Extending 301 Exclusions

There are currently 178 effective exclusions in the Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. These products are exempt from additional 301 duties. USTR has extended these exclusions several times, including a recent 90-day extension through November 29, 2025. USTR is seeking public comment on whether any of the 178 effective exclusions warrant further extension beyond November 29, 2025.

Comments are due October 16, 2025.

National Trade Estimate Report

Each year, USTR publishes the National Trade Estimate Report on Foreign Trade Barriers (NTE Report). USTR is seeking input to assist it in identifying significant foreign barriers to, or distortions of, U.S. exports of goods and services and U.S. foreign direct investment. 

Commenters should submit information related to one or more of the following categories of foreign trade barriers:

• Import policies
• Technical barriers to trade
• Sanitary and phytosanitary measures
• Government procurement
• Intellectual property protection
• Services
• Investment
• Subsidies
• Anticompetitive practices
• State-owned enterprises
• Other non-market policies and practices
• Labor
• Environment
• Other barriers

Comments are due October 30, 2025.

Joint Review of USMCA

Article 34.7 of the United States Mexico Canada Agreement (USMCA) requires government representatives from the three countries to meet on the sixth anniversary of the agreement (July 1, 2026) to conduct a Joint Review of the operation of the Agreement. Ahead of this meeting, the USTR is seeking input from the public and trade community in advance of the joint review. 

In particular, USTR invites comments regarding:

• Any aspect of the operation or implementation of the USMCA.
• Any issues of compliance with the Agreement.
• Recommendations for specific actions that USTR should propose ahead of the Joint Review.
• Factors affecting the investment climate in North America and in the territories of each Party
• Effectiveness of the USMCA in promoting investment that strengthens U.S. competitiveness, productivity, and technological leadership.
• Strategies for strengthening North American economic security and competitiveness.

Comments are due November 3, 2025.

Make your voice heard by filing a comment! Diaz Trade Law can assist you in preparing a filing and also help determine how these initiatives impact your business. Contact us at 305-456-3830 or info@diaztradelaw.com.

Read more:

• USTR Finalizes Action on 301 Tariffs
• White House Announces Further Section 301 Tariff Hikes on Chinese Goods
• Tariffs are Bad, So Are Non-tariff Barriers
• Bloomberg Law: USMCA Import Considerations for Practitioners

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

• The 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. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
• 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. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.
• OFAC is adding regulations to implement Executive Order 14059 of December 15, 2021, “Imposing Sanctions on Foreign Persons Involved in the Global Illicit Drug Trade”. These regulations are currently available for public inspection with the Federal Register and will take effect upon publication in the Federal Register on Tuesday, December 20, 2022.
  • OFAC intends to supplement these regulations with a more comprehensive set of regulations, which may include additional interpretive guidance and definitions, general licenses, and other regulatory provisions.
• OFAC is publishing the names of persons whose property and interests in property have been unblocked and who have been removed from the list of Specially Designated Nationals and Blocked Persons.

U.S. Customs and Border Protection (CBP)

• The U.S. Customs and Border Protection (CBP) announces the  DR-CAFTA contains quantitative restraints associated with a reduced duty rate for agricultural products that meet the requirements for a “qualifying good.” A qualifying good is one that meets the product specific rule of origin; however, U.S. materials or inputs are considered to be of a non-Party, i.e., U.S. materials are considered non-originating. The tariff rate quotas (TRQs) cover products such as sugar, sugar-containing products, beef, cheese, milk powder, butter, other dairy products, ice cream, milk, cream, and sour cream.
• CBP announced from September 16, 2022, through December 1, 2022, the document attachment functionality of the Automated Commercial Environment (ACE) Protest Module was inoperative. As announced in Cargo Systems Messaging Service (CSMS) message #54197466 the issue has been resolved and document attachment functionality is restored.
  • • Protest filers impacted by the error should upload any documents supporting a Section 514 protest or a Section 520(d) post-importation claim as soon as possible but no later than Monday, January 30, 2023. Documents must only be uploaded to the protest record; no documents will be accepted through email or any other means.
      • During this lapse in functionality, protests or 520(d) claims, submitted between September 16th and December 1st should not have been denied solely because supporting documents were not attached. In the event that CBP did deny a protest during this time period based on documents not being attached, protestants may submit a 19 U.S.C. 1515(d) void denial request, in accordance with the ACE Business Rules. For 520(d) claims that were denied for the reasons described above, the filer will need to submit a Section 514 protest.
• CBP announced the annual Customs Broker permit user fee due date for the 2023 calendar year is February 24, 2023. The annual permit user fee reflects changes made by two final rules (87 FR 63267 and 87 FR 63262) published in the Federal Register on October 18, 2022, and effective December 19, 2022, that eliminate broker districts and district permits, and transition all customs brokers to a single national permit.
  • The fee for the 2023 calendar year is $163.71 and is due to the processing Center no later than February 24, 2023. The annual permit user fee will only be collected for active national permits.

U.S. International Trade Commission (USITC)

• The U.S. International Trade Commission (USITC) has given notice of the scheduling of expedited reviews pursuant to the Tariff Act of 1930 to determine whether revocation of the countervailing duty order on steel concrete reinforcing bar from Turkey and the antidumping duty orders on steel concrete reinforcing bar from Japan, Taiwan and Turkey would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
• The USITC on the basis of the record developed in five-year reviews, has determined pursuant to the Tariff Act of 1930 that revocation of the antidumping duty orders on certain stainless steel pipe from South Korea and Taiwan would be likely to lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time.

Environmental Protection Agency (EPA)

• The United States Environmental Protection Agency (EPA) announced a regulation which establishes tolerances for residues of simazine in or on citrus fruits (crop group 10-10), pome fruits (crop group 11-10), stone fruits (crop group 12-12), and tree nuts (crop group 14-12) and amends the tolerance for residues in or on almond hulls. Syngenta Crop Protection, LLC requested these tolerances under the Federal Food, Drug, and Cosmetic Act (FFDCA).

