Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Import News: Customs Court Cases

Import News from the Importers Institute
19 August 2002 - Customs Court Cases

The High Court in Auckland and Wellington recently ruled on two cases of valuation and tariff classification of interest to importers.

Nike NZ Ltd, High Court, Auckland, Williams J, 27 May 2002. Valuation, buying commission, royalties.

Nike NZ orders goods from Nike Inc, which selects a manufacturer and employs a third company, Nissho Iwai, to arrange finance and export documentation. Nike NZ pays a royalty to Nike Inc as well as a buying agents' commission of 7%, and a fee (of .75% or 1%) to Nissho Iwai. Customs ruled that all three payments were part of the Customs value of the goods and were subject to import duty. Judge Barber, sitting as the Customs Appeal Authority agreed with Customs. The importer appealed to the High Court.

Williams J in the High Court found that the royalty was dutiable, but the other two commissions were not. Customs argued that Nike Inc should not be regarded as an agent of Nike NZ, since the New Zealand importer is subordinate to Nike Inc, its parent company. This view is consistent with accepted wisdom in the trade (see http://www.silva.co.nz/buysell.htm) but was rejected by the Court: "Whilst control of, or independence of, one party by another is regarded as a criterion by which these matters are judged, in this Court's view a distinction should be kept in mind between the roles of buyer, agent and financier regulated by contracts on the one hand and the roles of shareholder and financier which are regulated by different legal concepts on the other."

Customs is likely to appeal this judgement to the Court of Appeal. We will keep Importers Institute members informed.

* * *

Prairie AG Import Ltd, High Court, Wellington, Ronald Young J, 24 May 2002. Tariff classification.

Prairie AG classified grain augers as "grain storage bins and silos, including grain handling equipment" in heading 84.36. Customs classified the same goods as "other lifting, handling, loading and un-loading machinery" in heading 84.28. The importer appealed to the Customs Appeal Authority (CAA). The CAA agreed with the importer and reversed the Customs classification. Customs then appealed to the High Court. Judge Ronald Young agreed with Customs and reversed the CAA's decision.

The main issue here was similar to that of the Court of Appeal Rakaia case (http://www.silva.co.nz/Institute/Article.asp?Ref=130). The Court found that the CAA had compared a four digit heading (loading/unloading machinery) with a ten digit statistical heading (grain handling equipment). This is a cardinal sin of tariff classification, known as "reading down the page" and is not a valid way of identifying goods for tariff classification purposes.

--

Previous Import News items are published on our Internet site http://www.importers.org.nz. If you do not wish to be included in this mailing list, please reply to this message with the word REMOVE in the subject line. If you would like us to send Import News to friends or associates, please ask them to email info@importers.org.nz with the word SUBSCRIBE in the subject line.


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Tornado Aftermath: More Storms Forecast For New Plymouth

Up to 30 homes were damaged Monday night when a tornado roared through a New Plymouth suburb last night , cutting power lines, tearing off roofs, and toppling trees. More>>

ALSO:

Government Investment Rejig: Sustainable Food & Fibre Futures Launched

Growing New Zealand’s food and fibre sectors sustainably and supporting a thriving economy are the hallmarks of a new investment programme announced today by Agriculture Minister Damien O’Connor. More>>

Dump Levy Options: Waste Work Programme Announced

Associate Environment Minister Eugenie Sage has announced a programme of work to take action on New Zealand’s long-neglected waste problems. More>>

ALSO:

Real Estate: Foreign Buyers Ban Passes Third Reading

The Bill to put in place the Government’s policy of banning overseas buyers of existing homes has passed its third and final reading in the House. More>>

ALSO:

Nine Merger: Fairfax Slashes Value Of NZ Business

Fairfax Media Group more than halved the value of its Kiwi assets, attaching just A$40 million to mastheads that were once the core of a billion dollar investment. More>>

Collecting Scalpers: Commerce Commission To Sue Viagogo

The Commission will claim that Viagogo made false or misleading representations: • that it was an “official” seller, when it was not • that tickets were limited or about to sell out • that consumers were “guaranteed” to receive valid tickets for their event • about the price of tickets... More>>

ALSO: