Abady Law Firm, P.C. – Customs and Import/Export Attorney Blog

Learn the Basics of Customs and International Trade Policy and Procedure

Proposition 65 – Be careful what you import and sell in the State of California

California’s Proposition 65, also called the Safe Drinking Water and Toxic Enforcement Act, was enacted in 1986.  This act is limited to the State of California and requires businesses to provide warnings to California residents about significant exposures to chemicals that cause cancer, birth defects or other reproductive harm.

How is Proposition 65 implemented?  Proposition 65 requires California to publish a list of chemicals known to cause cancer, birth defects or other reproductive harm.  The Office of Environmental Health Hazard Assessment (OEHHA) administers the Proposition 65 program. This list, which must be updated at least once a year, has grown to include approximately 900 chemicals since it was first published in 1987.

What is a Proposition 65 Warning? A warning is placed on a product label or inserted into the products packaging if the business is aware or believes that it is exposing individuals to one or more of California’s listed chemicals. By California law, a warning must be given for listed chemicals unless the exposure is low enough to pose no significant risk of cancer or is significantly below levels observed to cause birth defects or other reproductive harm.

How is Proposition 65 enforced in California? The California Attorney General’s Office enforces Proposition 65.   Any district attorney or city attorney (for cities whose population exceeds 750,000) may also enforce Proposition 65.  In addition, any individual acting in the public interest may enforce Proposition 65 by filing a lawsuit against a business alleged to be in violation of this law.

What is a Proposition 65 60-day Notice? A 60-day Notice of Violation is a legal document served by a private party to a manufacturer, alleging violations of Proposition 65.  The 60-day notice must contain:

A 60-day Notice must contain certain information the following:

  • Proposition 65 statute
  • Adequate information with respect to the alleged violation
  • Identify the private individual
  • Period of the violation
  • Listed chemicals hazards present
  • Route of exposure (inhalation, ingestion, dermal contract)

During this period of time, the California Attorney General’s office reviews the allegations and may take over the proceedings. At the 60-day deadline, if the Attorney General’s office chooses not to take action, a private party is permitted to take action against the manufacturer.

What is a Certificate of Merit? The 60-day notice shall include a certificate of merit. The certificate of merit is required to be signed by the attorney for the private party, or by the private party, if the noticing party is not represented by an attorney. It must provide that the private party “has consulted with one or more persons with relevant and appropriate experience or expertise who has reviewed facts, studies, or other data regarding the exposure to the listed chemical that is the subject of the action, and that, based on that information, the person executing the certificate believes there is a reasonable and meritorious case for the private action.” In addition, supporting documentation sufficient to establish the basis of the certificate of merit (e.g., test and exposure results) must be attached to the certificate of merit that is sent to the Attorney General.

What are the penalties for violating Proposition 65?  Penalties for violating Proposition 65 by failing to provide warnings can be as high as $2,500 per violation per day!

Take the following fact pattern:

ABC wholesale corporation imports a container of 50,000 toy trucks into the United States.  The toy trucks are distributed throughout the fifty (50) states.  5,000 toy trucks make there way into XYZ department stores. John Doe purchases one of these toy trucks.  Before letting his 5 year old son Barry play with the toy he tests it for lead.  The test he performs results show a high level of lead content, beyond the permitted threshold. Further, it can be argued that exposure through dermal contact would result from playing with the truck. Unfortunately, the toy truck packaging did not bear a warning label as required by California law as to such exposure.  Both ABC wholesale and XYZ department store are served with a 60-day notice alleging prop 65 violations. 

What now? Do not ignore the notice, contact an attorney immediately; time is of the essence!

For more information about this blog post, please contact Abady Law Firm, P.C. and speak with an attorney familiar with prop 65 compliance at (800) 549-5099.  We can provide insight to both enforcing and defending prop 65 and come to an amicable resolution.  To chat with us, click the bottom right corner tab of our homepage.