National Institute of Standards of Technology

• The National Institute of Standards of Technology announced the 2023 Interim Meeting of the National Conference on Weights and Measures (NCWM) will be held in-person at the Hyatt Regency Savannah in Savannah, Georgia from Sunday, January 8 through Wednesday, January 11, 2023. This notice contains information about significant items on the NCWM Committee agendas but does not include all agenda items. As a result, the items are not consecutively numbered.

Department of Commerce (DOC)

• On December 9, 2022, the Department of Commerce (DOC)’s International Trade Administration announced the United States- Mexico-Canada Agreement (USMCA) Secretariat received a Consent Motion to Terminate Panel Review from Hogan Lovells US LLC on behalf of Evraz Inc. NA in the above-mentioned dispute. As a result, and pursuant to Rule 75(2) of the USMCA Rules of Procedure for Article 10.12 (Binational Panel Review), the USMCA dispute USA-CDA-2022-10.12-01 has been terminated effective December 9, 2022.
• DOC is amending the Export Administration Regulations (EAR) by adding thirty-six entities to the Entity List. These entities have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States and will be listed on the Entity List under the destinations of the People’s Republic of China  and Japan.
• DOC continues to find that Huantai Dongyue International Trade Co., Ltd, Shandong Dongyue Chemical Co., Ltd., Zhejiang Yonghe Refrigerant Co., Ltd., and Zhejiang Sanmei Chemical Ind. Co., Ltd. made no shipments during the period of review (POR), August 1, 2020, through July 31, 2021.
• DOC determines that certain steel nails from the Sultanate of Oman were sold in the United States at less than normal value during the period of review (POR), July 1, 2020, through June 30, 2021.
• DOC preliminarily finds that Ningbo Dongxin High-Strength Nut Co., Ltd., is not eligible for a separate rate. The period of review is April 1, 2021, through March 31, 2022. Commerce is also rescinding the review with respect to Ningbo Zhongjiang High Strength Bolts Co., Ltd.. Interested parties are invited to comment on these preliminary results of review.
• DOC is amending its notice of final results for the 2020 administrative review of the countervailing duty (CVD) order on certain softwood lumber products from Canada.
• DOC determines that certain steel nails from the Sultanate of Oman were sold in the United States at less than normal value (NV) during the period of review (POR), July 1, 2020, through June 30, 2021.
• DOC preliminarily determines that countervailable subsidies are being provided to producers and exporters of multilayered wood flooring  from the People’s Republic of China. The period of review (POR) is January 1, 2020, through December 31, 2020. Interested parties are invited to comment on these preliminary results of review.

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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U.S. Treasury Department – Office of Foreign Assets Control

• On July 6, 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned an international network of individuals and entities that has used a web of Gulf-based front companies to facilitate the delivery and sale of hundreds of millions of dollars’ worth of Iranian petroleum and petrochemical products from Iranian companies to East Asia. As a result, all property and interests in property of these targets that are in the U.S. must be blocked and reported to OFAC. 
  
• On July 1, 2022, OFAC  published an update to the identifying information of one person, LOPEZ DELGADO, of Nicaragua, currently included on OFAC’s Specially Designated Nationals and Blocked Persons List (SDN List). All U.S. property of this person remains blocked, and Americans are generally prohibited from engaging in transactions with him. 
• On July 1, 2022, OFAC adopted a final rule amending the Global Terrorism Sanctions Regulations to implement a September 9, 2019 Executive Order which strengthened U.S. counter-terrorism efforts, including include against acts of terrorism that threaten the Middle East peace process. This rule is effective July 1, 2022.  
• On July 1, 2022, OFAC sent out a reminder to file the 2022 Report of Blocked Property, requiring holders of blocked property to provide OFAC with a comprehensive list of all blocked property held as of June 30 of the current year by September 30, 2022. 
• On June 30, 2022, OFAC announced it has blocked property belonging to Heritage Trust, a Delaware-based trust owned by Russian oligarch Suleiman Abusaidovich Kerimov. Heritage Trust holds assets valued at over $1 billion. 
• The U.S. Department of State and the U.S. Department of Commerce have taken action prohibiting the importation of Russian gold. 

U.S. Trade Representative

• On June 30, 2022, the U.S. Trade Representative, Ambassador Katherine Tai, released the first Report on the Operation of the United States-Canada Mexico Agreement (USMCA) with Respect to Trade in Automotive Goods. 
• On July 6, 2022, the USTR issued a notice seeking public comments to assist in the development of a forced labor trade strategy. The deadline for submitting comments is August 5, 2022. USTR requests that comments be submitted electronically via the Federal eRulemaking Portal at https://www.regulations.gov, using Docket Number USTR–2022–0006.

U.S. Department of Commerce

• On July 1, 2022, the Department of Commerce and the International Trade Commission automatically initiated and conducted reviews of orders pertaining to pencil and rubber products. 
• On July 1, 2022, the DOC determined that Jiangsu Senmao Bamboo and Wood Industry Co., Ltd. has made sales of multilayered wood flooring from China at prices below normal value during the period of review (POR) December 1, 2019, through November 30, 2020. 
• On July 1, 2022, the DOC published a summary of duty orders, findings, and suspended investigations, and provided an opportunity to request administrative review for a range of investigations. 
• On July 1, 2022,  the DOC automatically initiated the five-year reviews (Sunset Reviews) of the antidumping and countervailing duty (AD/CVD) orders and suspended investigations for a wide range of cases. 
• On June 28, 2022, the Bureau of Industry and Security added 36 entities to the Entity List from China, Lithuania, Pakistan, Russia, Singapore, the United Arab Emirates, the United Kingdom, Uzbekistan, and Vietnam.

