TOP 5 Strategies to Mitigate the Impact of Tariffs

Many importers, exporters, and international businesses alike may be unaware that avenues exist to ensure that their products remain unabated by protectionist trade policies (think China tariffs).

This blog provides an easy reference overview of five (5) proven and legitimate options for duty-saving opportunities.

We recommend U.S. importers, exporters, and manufacturers to consider these five (5) options as they apply to all products from virtually any country subjected to a tariff, including Section 201 tariffs for solar systems, Section 232 tariffs for aluminum and steel, and the infamous Section 301 Tariffs in place for Chinese originating goods and violations of trade agreements, as well as acts, policies or practices that are unjustifiable,  unreasonable, or discriminatory and that burden or restrict U.S. commerce.

Did You Know That Sunglasses Are Regulated by The FDA As Medical Devices?

Whether you import sunglasses into the United States or sell sunglasses in the U.S. commerce, you are required to comply with the laws and regulations of the U.S. Food & Drug Administration (FDA). The FDA regulates sunglasses products to ensure their safety and impact resistance. These products are regulated as medical devices as they are intended to mitigate or prevent the effect of the sun's ultraviolet (UV) rays on the eyes of a person. The term “Medical Device” is defined in 21 CFR 201(h).

The following are FDA regulations that apply sunglasses. Failure to comply with them may result in CBP and FDA detaining your sunglasses at the U.S. port of entry.

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:

International Trade Day - May 23, 2018 - Port Miami

Miami World Trade Week is all about showcasing the importance of international trade, logistics, services and port operations to the South Florida economy and promotes Miami as the “Trade & Logistics Hub of the Americas”. World Trade Week includes a full of International Trade information at International Trade Day hosted by the World Trade Center Miami and U.S. Customs and Border Protection (CBP).

Over 300 international executives representing more than 150 companies have registered to attend. Top officials from CBP and other participating government agencies (e.g.  FDA, USDA, APHIS, PPQ, USFWS, CPSC, etc.) will be present and respond to your questions.

The UGG Boots Story: How Recording Your Registered Trademark Can Lead to a Jail Sentence

At the end of September 2017, Shi Wei Zheng, 42, plead guilty to one count of trafficking in counterfeit goods. During a five-month period, Zheng trafficked over 15,000 pairs of counterfeit UGG boots, with a total estimated retail value of over $2.5 million.

HELP! CBP Seized My Tobacco Products as Drug Paraphernalia, What Now?

Our office has increasingly received requests for guidance on importation of marijuana paraphernalia products to the U.S. where twenty-six (26) states have legalized the use of marijuana for medical purposes and/or personal consumption such as California, Massachusetts, Maine and Nevada. The purpose of this article is to dispel the confusion as to why paraphernalia products (grinders, storage containers, rolling paper, pipes, vape pens, etc.) are continuously being seized by U.S. Customs and Border Protection (CBP), even when such products may be used by tobacco smokers. It is important to address the realities between federal and state laws regulating drug paraphernalia products so importers can avoid CBP’s enforcement of U.S. Laws.

Why Does CBP Stop Drug Paraphernalia?

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      CBP secures America’s borders at and between ports of entry by stopping inadmissible people and illicit goods. The Tariff Act of 1789 provides one of CBP’s core functions: to act as the leading federal agency in determining the admissibility of goods that may enter the Commerce of the United States. Even though each State has internally legalized marijuana either for medical or recreational purposes, CBP still has the express power to authorize or not any merchandise that comes into the U.S. Thus, CBP can detain and seize “drug paraphernalia” even if you did not intend to use the product that purpose pursuant to 19 U.S.C. § 1595a(c) stating a violation of 21 U.S.C. § 863.

What Constitutes Drug Paraphernalia?

In 2014, a smoke shop owner imported different merchandise from China described as “glass hookahs and parts”. The Central District of California considered these products, which were valued at $82,933.64 as drug paraphernalia and thus detained and seized the merchandise pursuant to 19 U.S.C. § 1595a(c) for violations of 21 U.S.C. § 863. The U.S. sued the shop owner and the Court concluded that “despite…[the] erroneous characterization of the merchandise as ‘hookah pipes’…they are bongs, and are therefore barred from entry into the United States.”

