The basis of the investigations is Section 232 of the Trade Expansion Act of 1962. Under Section 232, the president can restrict imports of products that are found to threaten to impair national security.

On April 16, BIS published two federal register notices (pharmaceuticals, semiconductors) seeking public comment. Comments are due May 7, 2025.

Pharmaceuticals and Pharmaceutical Ingredients

The scope of the pharmaceutical investigation covers pharmaceuticals and pharmaceutical ingredients, including:

• Finished drug products
• Medical countermeasures
• Critical inputs such as active pharmaceutical ingredients
• Key starting materials, and derivative products of those items

Among other information, BIS is particularly interested in comments that address:

• Demand for pharmaceuticals and pharmaceutical ingredients in the United States
• The extent to which domestic production of pharmaceuticals and pharmaceutical ingredients can meet domestic demand
• The role of foreign supply chains, particularly of major exporters, in meeting United States demand for pharmaceuticals and pharmaceutical ingredients
• The impact of foreign government subsidies and predatory trade practices on United States pharmaceuticals industry competitiveness
• Whether additional measures, including tariffs or quotas, are necessary to protect national security

Interested parties may submit a comment in this proceeding on or before May 7, 2025 at Regulations.gov using ID BIS-2025-0022.

Semiconductors and Semiconductor Manufacturing Equipment

The scope of the semiconductor investigation covers semiconductors, semiconductor manufacturing equipment, and their derivative products, including:

• Semiconductor substrates and bare wafers
• Legacy chips
• Leading-edge chips
• Microelectronics
• SME components

Among other information, BIS is particularly interested in comments that address:

• Demand for semiconductors in the United States
• The extent to which domestic production of semiconductors can or is expected to be able to meet domestic demand
• The impact of foreign government subsidies and predatory trade practices on United States semiconductor and SME industry competitiveness
• Whether additional measures, including tariffs or quotas, are necessary to protect national security

Interested parties may submit a comment in this proceeding on or before May 7, 2025 at Regulations.gov using ID BIS-2025-0021.

Make Your Voice Heard by Filing a Comment

These investigations may yield new tariffs on some or all of the products under consideration. If your business involves the importation of pharmaceutical or semiconductor products covered in this proceeding, consider filing a comment. Diaz Trade Law can help you draft and file a comment and/or help you understand how this rule may impact your business.

Read more:

• Presidential Powers and Tariffs: A Breakdown of Key Trade Laws
• Tariffs: Key Updates for Importers

Case highlights:

The publication highlights over 100 cases covering various violations of export control laws.

Military Controls

The owner of BQ Tree Consulting in Jacksonville, Florida, along with the President and Manager of the company were indicted for conspiring to illegally export military-grade combat rubber raiding craft (CCRC) to China.

The scheme involved providing a U.S. company with false end-use and end-user information for a front company in Hong Kong, which was used to complete the transaction ultimately destined for China. The intention was to reverse engineer the CRRC and engines to mass produce them for the Chinese People’s Liberation Army (PLA) Navy.

The company owner was sentenced to 16 months in prison, two years of supervised release, mandatory mental health screening, and a $200 special assessment. The company President was sentenced to 42 months confinement, three years of probation, a $50,000 criminal fine, and a $200 special assessment. The company manager was sentenced to 17 months in prison, one year of supervised release pending deportation, a prohibition on employment with any company that deals with the military, and a $100 special assessment.

National Security Controls

GlobalFoundries U.S. Inc., a semiconductor wafer manufacturing company headquartered in Malta New York violated the Export Administration Regulations (EAR) by sending 74 shipments of semiconductor wafers, valued at approximately $17.1 million, to SJ Semiconductor (SJS), a company on the BIS Entity List, without a license from BIS.

GlobalFoundries voluntarily disclosed the violations and cooperated fully with the investigation, which resulted in a reduction in the penalty.

On November 1, 2024, GlobalFoundries agreed to a $500,000 civil penalty.

WMD Controls

Chinese national Zaosong Zheng conducted cancer-cell research at Beth Israel Deaconess Medical Center in Boston. Zheng stole vials of biological research and attempted to take them out of the United States aboard a flight to China.