Remanufactured or Refurbished Cell Phone Importing – What Should You Know? – Part II

In the past we wrote an article about importing remanufactured or refurbished cellular phones here.  Based on frequent phone calls pertaining to this issue there is some additional information for importers of such products to know.  Best to explain with the following fact pattern:

A U.S. company exports broken Apple and Samsung phones to a China factory for repairs.  The phones may have various issues including failed battery, cracked screens, scratched or damaged housing i.e. backplate and front plate of the phone, or defective camera.  These phones are then repaired to working condition and then imported back into the U.S. where they are intended to be sold in the secondary cell phone market.  Unfortunately, U.S. Customs and Border Protection (“CBP”) detained the shipment based on reviewing the Intellectual Property Rights (“IPR”) of the cell phones.  After thirty (30) days, if the importer does not provide sufficient evidence proving the authenticity of such cell phones CBP seizes said cell phones for violating Apple and Samsung’s IPR; specifically their trademarks.  The importer is left confused as to why this happened with the understanding that these are used cell phones. 

The most common reason for CBP’s seizure is the authenticity of the cell phones housing. When phones with housing issues are sent to China for repair the factories in China do not repair the same housing (e.g. buff the scratches out, fix cracks to the plastic, etc)  or replace the housing with housing from another phone that was manufactured under a Samsung or Apple license.  Rather, these factories manufacture their own housing without a trademark license or purchase the housing from factories who do not have a trademark license from the trademark holder.  Consequently, all trademarks on the these housings are considered counterfeit by CBP.  Here are examples of such trademarks:

 

 

Thus, for a company to legally import remanufactured or refurbished phones (1) read Part I; and (2a) the housing must come from an phone that was originally licensed by the trademark holder; or (2b) a factory that is licensed to manufacture housing parts to be used for repair. Alternatively, the housing must be generic i.e. contains none of the trademarks noted above like so:

For more information about this blog post, please contact Abady Law Firm, P.C. and speak with our customs attorney at (800) 549-5099 or (212) 202-0542. Also visit www.customsesq.com to chat with a customs lawyer — who has insight into CBP seizures — about your company’s import situation and to schedule a consultation.  To chat with us, click the bottom right corner tab of our homepage.

Exporting New and Used Vehicles from the United States to an Overseas Buyer

The question of whether one is permitted to export a vehicle from the United States to a foreign buyer (in China, Dubai, etc) is a tricky one.  Over the last few years there have been cases of federal officials seizing vehicles and cash associated with the business of exporting vehicles. News articles and government press releases of such scenarios have been reported on:

Two California Men Plead Guilty In “Far-Reaching And Elaborate” Automobile Export Scam (April 29, 2013)

U.S. Targets Buyers of China-Bound Luxury Cars (February 11, 2014)

Man accused of identity theft, fraud in car scheme arrested (March 18, 2015)

Selling vehicles for export angers automakers, but is it illegal? (July 21, 2014)

Exporting luxury cars is lucrative, legally questionable (August 6, 2014)

U.S. authorities are cracking down on oversea auto exporters (October 2, 2014)

Investigators pursue luxury car exporters (January 17, 2015)

Inside Stories From the War Between Automakers And Dealers Over Exports (February 12, 2016).

In United States v. Content of Wells Fargo Bank, et al,  the court ordered the federal government to return money and vehicles it seized from an automotive export business that sold luxury vehicles to the overseas market.  The government argued that there were federal wire fraud laws violated by using foreign money to defraud American car dealers into selling them vehicles that were intended to stay in the United States. Specifically, luxury vehicle dealers are prohibited by their manufacturers from selling cars for export.  Dealers have the purchaser sign a contractual agreement stating that the cars are not to be exported. In order the facilitate the purchase of luxury vehicles the automotive export company used “straw buyers” to purchase said vehicles (if the same purchaser walked into the same dealership multiple times to purchase luxury vehicles the dealership may get suspicious and prohibit the sale) and thereafter shipped them overseas.  The court held that the government could not establish probable cause to believe that the funds seized are the “proceeds” of wire or mail fraud.  The court reasoned that the misrepresentation was only a civil matter (not criminal) because the party deceived by a material misrepresentation (dealer) is NOT the same party injured (manufacturer). Therefore, the court ordered the immediate release of seized funds and vehicles.

