Background

Historically, the majority of CBP refunds for the overpayment of duties, taxes, and fees were transmitted via paper checks issued by the U.S. Department of the Treasury. The issuance of electronic refunds via ACH has been available for some time, but opting-in for electronic refunds has been voluntary and limited in scope. In 2024 and 2025, approximately 30% of the refunds CBP issued annually were issued electronically.

On March 25, 2025, President Trump issued an Executive Order titled “Modernizing Payments To and From America’s Bank Account.” The order mandates the transition from paper checks to electronic payments for all Federal disbursements and receipts.

Electronic Refunds

To implement the electronic payments Executive Order, CBP published an Interim Final Rule on January 2, 2026, announcing that the agency will issue all refunds electronically (subject to certain exceptions under 31 CFR part 208) effective February 6, 2026. This rule applies to refunds issued to all importers, brokers, filers, sureties, service providers, facility operators, foreign trade zone operators, and carriers,  and any designated third parties listed on CBP Form 4811. After this date, CBP will not issue any refunds by check, unless a waiver has been approved. Comments on the Interim Final Rule are due March 3, 2026.

Importers who are not already enrolled in the ACH Refund program must submit an ACH Refund application through the ACE Portal. As part of the ACH Refund application, all applicants are required to use a U.S. bank account (note that foreign Importers of Record may have an ACE account, but a U.S. bank account must be used for the ACH application). Once an application for ACH Refund is successfully submitted and approved in the ACE Portal, all future refunds will be issued electronically to the designated U.S. bank account.

Importers who are currently enrolled in the ACH Refund program will continue to receive electronic refunds via ACH without interruption. More resources on the migration from CBP here.

Set Up Your ACE Account Today!

Importers must set up an ACE account to access the ACH Refund application, but there are many other reasons to set up and utilize an ACE account. ACE is the primary system for the international trade community to submit import and export data to communicate with CBP and other participating government agencies. CBP and the partner government agencies use ACE to collect, track, and process required trade information. 

An ACE account gives importers:

• Full visibility into import activity
• Improved compliance through real-time monitoring
• Electronic notice & document management
• Ability to manage payments, refunds, and statements
• Better data for audit preparation
• Streamlined communication with CBP

Additionally, if the IEEPA tariffs are eventually found to be unlawful and are refunded, processing refunds electronically through ACE will be far easier and more efficient for CBP.

Diaz Trade Law can help you set up your ACE account, connect your ACH information, assist you with reports, upload responses to CBP on your behalf, and more. Contact us today to get started: info@diaztradelaw.com or 305-456-3830.

Learn more:

• Webinar: ACE – Auditing Your Import History
• Why You Need Your Very Own Ace Account
• Webinar: Importing 101: A Crash Course in CBP Compliance and Best Practices
• Webinar: Navigating CBP Regulations: Essential Practices for Import Success

What is De Minimis?

De minimis is a Latin term that means “of the smallest things,” “trifling,” “insignificant.” In the U.S., the de minimis rule dates back to the Tariff Act of 1930. Upon passage of the act, individuals and businesses were permitted to import shipments under $200 without paying duties and taxes. 

The intent behind the exemption was to allow CBP to focus on higher-risk and higher-revenue imports and to encourage small-scale trade. In 2016, the U.S. raised the de minimis threshold to $800 with the passage of the Trade Facilitation and Trade Enforcement Act. 

After the 2016 change, de minimis shipments surged, from 139 million in FY 2015 to 1.36 billion in FY 2024. International retailers took advantage of the new threshold, and many U.S. policymakers began referring to de minimis as a “loophole.” 

Citing safety and fairness concerns, there were dozens of unsuccessful efforts in the U.S. Congress to end de minimis. Finally, the Big Beautiful Bill of 2025 included a provision that permanently repeals the statutory basis for the de minimis exemption worldwide, effective July 1, 2027. However, on July 30, 2025, President Trump signed an Executive Order expediting this timeline, ending the exemption on August 29, 2025. 

What the Changes Mean for Consumers

With the duty-free threshold eliminated, all imported items, no matter how low in value, now face tariffs. This shift will likely translate into higher prices for consumers. Some global postal services including Australia Post and Deutsche Post, have paused shipments to the U.S. As a result, consumers may experience delays and canceled orders. Consumer groups advise consumers to re-read cancellation and return policies for international merchants going forward. 

What the Changes Mean for Importers

Following the Executive Order, CBP began publishing guidance to help importers navigate the change. As of August 29, 2025, all requests for de minimis entry will be rejected by CBP. Importers will be required to submit an entry type filed in the Automated Commercial Environment (ACE), except for shipments sent through the international postal network, along with the payment of all applicable duties, taxes, and fees.

CBP published a Federal Register notice guiding shipments sent through the international postal network that previously qualified for de minimis. For postal shipments, the transportation carriers or other qualified parties approved by CBP must collect and remit duties. The duty rate is based on the effective IEEPA tariff rate applicable to the country of origin of the product as follows:

                        (i) Countries with an effective IEEPA tariff rate of less than 16%: $80 per item;

                        (ii) Countries with an effective IEEPA tariff rate between 16 and 25% (inclusive): $160 per item; and

                        (iii) Countries with an effective IEEPA tariff rate above 25%: $200 per item.

The specific duty will cease to be effective for products entered for consumption on or after February 28, 2026, at which time only the ad valorem duty will be applicable.

 View CSMS #65934463 guidance here and view the list of the qualified parties here.

Questions about how the de minimis change impacts your business? Contact Diaz Trade Law today at 305-456-3830 or info@diaztradelaw.com.

Learn more:

• Bloomberg Law: Tariff Classification Basics
• ICYMI: President Trump Signs America First Trade Policy
• Trump Administration Announces Plan for Reciprocal Tariffs
• New Tariffs on Mexico, Canada, and China: Key Updates for Importers
• Navigating Tariff Increases: Strategies to Minimize Tariff Costs Under the Trump Administration
• Webinar: Navigating Tariff Challenges: Mitigation Tools & Tactics
• Trump Administration Announces Reciprocal Tariffs

With trade policy in flux, now is the time to ensure you are on solid footing by auditing your compliance strategies, reassessing tariff exposure, and ensuring your business is prepared for what’s ahead.

Audit Your Business Before CBP Does

Conducting an audit of your business to check for import compliance is an essential step to avoid costly penalties, thwart supply chain disruptions, and to minimize legal risk. An audit helps identify potential compliance gaps, ensuring that your existing business practices are in compliance with all applicable regulations. It also allows businesses to proactively address issues before they escalate.

Import Report Card

Diaz Trade Law can provide a customized ACE report card to give you an overview of your import compliance. The report contains a summary of your import transactions and identifies potential issues in your business’ processes as well as substantive recommendations to ensure compliance. The report provides information like:

• Your last 5 years of import history
• List of HTS’s you use
• Total amounts paid in AD/CVD
• Manufacturer ID’s reported to Customs
• Inconsistencies in reporting
• Total value of imports and duties paid by year
• Review of countries of origin of your imported merchandise
• Use of Free Trade Agreements
• Your surety, bond coverage, and bond type
• And more!

Lastly, the Report Card service includes a one hour debrief with a Customs and Trade Law expert on the findings and recommendations.

Pre-Compliance – Plan Now or Pay Later

Many mistake the ease of importing to mean there is no liability or obligation on the part of the importer. Whether your company is new to importing, or has been in the business for years, CBP expects importers to use “reasonable care” to ensure compliance with relevant rules and regulations.

Reasonable care requires importers to conduct themselves as a reasonable importer would under the circumstances with respect to importing goods into the United States.

Reasonable care requires importers to:

• Meet the standard to enter, classify and determine the value of imported goods
• Provide other information necessary to aid CBP in properly assessing duties and collecting accurate statistics
• Determine whether other applicable legal standards and requirements have been met

Diaz Trade Law has significant experience in a broad range of trade compliance matters, including helping companies customize their own import compliance program. The program can entail developing import compliance documents, ongoing training for various departments in your business, regular internal audits, record keeping, and more. Such a program can help you not only avoid penalties and potential criminal liability but can also help in the mitigation process should a violation be discovered. Remember, just because your goods have been allowed to enter the U.S. in the past, doesn’t mean those importations were compliant or that Customs will never pursue additional duties for those entries. 