U.S. International Trade Commission

• On July 1, 2022, the U.S. International Trade Commission (USITC) and the Department of Commerce (DOC) gave notice, setting forth the schedule and proposed topics for a meeting of the Environmental Technologies Trade Advisory Committee (ETTAC). Written comments concerning ETTAC affairs are welcome any time before or after the meeting. 
• On July 1, 2022, the USITC gave notice that it has instituted a review to determine whether revocation of the antidumping duty order on dioctyl terephthalate from South Korea would be likely to lead to continuation or recurrence of material injury. 
• On July 1, 2022, the USITC gave notice that it has instituted a review to determine whether revocation of the antidumping duty order on furfuryl alcohol from China would be likely to lead to continuation or recurrence of material injury. 
• On July 1, 2022, the USITC gave notice that it has instituted a review to determine whether revocation of the antidumping duty order on light-walled rectangular pipe and tube from Taiwan would be likely to lead to continuation or recurrence of material injury. 
• On July 1, 2022, the USITC instituted the subject five-year reviews on April 1, 2022 (87 FR 19131) to determine whether revocation of the antidumping duty orders on sulfanilic acid from China and India, and the countervailing duty order on imports of sulfanilic acid from India would be likely to lead to continuation or recurrence of material injury. 

U.S. Customs and Border Protection

• On July 2, 2022, U.S. Customs and Border Patrol (CBP) delivered a notice advising the public that the quarterly Internal Revenue Service interest rates used to calculate interest on overdue accounts (underpayments) and refunds (overpayments) of customs duties will increase from the previous quarter. Effective on July 1, 2022, the interest rates for overpayments will be 4% for corporations and 5% for non-corporations. The interest rates for underpayments will be 5% for both corporations and non-corporations.
• On July 1, 2022, U.S. Customs and Border Protection, (CBP), announced that it will refer to the Office of Management and Budget (OMB) for review and approval an application for withdrawal of bonded stores for fishing vessels.
• On June 30, 2022, CBP announced the launch of its Green Trade Strategy, a framework to incentivize green trade, strengthen CBP’s environmental enforcement posture, accelerate green innovation, and improve climate resilience and resource efficiency. 

U.S. Department of Transportation

• On June 30, 2022, the National Highway Traffic Safety Administration (NHTSA) issued a final rule to amend the Federal Motor Vehicle Safety Standard (FMVSS) (Standard) No. 213, “child restraint systems”, which furthers efforts to protect children seated in child restraint systems during side impacts. 

U.S. Trade Policy

• President Biden is anticipated to lift tariffs on $10 billion worth of Chinese goods under a plan being discussed within the administration, while opening a new exclusion process for firms to win additional relief. The plan is expected to involve three parts. First, a narrow set of tariffs would be lifted, likely duties on consumer goods like bicycles. Second, the administration is expected to announce that the U.S. Trade Representative will open a new exclusion process for companies to win exemptions from the tariffs on China. Third, the administration will initiate a new tariff investigation under Section 301 of the 1974 Trade Act that will target sectors of the Chinese economy that are heavily subsidized by the Chinese Communist Party. 
  • President Biden is anticipated to announce a rollback of some US tariffs on Chinese consumer goods — as well as a new probe into industrial subsidies that could lead to more duties in strategic areas like technology. It would mark Biden’s first major policy step on trade ties between the world’s two biggest economic powers. A White House spokeswoman said no decision on the tariffs has been made but the administration wants to ensure they are aligned with “economic and strategic” priorities and don’t unnecessarily raise costs for Americans. 
• On June 28, 2022,  President Biden met with G7 leaders to strengthen cooperation on economic issues, cyberspace and quantum, and other 21st century challenges, including those posed by China to U.S. workers, companies, and national security. The G7, representing over 50% of the world economy, is demonstrating that it is among the most potent institutions in the world today, with like-minded democracies solving problems.   
• On June 27, 2022, the White House released a proclamation announcing increased duties on all products produced by Russia and Belarus, including oil, fuel, and certain food products. 

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

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USITC

• On June 24, 2022, the U.S. International Trade Commission gave notice that it has received a complaint entitled Certain Mobile Electronic Devices, DN 3625; 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.
• On June 28, 2022, the USITC gave notice of the scheduling of the final phase of antidumping investigation No. 731-TA-1574 pursuant to the Tariff Act of 1930 to determine whether an industry in the United States is materially injured or threatened with material injury, or the establishment of an industry in the United States is materially retarded, by reason of imports of superabsorbent polymers from South Korea, provided for in subheadings 3906.90.50 and 3906.10.00 of the Harmonized Tariff Schedule of the United States, preliminarily determined by the Department of Commerce to be sold at less-than-fair-value.
• On June 28, 2022, the USITC determined to review in part a final initial determination (“FID”) of the presiding Administrative Law Judge (“ALJ”). On review, the Commission affirms the FID’s finding of no violation of section 337 of the Tariff Act of 1930, as amended, in this investigation of certain smart thermostats, HVAC systems and components thereof. The investigation is terminated.
• On June 28, 2022, the USITC gave notice of a complaint it received that, as supplemented, alleges violations of section 337 based upon the importation into the United States, the sale for importation, and the sale within the United States after importation of certain barcode scanners, scan engines, mobile computers with barcode scanning functionalities, products containing the same, and components thereof by reason of the infringement of certain claims of U.S.
• On June 29, 2022, the USITC gave notice of the scheduling of expedited reviews pursuant to the Tariff Act of 1930 to determine whether revocation of the antidumping duty order on large residential washers from China would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.
• On June 29, 2022, the USITC gave notice of the scheduling of expedited reviews pursuant to the Tariff Act of 1930 to determine whether revocation of the antidumping duty orders on certain polyester staple fiber from South Korea and Taiwan would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.

