AD/CVD & Trade Policy 

• On February 4, 2022, the House of Representatives passed the America Competes Act of 2022 containing provisions such as 102401 which limits protests against U.S. Customs decisions on claims of evasion of AD and CVD orders, a counterpart to the U.S. Senate bill passed in the late fall. The two bills will need to go to conference now to be reconciled. Both bills include provisions for the renewal of GSP and adopt MTB.

ITAR

• On February 2, 2022, the Department of State (DOS) proposes to amend the International Traffic in Arms Regulations (ITAR) to clarify the definitions of export and reexport. DOS proposes to replace the term “national” with “person” in the Canadian exemptions; revise the exemption for intra-company, intra-organization, and intra-governmental transfers to dual nationals or third country nationals; and correct administrative errors in the voluntary disclosures section.

USTR 

• On February 1, 2022. Deputy U.S. Trade Representative Sarah Bianchi announced China had failed to meet its commitments to increase purchases of U.S. farm and manufactured goods, energy and services by $200 billion under a two-year Phase 1 trade deal that expired at the end of 2021.
• On February 2, 2022, the U.S. – Brazil Protocol Relating to Trade Rules and Transparency enters into force after completion of internal procedures. The Protocol modernizes the 2011 Agreement on Trade and Economic Cooperation (ATEC) by adding new commitments on Trade Facilitation, Good Regulatory Practices, and Anti-Corruption based on the relevant chapter of the United States-Canada-Mexico Agreement.
• On February 4, 2022, the United States and European Union (EU) concluded negotiations to allow for resumption of bilateral trade in bivalve molluscan shellfish.  For the first time since 2011, U.S. producers, beginning in the states of Massachusetts and Washington, are eligible to export live, raw and processed bivalve molluscan shellfish to the EU, including oysters, clams, mussels, and whole or roe-on scallops.

If you have questions about these updates, contact our Customs and International trade law attorneys at info@diaztradelaw.com or call us at 305-456-3830.

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A lot has happened in the first 6 months of the Biden administration. Notable developments include (at least temporary) resolutions in the large civil aircraft and digital service tax disputes, consensus around a global minimum corporate tax of 15%, lawsuits pertaining to Section 232, increased export controls enforcement, shifting U.S. policy stances on Cuba, and more. However, the most important developments pertain to the ongoing U.S.-China trade war. The U.S. and China are engaged in ongoing negotiations while tensions have risen, a lawsuit challenging Trump’s imposition of 301 tariffs are underway, and a massive U.S. competitiveness bill is being considered in Congress that could bring back broad China tariff exclusions. Join us for a jam-packed hour where we discuss everything that has happened in the world of U.S. trade policy over the past 6 months, and provide insight into how Biden’s trade policies affect industry.

Register today to hear from this experienced trio:

• Todd C. Owen is the former Executive Assistant Commissioner, U.S. Customs and Border Protection (CBP), Office of Field Operations (OFO). As the senior executive for the Office of Field Operations for over 5 years, Mr. Owen was responsible for all operations at the 328 ports of entry in the United States, as well as overseas operations in 32 countries.
• President and Founder of Diaz Trade Law, Jennifer (Jen) Diaz is a Chambers ranked, Board Certified International Attorney specializing in customs and international trade.
• Associate Attorney of Diaz Trade Law, Sharath Patil, assists U.S. manufacturers, distributors, and importers with a range of export compliance and enforcement matters pertaining to the U.S. Department of Commerce; the U.S. Treasury Department; the U.S. State Department; and more.

This one-hour webinar provides an overview of President Biden’s Trade Policy six months into his presidency, an update on CBP enforcement actions, and a summary of Congressional actions pertaining to trade policy.

In This Webinar You Will Learn:

• An Update on the Status of the Section 301 Lawsuit
• An Overview of Key Developments in the U.S.-China Trade War under Biden’s Administration
• Congressional Developments under Biden
• Status of CBP Enforcement Efforts under Biden
• Recent Developments in the Miscellaneous Tariff Bill and Generalized System of Preferences
• The Impact of Economic Stimulus Efforts on Trade Flows
• An Update on USMCA Implementation
• The Latest on U.S.-Cuba Trade
• And Many Other Developments

Who Should Attend:

• Importers/Exporters
• Customs Brokers
• Regulatory Affairs Professionals
• In-house Legal Counsel
• Product Development Managers
• Others Interested in Trade Policy

This webinar is eligible for continuing education credit from the NCBFAA Educational Institute. Space is limited, registration required! Access instructions will be provided after your registration is complete. Don’t just take our word for how awesome Diaz Trade Law webinars are. Click here to see what our past attendees had to say. Be sure to join us on July 28, 2021!

Thankfully, U.S. Customs and Border Protection has been working to curb this inhumane practice.

