantial evidence on the record or not in accordance with law. [Note: When I teach this, I now go into a discussion of the meaning of the term "scintilla," but I will forgo that for now.] The reason judges are supposed to be on the panels is to make sure that the panelists have a strong grounding in the local value of precedent and stare decisis. In the U.S., that means accepting the binding nature of decisions by higher courts and avoiding, when possible, conflicts with prior decisions of the same court. This leads to predictability and uniformity.

Well, along comes Juscelino F. Colares of Syracuse University College of Law with an article called "An Empirical Examination of Product and Litigant-Specific Theories for the Divergence between NAFTA Chapter 19 and U.S. Judicial Review. Thanks to the Legal Theory Blog for the tip. Here is a link to the abstract. The upshot (based on the abstract) is that panels reverse U.S. agency decisions twice as often as does the CIT while panels are far more likely to affirm Canadian determination. According to the author, this indicates the operation of two independent systems in which the panel process has a "sub rosa code to liberalize U.S. trade law."

Although several judges are on the list, the roster is overwhelming populated by trade lawyers and academics. The Extraordinary Challenge Committee, which hears challenges to panel decisions in very limited circumstances, on the other hand, if chock full of judges including the rock-star status Justice Sandra Day O'Connor who was recently announced as a member of the ECC roster. While I think it is great that Justice O'Connor has decided to participate, I wonder if she knows what she is getting herself into. The cap on offsetting indirect selling expenses in constructed export price transactions, while interesting to a certain group of lawyers, hardly has the weightiness of, for example, any of the 26 amendments to the U.S. Constitution.

A Dog's Life

Here is a story from the Chicago Tribune that is full of local flavor, so to speak. We have just finished our visit from the 17-year cicada. See the pictures I posted here. Turns out dogs love to eat these critters. But, they are big and crunchy. So, dogs are advised to chew their cicadas. Otherwise, they could end up like Champ, U.S. Customs and Border Protection narcotics dog at O'Hare airport. Champ had a near-death experience after choking on cicadas but was saved by the quick action of his CBP handler and O'Hare paramedics. This story, it seems turned out better than the last CBP dog story I posted. Eddie appears to still be missing.

CBP News of the Wierd

It's been a while since I covered oddball Customs & Border Protection news. Here is a roundup:

Another arrest for smuggling exotic birds.

Here is a happy wine importer who discovered that you can import more than your person exemption so long as you pay the duty. It's been a while since I have seen an importer thrilled with a 3% rate of duty.

Brokers caught (and arrested) assisting counterfeit imports.

Smugglers give new meaning to the phrase "a brick of pot."

Update of 2007 HTS Revenue Neutrality

I probably should have posted this sooner, as the date for comments is tomorrow. But, it remains interesting. I previously posted about the concern that certain changes to the 2007 tariff were not revenue neutral as was the goal (if not the express requirement) of the statute.

The International Trade Commission has decided to take a look at that issue and is seeking public comment. The proposal specifically affects a couple products including bamboo flooring and radio receivers that were made subject to higher rates of duty under the 2007 changes. The proposal calls for retroactive application of lower rates. Also included in the notice are changes requested by Customs & Border Protection for administrative purposes and to better conform to the Harmonized System. In all likelihood, these changes will become the law soon.