DOC

• On June 24, 2022, the U.S. Department of Commerce determines that urea ammonium nitrate solutions (UAN) from the Russian Federation (Russia) are being, or are likely to be, sold in the United States at less than fair value (LTFV).
• On June 24, 2022, the DOC received scope ruling applications, requesting that scope inquiries be conducted to determine whether identified products are covered by the scope of antidumping duty and/or countervailing duty orders that Commerce issued pursuant to those inquiries.
• On June 24, 2022, the DOC determined that countervailable subsidies are being provided to producers and exporters of urea ammonium nitrate solutions from the Republic of Trinidad and Tobago. The period of investigation was January 1, 2020, through December 31, 2020.
• On June 24, 2022, the DOC determined that countervailable subsidies are being provided to producers and exporters of urea ammonium nitrate solutions (UAN) from the Russian Federation (Russia).
• On June 24, 2022, the DOC determined that acrylonitrile-butadiene rubber (AB rubber) from France is being, or is likely to be, sold in the United States at less than fair value (LTFV). The period of investigation was April 1, 2020, through March 31, 2021.
• On June 24, 2022, the DOC determined that acrylonitrile-butadiene rubber (AB rubber) from Mexico is being, or is likely to be, sold in the United States at less than fair value (LTFV). The period of investigation was April 1, 2020, through March 31, 2021.
• On June 24, 2022, the DOC determined that acrylonitrile-butadiene rubber (AB rubber) from the Republic of Korea (Korea) is being, or is likely to be, sold in the United States at less than fair value (LTFV). The period of investigation was April 1, 2020, through March 31, 2021.
• On June 24, 2022, the DOC determined that urea ammonium nitrate solutions (UAN) from the Republic of Trinidad and Tobago (Trinidad and Tobago) are being, or are likely to be, sold in the United States at less than fair value (LTFV).
• On June 28, 2022, the DOC has determined that the manufacturers/exporters of crystalline silicon photovoltaic cells, whether or not assembled into modules, from China, sold subject merchandise in the United States at less than normal value during the period of review from December 1, 2019, through November 30, 2020.
• On June 28, 2022, the DOC conducted an administrative review of the antidumping duty order on polyethylene terephthalate film, sheet, and strip from Taiwan. The period of review was from July 1, 2020, through June 30, 2021. This review covers the following producers and exporters from Taiwan: Nan Ya Plastics Corporation (Nan Ya); and Shinkong Materials Technology Corporation (SMTC)/Shinkong Synthetic Fibers Corporation (SSFC). Commerce preliminarily determines that sales of subject merchandise have not been made below normal value (NV) by Nan Ya during the POR. In addition, we preliminarily find that SMTC/SSFC had no shipments during the POR.
• On June 28, 2022, the DOC determined that countervailable subsidies are being provided to producers and exporters of sodium nitrite from the Russian Federation during the period of investigation January 1, 2021, through December 31, 2021.
• On June 28, 2022, the DOC preliminarily determined that sodium nitrite from the Russian Federation is being, or is likely to be, sold in the United States at less than fair value. The period of investigation was January 1, 2021, through December 31, 2021.
• On June 14, 2022, the United States – Mexico – Canada Agreement Binational Panel issued its Decision in the matter of Certain Gypsum Board, Sheet, or Panel originating in or exported from the United States of America. The Binational Panel affirmed the Canadian Intentional Trade Tribunal’s Final Determination.

OFAC

• On June 28, 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control designated 70 entities on the SDN List, many of which are critical to the Russian Federation’s defense industrial base, including State Corporation Rostec, the cornerstone of Russia’s defense, industrial, technology, and manufacturing sectors, as well as 29 Russian individuals. Today’s actions, taken pursuant to Executive Orders (E.O.s) 14024 and 14065, strike at the heart of Russia’s ability to develop and deploy weapons and technology used for Vladimir Putin’s brutal war of aggression against Ukraine.
• On June 29, 2022, The U.S Department of The Treasury’s Russian Elites, Proxies, and Oligarchs (REPO) Task Force leveraged extensive multilateral coordination to block or freeze more than $30 billion worth of sanctioned Russians’ assets, freeze or seize sanctioned persons’ high-value goods, and heavily restrict sanctioned Russians’ access to the international financial system.  REPO members have achieved these successes through close and extensive national and international coordination and collaboration.

CPSC

• On June 10, 2022, the U.S. Consumer Product Safety Commission (Commission or CPSC), in consultation with U.S. Customs and Border Protection (CBP), announced their joint intent to conduct a second test (a Beta Pilot) to assess the electronic filing of data from a certificate of compliance (certificate) for regulated consumer products under CPSC’s jurisdiction. Applications will be open until August 9, 2022. 

BIS

• On June 29, 2022, the Bureau of Industry and Security, U.S. Department of Commerce, through its Office of Export Enforcement, requested the issuance of an Order temporarily denying, for a period of 180 days, the export privileges under the Regulations of Russian airline Nordwind Airlines. OEE’s request and related information indicates that Nordwind is headquartered in Moscow, Russia.
• On June 29, 2022, the BIS, U.S. Department of Commerce, through its Office of Export Enforcement, requested the issuance of an Order temporarily denying, for a period of 180 days, the export privileges under the Regulations of Russian airline Pobeda Airlines. OEE’s request and related information indicates that Pobeda is headquartered in Moscow, Russia, and Aeroflot Russian Airlines JSC, a/k/a PJSC Aeroflot is Pobeda’s majority shareholder. The Russian Federal Government is the majority owner of Aeroflot, through its Federal Agency for State Property Management.

DOS

• On June 28, 2022, the U.S. Department of State submitted an information collection request to the Office of Management and Budget for approval regarding the statement of political contributions, fees, and commissions relating to sales of defense articles and defense services.

FCC

• On June 30, 2022, a member of the Federal Communications Commission requested that Apple and Google remove TikTok, a popular China-based app, from their app stores out of concern that the app could send sensitive U.S. user data back to Beijing. The member, Brendan Carr, stated that “TikTok’s pattern of conduct and misrepresentations regarding the unfettered access that persons have in Beijing…” is concerning.

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

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AD/CVD & Trade Policy 

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

ITAR

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

USTR 

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

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

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

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.

All merchandise of foreign origin imported into the United States (U.S.) must generally be marked with its country of origin, and it is subject to a country of origin (COO) determination by CBP. The country of origin of imported goods may be used as a factor to determine eligibility for preferential trade treatment under a free trade agreement.

