The U.S. Court of Appeals for the Federal Circuit affirmed the trade court’s grant of summary judgment for the government in a case concerning the tariff classification of imports of dinnerware decorated with “festive motifs” and intended for use during the Thanksgiving or Christmas dinner. While the Federal Circuit adopted a more flexible definition of “ritual” than did the trade court, it nevertheless concluded that the trade court had correctly determined that the subject imports did not qualify for duty-free treatment as articles for use in specific religious or cultural ritual celebrations.
The case is: WWRD US, LLC v. United States, 2017-1945 (Fed. Cir. April 2, 2018). Read the Federal Circuit’s decision [PDF 111 KB]
The imported dinnerware had festive motifs such as Christmas trees, hollies, or turkeys, and were intended for the Thanksgiving or Christmas meal. The importer asserted that the items qualified for duty-free treatment under subheading 817.95.01 of the Harmonized Tariff Schedule of the United States (HTSUS) which provides duty-free status for utilitarian articles of a kind used in the home in the performance of specific religious or cultural ritual celebrations. The importer asserted that Thanksgiving and Christmas dinners were specific cultural ritual celebrations, and that the imported dinnerware was used in the performance of these celebrations. The U.S. Court of International Trade, however, concluded that Thanksgiving and Christmas are cultural holidays, and that the dinners associated with these holidays while cultural celebrations, were not specific rituals. Summary judgment was granted for the government.
On appeal, the Federal Circuit affirmed the trade court’s grant of summary judgment for the government. However, the Federal Circuit in adopting a definition of “ritual,” found that while Thanksgiving and Christmas dinners may be religious or cultural ritual celebrations, the tariff classification also requires “specific ritual” use and that the imports must be used in the performance of that ritual. As the Federal Circuit stated:
But it is not enough that a utilitarian article is merely used during the ritual. Instead, the use must advance or serve a particular purpose in the ritual. . . . Assuming arguendo that Thanksgiving or Christmas dinners are specific rituals, the ritual of dinner will continue whether the serving trays and cups have festive motifs or not; the motifs themselves do nothing to further the ritual of dinner. Unless [the importer] can point to specific prescribed acts having underlying religious or cultural meaning, where the subject imports are used in the performance of those acts, its imports are not eligible for duty-free status….
For more information, contact a professional with KPMG’s Trade & Customs practice:
Douglas Zuvich | +1 (312) 665-1022 | email@example.com
Andrew Siciliano | +1 (631) 425-6057 | firstname.lastname@example.org
© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.