ANNOUNCEMENT 01 May 2019
A revision of U.S. customs regulations led to new restrictions on plastic hangers and the garments associated with them.
NUMBER OF INTERVENTIONS
On July 24, 2019 Customs and Border Protection announced that, effective September 23, 2019, it would no longer permit the duty-free importation of certain plastic hangers. This is a reversal of earlier policy, and will result not only in the imposition of a tariff on the hangers (which are classified under item 3923.90.0080 and subject to an MFN tariff of 3%) but also add to the administrative costs associated with the importation of the garments with which they are shipped.
Existing U.S. law (19 USC 1322 and 19 CFR 10.41a) allow “instruments of international traffic” (IIT) to be released without the formalities of entry or the payment of duty. Customs and Border Protection (CBP) has traditionally held that to qualify as an IIT an article must be used as a container or holder in international traffic, substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. In Binding Ruling Letter HQ H058876 (issued May 14, 2009) CBP confirmed that certain plastic garment hangers are IIT, concluding that they meet these criteria. These hangers are used transportation of garments to the United States, and are returned to the company that owns them after the garments are purchased in U.S. retail outlets. The company will then sort and inspects the hangers, and then ship the intact ones back to foreign manufacturing locations for reuse.
In the May 1, 2019 edition of Customs Bulletin and Decisions CBP proposed to revoke the 2009 ruling on the grounds that the plain English meaning of the term “hanger,” as well as prior precedent, indicate that a garment hanger must physically suspend the underlying garment during transportation. Because the garments are hung on the hangers but then folded into cardboard boxes for shipment, they are not suspended from the hangers during transport. CBP had allowed comments on this proposed ruling through May 31, 2019. The final ruling came in the July 24, 2019 edition of Customs Bulletin and Decisions.