The country of origin of imported goods is also used to determine non-preferential trade treatment, such as admissibility, marking, and trade relief (310 duties, antidumping and countervailing duties (AD/CVD). CBP uses the “substantial transformation” standard to determine the COO of goods for non-preferential purposes. For a substantial transformation to occur, “a new and different article must emerge, `having a distinctive name, character or use.’” Anheuser-Busch Brewing Ass’n v. United States, 207 U.S. 556, 562 (1908) (quoting Hartranft v. Wiegmann, 121 U.S. 609, 615 (1887)).

CBP applies two different methods to determine if goods have been substantially transformed – even though both are intended to produce the same origin determinations:

1. Case-by-case decision based on court decision and CBP rulings (often criticized because of the varied case-specific interpretations of the basic rule that has resulted in a lack of predictability and increased uncertainty both within CBP and in the trade community). Using this method, the effect of a particular type of processing could have on impact on  origin determination.
2. Rules of Origin in 19 CFR 102 – these rules are included in the Harmonized Tariff Schedule of the U.S. (HTSUS) under General Notes and are often referred to as the “change in tariff classification” or “tariff shift” method.

Prior to the USMCA, under the NAFTA, COO marking determinations were made using the NAFTA marking rules codified in 19 CFR 102, to determine if substantial transformation existed when a good imported from Canada or Mexico (was not entirely of Canadian or Mexican origin). The 102 rules helped determine whether or not goods were substantially transformed through processes that resulted in changes in the tariff classification (i.e., tariff shifts) in Canada or Mexico. To determine the country of origin of goods imported from Canada or Mexico for other non-preferential purposes (i.e., purposes other than marking), CBP employed case-by-case adjudication to determine whether such goods were substantially transformed in those NAFTA countries. These different non-preferential country of origin-determination methods required some importers to determine and declare two different countries of origin for the same imported good!

The Current Problem with COO Determinations Under USMCA

Importers from Canada and Mexico are subject to two different non-preferential origin determinations for imported merchandise:

• One for marking; and,
• Another for determining origin for other purposes (e.g., 310 duties, AD/CVD).

Consequently, these importers must also potentially comply with requirements to declare two different countries of origin for the same imported good (e.g., Canada and China, forcing the import to also tender the additional 301 duties, but, also take advantage of the FTA not having to pay regular duties). This is not only a burden, but, also quite confusing, creating inconsistency, and vastly reduces transparency.

CBP’s Proposed Solution

CBP is proposing to amend the scope provision in 19 CFR 102 by adding new language to apply the substantial transformation standard consistently across country-of-origin determinations CBP makes for imported goods from the USMCA countries of Canada and Mexico for non-preferential purposes. With this regulatory change, all non-preferential country of origin determinations by CBP for goods imported from Canada or Mexico would be based on the tariff shift rules in 19 CFR part 102.

Since importers must exercise reasonable care in determining the country of origin of their goods and may seek advice from CBP to determine the country of origin for their goods for preferential and/or non-preferential purposes; the proposed solution means CBP will no longer need to issue CBP rulings with non-preferential origin determinations for goods imported from Canada or Mexico, and there would no longer be rulings that conclude that a good imported from Canada or Mexico has two different origins under the USMCA (i.e., one for marking and one for other, customs non-preferential purposes).

CBP is proposing these changes to simplify and standardize country of origin determinations by CBP for all non-preferential purposes for goods imported from Canada or Mexico.

Comment Opportunity

Interested persons are invited to comment on the proposed rule by submitting written data, views, or arguments on all aspects of the proposed rule. CBP is seeking comments related to the economic, environmental, or federalism effects that might result from this proposed rule.

Deadline: Comments must be received on or before September 7, 2021 (extended from August 5, 2021).

Impacted Parties

Certain Canadian and Mexican importers are directly affected by the proposed change. In fiscal year (FY) 2019, 38,832 importers made 2.6 million non-NAFTA-preference entries. All of these entries were subject to non-preferential country of origin marking requirements, and some were also subject to trade remedies, that involve case-by-case adjudication. Around the same time, in FY 2020 and the start of FY 2021, CBP issued 52 rulings determining the origin of goods imported from Canada and Mexico for non-preferential purposes. These rulings, except for those involving the importation of certain textile and apparel products, were issued on a case-by-case basis to determine whether such goods were substantially transformed in Canada or Mexico or another country.

Impact on other Free Trade Agreements

While the Federal Register Notice (86 FR 35422) announcing the proposed rule and requesting comments from trade is focused on USMCA, this may be the future for all FTAs. The  Federal Register Notice makes clear that  19 CFR 102 was established to promulgate the U.S.’s responsibilities under the North American Free Trade Agreement (NAFTA); however, thereafter, 19 CFR 102 has been extended to apply to numerous other FTAs as CBP has found them to be reliable, simplified, and standardized method to determining the COO of a good. Specifically, 19 CFR §§ 102.21 through 102.25, are also to be used by CBP to determine the COO of textile and apparel products (imported from all countries except Israel).

As we learn more, we will keep you up to date on whether this change will also be adopted for FTAs that are silent as to how the country of origin should be determined for marking and other non-preferential purposes.

Contact Us

Jennifer Diaz and Denise Calle have extensive expertise on FTA’s and in preparing and submitting comments for federal rulemaking. Please reach out to our trade attorneys to prepare and submit your comments to CBP. If you would like more information on this issue, contact Diaz Trade Law at info@diaztradelaw.com and 305-456-3830.

Co-Authored by Jen Diaz & Denise Calle

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

Register today to hear from this experienced trio:

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

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

In This Webinar You Will Learn:

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

Who Should Attend:

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

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

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

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

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

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

Forced Labor Process

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

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

Withhold Release Order(s) WRO(s)

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

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

What Can You Do to Address Forced Labor?