While this decision may protect one from criminal liability there is still the question of civil liability.  In an article written by Automotive News entitled Dealer scores in suit against illegal exporters over 100 vehicles were purchased and exported overseas without the dealer’s knowledge.  As a result, the dealer violated its franchise agreement (which prohibited the sale of vehicles for export) and was liable to reimburse the manufacturer for incentive money it did not qualify for. Thereafter, the dealer filed suit against the purchasers and a jury found in favor of the dealer under claims of fraud, breach of contract, and intentional misrepresentation or concealment and violation of the RICO act.

Based on these cases, one must be careful in conducting an auto export business.

In addition, U.S. Customs and Border Protection (“Customs”) provides a list of regulations on its website regarding the export of vehicles here. One important point is the definition of “used” vehicles for purposes of filings in the Automated Export System (“AES”). For example, you go into a dealership and purchase a vehicle.  You drive it off the lot, is it now considered a “used” vehicle? Further, the distinction between a “new” versus “used” and “titled” versus “untitled” vehicle correlates to the type of documentation needed to be provided to Customs.

With respect to the definition of “used”:

  • Used. “Used” refers to any self-propelled vehicle the equitable or legal title to which has been transferred by a manufacturer, distributor, or dealer to an ultimate purchaser.
  • Ultimate Purchaser. “Ultimate Purchaser” means the first person, other than a dealer purchasing in his capacity as a dealer, who in good faith purchases a self-propelled vehicle for purposes other than resale.

A mistake in the designation of a vehicle as “new” versus “used” in the AES can result in the seizure of said vehicles. Thus, it is vital that one carefully reviews the Customs regulations prior to export.

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For more information about this blog post, please contact Abady Law Firm, P.C. and speak with our customs lawyer at (800) 549-5099. Also visit www.customsesq.com to chat with a customs lawyer — who has insight into Exporting Vehicles — about your company’s export situation and to schedule a consultation.  To chat with us, click the bottom right corner tab of our homepage.

Hoverboards On Fire This Holiday Season – Literally

 

Burned hoverboard. Photo: CPSC hoverboard fire

This past holiday season hoverboards have been one of the most popular items this past holiday season.  As a result, we have received numerous phone calls regarding U.S. Customs and Border Protection (“CBP” or “Customs”) intense examinations of these products.  The reason being is that there have been cases where these hoverboards burst into flames due to counterfeit batteries being used to power them. See here http://nypost.com/2015/12/30/hoverboard-bursts-into-flames-inside-a-brooklyn-apartment/. This led to intervention by the Consumer Product Safety Commission (“CPSC”), the federal agency regulating the safety of consumer products nationwide.

Customs and CPSC work closely to ensure the safety of products that are imported in the U.S. Customs is the “enforcer at the border” and enforces not only their own regulations but the regulations of all third party federal agencies.  Here, importers must ensure the quality of these hoverboards before importation. Make sure the factory you purchase from has a licensing agreement with the trademark holder of the battery inside.  If you are dealing with an agent in a foreign country make sure you get a paper trail leading to the trademark holder.  Once these goods arrive at the port of entry there is generally no turning back.  The trademark holder is unlikely to offer any assistance if the batteries are counterfeit and Customs will detain, seize, forfeit and destroy these goods.  Meaning the importer is out the money spent to their supplier for the purchase of the goods and Customs may come after the importer for penalties (if you receive a penalty contact a Customs and International Trade expert immediately).

How can this mistake be avoided?  Make sure you get a full understanding of what you are buying, the components (and packaging) comprising a product are just as important as the product as a whole. A minor mistake will cost you, and seizure will not be remitted because of ignorance.   Further, Customs will have you flagged as a potential violator and you may see an increase is examinations (and delays) at ports of entry.   Thus, if there are any trademarks on the goods, seek documentation supporting their legitimacy.  If you need help with identifying issues or verifying documentation contact an attorney experienced in Customs and International Trade law.

Resource Information

For more information about this blog post, please contact Abady Law Firm, P.C. and speak with our customs attorney at (800) 549-5099. Also visit www.customsesq.com to chat with a customs and international trade attorney —  about your company’s import/export situation and to schedule a consultation.  To chat with us, click the bottom right corner tab of our homepage.

