Federal Circuit - Revocation of ruling letter failed to comply with notice, comment procedures 

April 14:  The U.S. Court of Appeals for the Federal Circuit today affirmed a decision of the Court of International Trade regarding the classification of “white sauce imports” under the Harmonized Tariff Schedule of the United States (HTSUS). The Federal Circuit agreed that a “notice of action” failed to comply with the statutory notice and comment procedures prior to the government’s revocation of a ruling letter that had originally established the HTSUS classification of the imported white sauce. International Custom Products, Inc. v. United States, 2013-1176 (Fed. Cir. April 14, 2014)

Read text of the Federal Circuit’s decision [PDF 120 KB]

Summary

U.S. Customs and Border Protection (CBP) in 1999 issued a ruling letter that originally classified the subject white sauce imports under HTSUS 2013.90.9060.


Some six years later, in 2005, CBP reclassified the white sauce as “butter and … dairy spreads” under HTSUS 0450.20.3000. This reclassification increased the tariff by approximately 2400%.


The importer filed an action with the trade court, alleging that the ruling letter had been improperly revoked by CBP because the agency had not followed statutory notice and comment procedures. The trade court granted the importer’s requested relief and ordered CBP to re-liquidate the merchandise under the HTSUS heading as used in the ruling letter.


On appeal by the government, the Federal Circuit today affirmed, and concluded that the trade court had correctly determined that CBP’s revocation of the 1999 ruling letter had been made without the necessary statutory procedures having been followed.



For more information, contact a professional with KPMG’s Trade & Customs practice:


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