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

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

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

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

Comprehensive Supply Chain Profile

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

Written Code of Conduct

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

Robust Internal Control Process

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

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

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

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

From September 8-11, U.S. Customs and Border Protection (CBP) held its first virtual trade week. Over the course of the event, CBP held an action-packed series of webinars on the following topics:

• United States-Mexico-Canada-Agreement (USMCA)
• Forced Labor
• Customs-Trade Partnership Against Terrorism (CTPAT)
• E-Commerce
• 21^st Century Customs Framework (21CCF)

In the midst of this global pandemic and the vast challenges that (we are all navigating) the trade community faces, by us coming together in this way collective commitment to continue our persistent and ongoing dialogue about the most pressing issue facing.  CBP believes that improving and delivering effective transparency is an essential element to enhancing trust, and trust is essential to strengthening partnerships and getting things done for your business to thrive and trade community to succeed.

Below are summaries of each of the sessions. Have questions on them? Contact DTL at info@diaztradelaw.com.

USMCA

Whether you choose to refer to it as USCMA, T-MEC, or CUSMA, it continues to work towards economic prosperity and security for North America, and not just a replacement to NAFTA. USCMA provisions are cross-cutting in nature and affect multiple sectors of the economy. This agreement will facilitate mutually beneficial trade leading to freer markets, fairer trade, and robust economic growth in North America. The USMCA seeks to re-balance trading relationships in North America through having changed the legacy NAFTA provisions on investment protection, government procurement, and rules of origin for key manufacturing sectors, especially automobiles.

This Agreement also provides strong effective protection and enforcement through enhanced enforcement capabilities and unprecedented incorporation of the three customs administration best practices, in areas such as trusted trader and authorized economic operator, single window, risk-based analysis, targeting, trade advisory committees, and post-clearance audit. Additionally, it also addresses a new competition policy provision, expending on provisions of legacy NAFTA, to ensure fair competition by requiring parties to adopt and maintain laws against anti competitive business conduct. As for Rules of Origin, the USMCA will be more liberal for some products and stricter for others. Overall, the rules of origin promote production in North America, streamlining certification and verification rules of origin and strengthen enforcement.

USMCA, just as NAFTA once was, is extremely important to the economic recovery of Mexico, and North America as a region. The Mexican President came to Washington DC to convey exactly that when meeting with President Trump. USMCA signifies, or can even be the driver, for productivity working towards attracting investments for job creation, and ultimately for more welfare. That being said, customs authorities are fully engaged and committed to a successful implementation of this agreement. Knowing that such an implementation is paramount to this end. Customs authorities view themselves as partners to companies involved in the trade community, helping you comply with the agreement.

CBSA is responsible for Customs administration in Canada ranging from the risking and processing of commercial goods, per the assessment and reassessment of duties and taxes as well as enforcement of compliance directed by international commitments, domestic law, and security policy procedures. With regards to DGF trade and Dumping program in Canada, CBSA plays a key role in implementing Canada’s commitment in three areas:

1. Origin procedures.
2. New chapter on customs and trade facilitation Chapter 7; and
3. Trade remedies (e.g. anti-dumping)

When it comes to the Agreement and its implementation to Customs, it is safe to say there’s a dual process to the improvements being brought to bear. The first being, the drive to modernize and streamline customs experience, through the adoption of E-solution by reducing unnecessary and unjustified red tape, simplifying procedures, and standardizing how customs works. That thrives to modernize is backstopped by a clear focus on ensuring that the rules are enforced effectively and appropriately by each party. The compliance enforcement is grounded, transparent, predictable expectation in procedures, but due regard to privacy and confidentiality, and close collaboration across customs authorities.

Importers and producers can be a certifier and whoever certifies must have the records to show proof upon request. However, as such, they will have full appeal rights as well. Must provide clear facts establishing origin.

Diaz Trade Law’s President, Jennifer Diaz, and Associate Attorney, Denise Calle provided a thorough review of the agreement in their article published in Bloomberg Law, titled USMCA Import Considerations for Practitioners.

FORCED LABOR 

Unfortunately, the use of forced labor worldwide is extremely prevalent. Currently, roughly 40 million people are victims of modern slavery; over half, approximately 25 million, are victims of forced labor, specifically. Furthermore, over 150 million children around the world are laborers, rather than students. The use of forced labor is not only common but exceptionally profitable. In fact, behind drugs and weapons, Human Trafficking (which encompasses forced labor) is the third most profitable illicit trade, with an annual trade value of more than $144 Billion. According to the Global Slavery Index, the US imports the following items produced by forced labor:

• Electronics ~ $91 Million
• Clothing/Textiles ~$47 Million
• Cocoa ~ $1 Million

Thankfully, U.S. Customs and Border Protection has been working to curb this inhumane practice. The relatively recent push to fight forced labor came about with revisions to Section 307 of the Tariff Act of 1930. Section 307 of the Tariff Act of 1930 codifies into law the prohibition of importing items produced -wholly or in part- by the use of forced labor.

The Trade Facilitation and Trade Enforcement Act of 2015  ended the “consumptive demand” clause in 19 U.S.C. § 1307, which had previously allowed for the importation of goods that had been partially produced by forced labor. Since its repeal, CBP, in partnership with U.S. Immigration and Customs Enforcement, has been actively investigating allegations of forced labor around the globe, examining various supply chains in order to curb the illicit practice. According to CBP, the agency does not target whole product lines or industries, rather it focuses on information regarding specific actors and their merchandise.

The strategic use of Withhold Release Orders (WROs) on certain industries and nations has had a notable effect on mitigating this practice. Since May 2016, the US has implemented 19 WROs, which has had ripples world-wide. Another integral aspect aiding in this effort is Executive Order 13923 and the broad authority it grants to the newly established Forced Labor Enforcement Task Force. This EO aims to strengthen the task force monitoring the prohibition on the importation of goods produced by (or with) forced labor. Today, there is a joint effort between Non-profits, government agencies, as well as private industries to cooperate in quelling this international crisis.

What Can You Do to Address Forced Labor?

