US, Importer Avoid 'Phase 2' Trial in Customs Spat on Reimported Swimsuits
The U.S. and importer SGS Sports submitted a stipulation of facts and joint motion for the entry of a judgment in a customs case on the classification of reimported swimsuits, avoiding a bench trial over whether the swimsuits qualify for Harmonized Tariff Schedule subheading 9801.00.20 as U.S. goods returned (SGS Sports v. United States, CIT # 18-00128).
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SGS Sports entered the swimsuits under this subheading after first shipping them to Canada for warehousing at related firm Canada 147483's warehouse. CBP initially rejected the classification in 2018, finding that SGS and the warehouse operator were actually the same entity under the same ownership and couldn't have executed any "agreement" as required by the subheading.
The trade court first resolved phase one of the case, in which Judge Jennifer Choe-Groves ruled on whether a warehousing agreement between two related companies was valid under Canadian corporate law since the companies were allegedly the same entity. The judge said the companies are different and so the warehousing agreement amounts to a lease or similar use agreement (see 2302170060).
This judgment sent the case to phase two, in which the court was to rule on whether the goods were previously imported into the U.S., whether the duties were paid on the goods and whether the goods were not advanced in value or improved in condition when outside the U.S. Both parties met and agreed that the imports were previously entered into the U.S., the importer paid all applicable duties, the goods weren't advanced in value outside the U.S. and the imports were "reimported by or for the account of the person who imported it into" the U.S.
The U.S. said the judgment from the court that will resolve the case "does not waive or in any way prejudice the Government's ability to appeal any findings of fact or conclusions of law" in the case.