Exporting to Dubai – UAE and CBP’s Fear of Iran

Companies looking to export goods to Dubai need to be aware that it takes proper precaution before they submit the export documents to U.S. Customs and Border Protection (“CBP” or “Customs”).  We have dealt with many cases where Customs is suspicious as to the end user of said goods.  Conversations with CBP personnel have indicated that Dubai is a major reexporter of goods to Iran.  As of today’s blog post, the U.S. maintains sanctions against Iran.  See our previous posts on Iran and sanctions here.  As a result, goods may be detained and/or seized because an Office of Foreign Assets and Control (“OFAC”) license is required to be obtained before they can be permitted export to Iran.

Many times the goods are destined for Dubai and are going to stay in Dubai. Due to the cross-border relationship between Dubai and Iran, it is vital that the proper information be provided to Customs prior to questions regarding the final destination of your products.  We have represented companies before Customs in disclosing the right information so that their shipments see clearance for export at ports around the country.

If you intend on exporting products to Dubai or are in the midst of questions from CBP regarding your exports to Dubai contact us immediately.

Resource Information

For more information about this blog post, please contact Abady Law Firm, P.C. and speak with our customs attorney at (800) 549-5099. Also visit www.customsesq.com to chat with a customs and international trade attorney —  about your company’s import/export situation and to schedule a consultation.  To chat with us, click the bottom right corner tab of our homepage.

Hunters Traveling With Firearms and New Requirements by CBP

We have received inquiries regarding changes to the enforcement procedures for individuals traveling abroad with their firearms. Previously, if an individual was traveling with not more than three non-automatic firearms and not more than 1,000 cartridges of ammunition (provided this is for the person’s exclusive use and not for re-export or other transfer of ownership), the individual would complete U.S. Customs and Border Protection (“CBP” or “Customs”) Form 4457 and present it to Customs.  Now there have been changes in CBP enforcement procedures for such articles which have targeted those who use firearms for hunting trips or sporting events.

CBP is responsible for the enforcement of Department of Commerce and Department of State regulations when it comes to the export of certain controlled items. Specifically, the export regulations for handguns, rifles, associated parts and components, and related ammunition are found in the International Traffic in Arms Regulations (ITAR) administered by the Department of State’s Directorate of Defense Trade Controls (DDTC).  Additionally, the export regulations for sporting shotguns (barrel length of 18 inches or more), muzzle loading firearms, associated parts and components, and related ammunition are found in the Export Administration Regulations (EAR) administered by the Department of Commerce’s Bureau of Industry and Security (BIS).

All persons who travel from the United States to a foreign country with firearms and/or ammunition must comply with all applicable laws and regulations governing the lawful exportation of these controlled items. This includes understanding whether or not you are required to obtain a license prior to permanent or temporary export.  Thus, one should contact an attorney experienced in handling such matters to determine what type of license or license exemption you fall under.

I determined the type of license or license exemption I require, now what? 

Per U.S. Immigration and Customs Enforcement’s Website (https://www.ice.gov/cpi/faq):

Before exporting any firearms and/or ammunition with a valid DDTC or BIS export license or a qualifying license exemption, the traveler, or an agent acting on the traveler’s behalf, must file the Electronic Export Information (EEI) using the Automated Export System (AES) or the Internet-based system AESDirect which is publicly available and free of charge. In addition to filing the EEI in AES or AESDirect prior to export, all firearms, ammunition and additional mandatory documentation (e.g., certifications, foreign import permits, proof of AES filing; such as the Internal Transaction Number) must be presented to [Customs] authorities for visual inspection at the port of departure from the United States.

If you failed to file an EEI you can read about the consequences here.

UPDATE: “U.S. Customs and Border Protection (CBP) announced today [April 27, 2015] that it is returning to its previous system of facilitating the international transport of personal firearms and ammunition, after meeting with representatives from the NRA, firearms industry and sportsmen’s groups, and key members of Congress.” Read more: http://www.ammoland.com/2015/04/nra-scores-important-victory-for-american-hunters-and-sport-shooters/#ixzz3YYQJnDcN

For more information about this blog post, please contact Abady Law Firm, P.C. and speak with our customs lawyer at (800) 549-5099. Also visit www.customsesq.com to chat with a customs lawyer — who has insight into the federal agency export requirements — about your company’s export situation and to schedule a consultation.  To chat with us, click the bottom right corner tab of our homepage.