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

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

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

CTPAT

Customs-Trade Partnership Against Terrorism (CTPAT) is a voluntary partnership program between CBP and industry to protect supply chains, identity security gaps, implement specific security and trade compliance best practices, and maintain the integrity of low-risk cargo entering the US. CTPAT has about 11,400 members in the program and 350 trade compliance members. Due to COVID-19 companies have been withdrawing from the program. Out of 100+ Companies that have withdrawn from the program stems from financial reason or change of habits of supply, and not necessarily due to the minimum-security requirement. Pandemic or not, this program is something that companies in the industry need to adhere to.

Companies were given multiple opportunities during the pandemic to provide the information they needed for minimum security criteria that were due in 2018- 2019. Companies were given an ample amount of time to get to what they need to be with the validation report and responses to them but unfortunately plenty of companies have not been responding. Those companies represented about 53% of the total cargo coming into the US by value. Overall, 52 companies have been suspended this fiscal year and 14 of them since January 1. Those 14 companies were suspended not because of what they did in 2020 but what they did not do in 2019, and for some that were due to failure to respond within 30 days. Suspension leads to removal.

CBP is in the process of updating its bulletin on suspensions, removals, appeals, and the reinstatement process. (within the coming weeks). CBP recognizes that seizures have been affecting CTPAT partners. However, with staggering data relating to Narcotics seizure in the South West borders (e.g. methamphetamine and fentanyl) in the commercial environment. CBP is seeking help from partners and CTPAT members to do the right thing by training their employees and giving notice that something may be wrong with shipments. Seizures of Meth have doubled this fiscal year. Have had a number of companies notifying their supply chain specialist telling CBP things they are finding within their supply chain, leading to seizures in the border.

With regards to forced labor, CBP ensured that forced labor was a part of the new minimum-security criteria and was included as a “should”. Companies should have a social compliance policy in place and be transparent as to any discrepancy going on in the supply chain (e.g. drug smuggling from suppliers).

All scheduled in-person validations were postponed indefinitely, on Friday, March 13. At that time, it became clear that CTPAT needed a new approach to its validation process and the ability to validate members without traveling. So far, a few test cases have been conducted with members, while others are in the process of being conducted as well, which is helping how they will develop their internal policy moving forward. The program is working on finalizing its internal policy model along with conducting several more validation tests. CTPAT is tracking data of virtual validation tests to be assessed and compared to the in-person validation process. Once that has been finalized, that process will be scaled through training of SCS’s and most importantly to provide documentation to members on the updated process as well. CTPAT is planning on starting the virtual validation process at the start of fiscal year 20201. Regarding additional validation updates, those scheduled for 2020 (which they are unable to conduct) will be pushed to 2021. If a company is selected for virtual validation, it will always be a requirement of membership that they must uphold. However, CTPAT will work with companies to make reasonable accommodations on an as-needed basis. While finale decision is still forthcoming it is most likely that the 2021 validation cycle will be pushed to 2022. There is a potential for “self-certification”. Still in discussion, but any company considered for this would be based on their demonstration of being very low risk. CTPAT is also working on a long term validation process (e.g. Enhancement and Capability to conduct live facility tours, as well as Interviews with secure tool).

This enhanced platform for members and SCS’s is to conduct live interviews and upload facility tours and additional videos, to enhance proof of compliance with MSC and to reduce reliance on visiting member facility in person. This will help reduce administrative burning and generate additional time for SCS’s to tailor their assessment to focus further on critical areas of member risk and compliance.

Included below are helpful tips to navigate this process:

• First step: identify activity to automate and streamline the virtual validation process
  • Data
  • Document for member upload
  • Pre-validation information
  • Electronic communication
  • Secure data exchange with members, government, and MRA partners.
• Cognitive analytics and anomaly detection for virtual validation, research analytics tools that can help CTPAT assess member risk and flag threats based on validation, to inform risk-based validation actions in training and mass aggregated view of member supply chain risk trends.
• This process came about, similar to cybersecurity, was to navigate through this world of the virtual platform and actually see what the government (e.g. CBP and CHS) had in their repertoire to go through this new process.
  • Supply chain specialists will be able to establish their own private room (i.e. private connections) and invite important members or points of contact, subject matter experts – to the virtual validation, knowing that this link is as secure as it can be from a federal point of view.
  • CTPAT will always be a boot on the ground program. That is the methodology of this entire process, which is to physically go and view supply chains. SCS’s will visit facilities and every member at that facility will gain the knowledge and experience about the supply chain that is sorely needed.
  • CTPAT continues to learn from this process. Developing a risk-based approach (SOP) to make sure that candidates for virtual validation are recognized. A low risk-based operation, not a one size fits all. Not everyone eligible for virtual validation.
• Virtual Validation is another tool in CTPAT’s toolbox. Although it continues to learn from the process, CTPAT will always be a boot on the ground program.

Diaz Trade Law’s President, Jennifer Diaz, and Associate Attorney, Denise Calle provided an in-depth discussion of the relevant changes in their article, CTPAT Minimum Security Criteria Changes, published by Bloomberg Law.

E-COMMERCE

E-Commerce is one of the fastest-growing sectors of the US economy. Although E-Commerce has become increasingly more common over the past several decades, since the onset of the pandemic in early 2020, the prevalence of E-commerce has propelled by 3-5 years. Not only did the value of e-commerce in the second quarter of 2020 (Q2) see a 45% increase from the same time last year, but also, currently, more than 1 out of every $5 (28%) spent in the United States is related to e-commerce! Below are some e-commerce statistics CBP presented:

• $2.29 trillion in sales (globally)
• 80% of American use at least 1 e-commerce platform
• Nearly 2 Million mail and express shipments enter the US each day; FY 2019 volumes exceeded 600 million shipments
• Over 90% of all IPR seizures occur in the mail and express environments

E-commerce’s share of the market had been growing for years prior to the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA).  In TFTEA, CBP raised the De Minimis value, i.e., the value of a shipment of merchandise imported by one person in one day that generally may be imported free of duties and taxes, from $200 to $800 per shipment. The Section 321 Program provides admission of articles free of duty and of any tax imposed on or by reason of importation, but the aggregate fair retail value in the country of shipment of articles imported by one person on one day and exempted from the payment of duty shall not exceed $800.

