The first two articles in this series are “Brief Analysis of R.J. Reynolds “337 Investigation” One: Accusing E-cigarette Companies of False Advertising and Promotion” “Brief Analysis of R.J. Reynolds”337 Investigation” Two: Accusing E-cigarette Companies of Violating the PACT Act” on this “337 Investigation” “The two causes of action for false advertising and publicity and violation of the PACT Act are respectively interpreted. This article will discuss the causes of action against the defendants accused by Renault for violating the Customs Act.
1. R.J. Reynolds accusation of violating customs laws
R.J. Reynolds alleged that the defendants violated customs laws applicable to imported goods by using incorrect Harmonized Tariff Schedule (HTS) codes to evade customs duties and misclassifying the disposable e-cigarettes it imported to evade customs inspections. In the application, R.J. Reynolds clearly pointed out the import date, shipper, incorrect HTS coding, and incorrect classification of the brand of e-cigarettes it alleged.
The allegation is directly related to the FDA’s warning letter and import alert. R.J. Reynolds believes that related products cannot be sold in the United States due to warning letters and import alerts, and it is difficult to enter the United States. The only reason for entry is false statements during customs clearance.
2. Customs Law
R.J. Reynolds claims that the defendants violated the following provisions of the U.S. Customs Act:
(1) 19 U.S.C. §1484(a)(1)(B), the importer shall use reasonable care to complete the import activity summary form, including submitting the declared value, classification and applicable tax rate of the goods to Customs. (Importer of record … shall, using reasonable care, complete the entry … on an import activity summary statement, by filing with the Customs Service the declared value, classification and rate of duty applicable to the merchandise …)
(2) 19 U.S.C. §1485(a)(3), the importer who makes a declaration under Section 1484 shall make and submit a sworn statement stating that the statements in the declaration and other documents submitted therewith are true and correct. (Every importer of record making an entry under the provisions of section 1484 shall make and file or transmit electronically … a declaration under oath, stating that all other statements in the invoice or other documents filed with the entry, or in the entry itself , are true and correct.)
(3) 19 U.S.C. §1505(a), the importer shall deposit the estimated duties and charges payable to Customs at the time of import. (The importer of record shall deposit with the Custom Service at the time of entry … the amount of duties and fees estimated to be payable on such merchandise.)
(4) 19 U.S.C. §1592(a)(1)(A), no person shall enter, introduce, or attempt to enter or introduce into commerce any merchandise into the commerce of the United States by fraud, gross negligence, or negligence. (No person, by fraud, gross negligence, or negligence may enter, introduce, or attempt to enter or introduce any merchandise into the commerce of the U.S.)
3. A brief analysis of the accusation that R.J. Reynolds violated customs laws
Regarding the incorrect declaration of product classification and tax rate, R.J. Reynolds clearly pointed out in the application the import date, shipper, wrong HTS code, and wrong classification of the brand of e-cigarettes it accused; without reliable evidence, Renault would not file this complaint. In addition, importing goods into the United States in violation of the law may constitute a crime of smuggling, with a maximum prison term of 20 years (18 U.S.C. §545), and the person in charge of the enterprise shall be held accountable.
If the foundry is not responsible for the transportation and import customs clearance of the goods (for example, its delivery terms are FOB), its responsibility may be smaller; and for the brand, it is difficult to say that it does not know the flow of the goods. In addition, according to R.J. Reynolds According to the description in the application, it seems that it has detailed import customs declaration information, so the difficulty of the brand’s defense in this link will be higher than that of the OEM.
Since the accusation of violating customs laws is based on the FDA’s warning letter and import alert (withhold first and then inspect), logically, the warning letter and import alert should be lodged with the FDA first. After the relevant import alert is removed, the “337 investigation” will be followed up. The accusation is naturally difficult to establish.
Conclusion
At present, most of the e-cigarettes in the U.S. e-cigarette market are Chinese-brand e-cigarettes. R.J. Reynolds has filed a “337 investigation” application against Chinese e-cigarette companies. This move is intended to restrict the import of Chinese e-cigarettes and monopolize the U.S. e-cigarette industry. Therefore, if the ITC decides to accept the case, Chinese e-cigarette companies should overcome their fear of difficulties, actively respond, integrate industry resources, and unite to fight, so as to maintain the competitive advantage of Chinese e-cigarette companies in the world.