Tariff Minimization

Tariff increases have a significant impact on businesses involved in importing goods into the U.S. However, importers are not without options. There are several legal ways to minimize tariff costs, including:

• Temporary Importation under Bond (TIB)
• Incoterms
• Duty drawback
• Tariff engineering
• Country of origin change
• First sale
• Duty deferral
• Free trade agreements
• Moving some manufacturing to the U.S.

Importers exploring options to minimize tariff liability should always work with an expert to ensure they comply with all U.S. Customs regulations before making any changes. Duty evasion, even if unintentional, is a serious matter and can result in hefty monetary penalties or even prison time in the case of fraud.

A Customs Attorney Can Help You Prepare and Adapt

Diaz Trade Law has significant experience in a broad range of trade compliance matters and can help your business navigate constantly changing trade policy. From evaluating your existing practices to building a compliance program from scratch, we can help. Contact us at info@diaztradelaw.com or call us at 305-456-3830.

Learn more:

• Webinar: Navigating Tariff Challenges: Mitigation Tools and Tactics
• Webinar: Navigating CBP Regulations: Essential Practices for Import Success
• Webinar: Building and Maintaining an Effective Import Compliance Plan
• Webinar: CBP: ACE – Auditing Your Import History
• Webinar: Introduction to Importing
• Bloomberg Law: What is an Importer’s ‘Reasonable Care’ Standard?
• Bloomberg Law: Customs Administrative Enforcement Process: Fines, Penalties, Forfeitures and Liquidated Damages
• Bloomberg Law: Tariff Classification Basics

Customs and Border Protection (CBP)

• Customs and Border Protection(CBP) initiated a formal investigation under Title IV, Section 421 of the Trade Facilitation and Trade Enforcement Act of 2015, commonly referred to as the Enforce and Protect Act (“EAPA”), for Pitts Enterprises, Inc. (“Pitts”).
• CBP issued a determination on February 23, 2022, against Splendid Trading Co. (also doing business as NGY Group (Chino) Inc.) (collectively, Splendid Trading) and Superior Granite and Marble by Vivaldi LLC (also doing business as Vivaldi Interiors LLC and Vivaldi Commercial LLC) (collectively, Superior) for evading customs duties in Enforce and Protect Act (EAPA) Case 7607.
• CBP announced it has added Uyghur Forced Labor Protection Act (UFLPA) Region alert that will require a new mandatory data element for reporting imports via ACE system.
• CBP reminds that the Period 3 (August 8, 2022 to November 7, 2022) 300,000 quota for large residential washing machines is open.  
• CBP officers, working with Homeland Security Investigations (HSI) and the Food and Drug Administration, in the span of just two days, seized eight shipments involving counterfeit merchandise and FDA violative cosmetics at a local express consignment facility in Kenner.
• CBP officers that inspect packages at the Louisville Port of Entry seized one package concealing bracelets, necklaces, and earrings would total over $2.5 million had the merchandise been genuine. 
• CBP has initiated an investigation into Double L Group, LLC, to determine whether they have violated the Enforce and Protect Act (EAPA) by evading antidumping duty and countervailing duty orders.
• CBP will deploy the Uyghur Forced Labor Prevention Act (UFLPA) Region Alert enhancement to the Automated Commercial Environment (ACE) on a date to be determined. This enhancement will provide an early notification to importers of goods that may have been produced in the Xinjiang Uyghur Autonomous Region (XUAR) which would be subject to UFLPA restrictions per H.R. 6256. 

Federal Maritime Commission (FMC)

• Federal Maritime Commission (FMC) member Carl Bentzel proposed to carry extra transparency to the ocean delivery business. Bentzel unveiled his plan on the American Affiliation of Port Authorities’ annual conference Oct. 17. 

United States Department of Commerce (DOC)

• Department of Commerce (DOC) and USITC determine that revocation of the antidumping duty (AD) order on 1,1,1,2-Tetrafluoroethane (R–134a) from the People’s Republic of China (China) would likely lead to a continuation or recurrence of dumping and material injury to an industry in the United States, Commerce is publishing a notice of continuation of the AD order. 
• DOC determines that countervailable subsidies are being provided to producers and exporters of stainless steel flanges (steel flanges) from India during the period of review, January 1, 2020, through December 31, 2020.
• DOC, as a result of expedited sunset reviews, finds that revocation of the antidumping duty (AD) orders on welded ASTM A–312 stainless steel pipe (WSSP) from the Republic of Korea (Korea) and Taiwan would be likely to lead to continuation or recurrence of dumping.  
• DOC each year announces during the anniversary month of the publication of an antidumping or countervailing duty order, finding, or suspended investigation, an interested party, may request the DOC conduct an administrative review of AD/CVD order, finding, or suspended investigation.  
• DOC’s National Marine Fisheries Service issued a proposed rule to implement Amendment 52 to the Fishery Management Plan for the Commercial King and Tanner Crab Fisheries of the Bering Sea and Aleutian Islands (Crab FMP) and a regulatory amendment to revise regulations on Economic Data Reports (EDR) requirements for groundfish and crab fisheries off Alaska. 
• DOC and USITC determines that revocation of the antidumping duty (AD) and countervailing duty (CVD) orders on aluminum extrusions from the People’s Republic of China (China), would likely lead to a continuation or recurrence of dumping, net countervailable subsidies, and material injury to an industry in the United States, Commerce is publishing a notice of continuation of the AD and CVD orders. 
• DOC preliminarily determines that producers and exporters of hot-rolled steel flat products (hotrolled steel) from Japan, sold subject merchandise in the United States at prices below normal value during the period of review (POR) October 1, 2020, through September 30, 2021. 
• DOC finds, as a result of a sunset review, that revocation of the antidumping duty (AD) order on furfuryl alcohol from the People’s Republic of China (China) would be likely to lead to continuation or recurrence of dumping at the dumping margins.
• DOC has received requests to conduct administrative reviews of various antidumping duty (AD) and countervailing duty (CVD) orders with September anniversary dates.
• DOC finds, as a result of this expedited sunset review, finds that revocation of the antidumping duty (AD) order on dioctyl terephthalate (DOTP) from the Republic of Korea (Korea) would be likely to lead to continuation or recurrence of dumping.  
• DOC determines that producers and/or exporters of large diameter welded pipe (welded pipe) from the Republic of Korea (Korea) received countervailable subsidies during the period of review (POR), January 1, 2020, through December 31, 2020.
• DOC and USITC, based on affirmative final determinations, is issuing an antidumping duty order on sodium nitrite from the Russian Federation.  
• DOC preliminarily determines that certain preserved mushrooms (preserved mushrooms) from Poland are being, or are likely to be, sold in the United States at less than fair value (LTFV). 
• DOC preliminarily determines that certain preserved mushrooms (preserved mushrooms) from Spain are being, or are likely to be, sold in the United States at less than fair value (LTFV). 
• DOC preliminarily determines that certain preserved mushrooms (preserved mushrooms) from the Netherlands are being, or are likely to be, sold in the United States at less than fair value (LTFV). 
• DOC preliminarily determines that white grape juice concentrate (WGJC) from Argentina is being, or is likely to be, sold in the United States at less than fair value (LTFV). 
• DOC, through the Office of Trade and Economic Analysis (‘‘OTEA’’) of the International Trade Administration, has received an application for an amended Export Trade Certificate of Review (‘‘Certificate’’). 
• DOC announced on January 6, 2020, in the U.S. District Court for the Southern District of Texas, Jose Martin Gallegos-Luevanos (‘‘Gallegos-Luevanos’’) was convicted of violating 18 U.S.C. 554(a) for fraudulently and knowingly attempting to export from the United States to Mexico, one Barret .50 caliber bolt rifle, three FA Cugir Romanian AK–47 rifles, seven Century Arms VSKA AK–47 rifles, one Century Arms WASR AK–47 rifle, and 85 assorted magazines, in violation of 18 U.S.C. 554. 
• DOC and USITC, based on affirmative final determinations, is issuing an antidumping duty order on sodium nitrite from the Russian Federation.

U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC)

• U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is publishing the names of one or more persons that have been placed on OFAC’s Specially Designated Nationals and Blocked Persons List (SDN List) based on OFAC’s determination that one or more applicable legal criteria were satisfied. 
• OFAC took action on October 28, 2022, against the 15 Khordad Foundation, an Iran-based foundation that has issued a multi-million-dollar bounty for the killing of prominent Indian-born, British-American author Salman Rushdie. 
• OFAC on November 1, 2022, took action against the Islamic State in Somalia (ISIS-Somalia), its first designations against this affiliate of the Islamic State of Iraq and Syria (ISIS). 

United States International Trade Commission (USITC)

• U.S. International Trade Commission (USITC) has received a complaint entitled Certain Video Processing Devices and Components Thereof, DN 3651; the Commission is soliciting comments on any public interest issues raised by the complaint or complainant’s filing pursuant to the Commission’s Rules of Practice and Procedure. 
• USITC has given notice that on September 16, 2022, the presiding Chief Administrative Law Judge (‘‘Chief ALJ’’) issued an Initial Determination on Violation of Section 337.
• USITC invites comments from the public on whether changed circumstances exist sufficient to warrant the institution of a review pursuant to section 751(b) of the Tariff Act of 1930 regarding the Commission’s affirmative determination in investigation No. 731–TA–860 (Final). 
• USITC announces they will be holding the Sunshine Act meetings on November 4, 2022, in Washington D.C. and it will be opened to the public.  
• USITC hereby gives notice that it has instituted reviews pursuant to the Tariff Act of 1930 (‘‘the Act’’), as amended, to determine whether revocation of the antidumping and countervailing duty orders on high pressure steel cylinders from China would be likely to lead to continuation or recurrence of material injury. 
• USITC hereby gives notice that it has instituted reviews pursuant to the Tariff Act of 1930 (‘‘the Act’’), as amended, to determine whether revocation of the antidumping duty orders on stainless steel butt-weld pipe fittings from Italy, Malaysia, and the Philippines would be likely to lead to continuation or recurrence of material injury.  
• USITC hereby gives notice that it has determined not to review an initial determination (‘‘ID’’) (Order No. 70) of the presiding administrative law judge (‘‘ALJ’’) granting respondent Google LLC’s (‘‘Google’’) unopposed motion to terminate the modification proceeding based on withdrawal of its petition for modification. 
• USITC had a complaint filed with them on August 23, 2022, under section 337 of the Tariff Act of 1930, as amended, on behalf of Daedalus Prime LLC of Bronxville, New York.
• USITC on the basis of the record developed in the subject investigation, determines, pursuant to the Tariff Act of 1930 (‘‘the Act’’), that an industry in the United States is materially injured by reason of imports of sodium nitrite from Russia, provided for in subheading 2834.10.10 of the Harmonized Tariff Schedule of the United States, that have been found by the U.S. Department of Commerce (‘‘Commerce’’) to be sold in the United States at less than fair value (‘‘LTFV’’).
• USITC instituted Investigation No. 332–593, U.S.- Pacific Islands Trade and Investment: Impediments and Opportunities following receipt on September 29, 2022, of a request from USTR.

Bureau of Industry and Security (BIS)

• Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) to implement necessary controls on advanced computing integrated circuits (ICs), computer commodities that contain such ICs, and certain semiconductor manufacturing items. 

Foreign Agricultural Service (FAS)

• Foreign Agricultural Service (FAS), in accordance with the Paperwork Reduction Act of 1995, intends to request a revision of a currently approved information collection for the Refined Sugar Re-Export Program, the Sugar-Containing Products Re-Export Program, and the Polyhydric Alcohol Program. 

United States Food and Drug Administration (FDA)

• United States Food and Drug Administration (FDA) is proposing to amend the color additive regulation to increase the fee for certification services. The change in fees will allow FDA to continue to maintain an adequate color certification program as required by the Federal Food, Drug, and Cosmetic Act (FD&C Act). 

United States Trade Representative (USTR)

• United States Trade Representative (USTR) Katherine Tai and Secretary of Labor Marty Walsh released on October 27, 2022, the following statements after workers at a Saint Gobain facility in Cuautla, Mexico elected a new, independent union to represent them in collective bargaining agreement negotiations. 
• USTR received on September 8, 2022, a petition requesting an investigation of certain alleged acts, policies, and practices of the government of Mexico concerning seasonal and perishable agricultural products.  
• USTR Katherine Tai, and Julio José Prado, Minister of Production, Foreign Trade, Investment and Fisheries of Ecuador met on October 28, 2022, in Washington, DC, and agreed to establish a Fair Trade Working Group and explore potential negotiations on labor, environment, and digital trade.
• USTR on October 17, 2022, announced its request for comments on “the effectiveness of the actions in achieving the objectives of the investigation, other actions that could be taken, and the effects of such actions on the United States economy, including consumers.” USTR has posted the list of Four-Year Review Questions that it will work to determine whether tariffs should be maintained; whether the approach to China regarding trade needs to be changed; or whether the tariffs should end entirely.  

Department of Homeland Security (DHS)

• Department of Homeland Security (DHS), CBP will be submitting the following 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 White House

• President Biden on September 15, 2022, issued Executive Order further elaborating upon current statutory factors and add national security factor the Committee on Foreign Investment in the United States must consider in its review process of covered transactions.  
• Government officials from the United States and Jordan convened the fourth Labor Subcommittee under the United States-Jordan Free Trade Agreement on October 31, 2022. 

If you have questions about these updates, contact our Diaz Trade Law attorneys at info@diaztradelaw.com or call us at 305-456-3830.

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In order to protect U.S. national security interests and promote foreign policy objectives, various U.S. agencies collectively administer and enforce U.S. export control laws and participate in various multilateral export control regimes to prevent the proliferation of weapons of mass destruction and prevent destabilizing accumulations of conventional weapons and related materials. To that end, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) governs the export and reexport of commodities, software, and technology falling under the jurisdiction of Export Administration Regulations. BIS promotes continued U.S. strategic technology leadership and is responsible for enforcing the regulation of export, reexport, and transfer of items with commercial uses that can also have a dual use, and be used in conventional arms, weapons of mass destruction, terrorist activities, or human rights abuses, and less sensitive military items, which bleeds into cybersecurity as well.

Cybersecurity has recently become an essential aspect in export controls and on October 21, 2021, BIS published its Interim Final Rule (this rule is effective January 19, 2022), which summary states:

SUMMARY: This interim final rule outlines the progress the United States has made in export controls pertaining to cybersecurity items, revised Commerce Control List (CCL) implementation, and requests from the public information about the impact of these revised controls on U.S. industry and the cybersecurity community. Specifically, this rule establishes a new control on these items for National Security (NS) and Anti-terrorism (AT) reasons, along with a new License Exception Authorized Cybersecurity Exports (ACE) that authorizes exports of these items to most destinations except in the circumstances described. These items warrant controls because these tools could be used for surveillance, espionage, or other actions that disrupt, deny or degrade the network or devices on it.

Cybersecurity Items are defined by this Interim Rule as including:

• Systems, equipment, software, and other technology specially designed or modified to develop, generate, command and control, or deliver “intrusion software”;
• “IP [Internet Protocol] network communications surveillance systems or equipment” that meet specified criteria, including the ability to capture and analyze application data (e.g., email messages, attachments, video files, and the contents of web traffic, rather than simply metadata); and
• Other related items, software, and technology, as specified in new and revised Export Control Classification Numbers (ECCNs).

Revised Commerce Control List (CCL) Implementation

The Interim Rule adds multiple new export control classification numbers (ECCNs) to the Commerce Control List (CCL) that incorporate national security (NS) and antiterrorism (AT) controls for “cybersecurity items.” An EAR license or license exception would be required for exports and reexports of such items to most jurisdictions. In particular, this rule adds ECCNs 4Aoo5 and 4D004, along with a new paragraph to 4E001.c, commodities, software, and technology relating to the generation, command, and control or delivery of “intrusive software.” In addition, the interim rule added “IP network communications surveillance systems or equipment” to the CCL under ECCN 5A001.j.

New License Exception: Authorized Cybersecurity Exports (ACE)

The Interim Rule creates a new License Exception Authorized Cybersecurity Exports (ACE), authorizing certain exports, reexports and transfers of cybersecurity items. The License Exception ACE authorizes certain exports, reexports, and transfers of cybersecurity items. This would generally authorize the export, reexport. and transfer of cybersecurity items to most destinations excluding antiterrorism destinations listed in Country Groups E:1 and E:2 such as Cuba, Iran, Syria, and North Korea. It also excludes Group D Government End Users in Country Groups D:1, D:2, D:3, D:4, or D:5, along with Group D1 and D5 Non-Government End Users with exclusions for “favorable treatment cybersecurity end users,” vulnerability disclosures, cyber incident responses, or deemed exports to nationals of Country Groups D:1 or D:5.

