Wednesday, January 28, 2015

Celebrity-Worn Haute Couture Dresses Can’t Avoid Customs Duties

US Customs recently decided that no specialty provisions existed to avoid the payment of customs duties, or severely reduce them, on haute couture garments imported by Christian Dior Couture® (CDC).  

According to US Customs, a determination was sought acknowledging that the garments could either qualify

(a) for duty free treatment enter under an A.T.A. carnet as samples

(b) under a Temporary Importation Bond (TIB) as articles not for sale or sale on approval to be repaired, altered or processed, or

(c) for unused merchandise drawback.

Each of these types of treatment would have resulted in preferred duty treatment.

The facts presented with respect to the use of the garments were as follows:

“Christian Dior Couture imports haute couture garments so that they may be furnished to celebrities at no cost to wear at high-profile events, such as the Academy Awards ceremony. The garments serve an important form of advertising for the company because they allow the company to increase its brand awareness and showcase the latest fashions and increase sales.  Once entered into the United States, each piece is fitted to the particular person wearing the haute couture piece so that it may properly display the intended design. Such fittings include hemming, shortening, and/or otherwise altering for the measurements of the person displaying the piece. Only one of each piece will be imported. After exhibition at the event for which the piece was imported, the piece is returned to the company’s U.S. office, and shipped back to the company’s office in Paris, France. During this time, the company does not sell the garments, but retains ownership. The haute couture pieces generally spend no more than a week in the United States.”[1]
Despite these details, Customs claimed that while it did meet the test of being for purposes of soliciting orders, it also served to provide a celebrity with a garment to use to a high-profile event, which is precisely the environment that they are meant to be worn in and in the manner intended.  These therefore, constituted a normal use of the garment, and when you factored in the reality that there was no intention of soliciting orders for the item while being worn, the haute couture did not qualify for entry under an A.T.A. Carnet.

As for qualifying under a TIB, CDC needed the garments to qualify as articles being repaired, altered or processed here in the US and for which would be exported within 1 year from the date of importation.  From CDC’s description of the use of the garments however, it was clear to Customs that the main purpose for importation was something other than for an alteration, repair or processing, and for this reason, it didn’t qualify under a TIB.

Regarding drawback, to qualify for this the garments needed to be exported in the same condition as imported within 3 years from the date of importation, having not been used in the US.  Customs reasoned however, that since the pieces of haute couture were furnished to celebrities for use at a high profile event, that the garments were in fact “used,” and therefore not eligible for duty drawback either.  This is because Customs description of “use” turns on the article being “employed for the purpose for which it was built, which in this case, include[d] celebrities wearing and exhibiting the haute couture pieces at events.” [2]

While there is a special provision does allow women’s wearing apparel to enter duty free for purposes of soliciting orders, it cannot be removed from the importer's establishment for reproducing, copying, painting, sketching, or for any other use by others, nor be used in the importer's establishment for such purposes except by the importer or his employees.

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[1] Customs ruling HQ H251771, 12/16/2014.
[2] Id. Citing HQ h240038 (6/16/14).

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Monday, January 5, 2015

Eco-Fashion in 2015

Want to know what's on the horizon in 2015 for ECO-FASHION?

Our Deanna together with many of the leading thought makers on sustainable fashion contributed to Ecouterre's 2015 Eco-Fashion Predictions. You can check out the article here: 

Happy reading!

Tuesday, December 30, 2014

Our Fashion Protection Webinar Voted a Top 25 Resource in 2015 by SCORE

Our “Fashion Protection: Trademark Basics and Fashion Compliance” webinar was voted as one of the Top 25 Resources in 2014 by the U.S. Small Business Association’s “SCORE” program! 

  In case you missed it, you can access it here at no charge:  

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Monday, December 22, 2014

Registration Open for 2015 Africa Trade Conference

Next Fall will be the Trade Winds Business Development Conference in South Africa from Sept. 16 -18, 2015

Leading up to this event, there will be an eight-part webinar series to prepare participating U.S. companies for a more successful experience during the upcoming Trade Winds - Africa Trade Mission.

As explained on the U.S. Commercial Services website, U.S. trade to and from Africa has tripled over the past decade and U.S. exports to Sub-Saharan Africa now top $21 billion.  Africa is home to 7 out of the 10 fastest-growing markets in the world.

The International Monetary Fund projects Sub-Saharan Africa to grow between 5 and 6 percent each year over the next two years.

