Customs & International Trade
Customs and international trade law is a complex field of statutes and regulations that is frequently changing. Companies that import and export merchandise, services and technologies must be familiar with the regulations and restrictions that impact their international sales, purchases and other business transactions to guard against violations of the law and regulations, and reduce civil and criminal penalty risks. Our attorneys have experience assisting U.S. and non-U.S. emerging, middle market and publicly traded companies on matters of customs and international trade law. We frequently receive referrals and work with outside corporate counsel, licensed customs brokers, freight forwarders, public accountants and international trade consultants that trust us to handle important customs and international trade legal issues for their clients.
When U.S. and non-U.S. companies import merchandise into the U.S., all parties involved in the import transaction are required to use “reasonable care” under the Customs Modernization Act, including consulting with attorneys and other advisors, when warranted. U.S. Customs and Border Protection (CBP) and several other federal agencies that enforce U.S. laws governing imported goods have increased investigation and enforcement efforts for antidumping and countervailing duty evasion. They also are assessing significant civil and criminal penalties against companies and individuals that violate U.S. import laws and regulations, such as the Trade Facilitation and Trade Enforcement Act of 2015 (TFEA), and the Enforce and Protect Act, as part of the TFEA. We have the experience to assist U.S. and non-U.S. companies on a broad range of customs matters, including representation before CBP, the U.S. Department of Commerce and other federal government agencies.
- Handled CBP civil penalty cases in multiple ports from prior counsel and represented U.S. subsidiary of Chinese manufacturer in U.S. Court of International Trade proceedings to enforce gross negligence penalty assessed for alleged potential loss of revenue regarding antidumping duties.
- Represented Ohio manufacturer in CBP Port of Miami antidumping/countervailing duty investigation and administrative penalty proceedings stemming from erroneous advice from former customs brokers, in which total duties and penalties exceeded $3 million. Initiated and favorably settled federal court litigation brought against logistics provider and former customs brokers in Miami. Requested Administrative Review in countervailing duties proceedings before the U.S. Commerce Department, leading to a duty savings of over $700,000 and reduction of potential penalty. Prepared responses to initial Pre-Penalty Notice and multiple amended notices, and twice appeared at CBP Miami for oral presentations, including requesting a penalty waiver under the Small Business Regulatory Enforcement Fairness Act (SBREFA). Obtained complete waiver of proposed $1.08 million penalty.
- Represented U.S. subsidiary of major Chinese automotive supplier in aluminum extrusions antidumping/countervailing duty audit by CBP Port of Detroit. Advised on, and represented client in submission of, $2.5 million prior disclosure regarding undervaluation of vehicle interior parts imported from China, including prior disclosure audit performed by CBP Office of Regulatory Audit.
- Represented privately held Ohio company in U.S. Immigration and Customs Enforcement (ICE) criminal investigation of valuation and classification of imported goods from China and Korea, initiated in 2009, and successfully showed lack of criminal liability. Continued representation of company and owners in civil investigation by ICE and CBP Cleveland and, in defense of $1.3 million fraud civil penalty proceedings, prepared response, petition for relief and supplemental petition for relief resulting in penalty reduction of nearly $800,000. Continuing to represent clients in settlement negotiations with CBP.
- Represented Buffalo-based medical device manufacturer in high-value prior disclosure to CBP Laredo regarding misclassification, undervaluation and incorrect claims for preferential tariff treatment under NAFTA regarding imported products from wholly-owned Mexican maquiladora. Responded to various CBP Laredo Requests for Information regarding classification and NAFTA claims. Submitted NAFTA 520(d) duty refund to CBP Laredo and obtained six-figure refund.
- Advised Buffalo-based global leader in the development, manufacture and distribution of imaging and marking consumables on customs and international trade matters, including representation before CBP on Requests for Information and NAFTA Verification, as well as before the Canada Border Services Agency (CBSA) in classification verification proceedings.
- Defended Canadian figure skating apparel manufacturer in six-figure civil penalty proceedings handled by CBP Penalties Branch (Washington, DC), which arose from alleged false NAFTA claims, including requesting a penalty waiver under SBREFA and support from Canada’s Minister of International Trade regarding CBP’s rejection of retroactive Tariff Preference Level (TPL) Certificates of Eligibility for duty-free treatment.
