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Court Finds CBP Rulings, Guidance on Imports of Secondhand Clothing Erroneous

Friday, May 22, 2020
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has been erroneously applying HTSUS heading 6309 concerning worn clothing, the Court of International Trade ruled in a recent decision, including in rulings issued in 1998 and 2006 and guidance issued in 2014.

This case involves the proper classification of secondhand clothing imported in bales of 100 pounds or 1,000 pounds. The plaintiff entered the goods as worn clothing under HTSUS 6309.00.0010 (duty-free) but CBP determined they were commingled goods and thus subject to the highest duty rate of any one of the samples, which led to their classification under HTSUS 6204.63.3510 (28.6 percent duty).

The CIT’s decision centers on the requirement in HTSUS Chapter Note 3 that clothing must show signs of appreciable wear to be classified under heading 6309. Noting that this term is not defined in the HTSUS and has not been defined by the CIT, the court determined that “appreciable wear” constitutes noticeable damage or impairment caused by use.

By contrast, in ruling HQ 960577 (issued in 1998) CBP held as follows: “In essence, appreciable wear is descriptive of a garment or other article whose appearance has noticeably changed from its original/new/unused stage. This change in appearance must be the result of the various naturally occurring stages to which a fabric succumbs as a result of continuous use.” This ruling has been applied by subsequent rulings (including HQ 967718, HQ 967814, and HQ 968010) and guidance issued in 2014 stating, among other things, that “the assumption is that clothing imported under [heading 6309] will most likely be used as rags or other non-apparel purpose.”

Concluding that CBP “has been erroneously applying Heading 6309 for at least 22 years,” including in these rulings and guidance, the CIT has remanded this case to CBP to (1) examine and apply heading 6309 and Chapter Note 3 to the samples of subject goods to determine their appropriate classification and (2) if it determines that the subject goods are commingled goods, apply the highest duty rate for any one of the samples to the subject goods.

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