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U.S. Customs and Border Protection Export Issues and Enforcement

We are seeing many Automated Export System (“AES”) violations as of late, especially with FedEx, DHL, and UPS shipments. As a result, please find information below regarding the export regulations and enforcement by U.S. Customs and Border Protection (“CBP”). 

What is the Automated Export System?

CBP published the Trade Act regulations in the Federal Register on December 5, 2003. The rule requires advance transmission of electronic cargo information to CBP for both arriving and departing cargo. In the Federal Register notice, CBP identified the AES  as the system for transmission of advance electronic export data for all modes of transportation.

On June 2, 2008, the U.S. Census Bureau published amendments to Title 15, Code of Federal Regulations, Part 30, Foreign Trade Regulations, mandating the filing of export information by the U.S. Principal Party in Interest (“USPPI”) or its authorized agent through the AES or AESDirect for all shipments where a Shipper’s Export Declaration (“SED”) was previously required.  SED information filed to AES became known as Electronic Export Information (“EEI”).

When do you need to prepare the EEI formerly SED to be filed with CBP?

  • Shipment of merchandise under the same Schedule B commodity number is valued at more than US$2,500 and is sent from the same exporter to the same recipient on the same day. (Note: Shipments to Canada from the U.S. are exempt from this requirement.)
  • The shipment contains merchandise, regardless of value, that requires an export license or permit.
  • The merchandise is subject to the International Traffic in Arms Regulations, regardless of value.
  • The shipment, regardless of value, is being sent to Cuba, Iran, North Korea, Sudan or Syria.
  • The shipment contains rough diamonds, regardless of value (HTS 7102.10, 7102.21 and 7102.31)

What happens if you fail to file the EEI or file the EEI late?

The absence or late filing of the Electronic Export Information in the Automated Export System (AES) or late filing of AES commodity data subjects the shipment to seizure.

If my goods get seized by U.S. Customs for an AES violation what do I do?

Read the following blog post for details about the U.S. Customs seizure process here and contact a professional experienced in such matters.

Additionally, look for the following language in your Notice of Seizure and Information to Claimants Non-CAFRA Form that would indicate an alleged AES violation:

Screen Shot 2015-03-18 at 7.15.28 PM

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For more information about this blog post, please contact Abady Law Firm, P.C. and speak with our customs lawyer at (800) 549-5099. Also visit www.customsesq.com to chat with a customs lawyer — who has insight into the Notice of Seizure — about your company’s export situation and to schedule a consultation.  To chat with us, click the bottom right corner tab of our homepage.

 

Kratom Imports and FDA Import Alert 54-15

Lately it has come to our attention that kratom (MITRAGYNA SPECIOSA) is being targeted more frequently in the past couple of months.  Specifically, U.S. Customs and Border Protection (“Customs” or “CBP”) and the U.S. Food and Drug Administration (“FDA”) have been examining and detaining kratom shipments from overseas.  Additionally, express consignment operators such as FedEx, UPS, and DHL, are cautious to ship the product because of the potential problems associated with this botanical.

These delays can be attributed to FDA’s import alert 54-15.  The alert provides for:

DETENTION WITHOUT PHYSICAL EXAMINATION OF DIETARY SUPPLEMENTS AND BULK DIETARY INGREDIENTS THAT ARE OR CONTAIN MITRAGYNA SPECIOSA OR KRATOM

The language of the import alert focuses on “DIETARY SUPPLEMENTS AND BULK DIETARY INGREDIENTS.”   These types of goods implies an end use for human consumption purposes.  By classifying the product plainly and vaguely as kratom (MITRAGYNA SPECIOSA) on Customs and shipping documents, you are leaving the examining officers at ports of entry across the U.S. with the ultimate decision as to admissibility.   We have also seen declarations such as: incense, soap scrubs, and clothing dye.  Accordingly, the intended use of kratom when imported provides an important factor in determining the kratom’s admissibility. Thus, one must articulate to the federal agencies the use of the kratom properly so as to argue that it falls outside the scope of the import alert.

Please be aware that the FDA has brought action against company’s they find are selling for human consumption:

See here:

U.S. Marshals seize botanical substance kratom from southern California facility

and here:

United States of America v. 577 Cartons et al

We currently represent numerous kratom importers to establish a plan and dialogue with the federal agencies who regulate kratom so as to avoid unnecessary delays and improve clearance of their shipments.  As a result, we have been successful in getting kratom released from detention/seizure by Customs/FDA.  Contact us immediately if your shipment is being detained by the federal agencies.