Ending the “consumptive demand” clause; 19 U.S.C. § 1307

The relatively recent push to fight forced labor came about with revisions to Section 307 of the Tariff Act of 1930. Section 307 of the Tariff Act of 1930 codifies into law the prohibition of importing items produced -wholly or in part- by the use of forced labor.

Previously, under the “consumptive demand” clause in 19 U.S.C. § 1307, the United States effectively allowed for the importation of goods that had been partially produced by forced labor. However, since the enactment of the Trade Facilitation and Trade Enforcement Act of 2015, which eliminated the “consumptive demand” clause, United States’ federal agencies have been greatly increasing active measures to combat this practice. Since its repeal, CBP, in partnership with U.S. Immigration and Customs Enforcement (ICE), has been actively investigating allegations of forced labor around the globe, examining various supply chains in order to curb the illicit practice. According to CBP, the agency does not target whole product lines or industries, rather it focuses on information regarding specific actors and their merchandise. The Forced Labor Division, established in 2017 within CBP’s Office of Trade, leads enforcement of the prohibition against importing goods made with forced labor.

Forced Labor Process

CBP provides the public with an infographic detailing the detention process if merchandise is in any way related to forced labor, and in violation of 19 U.S.C. § 1307. Below is a chart categorizing CBP’s detention process for merchandise related forced labor:

FORCED LABOR PROCESS
Step(s)	Description
(1)  Receipt of Allegation or Self-Initiation	The provisions of 19 C.F.R § 12.42 detail who may submit information
(2)  CBP Evaluation	CBP must determine or establish reasonable suspicion to issue a Withhold Release Order (WRO) or conclusively demonstrate that merchandise is prohibited to publish a finding.
(3)  Commissioner Review of WRO Issuance	If Commissioner approves a WRO, CBP detains subject merchandise.
(4)  Issuance of WRO	Port directors instructed to withhold release of subject merchandise.
(5)  Detention of Merchandise	CBP begins to detain all shipments within WRO parameters.
(6)  Export, Contest, or Protest	Importer may export, contest, or protest; CBP may release or exclude
(7)  Finding/ Customs Bulletin and Federal Register	If a finding is published, subject merchandise that has not been released from CBP custody shall be treated as an importation prohibited by 19 U.S.C. § 1307.
(8)  Seizure – Subsequent FPF Process	CBP will seize merchandise. Violator may petition for the release of merchandise
(9)  Judicial Forfeiture	CBP will commence summary forfeiture proceedings.

Withhold Release Order(s) WRO(s)

The strategic use of Withhold Release Orders (WROs) by CBP has been especially effective at identifying certain nations, industries, and companies that employ forced labor. CBP issues WROs after receiving information that reasonably indicates the use of prison or forced labor at any point in a product’s supply chain. Prior to TFTEA, the United States had only implemented 30 WROs in the past five decades. Since 2016, however, USTR has implemented over 20 WROs.

CBP provides the public with a list of all WROs and the findings of the investigations. The chart below details the WROs imposed since the abolition of the “consumptive demand” clause by country, alphabetically:

What Can You Do to Address Forced Labor?

Have you taken reliable measures to ensure that you are not inadvertently using forced labor at any point in your supply chain? Ask yourself these 12 questions.

According to CBP, importers must exercise reasonable care and due diligence to ensure that forced labor is not included in any aspect of their supply chain. To effectively do this, importers must include forced labor into their internal risk assessment. CBP recommends referencing the International Labour Organization’s eleven (11) Indicators of forced labor, which are:

1. Abuse of Vulnerability
2. Restriction of Movement
3. Withholding Wages
4. Deception
5. Isolation
6. Physical & Sexual Violence
7. Intimidation & Threats
8. Retention of Identity Documents
9. Debt Bondage
10. Abusive Working & Living Conditions
11. Excessive Overtime

Additionally, to further its strategic goal of stopping the importation of goods produced with forced labor, CBP recommends reviewing the Department of Labor Comply Chain principles to create a social compliance system as a best business practice:

Comprehensive Supply Chain Profile

• Does the importer have a complete understanding of the supply chain from the sourcing of raw materials (manufacturing factory, farm, mines, etc.) to packaging and shipping, to ensure that none of the production uses forced labor?

Written Code of Conduct

• Has the importer ‘developed and applied for a written code of conduct for all international interactions associated with the sourcing of foreign goods?
• Is the code of conduct shared with all suppliers in the global supply chain as a stand-alone document or as addendums to purchase orders, contracts, or letters of credit?
• Does the code of conduct include specific language as to minimum labor standards as specified by the United Nations International Labor Organization, other intergovernmental organizations, or multi-stakeholder initiatives?

