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!

BRIDGING THE GAP - EMPOWERING BUSINESSES TO GO GLOBAL (October 24-25, 2018 - Nairobi, Kenya)

As President of OWIT International, I am honored to invite you to participate in our 18th Annual World Conference!!

In response to global demand and burgeoning trends in trade modernization, OWIT International is bringing back its 18th Annual World Conference. In recognition of Nairobi’s vast potential to engage in global trade, OWIT International has selected its OWIT Chapter in Nairobi, Kenya as the host for this year’s annual conference. On October 24-25, 2018, OWIT members around the globe will converge with supporters and experts in their field to empower both the local community and business leaders throughout the world. Day One will be comprised of a capacity-building workshop for local women entrepreneurs seeking to take their business across borders. Day Two is a conference for trade practitioners and policy makers from around the world for discussing best practices, what’s next for the future of trade, and what women’s roles should be in that future. Day 3 will be the first ever OPEN OWIT Board Meeting where we will discuss what it takes to start an OWIT chapter and best practices for existing chapters. Of course, we are making this a week to remember, so it also includes a safari!

REGISTER TODAY!

Deadline Approaching - Why Should Your Product Not Be on The 301 List!

We have been working hard to keep you up to date on the current Trade War between the United States and China.China has taken retaliatory actions against the United States in response to the first wave of additional U.S. duties that became effective on July 6, 2018. The United States is gearing up to impose a second round of 10% additional duties on approximately $200 billion worth of products of Chinese origin. The USTR has also been directed to consider levying a 25% tariff on these $200 billion worth of Chinese imports - thereby increasing the 10% to 25%.

Now, you have the ability to tell USTR why your products should not be on the 301 List.

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?

FDA Issues New Guidance to Help Food Facilities Meet Registration Requirements

On May 25, 2018, the U.S. Food and Drug Administration issued a Small Entity Compliance Guide (SECG) to help food facilities meet their registration requirements under the Federal Food, Drug, and Cosmetic Act (FD&C Act).

The FD&C Act requires food facilities engaged in manufacturing/processing, packing, or holding of food for human or animal consumption in the United States to register with the FDA. The Food Safety Modernization Act (FSMA) added new registration provisions to the FD&C Act. In 2016, FDA issued a final rule to reflect these changes, which include the following:

• Facilities are required to provide FDA with assurance that they will be permitted to inspect their facility (in accordance with the FD&C Act).
• Facilities are required to renew their registration every other year.
• FDA now has the authority to suspend a facility’s registration.

Under the 2016 final rule, additional information is also required that supports FDA’s ability to respond quickly to food-related emergencies and that will also help the agency more efficiently use the resources it has for inspections.

The SECG explains which types of facilities are required to register, and when and how to do that. The guide also explains the consequences for facilities that fail to register or to renew their registration as required. In addition, the guide explains when FDA can suspend a facility’s registration and the effect of a suspension order. To further assist small facilities, the SECG includes an “At-a-Glance” that summarizes all of the key information in the document.

Diaz Trade Consulting provides both registration and U.S. Agent services to food facilities. To register or find more information about registration, owners and operators of facilities should visit www.FDA-USA.com. For More Information check out the Draft Guidance for Industry: Questions and Answers Regarding Food Facility Registration (7th Edition)-Revised.

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.

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:

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.

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.