Whether your company is new to this region or is looking to tap into new markets, this is the ideal launching point for expansion throughout the region.  The conference portion will be hosted in South Africa, during which time you can:

·  Participate in a focused business development conference, highlighting opportunities and challenges in this extremely dynamic region

·  Attend high-visibility business networking events with leading industry and government officials

·  Meet one-on-one with top African business experts from the U.S. Embassies and Consulates from the region for the latest trade leads and market entry strategies 

·  Find a partner or customer through screened business-to-business meetings in Angola, Ghana, Mozambique, South Africa, Ethiopia, Kenya, Nigeria, and Tanzania

In addition, you can increase your benefit by adding one or more additional participating countries to your itinerary.  With increasing efforts by ACTIF and other textile partners, this is a conference the fashion industry may well want to attend.  To learn more about it, click on the links above.

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Friday, December 12, 2014

Ambassador Froman’s Updates on TPP, T-TIP and Support for Greater US Exports

Last week I was privy to a discussion with the U.S. Trade Representative Michael Froman on international trade and in particular, the state of two trade agreements currently being negotiated, namely the Trans-Pacific Partnership (“TPP”) and the Trans Atlantic Trade Partnership (“T-TIP”).

 More info. on TPP can be found at
More info. on T-TIP can be found at

Whether you like it or not, negotiations continue to advance on both the T-TIP and TTP as the government’s position steadfastly remains that through trade agreements, foreign markets are opened up allowing for increased sales of US products. 

As described by Ambassador Froman, only 1% of small and medium sized businesses throughout the nation export.  The government wants to streamline procedures to enable them to engage in greater export sales, including via e-commerce, since over 90% of exporters are small and medium sized businesses, out of about a total of 300,000 exporting companies. 
Export related jobs pay 13% to 18% more than non-export jobs.
In addition to export increases, other benefits cited include an ability to create “rules of the road” on things we (in the United States) care about, including environmental and intellectual property protections, as well as “leveling the playing field” with respect to worker’s rights.

Ambassador Froman further highlighted the benefits of the “InformationTechnology Agreement” expansion talks which had been postponed for a year but apparently will support 60,000 new U.S. jobs, in addition to the new "Trade Facilitation Agreement" between India and the US, which will reduce the costs of trade and other procedures by 10% for developing countries and 14% for developed ones.

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Wednesday, November 26, 2014

Ever Wonder How USPS Handles Exports and Imports?

I had the pleasure of seeing first hand how the US Postal Service (USPS) handles imports and exports by air in to and out of its Kennedy (JFK) airport location in Jamaica, New York during a recent tour I took there.

Regarding imports, USPS receives about 400 air containers per day from all over the world.  It has an International Mail Agreement which standardizes by code mail equivalents worldwide and streamlines the processing of incoming mail.  Mail passes under an infrared scanner that verifies receipt of the packages into the US mail system and reconciles payments at such time.  Of course, there is always mail for which an address cannot be read, a package’s integrity has been compromised, or some other reason necessitating the need for manual processing, so there is a dedicated area for doing this as well.

E-commerce and E-bay sales make up a huge portion of total imports by mail into the U.S. in what are known as “E-packets,” and to my surprise I saw some itty-bitty packages that identified the contents as clothing, a dress specifically, as it needed to be identified for customs purposes.  All I could think was, "this must be a really small dress!"  Or not a dress, obviously...
  In fact, 5 Million “E-packet” packages come from China and South Korea every month. Wow!
US Customs is, of course, present for cargo inspections and not only are agents walking around the floor to check and even open up questionable mail, Customs likewise has its own dedicated and restricted space for conducting larger inspections on flagged shipments.  

Regarding mail destined for foreign locales, i.e., exports, they arrive into the “Business Mail Entry Unit,” where commercial shipments have been delivered by bulk mail providers like “Asendia,” and the mail gets sorted and then assigned to a flight.  Air carriage services include their International Surface Air Lift (ISAL) option, which delivers within 7 to 11 business days, the International Priority Air Lift (IPA) option, which delivers in 4 to 7 business days, or an Express Air option which delivers in 3 to 5 business days and has a “time-definite” delivery to certain countries.  
 It should be noted however, that as not every foreign country has the infrastructure or capabilities to have this capacity, the time definite delivery cannot be offered to all destinations.
 The packages themselves are sorted by destination country and where the volume is very high, such as exports to Canada, a special section designated specifically for that country is demarcated.  With 3 working shifts a day, mail is kept moving 24 hours per day amounting to roughly 3 to 4 trailers of IPA and ISAL mail that gets exported daily.

While packages get placed onto various air carriers, 99% of air exports travel on a FedEX airplane, with whom USPS has service contracts and to which they are FedEx’s largest customer.

For more information on exports or imports with USPS, contact Mr. Kenyatta Adams of the US Postal Service at .

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