The increased definition of “low valued” shipments has seen an accompanying growth in the use of the Section 321 Program. This substantial increase, coupled with a reactive, rather than a proactive federal government has worsened CBP’s ability to efficiency enforcement the required measures. Today, some of the major challenges posed by the growth of E-commerce are:

• As volumes of small e-commerce packages grow rapidly, the inspection challenges intensify
• Transitional criminals ship illicit goods via small packages due to perceived lower interdiction risks and less severe consequences
• High volumes of small packages make it difficult to scale processes and procedures
• Domestic buyers are vulnerable to substandard products

The central message of the e-commerce webinar is modernization. The exponential growth of this eclectic industry has left a gap between private actors and the government agencies tasked with its regulation.  To begin to close the gap between regulations and innovations CBP has laid out four (4) concrete goals:

1. Enhance legal and regulatory authorities to better address emerging threats
2. Adapt all affected CBP operations to respond to emerging supply chain dynamics
3. Drive private sector compliance through incentives and enforcement resources
4. Facilitate international standards for e-commerce to support economic prosperity

Today, the US government partners, the trade community, and foreign customs agencies are cooperating to modernize e-commerce in an efficient and effective manner. The key tenets of bolstering e-commerce enforcement and facilitation are:

• Coordinating on actions set forth in the DHS Report on Combatting Trafficking in Counterfeit and Pirated Goods.
• Coordinating on actions set forth in the Executive Order Ensuring Safe & Lawful E-commerce.
• Establishing an international Framework of Standards for e-commerce through the World Customs Organization
• Applying enhanced Section 321 Data Pilot and Entry Type 88 Test Data (125 Million+ shipments to date) to identify and segment risk
• Leveraging data collection efforts to drive enforcement, enhance trade facilitation, and inform updated regulations
• Creating a predictable enforcement environment and addressing duty evasion by issuing an administrative ruling clarifying Section 321 eligibility.

21^st CENTURY CUSTOMS FRAMEWORK (21CCF)

CBP is a diverse agency and their responsibilities are not limited to just border security, instead, they act as a national security agency. With the ever-changing market conditions within the trade community, as they face new and unforeseeable challenges increasing the urgency to adapt, the U.S. government has been required to act now and set the stage for sustainable success.  Now more than ever, the trade community needs to adapt to cutting off trade rather than increasing trade and maintaining that kind of effect further down the line in case of a force majeure. In today’s world the market condition of the trade community and the challenges they face pertain to.

• The Expansion of the global marketplace
• The rapidly changing technology
• The Emergence of e-commerce
• Forced labor and unethical trade practices
• IPR infringement; and
• Product quality and safety concerns.

CBP’s 21^st Century Customs Framework (21CCF) stems from such unprecedented obstacles in an effort to tackle challenges, leverage emerging opportunities, and achieve transformational long-term changes. With collaboration amongst government agencies, the trade community (e.g. partners and trade agreement members), and Congress the five pillars of the 21CCF as they move towards modernization is,

• To enhance facilitation and security through 21 Century processes
• To define customs and trade responsibilities for emerging and traditional actors
• To ensure seamless data sharing and access
• To employed intelligent enforcement; and
• To protect and enhance Customs infrastructure through secure funding.

As such, these five pillars will be a game-changer for trade centers and government agencies and will further enable them to transform how they facilitate and effectively enforce trade. The 21CCF vision is to drive change by achieving end-to-end supply chain transparency, driving and facilitation data-centric decision making, and decentralizing and diversifying reasonable care standards. As a result, the U.S. government seeks to ensure that legitimate goods are never subject to unexpected delays at the border; that forced labor continues to be reduced within the supply chains; that seamless data sharing enables the same day order fulfillment around the globe; that trade capabilities can scale indefinitely with volume; and lastly, that security and speed no longer remain competing priorities. Through its 21CCF the U.S. government lead the world with innovative trade policy. As companies continue to divert their supply chain across the globe, e-commerce grows more and more as a crucial aspect of the trade community. CBP must look closely at what the future trade landscape is, especially with companies located globally. CBP seeking to evolve in this changing time, through partnership with another governmental agency (e.g.  US of Chamber of Commerce) to help each other adapt to new technology and ensure the on-time sharing of information. CBP asserts that this new initiative will have an extreme impact with all sectors having an equal share of the end game to ensure complete and accurate data collection. This data information is intended to be gathered from the right people, by the right people, and at the right time to properly enforce compliant trade. Today’s Technology is available for the use of proof of origin, proof of concept, IPR proof of concept, and the same for steal and pipeline exports. The U.S. government continues to take advantage of verifiable credential technology, which creates an underlying sense of trust, reduces fraud, and drives efficiency. The steps to such verification of data comprise of:

• Issuer created data credential
• A holder who stores the data credential; and
• Verifier who assure everything is correct.

Data will be made available to all parties. The owner of the data is responsible for what can be shared. They may also choose what data to share and with whom they are being shared. While it is all secured, there is a possibility that bad data be shared. With 21CCF, if bad data is given then the party responsible can be held accountable, as it helps identify discrepancies and anomalies. While Blockchain, which is most simply defined as a decentralized, distributed ledger that records the provenance of a digital asset, is not the only technology out there but was recommended by COAC. Proof of concept is proving very worthwhile and CBP along with other governmental agencies have had some positive feedback. That being said, some of the most important things to overcome across CBP are identifying the responsible parties and holding them accountable (starts and usually ends with importers), but they hope that they will be able to expend to others in the supply chain. The data discussion (i.e. what is being collected, who should be collected, and who already is providing data). Technology is here, but with that biggest challenges would be the legal aspect to it such as statutes and regulations in place for data being capture and who it is being captured from, along with funding. Taking modernization work and extending it for there to be one governmental control for imports and exports.

Have questions about the above topics or any CBP matter generally? Contact our Customs and International Law attorneys at 305-456-3830 or info@diaztradelaw.com.