License Exception ACE could authorize exports to government end users in Cyprus, Israel and Taiwan only for limited purposes such as those previously discussed but will not authorize exports to government end users in other Group D countries such as China, Russia, Saudi Arabia and the UAE. In addition, non-government end users in China and Russia will not generally be eligible for License Exception ACE. License Exception ACE may be used for deemed exports to non-governmental nationals of any country other than antiterrorism destinations.

Identifying and Managing Non-Tangible Exports: Software, Technology, and More

All U.S. origin items, items located in the U.S., certain non-U.S. origin products with U.S. origin parts, and certain products of U.S. origin technology wherever located are subject to EAR. Hardware and tangible items, software, and technology such as information necessary for the development, production, use, operation, installation, maintenance, repair, overhaul, or refurbishing of an item are all under the scope of EAR.

Software and technology exports pose challenges such as how software is not usually exported tangible and there is no export filing requirement, encryption controls are complex and many software are considered “mass market” and NLR but subject to annual filing requirements or CCAT, and they are often shared during R&D phase and not as a product as engineers are collaborating with other companies to produce an end product from OEM, along with purchasing and supply chain managers sending specifications to potential suppliers. Identifying what is considered technology can also be difficult and addition of prominent global companies to the Entity List means that technology reviews have to include EAR99 technology in addition to technology on CCL or USML.

Tips for Export Compliance with Software and Technology

Identify and classify software products. Many items may be eligible for mass market treatment as 5D992 items and most other items that involve encryption are eligible for License Exception ENC, both generally requiring filing self-classification reports or a CCATS. It is important to maintain an export classification list and check what information you have about recipient/consignee and end user, which should be screened for restricted parties.

Technology is most likely to be inadvertently exported so it is critical to train personnel, especially development, engineering, and R&D teams with an emphasis on controlled technology and screening counterparties prior to sharing information. In the case of suppliers, ensure to obtain classification of final product to assist in proper classification of component and related technology. When producing a technology control plan, make sure to include receipts and transmission security, physical security, IT security, conversation security, marking, and disposal.

Intersection of Cyber Security and Export Controls: Controlled Unclassified Information

Controlled Unclassified Information is unclassified information that have had access or distribution limitations applied IAW national laws, policies, and regulations of USG. This includes U.S. information that is subject to export controls IAW International Traffic in Arms Regulations (ITAR).

The CUI Registry is the online repository for all information, guidance, policy, and requirements on handling CUI. It identifies all approved CUI categories and subcategories, provides general descriptions for each, identifies the basis for controls, establishes markings, and includes guidance on handling procedures.

What Should You Do

If you are exporting goods subject to filing requirements under the Foreign Trade Regulations, we propose you should:

• Develop an effective export compliance plan
  • A key foundation of proactive and effective export compliance requires the development of an export compliance plan. An export compliance plan establishes a set of procedures for your organization to ensure that everyone is on the same page about how standard processes work, who is responsible for what, how to identify violations, what to do when violations occur, etc. An export compliance plan helps build consciousness in your organization that compliance is critical – both to avoid costly penalties and to protect national security. Diaz Trade Law helps exporters create export compliance manuals that help prove you have a process in place to classify your merchandise correctly, vet your customers and ensure you can prove you can take compliance seriously and implement all the important great weight mitigating factors. Diaz Trade Law has significant experience in developing and enhancing export compliance plans for organizations. Additionally, Diaz Trade Law can assist your business in auditing and improving your current plan so that it is in its best shape.
• Engage in regular export compliance training
  • A foundation of a strong export compliance program is export compliance training. Training is important because it (1) ensures that all employees understand the export regulations and reinforces internal policies and procedures, (2) demonstrates to federal government agencies that your business is proactive about export compliance, and (3) avoids your business from being subject to costly penalties and even criminal liability. Fortunately, export compliance training can be highly tailored to meet your company’s needs. All your training events include assessments for comprehension, certificates for successful participation, and ample opportunities for Q&A. For your next export compliance training event, trust Diaz Trade Law to provide highly-effective, engaging training.
• Thoroughly vet your proposed export transaction
  • Unsure whether a proposed export transaction violates the Foreign Trade Regulations or other export control laws? Diaz Trade Law has significant experience vetting your potential transaction against U.S. export control laws and in assisting clients to properly file their EEI. Through research and due diligence, Diaz Trade Law ensures that your transaction won’t get you in trouble later down the road.
• Request authorization when necessary
  • BIS or DDTC export authorization is required for many export transactions of controlled goods. Diaz Trade Law has significant experience in vetting proposed transactions to determine whether BIS or DDTC authorization is required. Furthermore, Diaz Trade Law assists clients by filing export license applications on their behalf.
• Engage in mitigation and corrective actions
  • If your business has violated U.S. export control laws, there is a lot you can do to mitigate penalties and prevent future violations. Diaz Trade Law has significant experience representing businesses in dealing with the U.S. Commerce Department’s Bureau of Industry & Security and the Census Bureau. Specifically, Diaz Trade Law has successfully assisted clients in (1) submitting voluntary self-disclosures to mitigate penalties, (2) negotiated agreements with BIS and Census, and (3) built corrective action systems to help ensure that your business does not make the same violation again.

Check out our Bloomberg Law article on Submitting a Voluntary Self-Disclosure to the U.S. Census Bureau.

Contact us

Diaz Trade Law has significant experience in a broad range of export compliance matters. To learn more about the services we offer, contact us at info@diaztradelaw.com or call us at 305-456-3830.

BIS 

• On January 14, 2022, the Bureau of Industry and Security (BIS) issued a notice of information collection regarding a Defense Production Act requirement for U.S. firms to furnish information to the agency regarding offset agreements exceeding $5,000,000 in value associated with sales of weapon systems or defense related items to foreign countries or foreign firms. BIS is soliciting public comments to help evaluate if the proposed information collection is necessary for the proper functions of the Commerce Department, evaluate the accuracy of their estimate of time and cost burden, evaluate ways to enhance the quality, utility, and clarity of the information to be collected, and to minimize the reporting burden.
  • Comments are due no later than March 15, 2022.

CBP 

• On January 18, 2022, CBP issued the largest agriculture seizures of 2021 with the top three seizures being 12,000+ pounds of marijuana, 750 unfertilized avian eggs, and 15 live giant land snails.
• On January 18, 2022, Customs and Border Protection issued Harmonized System Update (HSU) 2119 resolving issues related to the comingled data and/or missing information in previous HSUs.
• On January 22, 2022, CBP will deploy Phase 1 of the modernization of the ACE Secure Data Portal. These enhancements will include a new login screen, a new home page, and upgraded account information display and edit features.

DOT 

• On January 13, 2022, the Federal Motor Carrier Safety Administration detailed a pilot program that would allow for 18-to-20-year-old truckers drive big rigs from state to state in an effort to help ease the supply chain shortage.

OFAC 

• On January 18, 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated three Hizballah-linked financial facilitators and their Lebanon-based travel company because of Hizballah’s efforts as part of the Lebanese government to block economic reform and inhibit much needed change for the Lebanese people.
• On January 20, 2022, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned four individuals engaged in Russian government-directed influence activities to destabilize Ukraine.

USDA 

• Recent USDA import statistics show a surge in U.S. organic fresh produce imports of bananas, blueberries, apples, and pears. Much of the surge originates in the Latin American countries of Mexico, Peru, Chile, Colombia, and Argentina with New Zealand also experiencing a surge of organic produce exports to the United States.

USTR 

• On January 19, 2022, the United States and United Kingdom issued a joint statement announcing the start of bilateral discussions to address global steel and aluminum excess capacity, including the United States’ application of tariffs on imports from the United Kingdom under Section 232 and the UK’s retaliatory tariffs on certain U.S. exports to the UK.

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.

To receive an email notification whenever a new post is published, please subscribe to our weekly blog here.

Apparel

• Nike has ended 2021 as the most valuable apparel firm globally. According to data presented by FinancePR.com, the American outfit achieved a $30.44 billion valuation in 2021, placing it at the helm of the top ten garment firms worldwide.

