CIT Rules on Value Allowance, Export Permits
Value allowance regarding warranty expenses, port repair expenses. In Saab Cars USA, Inc. v. U.S., the Court of International Trade (CIT) ruled that, with respect to imported automobiles, most of Saab's claims for an allowance in value for warranty expenses were not adequately supported. However, the CIT did conclude that Saab should be granted an allowance in value for its port repair expenses.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
With regard to most of the claimed warranty expenses, the CIT found that Saab's submitted documentation was not detailed enough for anyone to ascertain whether the alleged defects existed at the time of importation. For most of its entries, Saab did not indicate how the component was defective or what type of repair was performed. For example, one claim number's defect description was merely "upholstery." The CIT did find Saab was entitled to an undisclosed allowance for three warranty expenses that were submitted with more specific documentation.
In considering Saab's claim for an allowance for port repair expenses, the CIT found that Saab was entitled to an allowance. The CIT states that given these repairs were performed almost immediately after importation, it is not concerned, as it was with Saab's warranty expenses, that the repairs might have been made to remedy damage resulting from intervening circumstances. (See ITT's Online Archives or 09/05/03 news, 03090525.) (Slip Op. 04-3, decided 01/06/04, available at http://www.cit.uscourts.gov/slip_op/Slip_op04/slip%2004-3.pdf)
Canadian export permits for softwood lumber. In Vanderhoof Specialty Wood Products, Inc. v. U.S., the CIT ruled in favor of Customs by dismissing the case. Vanderhoof, a "re-manufacturer" of value-added softwood lumber products in Canada, entered certain handrails under HTS 4409.10.45, as NAFTA-originating and duty-free. However, CBP liquidated the handrails under HTS 4407.10.00, as NAFTA-originating and duty-free, which required Vanderhoof to present Canadian export permits, as mandated by the U.S.-Canada Softwood Lumber Agreement (Agreement). Vanderhoof argued that it suffered injury due to the surrender of these "valuable" export permits.
The CIT dismissed the case because the encumbrance on Vanderhoof's entries was extinguished upon presenting Customs with the required export permits, and the return of such permits cannot meaningfully redress any economic or legal injury, as Vanderhoof had not established what, if any, value such permits possess. The CIT noted that Vanderhoof would be precluded from using such permits today, as the Agreement expired in 2001. (Slip Op. 04-23, dated 03/11/04, available at http://www.cit.uscourts.gov/slip_op/Slip_op04/Slip%20Op.%20Number%2004-23.pdf)