Newly Released CBP HQ Rulings for April 12
The Customs Rulings Online Search System (CROSS) was updated April 12 with the following headquarters rulings (ruling revocations and modifications will be detailed elsewhere in a separate article as they are announced in the Customs Bulletin):
H312047: Application for Further Review of Protest No. 1303-20-102061; Tariff classification of men’s and boys’ garments
| Ruling: The tops are classified in subheading 6205.30.20, which provides for “Men’s or boys’ shirts: Of man-made fibers: Other: Other.” The bottoms are classified in subheading 6203.43.90, HTSUS, which provides for “Men’s or boys’ suits, ensembles, suit-type jackets, blazers, trousers, bib and brace overalls, breeches and shorts (other than swimwear): Trousers, bib and brace overalls, breeches and shorts: Of synthetic fibers: Other: Other: Other: Other: Other: Other.” |
| Issue: What is the tariff classification of the men’s and boys’ garments at issue? |
| Item: Men’s and boys’ tops and bottoms made of 65% polyester and 35% cotton woven fabric, described as “pajama tops” and “pajama bottoms.” The tops and bottoms are not imported as sets, but rather as separate bulk orders in unequal quantities, and come in various colors. The tops feature a v-styled neckline, a full front opening with three left-over-right snap closures, long hemmed sleeves, a patch pocket on the left chest, and a straight hemmed bottom. The bottoms are pull-on style and feature an elastic waistband, no open fly, and hemmed leg openings. The imported garments are sold to the wholesaler and sole customer of Protestant’s and are then resold to a cooperative association that provides laundry and linen services to hospitals in the greater Rochester, New York area. The garments are made to certain specifications and are solely used for patients in hospitals. |
| Reason: Sleepwear is characterized by a sense of privateness or private activity. There is nothing private about the design or style of these tops and bottoms or nothing that would indicate that they would only be worn for sleeping and around close family and friends at the hospital. In addition, the garments at issue here are not light-weight, sheer, or revealing to indicate that the garments would only be worn for sleeping, in private, or at home around friends and family. With respect to the bottoms in this case, CBP notes that a lack of a fly is normally suggestive of modesty, which is a feature useful for loungewear. The merchandise is designed for exclusive use by patients while staying in the hospital. Although the subject garments may be worn inside for social activity, it is CBP's view that any use, other than use during a hospital stay while recuperating, would be a fugitive use. |
| Ruling Date: Jan. 31, 2022 |
H318630: Protest and Application for Further Review; National Air Cargo Group, Inc.; 19 U.S.C. § 58c; 19 CFR § 24.22; Airline Passenger User Fee Audit
| Ruling: (1) CBP has the legal authority to collect Customs User Fees from National Airlines for the “full capacity load” of flights conducted as part of the CRAF program. (2) CBP did not have the authority to collect Customs User Fees from National Airlines in relation to the Primera and Fly Jamaica flights. |
| Issue: (1) Whether CBP has the legal authority to collect Customs User Fees from National Airlines for the “full capacity load” of flights conducted as part of the CRAF program. (2) Whether CBP has the authority to collect Customs User Fees from National Airlines in relation to the Primera and Fly Jamaica flights. |
| Item: N/A |
| Reason: (1) After a CUF is collected but before it is remitted to the government, it is CBP’s position that such a fee is held in constructive trust until the fee is remitted to CBP or refunded to the customer. CBP’s position that CUFs collected by air carriers from ticket purchasers are held in constructive trust is borne out by applicable case law. For CRAF flights, National Airlines collected CUFs in an amount equal to the “full capacity load” of its aircraft but only seeks to remit to CBP only those fees that relate to passengers “actually carried” on those flights. All CUFs collected are to be held in constructive trust until the funds are either remitted or refunded. All CUFs collected by National Airlines in relation to the subject CRAF flights that have not been refunded must be remitted to CBP. (2) National Airlines’ contract with Primera and Fly Jamaica stated that these airlines were responsible for collecting and remitting to CBP such fees. There is no indication that Primera or Fly Jamaica remitted the relevant CUFs to National Airlines for payment to CBP. Because National Airlines did not issue the tickets or travel documents for these flights, and because Primera or Fly Jamaica did not remit the CUFs to National Airlines, CBP did not have authority to seek remission of the subject CUFs from National Airlines. |
| Ruling Date: Aug. 25, 2021 |
H315191: Protest and Application for Further Review; Southwest Airlines Co.; 19 U.S.C. § 58c; 19 CFR § 24.22; Airline Passenger User Fee Audit
| Ruling: To the extent Southwest collected CUFs on cancelled tickets, those fees are held in constructive trust for CBP and should be remitted without credit unless refunded to the customer. |
| Issue: Whether CBP has the legal authority to collect Customs User Fees from Southwest in instances in which an RTF expires and Southwest retains as revenue the entire value of the initial ticket, including the amount assessed as a user fee. |
| Item: N/A |
| Reason: Southwest argues that the issuance of an RTF that eventually expires constitutes a sufficient refund of the CUFs for the airline to take a credit on a future remittance.Southwest did not overpay CBP because, pursuant to 19 U.S.C. § 58c(d)(3), Southwest owes “those fees” that it collects from ticket sales. Commercial airline passenger user fees are imposed on the passenger and not the carrier. Thus, any CUF not returned to the passenger is still collected from the perspective of the party responsible for the party paying the fees. |
| Ruling Date: Aug. 11, 2021 |