Zheng was arrested at Logan International Airport in Boston. Zheng pled guilty to making false, fictitious or fraudulent statements in connection with his theft of 19 vials and was sentenced to time served in prison, three years of supervised release, a $100 special assessment, and removal from the United States.

Unlicensed Exports

USGoBuy, LLC of Portland, Oregon entered into a settlement agreement with BIS to resolve two alleged violations of the EAR involving unlicensed exports of riflescopes to China and the UAE. As part of the settlement agreement, USGoBuy, LLC agreed to a three-year suspended denial order, which BIS could activate if the company failed to meet the terms of the settlement agreement or committed additional violations.

A subsequent audit identified significant continued deficiencies in USGoBuy, LLC’s export compliance program and revealed new violations of the EAR including 176 failures to make Electronic Export Information (EEI) filings and failures to maintain adequate records.

BIS activated the previously agreed upon suspended penalty – a three-year denial order.

Takeaways

In the publication, BIS noted that export controls have never been more important to the U.S.’s security interests and that Export Enforcement has taken decisive action to prioritize its enforcement efforts.

BIS also urged companies to invest in compliance upfront to avoid becoming one of the highlighted case studies.

Exporters should have a robust compliance program in place not only to prevent violations of the EAR but to detect them if and when they do occur.

Diaz Trade Law can provide assistance with a number of EAR-related matters including developing a compliance plan, export compliance training, transaction vetting, voluntary self-disclosures, and more.

Learn more:

• Bloomberg Law: Submitting Voluntary Self-Disclosures to Bureau of Industry & Security
• Bloomberg Law: Building & Maintaining an Export Compliance Plan
• Bloomberg Law: Export Licensing Under EAR
• Bloomberg Law: Bloomberg Law – Introduction to U.S. Export Controls
• Webinar: Building and Maintaining an Effective Export Compliance Plan
• Webinar: Introduction to Export Controls

The guidelines cover basic requirements for applying and renewal and include an application checklist. 

Background on Licenses for Deemed Exports/Reexports 

The obligation to obtain an export license from BIS before releasing controlled technology to a foreign person is informally referred to as a “deemed” export. The release is considered an export to the person’s country or countries of nationality.   

The Export Administration Regulations (EAR), Section 734.13, defines a deemed export as releasing or otherwise transferring “technology” or “source code” to a foreign person in the United States.  

Typical organizations using deemed export licenses include universities, research institutions, bio-chemical firms, medical organizations, and computer companies.    

New Guidance 

 The basic guidance for filling out license applications is set forth in Supplement 1 to part 748 of the EAR. The new guidelines supplement the basic guidance and are intended to assist licensing officers in reviewing license applications more efficiently. 

Basic Requirements 

The guidelines reiterate that applicants must include all the necessary information and documentation required when submitting a license application. BIS will return applications with insufficient information.  

Basic documentation required: 

• Legible copies of passport, visa, and work authorization 
• Letter of Explanation (LOE)  
• Resume  
• Technology Control Plan (TCP) 

SNAP-R Best Practices 

SNAP-R is an electronic portal facilitated by BIS that allows individuals and organizations to process and track license applications. The guidelines provide best practices when submitting an application through this portal including: 

• Do not use acronyms 

• Do not list a P.O. box for required address 

• Include a detailed description of the end-use of the technology 

• Identify the technology by its Export Control Classification Number (ECCN), not by its trade name 

Letter of Explanation 

Applicants must submit a separate letter of explanation (LOE) when submitting an application. According to the guidelines, the LOE should include: 

• Copies of the foreign person’s valid passport 
• The address where the technology will be released 
• A description of all uses and applications for the technology 
• The form in which the technology will be released 
• The availability abroad of comparable foreign technology 

Resume 

The license application must include a complete resume of the foreign person. The resume information is considered in the application process to assess the risk that the technology in question could be diverted to unauthorized uses or users.  

The resume should include: 

• Personal background information 
• Educational and vocational background 
• Employment history  
• Research history  
• Military service  
• Special information (any special considerations that BIS should take into account) 

Review of Deemed Export Applications 

BIS’s policy is to approve deemed export license applications provided that there is no unacceptable risk that the technology will be diverted to unauthorized users and that the applicant agrees to comply with the applicable conditions on the license. 

It is critical that companies have a strong export compliance plan and sufficient processes and procedures to determine when an export license is required and counsel on standby to provide assistance or clarification when necessary. Diaz Trade Law has a strong track record in assisting companies in with export compliance and preparing export license applications when necessary. To learn more about how we can help, contact us at info@diaztradelaw.com or call us at 305-456-3830. 

Learn more: 

• The Importance of Regular Export Compliance Training for your Business 
• Building a Strong Export Compliance Plan 
• Bloomberg Law: BIS Regulatory Updates: 2023 Significant Changes 
• Bloomberg Law: Submitting Voluntary Self-Disclosures to Bureau of Industry & Security 
• Webinar: Building and Maintaining an Effective Export Compliance Plan 

Steel Proclamation

The steel proclamation implements a melt and pour requirement for imports of steel articles that are products of Mexico. It also increases the section 232 duty rate for imports of steel articles and derivative steel articles that are products of Mexico that are melted and poured in a country other than Mexico, Canada, or the United States. If the country of melt and pour is any country other than the U.S., Mexico, or Canada, then the steel articles are subject to an additional 25% duty.

In making this adjustment, the Administration stated that domestic steel producers’ capacity utilization remains below the target 80 percent capacity utilization recommended in the Secretary of Commerce’s report of January 11, 2018. Additionally, imports of steel articles from Mexico have increased significantly. In the opinion of the Administration and the Secretary of Commerce, these developments indicate the need for further action under section 232.

Aluminum Proclamation

The aluminum proclamation implemented a country of smelt and country of most recent cast requirement for imports of aluminum articles that are products of Mexico. It also increased the section 232 duty rate for imports of aluminum articles and derivative aluminum articles that are products of Mexico containing aluminum for which the reported primary country of smelt, secondary country of smelt, or country of most recent cast is China, Russia, Belarus, or Iran.

To avoid 232 tariffs, aluminum articles and derivative aluminum articles that are products of Mexico must be accompanied by a certificate of analysis proving the primary country of smelt, secondary country of smelt, or country of most recent cast.

As it did in the steel proclamation, the Administration stated that domestic aluminum producers’ capacity utilization remains below the target 80 percent capacity utilization recommended in the Secretary’s report of January 19, 2018, and imports of aluminum articles from Mexico have increased significantly.

The proclamation stated that these measures will provide an effective, long-term alternative means to address both aluminum article imports that threaten national security and excess aluminum capacity and production.

CBP Guidance on Aluminum

On September 4, 2024, CBP issued guidance to assist importers impacted by the additional duties on aluminum. The guidance provides specific HTSUS headings importers should declare:

• Heading 9903.85.71 for aluminum articles for which the primary country of smelt, secondary country of smelt, or country of most recent cast, is China, Russia, Belarus or Iran.
• Heading 9903.85.72 for derivative aluminum articles for which the primary country of smelt, secondary country of smelt, or country of most recent cast, is China, Russia, Belarus or Iran.
• Heading 9903.85.67 for aluminum articles when any amount of primary aluminum used in the manufacture is smelted in Russia, or when the aluminum articles are cast in Russia.
• Heading 9903.85.68 for derivative aluminum articles when any amount of primary aluminum used in the manufacture is smelted in Russia, or when the derivative aluminum articles are cast in Russia.

The guidance also specifies that filers may only report “N/A” for the primary and secondary country of smelt if the product contains only secondary aluminum and no primary aluminum. 

Looking Ahead

The proclamations state that the United States will monitor the effectiveness of these measures and may reconsider the policies as appropriate.

Importers should revisit their policies and procedures governing steel and aluminum imports in light of these proclamations.

For assistance complying with these new requirements or for more information on how this change will impact your business, contact Diaz Trade Law.

Background on Boycott Requests

BIS is charged with enforcing anti-boycott laws under the Export Administration Regulations (EAR). The laws prohibit U.S. companies from taking actions in furtherance of a boycott maintained by a foreign country against a country friendly to the United States. Common boycott requests include:

• Requesting a certification that goods are not from a specific country
• Requesting that goods are not shipped to a certain country
• Requesting that a business does not engage with a particular country

U.S. persons must report boycott-related requests to BIS’s Office of Anti-boycott Compliance (OAC).

Boycott Requester List

OAC maintains a boycott-requester list to raise awareness and assist U.S. persons in identifying sources of boycott-related requests.

Entities on the list have been reported by a U.S. person to BIS via a request report form. The list is updated quarterly but is not an exhaustive list of entities that may make these requests.

The most recent update to the list includes 57 additions and the removal of 127 entities.

Requesting countries added in the most recent update include:

• Afghanistan
• Algeria
• Bangladesh
• Germany
• India
• Iraq
• Japan
• Kuwait
• Malaysia
• Norway
• Oman
• Pakistan
• Saudi Arabia
• Singapore
• Switzerland
• United Arab Emirates
• Qatar
• Vietnam

Exporters have a duty to remain vigilant in spotting boycott-related requests and reporting them to BIS. Diaz Trade Law can help ensure your compliance program meets all EAR requirements.

Learn more:

• The Importance of Regular Export Compliance Training for your Business
• Building and Maintaining an Effective Export Compliance Plan
• Introduction to Export Controls

The note:

1. Highlights the applicability of U.S. sanctions and export control laws to persons and entities located abroad;
2. Outlines the enforcement mechanisms that are available for the U.S. government to hold non-U.S. persons accountable for violations of such laws; and
3. Provides an overview of compliance considerations for non-U.S. companies and compliance measures to help mitigate their risk

Applicability of U.S. Sanctions and Export Control Laws to Foreign-Based Persons

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) administers and enforces economic and trade sanctions, primarily against foreign jurisdictions but also against individuals and entities such as traffickers and terrorists.

The following persons/entities must comply with OFAC regulations:

• U.S. citizens and permanent resident aliens
• All persons within the United States
• All U.S.-incorporated entities and their foreign branches

In certain sanctions programs, foreign entities owned or controlled by U.S. persons also must comply with applicable restrictions – such as engaging in a transaction with the government of Iran. Certain sanctions programs also require foreign persons in possession of U.S.-origin goods to comply.

Non-U.S. persons are also subject to certain OFAC prohibitions. For example, non-U.S. persons are prohibited from causing or conspiring to cause U.S. persons to wittingly or unwittingly violate U.S. sanctions, as well as engaging in conduct that evades U.S. sanctions.

Applicability of U.S. Export Control Laws

The compliance note highlights that the Export Administration Regulations (EAR) follow the goods – meaning U.S. export control laws may extend to items subject to the EAR anywhere in the world and to foreign persons who deal with them. Anyone involved in the movement of items subject to the EAR must adhere to U.S. export control laws.

Transshipment

The reach of U.S. export control laws means that parties to an export transaction cannot bypass the EAR by shipping items through a third country. Similarly, foreign parties to an export transaction cannot bypass EAR requirements because the item is located outside the United States.

U.S.-Origin Components

The EAR may also apply to foreign companies that manufacture items containing U.S.-origin components. The factor that determines EAR applicability is the value of the components. Most of the time, a non U.S.-made item is subject to the EAR if the value of the U.S.-origin controlled content exceeds 25% of the value of the finished product. For certain countries, the threshold is lower (Cuba, Iran, North Korea, and Syria – 10%).

Foreign Produced Products that contain U.S.-Controlled Technology

Under the EAR, certain foreign-produced items located outside of the United States that are produced using certain U.S.-controlled technology, software, or production equipment are subject to the EAR when exported from abroad, reexported, or transferred in-country to certain countries or parties on the Entity List.

This means that even if the items never enter the U.S., they may still be subject to U.S. export control jurisdiction under certain conditions.

Examples include:

• License requirement for Huawei and its subsidiaries on the Entity List on items that are the direct product of certain U.S.-origin software or technology.
• Certain Chinese entities associated with advanced semiconductors.
• Controls on certain defense-related entities and items in Russia, Belarus, and Iran.

Enforcement Against Foreign Persons and Entities

The note illustrates the authority of the Bureau of Industry and Security (BIS), OFAC, and the Department of Justice by providing past examples of enforcement actions.

BIS

• June 9, 2023 – BIS issued a Temporary Denial Order (TDO) suspending the export privileges of companies in the Netherlands and Greece for acting as a procurement network for Russian intelligence services.
• April 20, 2023 – BIS announced a $300 million penalty against a Singapore company for shipping millions of hard disk drives to Huawei without a license.

OFAC

• In April 2022, an international freight forwarding and logistics company paid over $6M to settle civil liability for received payments through the U.S. financial system in connection with shipments to Korea, Iran, and Syria.
• July 2021 – a UAE-based company settled with OFAC for $415,000 for exporting storage tank cleaning units from the U.S. to Iran by falsely listing a Dubai-based company as the end-user.

Department of Justice

• October 2022 – DOJ indicted three Latvian nationals, one Ukrainian national, one Latvian company, and one Estonian company with violating U.S. export laws by trying to smuggle from the United States to Russia a dual-use, high-precision computer-controlled grinding machine.
• December 2023 – DOJ indicted one Iran-based person and one China-based person for conspiring to illegally purchase and export from the United States to Iran dual-use microelectronics commonly used in UAV production.

Compliance Considerations for Foreign-Based Persons

The note ends by advising foreign-based companies and individuals to take seriously the impacts of U.S. sanctions and export control laws on their business and operations. The note provides a list of compliance considerations including screening protocols, integrating know-your-customer practices, and ensuring that affiliates are trained on U.S. export control requirements.

Diaz Trade Law Can Assist with EAR Compliance

While having an export compliance plan is not a guarantee that an export violation will not occur, a robust export compliance program can minimize the risk of non-compliance. Diaz Trade Law can help you develop an effective export compliance plan, export compliance training, transaction vetting, and more.

Reach out to us at info@diaztradelaw.com or call us at 305-456-3830.

Want more information on EAR compliance? Check out our relevant blog posts and on-demand webinars:

• Introduction to Export Controls
• The Importance of Regular Export Compliance Training for your Business
• Expanded Export Control Obligations when Exporting to China

The Coalition is comprised of U.S. producer Ardagh Glass Inc. and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (“USW”). The petitions allege that the Chinese, Chilean, and Mexican industries have been dumping wine bottles in the U.S., harming the U.S. market and destroying American jobs.

Full list of producers here. Full list of U.S. importers here.

The petition alleges dumping margins of:

• China: 280.10% and 620.03%
• Mexico: 78.55% and 102.09%
• Chile: 615.68%

The scope of merchandise covered includes a wide array of products including both clear and colored bottles in the Bordeaux, Burgundy, Champagne, or Sparkling shapes. Full scope here.

The Commerce Department will determine whether to initiate the investigations within 20 days. The USITC will reach a preliminary determination of material injury or threat of material injury within 45 days. Final determinations will likely occur late 2024.

As with any proceeding, participation is very important to protect your rights. We urge anyone that imports glass wine bottles to pay close attention to this case and to ensure that all appropriate steps are taken to mitigate any damage.

Diaz Trade Law will continue to monitor this case and share updates. For more information or questions get in touch with us at 305-456-3830 or info@diaztradelaw.com.

The agencies highlight the increasingly complex nature of global supply chains and opportunities for nefarious actors to evade export control laws and U.S. sanctions. The note also highlights the responsibility of individuals and entities participating in the global transport of goods to assess their risk profile and implement compliance programs.

Potential Indicators of Efforts to Evade Sanctions and Export Controls

The note directs companies involved in funding and facilitating the transport of cargo to be aware of these practices that may suggest export control or sanctions evasion: 

• Manipulating location or identification data
• Falsifying cargo and vessel documents
• Ship-to-ship transfers
• Voyage irregularities and use of abnormal shipping routes
• Frequent registration changes” that evade national provisions; and
• Complex ownership or management

Recommended Compliance Practices

The note recommends that individuals and entities who participate in maritime and other transportation industries should implement and strengthen compliance controls as necessary, especially when operating in high-risk areas or when dealing with entities who demonstrate suspicious behavior. A non-exhaustive list of compliance practices includes:

• Institutionalizing sanctions and export control programs
• Establish location monitoring best practices and contractual requirements
• Know your customer
• Exercise supply chain due diligence
• Industry information sharing

The note also encourages individuals and companies to report suspicious behavior to the relevant U.S. authorities.

