Customs Law Advisory - US Court Confirms Import Classification Is Governed by Tariff Language, Even If Seemingly Contrary To Importer’s Use

US Court Confirms Import Classification Is Governed by Tariff Language, Even If Seemingly Contrary To Importer’s Use
A decision last month by the United States Court of International Trade (“CIT”) serves as a useful reminder to importers that the literal language of terms in the Harmonized Tariff Schedule of the United States (“HTSUS”) governs the classification of imported merchandise, even if the result seems contrary to normal commercial use.  In Reser’s Fine Foods v. United States, the CIT found that, despite evidence that no consumer would consume certain artichoke hearts in their condition as imported, the language of a seemingly contrary HTSUS provision nonetheless controlled the classification.  The CIT’s decision contains an excellent review of basic classification principles that every importer should keep in mind.

Reser’s imported artichoke hearts were packed in cans with a preservative solution of water, acetic acid, salt and citric acid.  After importation, Reser’s rinsed away the preservative solution, mixed in other ingredients and put the mixture in jars for sale as marinated artichoke salad.  Reser’s argued that classification should be in heading 0711, HTSUS as “Vegetables provisionally preserved (for example, by sulfur dioxide gas, in brine, in sulfur water or in other preservative solutions), but unsuitable in that state for immediate consumption” because the imported artichoke hearts had a “disagreeable taste” and could not be immediately consumed without being rinsed.  Heading 0711 carried a tariff rate of 9.1 percent.  US Customs and Border Protection (“Customs”) did not dispute that the artichokes as imported had a disagreeable taste and required rinsing.  Instead, Customs relied on the fact that similar artichoke hearts sold at retail also required rinsing before consumption and, thus, were nonetheless suitable for use by the consumer.  Consequently, Customs argued that the correct HTSUS classification was in heading 2005, as “Other vegetables prepared or preserved otherwise than by vinegar or acetic acid, not frozen,” with a tariff rate of 15.8 percent.

The CIT explained that the starting point for all classification is “the terms of the headings and any relative section or chapter notes. . . .”  However, the Court explained that when a term or phrase in the tariff headings is not defined in the HTSUS or legislative history, then “the term’s correct meaning is its common meaning.”  Moreover, to understand common meaning, the court “may rely upon its own understanding, dictionaries and other reliable sources.”  The CIT referred to the dictionary definition of “suitable” and found it to mean “adapted to” or “fit for” a purpose.  The Court upheld Customs’ classification on the ground that since the imported artichokes were edible, then just because “the artichokes might not be pleasant to eat prior to rinsing does not render them unfit for immediate consumption as that phrase is commonly understood.”

US Customs law places the responsibility for proper classification on the importer of record, not the customs broker or any supplier.  The CIT’s analysis in this case demonstrates that the importer should carefully review the language of each of its declared HTSUS headings, as well as the language of alternative classifications for possible application.  If you have any questions regarding classification of imported merchandise, please contact Greg McCue at (202) 429-6421.