The New Miscellaneous Tariff Bill Process Set to Begin

On October 11, 2019 the U.S. International Trade Commission (ITC) began accepting Miscellaneous Tariff Bill (MTB) petitions for duty suspension or reduction. The American Manufacturing Competitiveness Act (AMCA) of 2016 created the current MTB process. Under the MTB process, U.S. importers are able to petition for duty-free or reduced-duty treatment of certain imported products by submitting a petition to the ITC.

A detailed timeline of the process can be found here. The new MTB process, as set out in the law, runs from October 2019 through the end of 2020. The dates and time frames below have been calculated from the start date announced by the U.S. ITC and the text of the legislation:

• October 11 – December 10, 2019: USITC MTB portal open for petition submission.
• December 10, 2019 – January 11, 2020: USITC compiles petitions.
• No later than January 11 – USITC issues Federal Register notice soliciting comments on product petitions.
• January 11 - Late February, 2020 (45 days): USITC accepts public comments through online portal.
• January 11 - Mid-April, 2020 (90 days): Commerce conducts its review of petitions, at the end of which it submits its report to the congressional committees and the USITC.
• January 11 - Mid-June, 2020 (150 days): USITC conducts its review of petitions, at end of which it submits its Preliminary Report to the congressional committees, taking into consideration the Commerce Report.
• Mid-June – mid-August, 2020 (60 days): USITC conducts re-review of individual petitions, based on information submitted by the congressional committees, at the end of which it submits its Final Report to the congressional committees.

A successful MTB petition will cover a “noncontroversial” or “noncompetitive” product. The guidelines defining those products are:

• No domestic producer objects to the import duty elimination or reduction for the product;
• The import duty elimination or reduction for the product is determined to be in the interest of U.S. “downstream” producers and consumers; and
• The import duty elimination or reduction for the product must not result in a loss to the U.S. Department of the Treasury of more than $500,000 in annual revenue.

The ITC determines whether the petition should move forward. ITC delivers its determinations directly to congressional committees, including but not limited to:

• A determination if domestic production of the product exists;
• A determination of whether a domestic producer objects to the petition;
• Any technical changes to the product’s article description that are necessary for purposes of administration;
• An estimate of the amount of loss in revenue to the United States if the duty suspension or reduction takes effect;
• A list of petitions that it does not recommend for inclusion in an MTB.

Importers can request an elimination or reduction of duties, depending on the annual duty savings anticipated and the $500,000 threshold.

The ITC’s website indicates that almost 700 (or only 28 percent) of the petitions listed in the Commission’s final 2017 report were not recommended to Congress for inclusion in an MTB.  Many of these are due to issues regarding classification and the ability of U.S. Customs and Border Protection (CBP) to administer the claimed provision.

Successful MTB petitions are compiled into a bill and presented to the House Ways and Means and Senate Finance Committees and would then need to be approved by Congress and signed into law by the president before becoming effective. If signed into law, then the MTB petitions may become effective January 1, 2021, with an expiration date of December 31, 2024.

The ITC’s new petition procedures appear more stringent than those applied during the 2016 round of MTB petitions.

The new procedures indicate that the petitions should include (to the extent available):

1. CBP rulings issued on the product;
2. a copy of other CBP documentation indicating where the article is classified in the HTS;
3. an estimate of both total value and dutiable value for the product for the next five calendar years;
4. an estimate of the share of total imports represented by the petitioner’s imports of the subject article;
5. the names of any domestic producers of the article, if available;
6. a certification of completeness and correctness; and
7. an acknowledgement of the petitioner’s awareness that the information submitted is subject to ITC audit and verification.

The USITC will take into account the Department of Commerce report, including input from CBP, and other Executive agencies, in its report. The USITC will provide its preliminary report to the House Ways and Means and Senate Finance Committees in mid-June 2020 and its final report in mid-August 2020. In between the preliminary and final reports, the USITC is directed to consider information from the congressional committees on its report. For more information on the MTB process, click here.

For more information regarding the filing or preparation of the petition, contact Diaz Trade Law today at 305-456-3830 or via email at info@diaztradelaw.com.

33,810 IPR Seizures in 2018!

U.S. Customs and Border Protection (CBP) is tasked with the monitoring of and enforcement of intellectual property rights (IPR). In CBP's FY 2018 Seizure Statistics, CBP advised that it enforced trademarks and copyrights pertaining to over 17,641 active recordations, including 2,289 new recordations and 812 renewals of expiring recordations.

In fiscal year 2018, 381 individuals were arrested by CBP or ICE for violations related to IPR violations and 260 convictions related to intellectual property crimes proceeded. The total number of IPR seizures decreased by 333 seizures from the previous year. Surprisingly, while the number of seizures decreased from 34,143  in 2017 to 33,810 in 2018, the total estimated manufacturer’s suggested retail price (MSRP) of seized goods, had they been genuine, increased $1.4 billion.