- Successfully responded to CBP Laredo Request for Information regarding tariff classification of antilock brake system component and challenged CBP’s reclassification of the component as a valve and determination that the item was not eligible for duty-free treatment under NAFTA, including submission of extensive legal arguments based on court decisions and CBP Rulings. Obtained favorable classification decision resulting in projected annual duty savings of approximately $1 million.
- Advised Canadian Non-Resident Importer of industrial conveyor belts from South Africa and India regarding tariff classification, including filing protests against reclassification of imported merchandise by CBP Charlotte, Charleston and St. Louis, supported by independent laboratory reports and submission of extensive legal argument based on court decisions and CBP Rulings. Obtained favorable rulings and duty refunds on certain protests.
- Filed protests with CBP Atlanta and Charleston on behalf of Ohio specialty apparel manufacturer challenging CBP’s classification determinations regarding cleanroom garments. Analyzed Morocco Free Trade Agreement (MAFTA) TPL program and advised company on strategy to import goods from Morocco as duty-free under TPL program. Successfully responded to MAFTA Verification from CBP JFK, secured classification determination supportive of protests, and confirmed duty-free treatment of goods. With Mexican counsel, analyzed NAFTA rules of origin and advised Belgian parent company on formation of joint venture in Mexico.
- For Cleveland-area small business, responded to Proposed Notice of Action from CBP Cleveland regarding reclassification of crystal scintillation detectors imported from Ukraine. Obtained favorable classification determination resulting in avoidance of potential increase in duties of over $200,000 annually.
- Successfully represented family-owned Ohio marble and granite importing company before CBP Cleveland in administrative proceedings to collect underpaid duties and penalty, achieving 75 percent reduction of penalty amount. Negotiated offer in compromise with CBP to resolve case for less than reduced penalty amount.
- Representation of Buffalo-area health care company in six-figure prior disclosure to CBP Anchorage regarding supplier’s undervaluation of imported goods.
- Representation of Chicago industrial products supplier in six-figure prior disclosure to CBP Chicago regarding misclassification and undervaluation of imported goods.
- Representation of Cleveland consumer products company in six-figure prior disclosure to CBP Seattle regarding misclassification and undervaluation of imported goods.
- Advised Canadian company on importation of e-cigarettes to U.S. market on Food and Drug Administration and CBP regulations, recordation with CBP of U.S. trademark, as well as assisted customs broker on classification and importation strategy.
- Advised Chicago family-owned company on Canadian operation start-up planning and market strategy in response to U.S. antidumping duty order.
- Counseled multinational manufacturing company on scope of antidumping duty order and prepared memorandum advising imported products from China were outside scope of order to support position with customs broker and CBP.
- Advised Ohio aerospace manufacturer on temporary import of defense articles from Canada subject to the International Traffic in Arms Regulations (ITAR) to ensure compliance. Issued opinion letter to company regarding applicability of ITAR Brokering requirements to foreign representatives and compliance with same, relied on by suitor company during due diligence.
- Counseled Ukrainian silicon wafer manufacturer on potential U.S. antitrust violation by New York equipment manufacturer for refusal to sell upgraded equipment.
- Advised New York subsidiary of publicly traded company to assess potential voluntary disclosure strategy for foreign representative’s sale to sanctioned country.
- Advised U.S. subsidiary of Korean pharmaceutical company on Bureau of Alcohol, Tobacco, Firearms and Explosives, Federal Trade Commission, and U.S. Customs regulatory compliance relating to importation and distribution of nicotine-free cigarette product and dietary supplement products.
- Advised Ohio medical training device manufacturer on regulatory compliance with Australian Therapeutic Goods Act in connection with sale of products to leading Australian medical university. Counseled company on evaluating prospective distributors and commercial agents to sell products in Malaysia and Turkey, as well as advising on potential global master distributorship agreement strategy with leading UK company. Advised company on proper Schedule B/HS Number for export of products.
On an ongoing basis, we assist with:
- Providing advice to privately-held Ohio oil/gas sector company on “Made in USA” marking requirements and foreign marking requirements.
- Providing advice to industry-leading charitable gaming manufacturer and Canadian, UK and Mexican subsidiaries on import-export matters, including NAFTA regulations and qualification, country of origin marking, classification, and duty rates.
Phillips Lytle is proud to be a recipient of the 2018 President’s “E” Award for Export Service.
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