CBP 

• On November 30, 2021, U.S. Customs and Border Protection officers in Cincinnati seized a shipment containing counterfeit designer jewelry and scarves. The fakes, which came from China, would have been worth a total of $3.09 million had they been genuine.
• On December 6, 2021, a garment importer based in downtown Los Angeles was sentenced to 12 months and one day in federal prison for scheming to undervalue imported garments and avoid paying duties to the United States, and failing to report income on tax returns and large cash transactions to the federal government.
• On December 13, 2021, Chris Magnus was sworn in as Commissioner of United States Customs and Border Protection following his Senate confirmation last week. Magnus becomes the fifth confirmed CBP Commissioner since the law enforcement agency’s creation under DHS in 2003.
• CBP has reorganized all Informed Compliance Publications (ICPs) on CBP.gov under each applicable Center of Excellence and Expertise.
• U.S. Customs and Border Protection is modernizing the ACE Secure Data Portal over multiple phases in 2022. The modernization effort will entail the transition of existing functionality to an upgraded platform, offering easier use and better performance.
• On December 27, 2021, CBP issued guidance on the Department of Commerce’s December 9, 2021 interim final rule revoking 30 previously granted Section 232 General Approved Exclusions.

U.S. Census Bureau

• On January 5, 2022 Robert Santos was sworn as the U.S. Census Bureau’s 26th director, becoming the first Latino person to serve in the role. This appointment follows the U.S. Senate confirmation Nov. 4, 2021, with Santos’ term set to last for five years.

China

• On December 2, 2021, U.S. Customs and Border Protection announced that it will deny requests for extensions of time for liquidation based on pending litigation before the U.S. Court of International Trade concerning challenges to additional customs duties imposed under Section 301 on goods imported from China.
• On December 23, 2021, President Biden signed The Uyghur Forced Labor Prevention Act banning imports from the Xinjiang Uyghur Autonomous Region which has sparked debate over how the law will be enforced and its potential ramifications.
• On December 20, 2021, the Office of Foreign Assets Control (OFAC) sanctioned 10 Chinese citizens pursuant to the Hong Kong Autonomy Act of 2020 sanctioning individuals that materially contribute to China’s failure to preserve Hong Kong’s autonomy.
• On January 7, 2022, China fell short on trade commitments to step up purchases of U.S. goods and services creating a dilemma for the Biden administration as it could potentially reinstate certain tariffs or ignore the shortfall.

Department of Commerce 

• On December 9, 2021, the Department of Commerce issued an interim final rule amending its regulations pertaining to the procedures and rules related to Article 1904 of the North American Free Trade Agreement (NAFTA) with appropriate references to the United States-Mexico-Canada Agreement (USMCA).
  • Comments are due January 10, 2022

FDA

• The FDA is seeking early feedback on a plan to assist stakeholders, including industry, health care professionals, and patients, with a smooth transition away from the temporary emergency measures of the pandemic to the eventual resumption of normal operation.
  • Comments are due March 23, 2022
• Elizabeth Miller, assistant commissioner for medical products and tobacco operations in FDA’s Office of Regulatory Affairs, announced at a recent FDLI enforcement conference that the FDA will resume unannounced and hybrid inspections of foreign facilities in 2022.
• On January 1, 2022, the Food and Drug Administration (FDA) opened the Voluntary Qualified Importer Program (VQIP) for FY 2023. Participants in the fee-based program receive expedited review of animal and human foods entering the United States.
  • Contact DTL at info@diaztradelaw.com for registration assistance.
• On January 12, 2022, the U.S. Food and Drug Administration declared they are revoking the standard of identity for French dressing, reacting to a citizen petition from the Association for Dressings and Sauces that shared information documenting that the standard is outdated. The agency is now finalizing the proposed rule issued in December 2020 based on the conclusion that revoking the standard will allow for greater innovation and flexibility of products on the market.
  • • The final rule is effective February 14, 2022

HTSUS 

• On December 23, 2021, President Biden signed a Presidential Proclamation modifying the Harmonized Tariff Schedule of the United States to reflect international agreements.
• On December 27, 2021, CBP issued guidance regarding the U.S. Trade Representative’s conforming amendment to a previously granted and extended Section 301 product exclusion, replacing HTSUS number 3401.30.5000 with HTSUS number 3401.11.5000 effective November 30, 2020

Port Everglades

• On January 7, 2022, Port Everglades announced the arrival of the Mediterranean Shipping Company’s MSC Rachele which brought a record 4,849 containers into port.

Sanctions 

• On December 15, 2021, President Biden issued an executive order imposing sanctions on foreign persons involved in the global illicit drug trade.
• On December 16, 2021, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned eight Chinese technology firms for being part of the Chinese Military-Industrial Complex.
• On January 12, 2022, the U.S. Department of Treasury’s Office of Foreign Assets Control designated five North Korean individuals responsible for procuring goods for North Korea’s weapons of mass destruction (WMD) and ballistic missile-related programs. These actions are intended to target and prevent the advancement of North Korea’s WMD and ballistic missile programs and ongoing efforts to cease illegal procurement of weapons overseas.
• On January 11, 2021 the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced a settlement with Sojitz Limited (“Sojitz HK”), a Hong Kong, China-based company that engages in offshore trading and cross-border trade financing. Sojitz HK agreed to remit $5,228,298 to settle its potential civil liability for apparent violations of the Iranian Transactions and Sanctions Regulations (ITSR).

USTR

• On December 21, 2021, the Office of the U.S. Trade Representative (USTR) released its annual congressional report assessing Russia’s adherence to its World Trade Organization commitments such as non-discriminatory practices, more open trade, and fair competition. The report notes that in the past years Russia had further extended its control over the Russian economy and tightened restrictions on trade.
• On January 4, 2022, United States Trade Representative Katherine Tai announced that the United States has prevailed in the first dispute settlement panel proceeding ever brought under the United States-Mexico-Canada Agreement (USMCA).  The panel ruled that Canada is breaching its USMCA commitments by reserving most of the in-quota quantity in its dairy tariff-rate quotas for the exclusive use of Canadian processors.
• On January 10, 2022 United States Trade Representative Katherine Tai and United States Secretary of Agriculture Tom Vilsack announced the government of India has agreed to allow imports of U.S. pork and pork products into India.

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.

To receive an email notification whenever a new post is published, please subscribe to our weekly blog here.

Below we share some of our top 2021 success stories with you.

Successfully Mitigated Liquidated Damages Claims 

• For failure to timely refile rejected entries subject to AD/CV duties:
  • After DTL’s strategic involvement CBP substantially mitigated approximately $5 MILLION in claims down to $26,365.00, successfully saving our client over $4.7 MILLION dollars
  • Our client received 36 liquidated damages notices from CBP totaling over $567,000. After Diaz Trade Law’s successful negotiation with CBP, all 36 cases were canceled by CBP, saving our client $over $567,000!!
• CBP sent our client a liquidated damages claim in the amount of $150,000. As a result of Diaz Trade Law’s successful petition, CBP mitigated the liquidated damages claim down to $1,500!
• CBP issued a liquidated damages claim in the amount of $50,000.00. After DTL successfully petitioned CBP, the claim was cancelled!
• CBP issued a liquidated damages claim in the amount of $36,033.00. After DTL successfully petitioned CBP, the claim was mitigated to $360.33 (the best potential mitigation!).

CBP Detention Assistance 

• Mere days after being retained, Diaz Trade Law successfully assisted in negotiating with CBP and numerous trademark owners proving that our clients detained goods (collectively valued over $1,000,000.00) were legitimate, receiving either consent TM holder, and/or convincing CBP to release legitimate merchandise that should not have been detained.
• After CBP detained our client’s electronic merchandise to verify admissibility with the Department of Transportation (DOT)
  • CBP released the electronic goods after DTL proved the merchandise, LED driving lights, were eligible for an “off road” use exception and DOT providing such confirmation.
• After CBP detained our client’s electronic merchandise to verify the validity of a trademark on the product packaging.
  • Diaz Trade Law proactively communicated with the trademark holder and CBP, who, with the authorization of the trademark holder, permitted the importer to manipulate the merchandise and import the goods saving our client from a costly and lengthy seizure case that potentially exposed our client to CBP penalties.
• After CBP detained our client’s electronic merchandise to verify the validity of a trademark on the product packaging.
  • After Diaz Trade Law’s immediate involvement in arguing the product was “confusingly similar” and not counterfeit, DTL persuaded CBP to apply the relief afforded to “confusingly similar” seized merchandise and ultimately CBP permitted the exportation – which is relief that is rarely granted for detained products. DTL saved our client from a seizure case and potential penalties.
• CBP detained 28 containers of our client’s cargo.
  • Diaz Trade Law successfully negotiated with CBP to permit the goods to be reexported and avoid substantial demurrage expenses.