Robust Internal Control Process

• Are the internal controls established according to professionally recognized objective audit standards?
• Does the US importer have sufficient internal controls in place to effectively deter and detect instances of noncompliance with the code of conduct and other best-practices?
• Does the U.S. importer conduct periodic compliance audits using in-house personnel or external audit professionals?
• Does the U.S. importer’s internal control process cover every level of the product supply chain including relevant business documents?
• Does the U.S. importer have adequate corrective action plans to address non-compliance and deter weak business practices?

Tips for importers whose shipment(s) has been detained under a WRO:

• Merchandise Subject to a WRO: If your product has been detained by CBP due to a WRO, you may export your shipment to another country within three (3) months of the initial importation.
• Merchandise Subject to a Finding: Within three (3) months of importation, the importer must submit “a certificate of origin and a detailed statement demonstrating that the subject merchandise was not produced with forced labor. If the proof submitted does not establish the admissibility of the merchandise, or if none is provided, the merchandise is subject to seizure for a violation of 19 U.S.C. § 1307”.
• Amendment or Revocation of a WRO/Finding: WROs have no expiration date and stay in effect until they are revoked. WROs may be revoked if CPB is presented with sufficient evidence that substantially proves that the “subject merchandise was not made with forced labor, is no longer being produced with forced labor, or is no longer being, or likely to be, imported into the U.S”.

For assistance with importer due diligence in relation to forced labor requirements; or for assistance re-exporting your detained merchandise, in submitting documents to dispute the use of forced labor, or for assistance with the revocation request process, contact our Customs and International Law attorneys at info@diaztradelaw.com or 305-456-3830.

Source: U.S. Census Bureau

Co-Authored by Sharath Patil, a trade policy researcher in Washington, DC., with a background in global logistics, international trade, and commercial diplomacy. Patil is an active member of the District of Columbia bar, and is a graduate of the University of Oregon School of Law.

What and Where do Floridians Export?

Exports are big business in the Sunshine State. In 2019, export sales brought $56.3 billion into Florida’s economy. International trade has supported 2.4 million Floridian jobs. Floridians export a wide array of goods all over the world. In 2019, the top export markets for Florida’s goods were Brazil, Canada, and Mexico, respectively. See Chart 1. We will discuss the significance of each of these markets, in turn.

Export Market #1: Brazil

Brazil is Florida’s largest export market. Florida merchandise exports to Brazil were valued at $4.5 billion in 2019. Floridians have relied on Brazil as a top export partner for many years. Brazil’s important relationship with the state of Florida has been strengthened by the contributions of Florida’s large Brazilian-American community, which has grown to be 300,000 strong in recent years – becoming the largest Brazilian community in any U.S. state. Additionally, more than one million Brazilians visit Florida annually. The Consulate General of Brazil in Miami’s Economic and Commercial Affairs Office and the Brazil-Florida Business Council are helpful resources for Floridian businesses wishing to export to Brazil.

Top Floridian exports to Brazil are comprised of the following categories:

Export Market #2: Canada

Canada was Florida’s second-largest export market in 2019. Florida merchandise exports to Canada were valued at $4.4 billion in 2019. In fact, a 2017 study found that Florida’s trade with Canada supports 446,300 Floridian jobs. Furthermore, Canadians significantly invest in Florida. A large community of Canadians who spend the winter months in Florida, known as snowbirds, have invested billions of dollars into Florida’s economy, including its real estate market. Enterprise Florida, a Florida state government international trade resource, operates an office in Canada and assists Floridians with export and investment opportunities in Canada. Additionally, Canada operates a consulate in Miami.

Top Floridian exports to Canada are comprised of the following categories:

Export Market #3: Mexico

Mexico is Florida’s third largest export market. Florida merchandise exports to Mexico were valued at $3.3 billion in 2019. A 2017 study found that Florida’s trade with Mexico supports 304,100 Floridian jobs. Mexico operates consulates in Miami and Orlando. Although Florida has long enjoyed a strong trade relationship with Mexico, a recent agreement between the Florida Ports Council and the Mexican Coordinadora de Puertos has sought to increase maritime trade between Florida and Mexico. Miami has one the nation’s largest maritime ports, so the opportunities for increased seaborne trade with Mexico are promising.

Top Floridian exports to Mexico are comprised of the following categories:

Resources

Exports are an important dimension of Florida’s economy, and opportunities abound for Floridian manufacturers and service-providers. If you think exporting might be right for you, be sure to look into resources such as the South Florida District Export Council (as a board member of the South Florida DEC, Jen Diaz is happy to answer any questions you have) and the U.S. Commercial Service Florida.

Florida exporters should work to ensure their exports are complaint with U.S. trade and customs laws. Do not know where to start? Check out the Top 10 Tips When Exporting. Have questions about exporting compliantly or want more information on your specific products? Contact info@diaztradelaw.com.

DATA NOTES: All trade flow data is sourced from the U.S. Census Bureau. Trade data is adjusted for inflation to base month June 2020. Trade data reflects merchandise trade only, and does not include trade in services.