WE'VE MOVED - SUBSCRIBE TODAY!

Thank you to all who have followed Customs and Trade News on Blogger. Please note we're moving to the Customs and International Trade site! You can easily subscribe to keep up with the latest customs and international trade law news and relevant events. 

http://customsandinternationaltradelaw.com/

Subscribe NOW to ensure you never miss an update on the hottest news in international trade.

Questions related to importing/exporting? Contact Diaz Trade Law today at 305-456-3830 or info@diaztradelaw.com.  

PC Wire Strand Availability Facing Risk

Guest article drafted by David Craven, an expert on AD/CVD matters, who serves Diaz Trade Law clients in an Of Counsel capacity.

Do you use, or are you planning to use PC Wire Strand?

PC Wire Strand is a critical raw material used in the production of pre-stressed concrete. The availability of such a product is now at serious risk, which would make producing pre-stressed concrete difficult and expensive. A trade action has just been filed,  seeking to impose anti-dumping and countervailing duties on imports from fifteen countries (Argentina, Columbia, Egypt, Indonesia, Italy, Malaysia, Netherlands, Saudi Arabia, South Africa, Spain, Taiwan, Tunisia, Turkey, Ukraine and the United Arab Emirates). This investigation is being conducted in parallel by two separate Federal Agencies; The International Trade Commission which decides whether the U.S. industry is being injured by the imports and the U.S. Department of Commerce which decides the amount of any duties.

Diaz Trade Law Remains Available During the Coronavirus

As information about the Coronavirus (COVID-19) continues to rapidly evolve, we at Diaz Trade Law want to assure you that providing you the best service remains our top priority. We have received many calls asking if we are still working on cases and taking on new cases. The answer is, yes. To schedule a consultation, please contact info@diaztradelaw.com.

We have plans in place to maintain the high level of service that is expected of us.  You can depend on our team to handle matters with our usual efficacy, and we have instituted measures to protect you and our staff.

FREE Webinar Series on Intellectual Property Rights

Do you want to learn more about intellectual property rights (IPR)? Do you want to understand how IPR and U.S. Customs mix (and don't mix)? Do you want to understand how to properly protect your brand internationally and domestically and what type of enforcement action U.S. Customs can take against infringers? If so, this 3 part FREE seminar series is especially for you. Act now, and reserve your FREE seat while they last. Did we mention it's FREE??

Date and Time:

Wednesday, January 29, 2020

12:00 PM EST to 1:00 PM EST

FREE Webinar!

Session Highlights:

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.

Trump to Impose Tariffs on All Imported Goods From Mexico

As a result of the immigration crisis intensifying at the border of the United States and Mexico, President Trump announced a five (5) percent tariff to be levied on all goods from Mexico starting June 10^th. 

The tariffs are set to continue to increase by five percent each month up to twenty-five percent. The tariffs will permanently remain at the 25 percent level unless and until Mexico substantially stops the illegal inflow of aliens coming through its territory.

The effective date of the imposition of the additional tariffs are as follows:

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:

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.

Chinese Telecom Giant, ZTE, Faced with Largest Penalty Ever Levied

In our previous post, we discussed ZTE’s record penalty for selling technology with US-origin chips to North Korea and Iran, in violation of US trade laws. The company initially received a $1.19 billion in penalties and was ordered to reprimand the executives responsible for the malfeasance's as a condition to re-enter the United States (US) market after a three-year suspension. Despite telling the US government that the guilty executives had been properly punished, it became clear that they were instead rewarded with bonuses. This violation triggered an automatic ban of ZTE from the US market for seven (7) years. As the 4^th largest seller of cell phones to the US, the ban on ZTE serves as a means of protecting American production.

After the announcement, the ensuing backlash from Beijing, as well as trade talks in China, President Trump stated that he and Chinese president Xi Jiping are working together to bring ZTE “back into business”.

Now, the Trump administration threw a metaphorical lifeline to this tech giant, seemingly easing tensions with Beijing. Secretary Ross announced a $1.4 Billion dollar settlement with ZTE.

ZTE has agreed to severe additional penalties and compliance measures to replace the U.S. Commerce Department’s Bureau of Industry and Security (BIS) denial order imposed as a result of ZTE’s violations of its March 2017 settlement agreement.  Under the new agreement, ZTE must pay $1 billion and place an additional $400 million in suspended penalty money in escrow before BIS will remove ZTE from the Denied Persons List. These penalties are in addition to the $892 million in penalties ZTE has already paid to the U.S government under the March 2017 settlement agreement.

The announcement of a deal stirred up controversy in Washington, due to the administration’s uncertain stance towards China. The deal provides ZTE the opportunity to buy American parts, so long as it complies with specific parameters. The US not only levied over 1 Billion in penalties against ZTE, but also placed $400 million in escrow, in the event it reneged on the deal. The agreement will be enforced by a handpicked US compliance team, which will serve at the US Commerce Department for the next decade. The team is tasked with overseeing ZTE’s replacement of its entire board of directors, as well as oversight of general compliance.