4647 Responses 

• CBP issued our client a CBP Form 4647 – Notice to Mark, because its electronic car accessories labels had both a country of origin marking and a “Designed in the USA” claim (in separate locations on the label).
  • After 48 hours of Diaz Trade Law’s successful escalation and negotiation with the Electronic Center of Excellence and Expertise, CBP granted a rarely used marking waiver permitting the merchandise to be imported as is, saving our client both money and time.
• CBP issued our client a CBP Form 4647 – Notice to Mark, because over 1,000 electronic car accessory units did not bear a country of origin marking.
  • Diaz Trade Law successfully and efficiently guided our client through the marking process. Ultimately, the goods were marked and authorized for distribution within recording timing – less than 10 days from the issuance of the 4647, saving our client both money and time.
• CBPO’s at Port Everglades detained two of our client’s shipments and issued two separate CBP Form 4647s – Notices to Mark because the imported merchandise valued at $98,744.00 did not bear a country of origin marking.
  • Diaz Trade Law successfully and efficiently guided our client through the marking process. Ultimately, the goods were marked and authorized for distribution with record timing – within 7 days from the issuance of the 4647, saving our client both money and time.
• Diaz Trade Law successfully assisted our client in responding to CBP’s Notice to Redeliver (CBP Form 4647) and provided CBP confirmation that the intellectual property rights displayed on the goods was authorized and our client’s merchandise was released in record timing!

Successfully Assisted Numerous Importers Battle Alleged Intellectual Property Rights Violations

• Our client’s merchandise was seized by CBP due to an alleged trademark violation.
  • After Diaz Trade Law’s successful petition, CBP issued a decision authorizing our client to relabel and export its legitimate merchandise.
• CBP detained several shipments of our client’s cargo for both Country of Origin (COO) and Intellectual Property Rights (IPR) reasons.
  • Diaz Trade Law advocated for our client and within less than one week convinced CBP to release our client’s legitimate merchandise detained at numerous ports of entry nationwide.
• Our client’s designer handbags were seized by CBP due to an alleged counterfeit violation.
  • After Diaz Trade Law’s successful petition, proving that the handbags were legitimate, CBP released our client’s legitimate merchandise.
• CBP detained our client’s goods valued at $98,744.00 for an alleged IPR validation.
  • Our firm immediately communicated with the appropriate CBP CEE and submitted evidence supporting the legitimacy of the imported goods requesting their immediate release. The CBP CEE agreed with our request and recommended the local port release the shipment, saving our client from a costly and lengthy seizure case.
• Diaz Trade Law successfully negotiated with CBP on behalf of an aftermarket car part importer to permit the exportation of goods detained for alleged IPR violations, saving the importer from a costly and lengthy seizure and potential penalty.
• Our client imported electronic merchandise which contained a trademark-violating processing system.
  • After Diaz Trade Law’s successful intervention, Diaz Trade Law received authorization from the trademark holder to permit the violative components to be removed and destroyed, and the larger shell merchandise to be imported in its current form. CBP agreed to these terms, and issued a disposition order authorizing the manipulation and release of the goods as Diaz Trade Law had requested.

Successfully Mitigated Penalty Actions Issued by CBP to our Clients 

• For importing noncompliant Wood Packaging Material:
  • $91,714 mitigated to 3% of penalty to $2,751.42, saving our client $88,962
  • $69,900 mitigated to 3% of penalty to $6,990, saving our client $60,000
  • $28,478 mitigated to 10% of penalty to $2,847, saving our client $25,631
  • $27,857 mitigated to 10% of penalty to $2,786, saving our client $25,071
  • $19,980.00 mitigated to 10% of penalty to $1,998, saving our client $17,982
• For filing incorrect Electronic Export Information (EEI)
  • $14,194 mitigated down to $500 (the best possible relief)!
  • $14,194 mitigated to 10% of penalty to $1500, saving our client $12,694

CBP 28 / CBP 29 Responses / CBP Investigations and Rejections

• Our client received a CBP 28 for a U.S. Australia Free Trade Agreement verification.
  • After Diaz Trade Law filed a successful response proving the imported goods were eligible for preferential duty-free treatment, CBP closed the 28 with a positive CBP 29 (Notice of Action).
• Our client received a CBP 28 Request for Information from U.S. Customs to verify GSP eligibility.
  • After Diaz Trade Law submitted a substantive response proving the GSP claim was valid, CBP issued a CBP 29 determining that the merchandise qualifies for GSP and no duties are owed to CBP!
• Our client received a Request for Information (CBP 28) from CBP.
  • Diaz Trade Law filed a 28 response which included a Prior Disclosure. The 28 was closed out, and the disclosure was accepted by CBP resulting in no 1592 penalties being issued to our client.
• CBP physically inspected our client’s cargo at the time of entry and identified that the commercial invoice and packing slip submitted to CBP did not include one model number included in the cargo. Diaz Trade Law immediately negotiated with CBP to accept an updated invoice and packing list. CBP accepted and released the complete cargo with no further enforcement action taken, saving our client costly demerge fees and other expenses.
• CBP rejected and refused an importation of tires because CBP alleged the importer did not have a right to make entry. After three uphill battles with CBP and DTL’s strategic recommendation to change the import transaction model, the importer was successfully able to act as IOR and its merchandise was admitted into the US.

USTR/China Tariffs

• Diaz Trade Law assisted over 100 importers in filing complaints with the Court of International Trade challenging Section 301 tariffs imposed for imported goods under for List 3 and List 4a, requesting full refunds.
• Diaz Trade Law filed numerous exclusions for goods subject to the Section 301 List 3 and List 4. USTR agreed and granted our client’s exclusion!
• Numerous clients that were subject to 301 duties used Diaz Trade Law to actively monitor 301 exclusions to ensure they were notified when refunds were a possibility. Diaz Trade Law assisted with not only actively monitoring the relevant exclusions, but also interpreting the applicability, and fighting for refunds via the Protest or PSC process. CBP has accepted numerous Protests, and hundreds of thousands of dollars of refunds were sent to our clients!
• As a result of Diaz Trade Law’s closely monitoring Section 301 China tariff exclusions, Diaz Trade Law found an applicable exclusion for our client to use and filed two Protests with CBP requesting that CBP refund the China tariffs paid. Our client’s protests were approved by CBP, resulting in a refund of $64,678.00.

Export Compliance and Enforcement Mitigation Assistance

• Diaz Trade Law is actively assisting exporters:
  • Vetting proposed export transactions
  • Providing voluntary self-disclosures to Census and OFAC
  • Developing an effective export compliance plan
  • Developing export compliance training
  • Mitigation and corrective action
  • Presenting export report cards to clients based upon an analysis of ACE data
  • Analyze export trade data
  • With mitigation of export seizures and penalties
• Our client needed urgent assistance to ensure it understood the requirements to properly export hazardous materials. Diaz Trade Law successfully and expeditiously secured Competent Authority Approvals for the hazardous material from the U.S. DEPARTMENT OF TRANSPORTATION Pipeline and Hazardous Materials Safety Administration (PHMSA) as well as the Competent Authority of Turkey and Finland.

OFAC/FAA/HSI 

• Our client’s incoming wire payments of $842,918.92 from Venezuela were blocked by its U.S. bank for possible violations of U.S. sanctions laws.
  • After Diaz Trade Law filed a specific license application with the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), OFAC issued a specific license authorizing the legitimate funds to be unblocked and returned to our client.
• Our client was being investigated by FAA as a result of a hazardous materials incident.
  • As a result of Diaz Trade Law’s successful involvement, the FAA closed the matter with an informal action!
• Our client was being investigated by HSI for possible criminal liability.
  • After Diaz Trade Law’s intervention, HSI closed its investigation into our client.