Recent Activity to Combat the Illicit Shipment of Cargo 

The note highlights increased U.S. criminal and regulatory enforcement activity and the partnership between the agencies to enforce U.S. laws and regulations. Examples of recent enforcement actions include:

Criminal Prosecutions

• On September 8, 2023, the DOJ announced the first-ever criminal resolution against a bareboat charterer of a crude oil tanker carrying contraband Iranian oil for the benefit of the IRGC.

Civil Forfeiture Action

• In July 2020, DOJ filed a civil forfeiture complaint and warrant alleging that the oil aboard four vessels was the object of a scheme to deliver the oil to Venezuela.

Civil Enforcement Actions

• In 2018, BIS imposed a $155,000 penalty on a logistics company that exported items to entities in China and Russia on the Entity List.
• In 2019, OFAC imposed monetary penalties of over $800,000 on a U.S.-based company who executed agreements with third parties who had nominated blocked Iranian vessels for their shipments.
• In 2022, OFAC imposed a penalty of $6.1 million against a freight forwarding company who instructed its United Arab Emirates and South Korea affiliates to avoid including the names of sanctioned jurisdictions on invoices to avoid scrutiny.

The note concludes by urging companies operating in the maritime and other transportation industries to be vigilant in their compliance efforts and be on the lookout for efforts to disguise the nature, origin, or destination of cargo being transported.

Bottom Line: Know Your Business Partners

This compliance note demonstrates that the U.S. government has prioritized enforcement activity and expects parties involved in international trade to play their part in detecting and avoiding evasion.

Diaz Trade Law has significant experience in a broad range of compliance matters and can help you implement a robust export compliance program. Contact us at info@diaztradelaw.com or call us at 305-456-3830.

Want more information on Export Compliance Training? Check out our blog posts and on-demand webinars:

• The Importance of Regular Export Compliance Training for your Business
• Building a Strong Export Compliance Plan
• Building & Maintaining an Effective Export Compliance Plan
• Introduction to Export Controls

We’d love to hear your feedback!