To determine whether the product is drug paraphernalia, the Court will not only consider the Code, but also other relevant factors such as the existence and scope of legitimate uses of the product in the community and expert testimony concerning its use. Under 21 U.S.C. Section 863(e), the following items are used to determine if a product is drug paraphernalia:

(1) instructions, oral or written, provided with the item concerning its use;

(2) descriptive materials accompanying the item which explain or depict its use;

(3) national and local advertising concerning its use;

(4) the manner in which the item is displayed for sale;

(5) whether the owner, or anyone in control of the item, is a legitimate supplier of like or related items to the community, such as a licensed distributor or dealer of tobacco products;

(6) direct or circumstantial evidence of the ratio of sales of the item(s) to the total sales of the business enterprise;

(7) the existence and scope of legitimate uses of the item in the community; and

(8) expert testimony concerning its use.

There is no requirement that the violator had specific knowledge that the merchandise constituted drug paraphernalia. United States v. 160 Cartons of Glass Water Pipes, Case No. CV 12-8965- BRO (VBKx) (C.D. Cal. Mar.  10, 2014).

What Must You Refrain From Doing?

•        Sell or offer to sell drug paraphernalia
•          Mail drug paraphernalia or transport it through interstate commerce
•          Import or Export drug paraphernalia

REMEMBER: CBP is the federal agency that has control over everything that is imported and exported to/from the U.S. and therefore, they have the power to detain and seize your products when it constitutes drug paraphernalia. This will continue to happen until Congress decides to enact a Federal Law that allows marijuana consumption on a federal level or drug paraphernalia within the U.S.

What Do You Do if CBP Detains and/or Seizes Your Merchandise?

CBP has the power to detain persons or merchandise and make admissibility decisions. If CBP believes merchandise should be detained, it is required to send a Notice of Detention no later than five (5) business days from the day of examination. Often, the Notice of Detention does not specify the circumstances of the detention or is not even issued. It is important during this detention phase to communicate with CBP to discuss why your merchandise should not constitute drug paraphernalia and should be released.

CBP also has the ability to seize your merchandise if it is contrary to law and CBP will send a Seizure Notice, which you will have 30 days to respond, and typically we respond in the form of a Petition. Seizure cases are complicated, it is best to hire an expert who knows the policies, internal procedures and practices of U.S. Customs. Most importantly, getting involved early in the detention process is the best way to tackle this issue.

Want to Know if Your Product Will be Considered Drug Paraphernalia Prior to Importing?

Prior to importing your product, we recommend you review your product with an expert and determine whether to request a Binding Ruling from CBP. In CBP Ruling HQ H150766, an importer inquired on whether its hookah and hookah components constituted drug paraphernalia. The major issue CBP decided was whether the hookahs are “primarily intended” for use with drugs since it is considered a multiple-use item. CBP ruled that hookahs are admissible merchandise into the United States and held that they are not considered drug paraphernalia based on the weight of the evidence addressing the 8 criteria as set forth in 21 U.S.C. § 863, specifically its intended use for tobacco and not drugs.

If you have questions on whether or not your product constitutes drug paraphernalia and are interested in requesting a binding ruling, or if CBP has detained or seized your product, contact our office at info@diaztradelaw.com or (305) 456-3830 for assistance.

ISF PENALTIES HAVE OFFICIALLY ARRIVED: SELF FILE AND SELF POLICE

Back in July, 2013, we warned CBP would start enforcement efforts for Importer Security Filing (ISF) violations. What’s ISF Again? The ISF rules require importers and vessel-operating carriers to provide additional advance trade data on cargo shipments to CBP 24 hours prior to vessel lading, pursuant to Section 203 of the Security and Accountability for Every Port (SAFE Port Act) of 2006. (Practitioners Tip – This ONLY applies to goods arriving to the U.S. by Sea, not air). Now, CBP advised:

Yet Another Reason to Record your Trademark or Copyright with U.S. Customs and Border Protection (CBP)

Co-Authored by Jennifer Diaz and Kristina Hernandez-Tilson, an attorney in Miami, Florida, practices in state and federal court, litigating matters of civil and administrative law.  

Whether you are importing goods to the United States, or are a U.S. trademarks or copyright owner, there is a new law on the books that should be of interest to you, the Trade Facilitation and Trade Enforcement Act of 2015 (TFTE), which was signed into law on February 24, 2016.  TFTE, a bipartisan piece of legislation, is comprehensive in scope. In this Article, we will look specifically at Sections 302 through 311, the section on “Import-Related Protection of Intellectual Property Rights” (IPR). The TFTE highlights the fact that CBP treats IPR as a priority trade initiative. 

In this previous article, we explained the benefits of taking the extra step of recording your registered trademark or copyright with U.S. Customs and Border Protection (CBP), instead of relying solely on registration of the intellectual property with the U.S. Patent and Trademark Office (USPTO for trademarks), or the U.S. Copyright Office (for copyrights). Initial registration with the USPTO or the U.S. Copyright Office provides only public notice of ownership of the trademark or copyright, whereas taking the extra step of recording that registered trademark or copyright with CBP transforms the intellectual property into one that is now eligible to receive protection from CBP at over 327 U.S. Ports of Entry. Thanks to TFTE, this protection will now be more robust.