For more information about an importing kratom or for assistance with any of the issues noted above, contact Abady Law Firm, P.C., at 800.549.5099, to speak with a international trade attorney today!

Remanufactured or Refurbished Cell Phone Importing – What Should You Know?

There is a big market for used cell phones around the world.  Accordingly, we come into contact with many entrepreneurs who are involved in the secondary cell phone market.  As a result, we have handled many cases involving refurbished or remanufactured cell phones.

Your typical fact pattern involves a U.S. company that would export broken cell phones to a refurbishing center in a foreign country. Depending on the nature of repair, the cell phones would undergo a thorough repairing process before they are considered to be back in good working order.  Subsequently, the cell phones are shipped back to the United States.

Prior to delivery to the importer, these now remanufactured or refurbished cell phones must clear through customs.  U.S. Customs and Border Protection (“CBP” or “Customs”) is the responsible federal agency for determining the admissibility of such products. When it comes to investigation and delays for remanufactured or refurbished cell phones we have seen that questions involving intellectual property rights are most notably at issue.  Specifically, Section 526(e) of the Tariff Act of 1930, as amended, provides that merchandise bearing a counterfeit mark within the meaning of Section 1127 of Title 15, that is imported in violation of Section 1124 of Title 15, shall be seized and, absent the consent of the trademark owner, forfeited for violations of the Customs laws. 19 U.S.C. Section 1526(e).

The first prong of section 526(e) requires that the imported merchandise bear a counterfeit mark as defined by section 45 of the Act of July 5, 1946 (the “Lanham Act,” codified as amended at 15 U.S.C. Section 1127.  Section 45 of the Lanham Act defines the term counterfeit as “a spurious mark that is identical with or substantially indistinguishable from, a registered mark.” 15 U.S.C. Section 1127.

The second prong requires that the merchandise, in addition to bearing a counterfeit mark, shall have been imported in violation of section 42 of the Lanham Act, which provides:

Except as provided in subsection 1526 (d) of Title 19 . . . no article of imported merchandise . . . which shall copy or simulate a trademark registered in accordance with the provisions of this chapter . . .  shall be admitted to entry at any customhouse of the United States . . . .

15 U.S.C. Section 1124.  A “copying or simulating” trademark or trade name is one which may so resemble a recorded mark or name as to be likely to cause the public to associate the copying or simulating mark or name with the recorded mark or name. 19 C.F.R. Section 133.22(a).

Questions arise as to whether there is a violation of a trademark when one is selling remanufactured or refurbished goods under the original manufacturer’s U.S. trademark.  As a general matter, it is not a violation to sell such goods without deceiving consumers provided that one attempts so far as possible to restore the original condition of the goods and full disclosure is made about the true nature of the goods i.e. that they are remanufactured or refurbished goods.  Nitro Leisure Products, L.L.C. v. Achushnet Co., 341 F.3d 1356, 1361 (Fed. Cir. 2003).  Accordingly, there is information one can provide to CBP to prove that your goods do not violate any trademark laws.  This depends on the nature of remanufacturing or refurbishing done to the product, how it was imported, and the documents one has regarding their purchase.

If you find yourself in a position where your remanufactured or refurbished goods are detained or seized by CBP contact an attorney who is familiar with Customs and International Trade laws and regulations as well as the secondary cell phone market business.

For more information about an importing remanufactured or refurbished cell phone products or for assistance with any of the issues noted above, contact Abady Law Firm, P.C., at 800.549.5099, to speak with a international trade attorney today!

Smoke Shop Importing Into the U.S. – What Should You Know?

U.S. Customs and Border Protection (CBP or Customs) is the federal agency in charge of determining the admissibility of items sold in smoke shops across the country.  Presently, we have been asked by importers across the United States for information regarding how to determine whether ones product will meet scrutiny by CBP.  Moreover, whether Customs would permit entry of these products into the United States.

For such products like water pipes, grinders, blunt wraps/wrappers, and vaporizers CBP will consider whether the specific product you are attempting to import constitutes “drug paraphernalia.”