The conditions set on ZTE to reenter the US are the toughest sanctions ever to be placed on a public or private company. Although the move faced backlash in Washington, “analysts say the ban is likely to have cost ZTE billions of dollars in lost revenue, tarnished its brand and strained its relationships with customers around the world”. As one of the largest and most profitable companies in China, ZTE, touting over 160 corporate and governmental clients worldwide, plays a vital role in the China’s functioning.

The initial announcement of ZTE’s ban, included “Commodity, Software or Technology” products as items prohibited to be sold or exported to ZTE. Effectively, the ban would do more than just tarnish the brand, rather it would have potentially ended ZTE’s ability to function as a mobile electronics production company.

While seemingly gracious for the Chinese government and the Chinese economy, the deal sets a precedent that sanction violators may never face severe consequences. Although the company must pay over $1 Billion in penalties, it was granted a gift. Assuming that they work within the confines of the deal, the penalties will be a minuscule price to pay, while ZTE maintains its position and its prowess.

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?

REGISTRATION OPEN - 2018 CBP Trade Symposium

U.S. Customs and Border Protection announced that the 2018 Trade Symposium will be held on August 14-15,  2018 at the Marriott Marquis in Atlanta, GA. Registration opened today Tuesday, May 29^th at 12:00 p.m. EST.  This year's symposium will include discussions on:

ZTE Barred by U.S. Government & ZTE Fights Back!

Background

China-based Zhongxing Telecommunications Equipment Corporation and ZTE Kangxun Telecommunications Ltd (collectively “ZTE”) entered a guilty plea and agreed to pay a combined penalty up to $1.19 billion to settle criminal and civil allegations that ZTE violated U.S. export control laws and U.S. sanctions by illegally shipping U.S.-origin items to Iran.

The record-breaking settlement agreement was with the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the U.S. Department of Justice (“DOJ”), and the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”). The penalty assessed against ZTE included a $100,871,266 civil monetary penalty imposed by OFAC; a $430,488,798 in combined criminal fines and forfeitures; and a $661,000,000 penalty payable to BIS, of which $300,000,000 were suspended for a seven-year probationary period.

CBP Now Issuing Penalties for Wood Packaging Material Violations

Due to the increase in penalties for wood packaging material (WPM) violations – we thought it important to remind the importing community that CBP is issuing WPM penalties and the background as to why.

On September 25, 2017, CBP issued Cargo Systems Messaging Service (CSMS) #17-000609 informing importers of CBP’s intent to issue penalties for wood packaging material violations. In the message, CBP states all wood packaging material (WPM) imported into the United States must have been treated at the place of origin, and contain the appropriate marking upon importation.  CBP is trying to “prevent the introduction of exotic timber pests,” and is encouraging the importing community to look towards alternatives to WPM and to educate your supply chains about ISPM 15 requirements.

Right to Make Entry: Are You Entitled to Import Goods?

Prior to importing goods into the U.S. -it is essential to confirm that the Importer of Record listed on the entry actually has the "Right to Make Entry".

Who is entitled to make entry of goods?

Under U.S. law, the right to make entry for goods is held only by the importer of record.

The term importer of record, provided under Section 484 of the United States Code, was amended by Public Law 97-446.  Under those provisions, the importer of record is defined as

On the Brink of a Trade War: Trump’s New Tariff Plan on Chinese Imports

The Trump administration has engaged in a trade showdown with China, targeting more than $50 billion worth of products.  The administration’s actions are the result of investigations under Section 301 of the Trade Act of 1974 (“Section 301”) and Section 232 of the Trade Expansion Act of 1962 (“Section 232”). 

Section 301 

Making E-Commerce Safer: CBP Releases New E-Commerce Strategy

On December 1, 2016, we wrote about U.S. Customs and Border Protection’s (CBP) new E-Commerce and Small Business Branch, which was created to help consumers and merchants safely navigate the complexities associated with the steady rise of global e-commerce. CBP defines e-commerce as high-volume, low-value shipments purchased via electronic means. E-commerce shipments pose the same health, safety, and economic security risks as containerized shipments, but the volume is higher and growing. Additionally, transnational criminal organizations are shipping illicit goods to the U.S. via small packages due to a perceived lower interdiction risk and less severe consequences if the package is interdicted. 

In an effort to combat those risks and have a stronger trade posture in the e-commerce environment, the CBP released its e-commerce strategy. The new e-commerce strategy addresses the growing volume of imported small packages and the challenges it presents for the U.S. economy and security. 

 The strategy includes efforts to educate the public and trade community to ensure they understand their responsibilities as importers to comply with customs regulations. 

What New Challenges Does E-Commerce Pose to the U.S.