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Conversion of vans into motorhomes created “commercially different good”

Conversion of vans created commercially different good

The U.S. Court of Appeals for the Federal Circuit today affirmed the trade court’s grant of summary judgment for the government in a case concerning the customs treatment of cargo vans that were exported to a manufacturing facility in Canada for conversion into motorhomes. The Federal Circuit agreed with the trade court that the conversion of the vans into motorhomes created “a commercially different good” and thus affected the customs duty applicable on their import back into the United States.


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The case is: Pleasure-Way Industries, Inc. v. United States, 2017-1190 (Fed. Cir. January 5, 2018). Read the Federal Circuit’s decision [PDF 129 KB]


A company manufactures and sells motorhomes at dealerships in the United States and Canada. Between January 2008 and September 2009, having bought 144 vans in the United States, the company exported them to its manufacturing facility in Canada, where it converted them into model motorhomes. The conversion included installation of interior features such as fully plumbed kitchen and bathroom fixtures with freshwater and sewage tanks, water heaters, sleeping quarters, countertops with propane burners, microwave ovens, wallmounted televisions, and refrigerators. The conversion also included installation of exterior features such as large picture windows and porch lights, awnings, running boards, and exterior showers.

When the company then imported the resulting motorhomes into the United States, it sought to avoid their being treated, for purposes of import duties, under an applicable provision of the Harmonized Tariff Schedule of the United States (HTSUS) subheading 8703.33.00. It requested a ruling from U.S. Customs and Border Protection that the motorhomes were to be classified under HTSUS subheading 9802.00.50, which provides favorable import-duty treatment to certain articles that meet the requirements set forth in 19 C.F.R. § 181.64 (2017) for favorable treatment of imported articles that qualify as “[g]oods re-entered after repair or alteration in Canada or Mexico.”

CBP initially granted the company’s request, but then changed its position. CBP determined that the regulation does not apply to the motorhomes that resulted from the conversion in Canada of the vans it acquired in the United States, and assessed a 2.5% ad valorem import duty in accordance with HTSUS subheading 8703.33.00.

CBP denied the company’s protest, and the U.S. Court of International Trade court granted summary judgment against the company. The company appealed to the Federal Circuit which today affirmed the trade court’s judgment.


For more information, contact a professional with KPMG’s Trade & Customs practice:

Douglas Zuvich | +1 (312) 665-1022 |

Andrew Siciliano | +1 (631) 425-6057 |

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