The third iteration of the dispute between an Importer (GRK Canada, Ltd.) and the United States regarding imported screws will soon be heard by the Court of International Trade (CIT). In early 2013, the CIT considered arguments concerning two varieties of screws. The parties agreed that both varieties would fall under the same subheading, but disagreed which subheading in the Harmonized Tariff Schedule of the United States (HTSUS) was most appropriate.

Before the CIT, GRK argued that subheading 7318.14.10 (“self-tapping screws”) was most appropriate and the government argued in favor of subheading 7318.12.00 (“other wood screws”). The CIT began by noting that both the proposed subheadings were eo nomine provisions, meaning that the articles in the subheadings are described by their name, not by their use. The CIT then constructed a workable definition for the items described in each subheading, as required by the General Rules of Interpretation (GRI). They found that the screws at issue, as a matter of definition based on the physical properties of the screws, fit neatly under both proposed subheadings. The CIT then commenced to work their way through the GRIs and found that GRI 3(c) was the most appropriate “tie breaker,” and that the screws were properly classifiable under 7318.14.10, as GRI3(c) calls for the subheading appearing last in the numerical order to be the proper subheading.

The government argued on appeal that the CIT erred by defining the screws based on their physical characteristics while not even considering the use of the screws in their analysis. The government contended that the use of the screws must be considered in an eo nomine analysis, as use speaks to definition. The United States Court of Appeals agreed that an item’s use needs to be considered when determining the common meaning of eo nomine tariff provisions. There was, however, a strong dissent to this opinion, arguing that the CIT’s analysis was properly carried out according to the General Rules of Interpretation in the HTSUS. The dissenting judge went on to opine that the Majority were invoking non-binding judgements and employing an obsolete analysis done according to the old Tariff Schedule of the United States (TSUS) when they should have been carrying out their analysis according to the rules in the modern Harmonized Tariff Schedule of the United States (HTSUS).

The strong dissent has set the stage for the coming ruling in the CIT. This case may prove to have lasting consequences that reshape how importers must understand eo nomine provisions. It may be that two apparently different provisions – eo nomine and “use” – will now be understood as blended. It bears following whether or not the CIT will reaffirm its previous ruling or find in favor of gray areas at the expense of sharp distinctions.

Click here for the CIT’s original ruling.

Click here for the ruling in the Court of Appeals.