China Trade War Intensifies

 

 Today, the Trump administration’s China trade war intensified as it announced plans to increase tariffs on Lists 1, 2, 3, and 4! The president connected the additional tariff hikes to China’s new retaliatory tariffs (as a result of US’s imposition of List 4 tariffs) on $75 billion-dollar in US products, mainly impacted the agricultural and auto industries, or President Trump’s base (as previously reported here). So what are the changes?

U.S. and China Reach ‘Phase 1 Deal’

 Today, President Trump and the Chinese government announced a “Phase 1 Deal” and suspended the proposed increase in tariffs for products (on Lists 1, 2, and 3) that were set to begin on October 15. The scheduled tariff was set to increase from 25 to 30 percent on $250 billion worth of Chinese imports. In exchange, the Chinese government will buy $40-50 billion worth of American agricultural goods, and the agreement will include terms on both intellectual property rights and financial services.

BREAKING NEWS: EXCLUSION PORTAL TO OPEN FOR LIST 4A

                      

USTR announced it will open the exclusion request process for HTS’s on List 4A. List 4A includes products covered by Annex A of the August 20, 2019 notice (84 FR 43304)  that are subject to 15% duty as of September 1, 2019.

 

List 4 has a total of 300 Billion worth of products and includes both lists 4A & 4B. 15% duties for List 4B (products covered by Annex C of the August 20 notice) are effective December 15, 2019, and no exclusion process has yet been discussed for 4B.

Exclusion portal opens October 31, 2019, and closes on January 31, 2020.

Contact us today to get your request in timely!

DTL helps clients strategize how to identify the strongest argument to persuade the government in granting your exclusion request. DTL was active in assisting clients submit exclusion requests for List 3.

NEWS ALERT - USTR’s newly Announced List 3 Exclusion process and List 4 Comment and Hearing Process

USTR published a Federal Notice on May 21, laying out the exclusion process for list 3. USTR anticipates that the exclusion period will open up on or around June 30^th. USTR estimates that over 60,000 US Stakeholders will request an exclusion for a particular product. On May 13, USTR proposed a 4^th list, which slaps a 25% tariff on roughly 300 billion worth of goods. From food products to furniture, the proposed list would include “essentially all products not currently covered” under previously imposed lists including literally thousands of irrelevant goods. If your product appears on any Section 301 tariff list there are three avenues to potentially get it removed. You may submit a comment, attend public hearings, or obtain an exclusion. Below is a big picture of the past and future opportunities get products off tariff lists:

As the trade war between United States and China drags into its second year, a resolution does not appear to be in the near future. In fact, following the most recent wave of escalations, the US stock market plummeted over 600 points leading into Monday, May 13.

While the trade war continues, neither side seems ready to reconcile. In early May, the two parties came close to a consensus. According to President Trump, China backed out of the deal, re-igniting tensions. In response to China reneging on the tentative agreement, President Trump called for an additional 25% tariff increase on Chinese Products on List 3.

Voice Your Comments about CTPAT & the Trusted Trader Program!

U.S. Customs and Border Protection (CBP) provided a 60-day extension as part of their “Agency Information Collection Activities” requesting comments on the CTPAT and Trusted Program.

CBP will be submitting the information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995 (PRA). The PRA changed many aspects of Information Collection by the Federal government. requiring agencies to plan for the development of new collections of information and the extension of ongoing collections well in advance of sending proposals to OMB. Agencies must:

Using a Middleman? Learn How to Lower Your Customs Value Using First Sale!

Pursuant to the Customs Modernization Act, the importer of record (IOR) must use “reasonable care” when providing the value of the goods to Customs and Border Protection (CBP). All merchandise imported into the United States is subject to valuation or appraisement. The Trade Agreements Act of 1979, codified at 19 U.S.C. § 1401a, sets forth a hierarchy of methods for the appraisement of imported merchandise. Under the Trade Agreements Act of 1979, the transaction value of imported merchandise is the primary or preferred method for determining the value of imported merchandise. Generally, transaction value is the price actually paid or payable for merchandise when sold for exportation to the United States, plus certain statutorily enumerated additions.

CBP, BIS, AND OTHER AGENCIES LAUNCH A NEW TASK FORCE TO COMBAT COUNTERFEIT GOODS

The Department of Homeland Security (DHS) published a press release announcing a new multi-agency task force, The Global Trade Task Force (GTTF), which is designed to protect national security and combat counterfeit goods. The multi-agency task force was launched recently in Detroit and DHS believes the task force could serve as a national model for related investigations.

CBP Needs Your Help to Improve their Operations in the 21st Century Business Environment – COMMENT PERIOD NOW OPEN!

