Issue 310, August 2, 2001
The Customs Service has proposed to overhaul its regulations covering administrative rulings (July 17th Federal Register). Several of the changes are meant to bring the regulations into conformity with Mod Act requirements, but Customs is making other changes at the same time.

A significant change would be the establishment of a formal administrative appeal procedure for an importer dissatisfied with an adverse ruling or internal advice decision. An importer would be limited to only "two bites at the apple," and could not seek repeated advice from Customs on the same transaction or circumstances. An even more significant change is that parties other than the party that requested the ruling would be entitled to rely on it.

New procedures are also proposed to cover the revocation or modification of rulings. Significantly, where a revocation or modification is made to a ruling that has been in effect for longer than 60 days, importers could choose the effective date that would apply to them (either immediately or after a 60-day period following publication of the final modifying or revoking notice), depending on whether the change would benefit them or not.

The proposed regulations expand the subject matters that prospective rulings may cover, with express provisions covering ruling requests on tariff classification, country of origin and marking, valuation, entry procedures, Customs brokers, drawback, duty-deferral programs, transportation and conveyances, and intellectual property rights. Specific information that must be included in a ruling request on each of these issues is included.

Several novel proposals are included in the draft regulations. One such proposal is that Customs may issue rulings on its own initiative, and not only when requested by a private party. Another proposal is that Customs may issue a ruling on a matter even though the party requesting the ruling has withdrawn the request. Still, another proposal would oblige an importer to inform Customs, as part of the reasonable care requirement, when two or more ports are treating the same merchandise differently.

The proposed regulations are filled with subtle changes to existing Part 177 of the Customs Regulations. Eight years in the making, the proposed regulations should be reviewed very carefully because they now contain concepts that could be adverse to importers. Customs seeks comments on these proposed regulations by September 17, 2001.

Our contributing writers, Richard H. Abbey and Sarah M. Nappi work for Miller & Chevalier Chartered in Washington D.C. and can be reached at 202-626-5901 or rabbey@milchev.com and snappi@milchev.com respectively.

Please note that due to the complex nature of the subject matter, Danzas AEI cannot be responsible for actions taken by the reader in reliance on the information contained herein without prior consultation with Danzas AEI.