 Protests

• Diaz Trade Law successfully assisted our client in filing two Protests with CBP. These approvals saved our client over $600,000!!
• After Diaz Trade Law’s successful Protest of CBP’s AD/CVD bills, our client’s protest was approved by CBP, saving our client over $200,000!!

Binding Rulings

• Diaz Trade Law successfully requested and received binding rulings for numerous clients confirming:
  • the correct country of origin for its prospective imported merchandise.
  • the correct harmonized tariff schedule (HTSUS) for its imported merchandise.
  • both the origin of their merchandise and appropriate CBP country of origin marking
  • the applicability of a free trade agreement.

Assisted Numerous Importers in Filing Prior Disclosures and Voluntary Self-Disclosures Accepted by CBP 

• Diaz Trade Law successfully submitted a perfected prior disclosure for underlying classification, valuation, quantity, and 301/China tariff errors. While reviewing ACE data, we identified offsets for the duties owed to CBP. Ultimately, CBP agreed with our assessment and accepted our prior disclosure and tender, resulting in a refund of over $25,000 to our client and ensuring no future penalties would be assessed for our client’s past importing errors.
• After discovering Electronic Export Information (EEI) filing errors made by one of our clients, Diaz Trade Law assisted our client in proactively filing a Voluntary Self-Disclosure (VSD) with the U.S. Census Bureau and assisting our client in fixing all past errors. The VSD filing was accepted and resulted in the U.S. Census Bureau closing out the matter without penalties being assessed.
• On behalf of a client, Diaz Trade Law filed a voluntary disclosure with the Office of Foreign Assets Control (OFAC), disclosing potential sanctions violations.
  • Diaz Trade Law worked proactively with OFAC and received this “No Action letter” with no penalties assessed to our client.
• Diaz Trade Law successfully assisted our client in filing a Voluntary Self-Disclosure (VSD) with the U.S. Census Bureau for violations of the Foreign Trade Regulations.
  • Diaz Trade Law proactively worked with the Census Bureau and corrected past filing errors. The VSD was successfully closed out with no penalties assessed.
• Diaz Trade Law successfully assisted our client in filing a Prior Disclosure. CBP accepted the prior disclosure with no 1592 penalties being assessed!

Bonded Warehouse

• After Diaz Trade Law’s successful application, our client’s Bonded Warehouse Application was approved!
• After its bonded warehouse was activated by CBP, our client realized it wanted to change the total square footage. Diaz Trade Law successfully assisted our client alter its customs bonded warehouse space.

Successfully Assisted Numerous Importers in Various Seizure Cases 

• CBP seized our client’s vehicle after believing it could have been used to import illegal substances. After Diaz Trade Law’s successful petition proving our client’s innocence, CBP released the vehicle with no penalty assessed
• $20,868.81 of our client’s currency was seized by CBP. After Diaz Trade Law’s successful petition, $19,868.81 was returned to our client!
• $15,795 of our client’s currency was seized by CBP. After Diaz Trade Law’s successful petition, $14,795 was returned to our client!
• $12,157.95 worth of jewelry was seized by Customs after our client failed to declare it. After Diaz Trade Law’s successful Petition, CBP released the jewelry within 22 days.

Awards

• In 2021, Diaz Trade Law founder Jennifer Diaz was again Chambers ranked in International Trade: Customs – USA – Nationwide

Publications

Key publications written by Diaz Trade Law in 2021 were:

• Bloomberg Law, Introduction to U.S. Export Controls: Part 2, November, 2021.
• Bloomberg Law, Protecting Intellectual Property Rights in China, October 2021.
• Bloomberg Law, Incoterms 2020, May 2021.
• Bloomberg Law, Submitting Voluntary Self-Disclosures to Bureau of Industry & Security, May 2021.
• Bloomberg Law, Submitting a Voluntary Self-Disclosure to Census, April 2021.
• Bloomberg Law, Submitting a Voluntary Self-Disclosure to OFAC, April 2021.
• Bloomberg Law, U.S. Customs Targets Use of Forced Labor, January 2021.
• Customs and International Trade Bar Association, An Overview of China’s New Export Controls Regime,
• Customs and International Trade Bar Association, COVID-19’s Impact on 2020 Trade Flows,

Customized Training Programs & Webinars

Key compliance programs taught by Diaz Trade Law in 2021 were:

• Intellectual Property Rights and Customs – Amazon Brand Registry
• CTPAT Program: Is CTPAT a Right Fit
• Successfully Navigating the U.S. Customs Detention and Seizure Process
• How to Navigate FDA Enforcement Action: Detentions, Warning Letters, and Import Alerts
• Requests For Information (CBP Form 28) and Prior Disclosures
• How to Build and Maintain an Effective Import Compliance Plan
• How to Build and Maintain an Effective Export Compliance Plan
• Importing Food in Compliance With U.S. FDA and Surviving A FSVP Audit
• Importing Medical Devices in Compliance With U.S. FDA
• 6 Months In – Insights on Biden & Congress on Trade
• Is it a Cosmetic, a Drug, or Both? FDA Enforcement Actions
• ACE: Auditing Your Export History
• ACE: Auditing Your Import History
• Introduction to Export Controls
• Importing 101 – Introduction to U.S. Customs
• Anti-Circumvention / EAPA / Dumping Duties & the Spreadability of Cases (Coated Paper)
• Other Trade Remedies 101 – Every Administration has a Favorite!
• Basics on AD/CVD
• Cleaning for Covid-19 – Importing Cleaning Products: Who Regulates You?
• Forecasting the Next 4 Years of Biden on Trade

Diaz Trade Law values you and appreciates your trust in us to be your Customs and International Trade Law Expert! Contact us at info@diaztradelaw.com to schedule your consultation or customized training today.

BIS

• BIS Publishes Report on Effect of Uranium Imports on National Security
• BIS Publishes First Military End User List

Bloomberg

• Bloomberg Law – Introduction to U.S. Export Controls: Part 2
• Protecting Intellectual Property Rights in China
• Incoterms 2020
• Submitting Voluntary Self-Disclosures to Bureau of Industry & Security
• Submitting a Voluntary Self-Disclosure to Census
• Submitting a Voluntary Self-Disclosure to OFAC
• U.S. Customs Targets Use of Forced Labor

Customs and International Trade Bar Association 

• New CITBA Article – An Overview of China’s New Export Controls Regime
• COVID-19’s Impact on 2020 Trade Flows

China

• OFAC Issues Clarifying Guidance on Communist Chinese Military Companies Sanctions
• Hong Kong’s Initiates Dispute Regarding U.S.-Origin Marking Requirement
• CBP Issues WRO on Cotton, Tomato, & Downstream Products Made in Xinjiang
• Future of First Sale Rule in Question

Crypto

• OFAC Targets Russian Crypto Platform
• Why China’s Cryptocurrency Miners are Moving to Texas

Covid-19

• Recent Government Data Indicates that Florida Trade is Rebounding Fast Despite Pandemic Hit

Export

• What are Routed Export Transactions?
• Understanding the Computer Export License Exception (APP)
• Understanding the GOV Export License Exception
• Vegas Woman Charged with Iran Sanctions Violations
• Do’s and Don’ts of Filing a Commodity Jurisdiction Request
• Understanding Strategic Trade Authorization
• Building a Strong Export Compliance Plan
• Commerce Department Issues Rule Securing Digital Supply Chains Against Foreign Adversaries

Import/CBP

• UK Joins Kimberley Diamond-Trading Process
• FTC issues a Record Breaking $1.2 Million Penalty
• Customs Issues Notice of Proposed Rulemaking on Broker Continuing Education – Comments Open
• Comment Now – CBP Proposed Rule on Country of Origin Determination for Imports under USMCA
• 9801.00.10: Updated Requirements for Returned Goods
• Customs Valuation 101
• Breaking News – New Federal Law Expands Furniture Flammability Testing Standard

AD/CVD

• New Antidumping Petition Against Imports of Certain Honey Products
• New AD/CVD Petition Against Imports of Certain Chinese Mobile Access Equipment