Prior to the passage of this Act, CBP was authorized, pursuant to section 818(g) of the 2012 National Defense Authorization Act (NDAA), but not required, to share unredacted images and samples with right holders if CBP suspected a product of infringing an IPR. According to House Report 114-114 – Part 1, which comments on TFTE, giving this discretion to CBP resulted in implementation of section 818(g) of NDAA that did not provide effective enforcement for trademark and copyright holders, and by replacing 818(g) of NDAA with section 302 of TFTE, the Committee intends for CBP to implement the latter in a manner that ensures effective CBP enforcement of IPR. This means greater protection for U.S. right holders, but also more of a need for pre-compliance for importers. 

Pursuant to section 302, when CBP suspects merchandise that violates a domestic copyright or trademark is being imported into the United States, it is required to provide the U.S. right holder with certain information, so as to facilitate the right holder in conducting his or her own examination and testing of the merchandise. Specifically, CBP must provide information that appears on the merchandise and its packaging and labels, including unredacted images of the merchandise and its packaging and labels. However, it should be noted that this requirement only kicks in if CBP determines that the examination or testing of the merchandise by the owner of the trademark or copyright would assist CBP in determining if the merchandise is being imported in violation of the IPR. In other words, CBP is still allowed to exercise some discretion. CBP is also permitted to use its discretion in determining whether or not it wants to provide the right holder with actual samples, unredacted, of the merchandise. 

As a result of this new law, CBP now has even more power to protect against IPR infringement to assist in identifying and seizing goods that violate U.S. IPR holders. During the recordation process with CBP, a right holder has the opportunity to train CBP on how to detect and identify infringing merchandise. Now, section 308 of the TFTE will ensure that CBP officers are trained effectively to catch the infringers. If counterfeit merchandise is seized and forfeited by CBP, CBP can also impose a penalty of the MSRP value of the infringing goods under the authority found in 19 U.S.C. 1526(f), and discussed in CBP’s own “FP&F Mitigation Guidelines”. The catch however, is that only those companies or individuals whose trademarks have been recorded with CBP enjoy this added benefit. This reinforces our prior advice in the “Top 10 Tips When Importing”, that all who have registered trademarks or copyrights take the extra step of recording those rights specifically with CBP. Only then will right holders enjoy the new protections afforded by TFTE.

It should also be noted that pursuant to subsection (d) of 302, all these requirements and discretionary powers now imposed on CBP are subject to security interests of the United States. CBP may not provide information, photographs, or samples to a right holder if providing such “would compromise an ongoing law enforcement investigation or national security.” 

Lastly, it is important to note that TFTE affords these enhanced protections not only to right holders, but even to those who have “submitted an application for registration under Title 17, United States Code, with the United States Copyright Office, to the same extent and in the same manner as if the copyright were registered with the Copyright Office.” Section 304. 

Are you now ready to record your registered trademark or copyright with Customs?

Why Pre-Compliance is a MUST

If the thought of monetary penalties, shipment delays, detentions or seizures of merchandise keep you up at night, then this article is for you.  First, it’s quite easy to establish a U.S. company, pick (what you hope is) a terrific customs broker, file Form 5106 with U.S. Customs and Border Protection (CBP) to request your importer number, pick a surety (there are many, your broker will likely sway you to their favorite) and WALLAH! Right? Wrong. No one sits you down during this process to say, wait, importing can be great, but, this is also a LOT of responsibility. Your company (and SOMETIMES even YOU) have liability and a burden when importing. This article will walk you through YOUR burden as an importer, how CBP can question your imports, and how penalties can ensue and what you should be doing about it, in advance! 

Diaz Trade Consulting Partners with 305 Cargo and SBDC on Compliance Seminars

Diaz Trade Consulting partners with leading experts to bring you compliance seminars catered to your international business.

3 Part Seminar Series You DON'T Want to Miss!

We are excited to announce our upcoming 3 part seminar series on Importing, Exporting, and FDA Compliance! Government and private speakers will participate.  

Each seminar will provide resources for new and experienced international trade professionals including:

Calling Medical Device Importers Attending U.S.'s TOP Medical Show, FIME

If you import medical devices into the U.S. (or want to), FIME is the trade show for you.  Last year, FIME surveyed attendees and received feedback that 52,890 FIME attendees were interested in 25 categories of medical device products. FIME is the #1 Medical Show, and the #1 Medical Trade Fair - and takes place from August 5-7, in my home town, at the Miami Beach Convention Center. Since 2010, I have had the privilege to be a speaker at FIME and had some of the largest groups of attendees to discuss compliance with the FDA, and how to resolve typical FDA and CBP issues.  

