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Risks and Penalties

What you should know about the revised Tomato Suspension Agreement

The 2013 Mexican Fresh Tomato Suspension Agreement continues to provide for penalties against Mexican tomato growers and exporters (the “signatories”) who violate terms of the agreement with the U.S. Department of Commerce.  It also creates additional risks of Customs law violations for importers.  This article describes the risks faced by importers and incentives for reducing those risks by complying with U.S. Customs and Border Protection (CBP) requirements and the Suspension Agreement’s provisions for importing Mexican tomatoes into the United States.

Importers And The 2013 Suspension Agreement

Under U.S. Customs law, importers of record are responsible for the accuracy of the declarations made regarding their imported merchandise, including but not limited to the classification and value (“price paid or payable”) of this merchandise. 

The Suspension Agreement (which we will abbreviate as “SA” for the purposes of this article) requires that each category of tomato within an exporter’s shipment be sold above the reference price for these varieties as established by the 2013 SA.  Importers must therefore correctly classify and value Mexican tomatoes coming into the United States or face significant penalties. 

Tomatoes:  Classifications and Categories

There are noteworthy differences between the Customs approach to classification of tomatoes and identifying the tomato categories under the 2013 SA, which can present challenges to diligent importers and may tempt the unscrupulous importer to finesse these tasks. 

For CBP classification purposes, the Harmonized Tariff Schedule of the United States (HTSUS), specifically provides for “greenhouse” and “other” tomatoes, with the “other” category including cherry, grape, Roma (plum type), and still “other” varieties. 

The first classification question concerns whether imported tomatoes are grown in a greenhouse, which may be a covered building with environmental controls and soil-like media for growing plants heated by solar radiation and other sources inside the building. 

If the tomatoes are not classified as “greenhouse” for Customs purposes, they are to be classified as “other,” and then further as “cherry,” “grape,” “Roma (plum type),” or as “other, other.”

The SA covers all types of fresh tomatoes (not those imported for processing), including the “important” commercial varieties described as “common round, cherry, grape, plum, greenhouse, and pear tomatoes.”  These SA categories do not directly correspond to Customs classifications specifically provided for in HTSUS.

The category of “specialty tomatoes” under the SA is relatively clear, because they are specifically defined to include “grape,” “cherry,” “heirloom,” and “cocktail” varieties.  From this definition of specialty tomatoes arises a category of “other than specialty” tomatoes which includes “common round,” “greenhouse,” “pear,” and others deemed as less important commercial varieties.