In a customs classification case, Chemtall, Inc. v. United States, the U.S. Court of Appeals for the Federal Circuit affirmed a U.S. Court of International Trade (“CIT”) ruling that the vinyl polymer acrylamide tertiary butyl sulfonic acid was properly classified under the Harmonized Tariff Schedule of the United States (“HTSUS”).
The Federal Circuit was called on to distinguish between “Amides” and “Other” in a heading of the HTSUS that covers amides, their derivatives and salts thereof. The case considered the appropriate duty rate for the product that Chemtall, Inc. (“Chemtall”) is importing.
The HTSUS is a hierarchical structure for describing all goods in trade for duty, quota, and statistical purposes. Goods are classified in accordance with the General and Additional U.S. Rules of Interpretation, starting at the 4-digit heading level to find the most specific provision and then moving to the subordinate categories. The United States International Trade Commission maintains and publishes the HTSUS. However, the Bureau of Customs and Border Protection of the Department of Homeland Security (“CBP”) is responsible for interpreting and enforcing the HTSUS.
The Federal Circuit affirmed the CIT determination that the chemical product of the plaintiff-appellant Chemtall, acrylamide tertiary butyl sulfonic acid, is not an amide, but rather is a derivative of an amide.
The significance of this categorization is that derivatives of amides are subject to a higher duty rate, which is almost double that of amide imports. The categorization that Chemtall argued applied carries a 3.7% duty rate. However, the federal judge affirmed the decision of the CBP to apply the higher 6.5% duty rate for the product.
The full opinion of Chemtall, Inc. v. United States, case number 2016-2380, in the U.S. Court of Appeals for the Federal Circuit can be found here.