CAFC Affirms That "Virola" Is Not a Commercial Designation in the Plywood Trade
In Timber Products Co., v. U.S., the Court of Appeals for the Federal Circuit affirmed the Court of International Trade's decision to sustain Customs' classification of plywood panels imported by Timber Products from Brazil under HTS subheading 4412.14.30 ruling that "Virola" is not a commercial designation in the plywood trade.
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Timber imported plywood panels from Brazil invoiced as consisting of various tropical hardwood species, which Customs had classified under HTS 4412.1430 (1997, 8%), a provision that covers "other plywood with at least one outer ply of non-coniferous wood."
Timber claimed that their plywood was more properly classified under subheading 4412.13.40 (1997, GSP duty-free), which provides for, among other things, "other plywood with at least one outer ply of virola."
Plywood is constructed from three or more wood sheets pressed together, with one outer ply called the "face" ply. The other outer ply is called the "backing", and the middle ply or plies comprise the "core." Plywood is identified based on the species on its "face" ply. However, due to the particular nature of the manufacturing and exporting processes in Brazil, in which various species of wood are first mixed together and then sorted by quality rather than species, the exact botanical identity of the "face" ply of Timber's imported plywood could not be accurately identified on the entry documents.
Timber sought to establish a commercial designation for "Virola" that was broader than the common meaning. Timber argued that there was an established commercial designation in the wholesale plywood industry for the term "Virola" that extended beyond the botanical genus "Virola" to encompass various types of wood, including the types of wood listed on its invoice.
The CAFC ruled that Timber was unable to establish a commercial designation for "Virola" that was the same throughout the plywood trade. In addition, the CAFC noted that witnesses could not agree, offering a range of five to thirty-five different species, identified as included in purported commercial designation. Based on these discrepancies, the CAFC agreed that the CIT had correctly determined that Timber had failed to establish a commercial designation for "Virola".
The CAFC affirmed the CIT's decision to sustain Customs' classification.
(See ITT's Online Archives or 06/18/04, and 12/28/06 news, 04061835 and 06122830, for BP summaries of the CIT's Initial classification decision and on remand, the CIT's determination that "Virola Plywood" is not a commercial designation in the U.S. plywood industry.
See ITT's Online Archives or 04/03/06 news, 06040330, for BP summaries of the CAFC remand to the CIT to determine whether Timber could establish a commercial designation for "Virola Plywood" in the U.S. plywood industry.)
CAFC decision 07-1136 (dated 01/24/08) available at http://www.cafc.uscourts.gov/opinions/07-1136.pdf