I'm thrilled to say I'm speaking again this year. My topic is "How to Effectively Resolve Typical U.S. Food and Drug Administration (FDA) and U.S. Customs and Border Protection (CBP) Issues for Medical Devices".

“Fast Track” Bill Signed Into Law: Next Up Trans-Pacific Partnership

On Monday, President Obama signed Trade Promotion Authority (TPA) into law. TPA, also known as the “fast track” bill, was seen as a crucial component in solidifying the Trans-Pacific Partnership (TPP).  Although the re-authorization of TPA grants the President greater authority in his ability to negotiate and secure a trade deal--thus speeding up the TPP negotiation process--the TPP still has some tough negotiations ahead. However, the new authority Congress granted the President will now give him the power needed to ultimately conclude negotiations on the TPP.

In Tampa? Meet the Expert May 12, 2015

I'm proud to participate in America's SBDC's "Meet the Expert" seminar on May 12, 2015. If you are in Tampa, you won't want to miss this seminar. It will take place from 3:30-5:30 PM at the FSBDC at the University of South Florida, Port Tampa Bay Building, and will cover the following HOT Topics in International Law:

Jen Diaz to Speak on Import Regulations

The 11th Annual International Business Trade Expo (IBTE), “Expanding Beyond Our Borders,” will be held Thursday, October 16, 2014 at the Broward Center for the Performing Arts. The event promotes international trade and highlights the significant impact that bilateral trade has in South Florida’s economy. IBTE is hosted by the Lauderhill Regional Chamber of Commerce (LRCC) in partnership with: Florida Chamber of Commerce; Enterprise Florida; City of Lauderhill; Broward Center for the Performing Arts; Unique Production International, and MD Marketing Network.

Business leaders from across the globe will convene to strategize on how to promote and expand bilateral trade between Florida the Caribbean and Latin America. Attendees will hear from experts on trade issues and regulations affecting Florida’s international business economy, and more.

Featured Speakers, Panels and Workshops are listed below:

Export Penalties Already Total $184 MILLION in 2014 – Want to Learn Who, What, Why & How to Stay Compliant?

Within just the first nine weeks of 2014, almost $182 million dollars in penalties have been assessed against companies for OFAC and ITAR export violations.  Within those same nine weeks alone, companies have been ordered to pay the Department of Treasury almost $25 million dollars more than was ordered in all of 2013. Simply put, compliance is critical, and non-compliance is costly!

Don’t miss this update on export enforcement actions stemming from a busy 2013 and start of 2014.

Jen Diaz Honored as Rising Star by DBR

On July 18, 2013, the Daily Business Review (DBR) announced the 40 young Florida lawyers chosen as 2013 Rising Stars by a panel of DBR judges. I'm proud to announce I have been selected as one of the 40 Rising Stars!
The article stated:

Our panel carefully reviewed more than 125 nominations of attorneys 40 years old and under who have established themselves as top contributors to the practice of law and their communities, and are in a position to become tomorrow's top lawyers and leaders.

See the list of the 40 Rising Star honorees.

Profiles of all the Rising Stars will appear in a DBR special section on Wednesday, Sept. 18, and an event honoring their accomplishments will be held that night from 6 p.m. to 9 p.m., at the Bankers Club in downtown Miami, One Biscayne Tower, Biscayne Room, 14th Floor.
For those who wish to attend the event to honor the Rising Stars, please contact Andre Sutton at asutton@alm.com or (757) 721-9020. The event's main sponsor is Ice Legal.

Congratulations to the 2013 Rising Stars.

-David Lyons, Editor in Chief
-Chris Mobley, Publisher

I'm honored to have been selected and invite you to join me as we celebrate on September 18th at the Bankers Club.

Do You Know the TOP 10 COMPLIANCE TIPS?

If you import, you need to!

On behalf of the Organization of Women in International Trade (OWIT-South Florida), I am hosting an informal round table where members OWIT will have the opportunity to get to know one another and learn all about compliance with U.S. Customs and Border Protection (CBP)!

Yes, men are welcome!

This session is especially important for importers and brokers and those in involved in international trade.

Attendees will receive a special "cheat sheet" providing great resources to utilize when importing, including the top 10 compliance tips.

Space is limited to OWIT members! Become a member of OWIT here (it is only $100 for a YEAR of benefits including these FREE IBR's), and assure your spot by sending in your RSVP today!

Please email Jennifer Diaz with any questions!