The relevant statute, 21 U.S.C. Section 863 provides,

(a) In general It is unlawful for any person—

(1) to sell or offer for sale drug paraphernalia;

(2) to use the mails or any other facility of interstate commerce to transport drug paraphernalia; or

(3) to import or export drug paraphernalia.

Pursuant to 21 U.S.C. Section 863(d), the term “drug paraphernalia” is defined as:

[A]ny equipment, product, or material of any kind which is primarily intended or designed for use in manufacturing, compounding, converting, concealing, producing, processing, preparing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance, possession of which is unlawful under this subchapter. It includes items primarily intended or designed for use in ingesting, inhaling, or otherwise introducing marijuana, cocaine, hashish, hashish oil, PCP, methamphetamine, or amphetamines into the human body, such as—

(1) metal, wooden, acrylic, glass, stone, plastic, or ceramic pipes with or without screens, permanent screens, hashish heads, or punctured metal bowls;

(2) water pipes;

(3) carburetion tubes and devices;

(4) smoking and carburetion masks;

(5) roach clips: meaning objects used to hold burning material, such as a marihuana cigarette, that has become too small or too short to be held in the hand;

(6) miniature spoons with level capacities of one-tenth cubic centimeter or less;

(7) chamber pipes;

(8) carburetor pipes;

(9) electric pipes;

(10) air-driven pipes;

(11) chillums;

(12) bongs;

(13) ice pipes or chillers;

(14) wired cigarette papers; or

(15) cocaine freebase kits. (Emphasis added).

How do you determine whether an item is considered drug paraphernalia?

21 U.S.C. Section 863(e) provides that:

[I]n addition to all other logically relevant factors, the following may be considered:

(1) instructions, oral or written, provided with the item concerning its use;

(2) descriptive materials accompanying the item which explain or depict its use;

(3) national and local advertising concerning its use;

(4) the manner in which the item is displayed for sale;

(5) whether the owner, or anyone in control of the item, is a legitimate supplier of like or related items to the community, such as a licensed distributor or dealer of tobacco products;

(6) direct or circumstantial evidence of the ratio of sales of the item(s) to the total sales of the business enterprise;

(7) the existence and scope of legitimate uses of the item in the community; and

(8) expert testimony concerning its use.

Lastly, 21 U.S.C. Section 863(f) lists exemptions:

(1) any person authorized by local, State, or Federal law to manufacture, possess, or distribute such items; or

(2) any item that, in the normal lawful course of business, is imported, exported, transported, or sold through the mail or by any other means, and traditionally intended for use with tobacco products, including any pipe, paper, or accessory. (Emphasis added).

The U.S. Supreme Court examined the meaning of “drug paraphernalia” pursuant to 21 U.S.C. Section 863 in the matter of Posters ‘N’ Things v. United States, 511 U.S. 513 (1994), and considered the phrases (1) “primarily intended for use” and (2) “designed for use” in such case.

The Court concluded that “primarily intended for use” is to be understood objectively and refers generally to an item’s likely use. Posters ‘N’ Things, 511 U.S. 513, 521 (1994). Moreover, the Court noted that this “is a relatively particularized definition, reaching beyond the category of items that are likely to be used with drugs by virtue of their objective features.” Id. at 521 n.11.

The court stated that “items ‘primarily intended’ for use with drugs constitute drug paraphernalia, indicating that it is the likely use of customers generally, not any particular customer, that can render a multiple-use item drug paraphernalia.” Id. at 521 n.11. Therefore, items having possible multiple uses may constitute drug paraphernalia for purposes of 21 U.S.C. Section 863 if the likely use by customers of the seller of the items is for use with illegal drugs.

Customs will make the determination on a case-by-case basis about whether your product falls within the context of drug paraphernalia.  Accordingly, one should take into account the relevant factors that CBP considers when publishing its rulings on such products.  Further, one should speak with an attorney who focuses on Customs law to ensure that the best arguments are presented to CBP for clearance of their smoke shop products into the United States.

For more information about an importing smoke shop and vape products or for assistance with any of the issues noted above, contact Abady Law Firm, P.C., at 800.549.5099, to speak with a customs law attorney.