• Elimination of Customs Broker District Permit Fee
  • Section 641 of the Tariff Act of 1930, as amended (19 U.S.C. 1641), provides that individuals and business entities must hold a valid customs broker’s license and permit to transact customs business on behalf of others. The statute also sets forth standards for the issuance of broker licenses and permits; provides for disciplinary action against brokers in the form of suspension or revocation of such licenses and permits or assessment of monetary penalties; and, provides for the assessment of monetary penalties against other persons for conducting customs business without the required broker’s license.
  • On June 5, 2020, U.S. Customs and Border Protection (CBP) published a notice of proposed rulemaking (NPRM) in the Federal Register (85 FR 34549), proposing the elimination of customs broker district permit fees in parts 24 and 111.
  • Consistent with the June 5, 2020, notice, CBP is publishing a final rule to, among other things, eliminate customs broker districts (see ‘‘Modernization of the Customs Broker Regulations’’ RIN 1651–AB16). Specifically, CBP is transitioning all brokers to national permits and expanding the scope of the national permit authority to allow national permit holders to conduct any type of customs business throughout the customs territory of the United States. As a result of the elimination of customs broker districts, CBP is amending in this document the regulations to eliminate customs broker district permit fees.
• Modernization of the Customs Broker Regulations
  • This document adopts as final, with changes, proposed amendments to the U.S. Customs and Border Protection (CBP) regulations modernizing the customs broker regulations. CBP is transitioning all customs brokers to a single national permit and expanding the scope of the national permit authority to allow national permit holders to conduct any type of customs business throughout the customs territory of the United States.
  • To accomplish this, CBP is eliminating broker districts and district permits, which in turn removes the need for the maintenance of district offices, and district permit waivers. CBP is also updating, among other changes, the responsible supervision and control oversight framework, ensuring that customs business is conducted within the United States, and requiring that a customs broker have direct communication with an importer. These changes are designed to enable customs brokers to meet the challenges of the modern operating environment while maintaining a high level of service in customs business.
  • Further, CBP is increasing fees for the broker license application to recover some of the costs associated with the review of customs broker license applications and the necessary vetting of individuals and business entities (i.e., partnerships, associations, and corporations).
  • Additionally, CBP is announcing the deployment of a new online system, the eCBP Portal, for processing broker submissions and electronic payments. Lastly, CBP is publishing a concurrent final rule document to eliminate all references to customs broker district permit user fees (see ‘‘Elimination of Customs Broker District Permit Fee’’ RIN 1515–AE43) to align with the changes made in this final rule document.
  • This final rule is effective December 19, 2022.
• BGH Edelstahl Siegen GmbH v. United States and Ellwood City Forge Company, et al.
  • Before the court was BGH Edelstahl Siegen GmbH’s (“BGH”) Rule 56.2 motion for judgment on the agency record challenging various aspects of the U.S. Department of Commerce’s (“Commerce”) final determination in its countervailing duty (“CVD”) investigation of forged steel fluid end blocks (“Fluid End Blocks”) from the Federal Republic of Germany (“FRG”).
  • BGH challenged Commerce’s Final Results on three grounds, arguing (1) that Commerce improperly initiated its CVD investigation and impermissibly expanded the CVD investigation to include new subsidy programs, (2) failed to include ex-parte communications in the record, and (3) incorrectly determined that seven programs used by BGH during the period of investigation were countervailable subsidies.
  • Defendants argued that Commerce’s decisions to initiate and expand its CVD investigations were in accordance with law because the petition to initiate the CVD investigation “included the relevant laws and policies that provided the countervailable subsidies, tied those facts to the legal framework, and established a reasoned basis to conclude that BGH received subsidy benefits[,]” and that Commerce may consider new subsidy programs uncovered during its investigation.
  • Defendants further argued that the record for the CVD investigation is complete because the ex parte communication that BGH asserts is missing from the record pertained to the antidumping investigation, not the CVD investigation, and therefore need not be included in the record. Finally, Defendants argued that Commerce correctly determined the Contested Programs are countervailable.
  • The CIT held:
    • 1. That Commerce’s Final Results are sustained with respect to the initiation of the CVD investigation, the determination that the administrative record is complete, the determination that the provisions of the Electricity Tax Act and the Energy Tax Act, the EEG and KWKG Reduced Surcharge Programs, the ETS Additional Free Emissions Allowances, and the CO2 Compensation Program are countervailable subsidies, and the determination that Commerce’s calculations for the EEG and KWKG Reduced Surcharge Programs, the ETS Additional Free Emissions Allowances, and the CO2 Compensation Program are supported by substantial evidence;
    • 2. That Commerce’s Final Results are remanded for further explanation or reconsideration consistent with this opinion with respect to its determination that the KAV Program is a specific subsidy;
    • 3. That Commerce’s Final Results are remanded for further explanation or reconsideration consistent with this opinion with respect to its calculations of the CVD rates for the Electricity Tax Act and the Energy Tax Act; and it is further ORDERED that Commerce shall file its remand redetermination with the court within 90 days of this date;
    • 4. That Commerce shall file the administrative record within 14 days of the date of filing of its remand redetermination;
    • 5. That the parties shall file any comments on the remand redetermination within 30 days of the date of filing of the remand determination;
    • 6.That the parties shall have 30 days to file their replies to the comments on the remand redetermination;
    • 7. That the parties shall file the joint appendix within 14 days of the date of filing of responses to the comments on the remand redetermination.
• Keirton USA v. United States
  • Before the court was Keirton USA, Inc.’s (“Keirton”) Rule 12(c) motion for judgment on the pleadings.
  • Keirton challenged CBP’s protest denial arguing possession and importation of the subject merchandise is permissible because Washington State law authorizes the possession and importation of marijuana paraphernalia.
    • Keirton sells Twisted Trimmers to companies in the State of Washington that process marijuana plants.
  • Defendant United States argued that, although Washington State repealed its laws criminalizing possession of marijuana paraphernalia like the Twisted Trimmer, that repeal does not explicitly authorize Keirton to use the subject merchandise to manufacture, possess, or distribute marijuana paraphernalia under Federal law.
  • The CIT held that it is lawful for Keirton to possess and import its merchandise into the state of Washington. Therefore, Keirton’s motion for judgment on the pleadings is granted, and Defendant’s cross-motion for judgment on the pleadings is denied.