U.S. Customs and Border Protection (CBP), has announced the re-opening of the public comment period on the six key themes identified by “The 21st Century Customs Framework” initiative. Now is your chance to provide feedback to CBP that can benefit your supply chain and the US economy.

CBP appreciates the need to stay modern to face the challenges of an evolving business landscape. To fulfill its mission, CBP is carrying out an initiative entitled “The 21st Century Customs Framework" which will seek to address and improve many aspects of CBP's trade mission to better position the agency to operate in the 21st Century business environment. Below are the topics CBP is seeking public input on:

New Import Detention Order Targets Tuna Harvested with Forced Labor

Effective February 4, 2019, Customs and Border Protection (CBP) has ordered the detention at all U.S. ports of entry of tuna and any such merchandise manufactured wholly or in part by the Tunago No. 61, which is a fishing vessel owned by Tunago Fishery Co., LTD a company located in Vanuatu. According to the CBP press release of February 6, 2019, importers of detained shipments are provided an opportunity to export their goods or demonstrate that they were not produced with forced labor. The Tariff Act of 1930 (19 U.S.C. § 1307) bans imports of merchandise or food produced in whole or at least in part by forced labor, including convict labor, forced child labor, and indentured labor.

TOP 10 MISTAKES MADE BY TRADEMARK OWNERS

In most jurisdictions, the majority of trademark filings are made by small businesses and entrepreneurs or solopreneurs. When starting a business, it is easy to get caught up on getting your business off the ground. Below outlines the TOP 10 mistakes trademark owners can make (and we will teach you how to avoid them and MUCH more in our seminar, ABC’s of Protecting Your Brand, on February 20, 2019).

1. Not Realizing That Protecting Trademarks Could Create Value for Your Business.

Most new businesses should analyze the value of their business from the start. While most businesses operate out of rented/leased space or straight out of the owner’s home and rely on loans to promote their services or financing for product inventory, businesses fall short in adding value to their own brand name. When it’s time to sell or liquidate businesses are left with little or no assets apart from their client lists and intellectual property, if any. Not investing in protecting their trademarks will diminish the value of their business in the future.

PAYING CHINESE TARIFF’S & YOUR COMPETITORS AREN’T?

Now that the Section 301 tariffs are effective, importers are required pay additional duties – but not all are doing so. We found that while some importers know their product is subject to one of the 3 Chinese tariff lists, they are either using HTS’s not on the list (even though that is not the correct HTS for their product), or using an HTS subject to additional tariffs, but, not paying the additional tariffs. If you are an honest importer paying the correct amount of additional duties, this may leave you unable to compete in the current market.

If you’ve noticed that some of your competitor’s pricing has not been affected by the additional tariffs and you have been forced to increase your prices to stay in business, you have an option to help equal the playing field.

CATCH UP ON DTL’S TOP BLOGS FROM 2018!

We want to make sure you stay up to date with the hottest trade topics from 2018. below is a summary of what you missed by category. Enjoy!

Why You Need Your VERY OWN ACE Account

The Automated Commercial Environment (ACE) is a U.S. Customs and Border Protection (CBP) system designed to facilitate legitimate trade while enhancing border security. ACE improves collection, sharing, and processing of information submitted to CBP and government agencies.

You can now double check your entries filed by your broker  with CBP & directly (or via a trusted consult) interact with CBP via ACE!

HELP US CELEBRATE 2018 SUCCESSES!

DTL saved clients MILLIONS of dollars in 2018, below we share some of success stories with you. We look forward to assisting you in 2019! U.S. Customs & Border Protection (CBP)

• Successfully assisted numerous importers in various seizure cases to assist in getting property returned, despite CBP claims merchandise was drug paraphernalia, counterfeit, etc.

Drug Paraphernalia, Priority Trade Initiatives, & Forced Labor

You don’t want to miss this one!

What: Drug Paraphernalia, Priority Trade Initiatives, & Forced Labor - An Update on CBP Enforcement

When: November 27th, 2018, 12:00PM-1:00PM EST

RSVP TODAY!

Will President Trump Impose New Tariffs on Imported Vehicles?

Under the direction of President Trump, U.S. Secretary of Commerce, Wilbur Ross has initiated an investigation under Section 232 of the Trade Expansion Act of 1962, as amended. “The investigation will determine whether imports of automobiles, including SUVs, vans and light trucks, and automotive parts into the United States threaten to impair the national security as defined in Section 232.”

What are the Section 232 Investigations?

Top International Law Blogs To Follow in 2018

We're ecstatic to announce Diaz Trade Law's Customs and International Trade Law blog was included in TOP 30 International Law Blogs! We were chosen from thousands of International Law blogs on the web using search and social metrics because we actively work to educate, inspire, and empower our readers with frequent updates and high-quality information.