Buy America

• Biden Executive Order Strengthens Buy American Government Procurement Laws

U.S. Fish and Wildlife Service

• Trading in Wildlife? You May Need a License

U.S. Food and Drug Administration

• FDA Seeks Public Comments on Proposed Final Order for OTC Sunscreen Safety
• FDA OPENS NEW FSVP PORTAL FOR IMPORTERS
• FDA Further Extends UFI Flexibility For Food Facility Registrations
• OTC Drug Manufacturers are Required to Pay FDA Facility User Fees by May 10, 2021
• FDA Import Alert on Mexican Hand Sanitizer
• Comment on FDA’s Proposed Rule – French Dressing

USITC

• An Introduction to Safeguard Investigations

OFAC 

• Between a Rock and a Hard Place – Conflicting U.S. & EU Sanctions Policies Towards Iran
• OFAC Sanctions & Licensing
• The CAPTA List – An Introduction
• Treasury Imposes Further Sanctions on Iran
• Trump Administration Designates Cuba State Sponsor of Terrorism

Section 301

• Want Your 301 Exclusion Back? Comment Now!
• Potential Relief from China Tariffs Coming
• 301 Exclusion Extensions for COVID-19 Related Products
• Proposed 25% Tariffs on Section 301 Digital Service Taxes – Comment Now
• USTR Announces Special 301 Review – Comments Due January 28
• US Imposes Additional Tariffs on EU Goods
• USCIT Invalidates 232 Tariffs on Steel and Aluminum Derivatives

Podcasts

• 3-Part Podcast Miniseries – Importing, Exporting, and AD/CVD

Trade Snapshots

• Customs and Trade Law Snapshot
• Customs and Trade Law Weekly Snapshot

USDA 

• Understanding Organic Equivalency Arrangements
• USDA National Organic Program – Enforcement & Compliance Overview

Webinar

• Want Customs to Police Your IPR at all 328 Ports of Entry?
• Customs Classification – A Key Component of an Import Compliance Manual
• Keysight Technologies Pays $6.6M to State Department for Export Violations
• Food Importers: How to Import Food Compliantly & Survive a FSVP Audit
• Don’t Let FDA Target Your Medical Device Company
• Insight on Last 6 Months of Biden/Congress on Trade
• Diaz Trade Law Invites the Trade Community to Two Free Webinars this Summer!
• Don’t be a Target, Learn Best Practices to Mitigate FDA Enforcement
• ACE: Auditing Your Export History
• ACE: Auditing Your Import History
• Exporting 101 – Introduction to Export Controls
• Anti-Circumvention, EAPA, Dumping Duties & the Spreadability of Cases
• Cleaning for COVID-19 – Importing Cleaning Products: Who Regulates You?
• REGISTER TODAY! NEI Accredited Webinar Importing 101 – Introduction to U.S. Customs
• Biden Administration Commits to Modernizing Regulatory Review

If you have any questions on the topics above, contact us at info@diaztradelaw.com.

Ever hear of U.S. goods returned and wondered what it really meant? The Harmonized Tariff Schedule of the United States (“HTSUS”) subheading 9801.00.10 is used for re-importing U.S. made products back into the United States, duty-free. Previously, this classification only covered merchandise originally made in the United States and now reentering the country (hence “US Goods Returned”). In order to qualify for classification under subheading 9801.00.10 and duty-free treatment, these products entering the United States had to be unimproved in condition or value. In other words, the products had to not be subject to further processing abroad. For example, subheading 9801.00.10 may be used when goods are being re-imported as returned product to the seller or for repair. Under subheading 9801.00.10, the importer has the burden to prove their claim for duty-free treatment.

CBP Issues Updated Guidance

On August 20, 2021, subheading 9801.00.10 was expanded to include products which originated from foreign countries. HTSUS subheading 9801.00.10 now states: “Products of the United States when returned after having been exported, or any other products when returned within 3 years after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad.” In other words, non-U.S. origin products that are returned to the United States will ALSO qualify for duty-free treatment under subheading 9801.00.10. However, the timing requirements for U.S.-origin and foreign-origin products are different. U.S.-origin products currently have no time limit to file a claim for duty-free treatment. However, claims for foreign-origin products must be filed within three years.

Duty-Free Treatment

To prove you are eligible to rightfully claim duty free treatment under subheading 9801 the foreign shipper/importer must declare that the products reentering the United States were not advanced in value or improved in condition by any manufacturing process or other means while abroad. However, if the customs broker obliges themselves as the importer, the customs broker will now have the legal responsibility to provide the required documents to substantiate the subheading 9801.00.10 claim (p.s. – if you are a broker, think 50 times, maybe 100, before taking on this responsibility).

Specifically, the changes resulted in:

1. For either U.S. manufactured goods or foreign origin goods:
   •  A declaration by Foreign Shipper should be included as it will indicate that the goods were not advanced in value or improved in condition while outside the United States.
   • A certificate from the master of a vessel may be accepted with the Declaration by the Foreign Shipper if it states that the product have not been un-laden from the exporting vessel.
   • Declaration by the owner, importer, consignee, or agent indicating that they have knowledge of the facts regarding the duty-free claim.
2. For goods reentering the U.S. after three years and are valued over $2500, CBP may request additional documentations if the name and address of the U.S. manufacturer are not clearly stated. An example of the documentation is a statement from the U.S. manufacturer verifying that the articles were made in the United States.
3. The documents which are sufficient to establish proof of export are Electronic Export Information (EEI)/the Automated Export System (AES) filing exemption, copy of the entry into the foreign country, or U.S. export invoice or bill of lading/airway bill.
4. For aircrafts, aircraft parts and equipments reentering the U.S, a CBP Form 3311 or its equivalent as stated in 19 CFR 10.1 may be used. The entrants which should be included are:
   • The name of the importing vessel or conveyance
   • The date of its arrival
   • A description of the articles
   • The value of the articles, and
   • That the articles are intended for use by the aircraft owner or operator in his own aircraft operations
5. For U.S. origin goods reentering the U.S. that were originally exported under a Department of State license are required to be imported through formal entry and the value of the goods doesn’t matter.
6. For U.S. manufactured aircraft reentering the U.S which were sold t0 a foreign government under the Foreign Military Sales program, formal entry is required if any maintenance is being performed on the aircraft while in the United States. Also, at the time of export of the aircraft, the EEI has to be filed for the maintenance of the aircraft.
7. For U.S. manufactured aircraft reentering the U.S which were sold t0 a foreign government under the Foreign Military Sales program and modification or enhancement will occur, to be imported and exported formal entry is required and the EEI submission citing the Directorate of Defense Trade Controls export license (DSP-5) is required.

Below is your checklist of necessary documents when claiming 9801.00.100/duty-free treatment:

• Declaration by Foreign Shipper,
• Declaration by the Owner, importer, consignee or agent,
• Proof of export documentation, and
• A statement from the U.S. manufacturer verifying that the merchandise was made in the United States (for products valued over $2,500 USD).

What You Can Do

The HTSUS is the primary resource for determining tariff classifications and deciphering customs duties owed for goods imported into the United States. Experts use the HTS, in conjunction with explanatory notes, general notes, general rules of interpretation, and Customs Binding Rulings to help determine the correct HTS. Correct classification is a part of the importer of records “reasonable care” requirement. Penalties for non-compliance can be severe. 19 U.S.C. 1592 is the statute CBP references when issuing penalties for negligence, gross negligence or fraud – depending on the degree of culpability CBP believes you had at the time of your non-compliance.

Fortunately, there is a lot you can do to be proactive about your HTSUS classification:

CLASSIFICATION CHECKLIST

1. Obtain as much information about the product subject to classification PRIOR to importation (if you can, get a sample, if not, photographs of the item and its packaging (exactly as it will look when being imported) are essential).
2. Refer to brochures, catalogs, product datasheets, or websites, etc., to truly understand the products intended use.
3. Review HTSUS chapters and look for the most relevant chapter/heading (first four digits) that best describes your product (i.e., and apple is an apple).
4. Review the Chapter and Section Notes to ensure the product is not kicked out of the HTS.
5. Review the General Rules of Interpretations (GRI’s) in the order.
6. Read the Explanatory Notes for the relevant headings.
7. Check CBP CROSS Rulings for classification of items of the same class/kind.
8. Consult Internal and/or external experts such as trade lawyers or engineers.
9. Request a CBP Binding Ruling.
10. Consult CBP Informed Compliance Publications

Contact Us

If you have questions or require assistance on U.S. And Foreign Goods Returned, contact Diaz Trade Law today at info@diaztradelaw.com or 305-456-3830.