October 2002 International Trade Law Update

Don't think you should have to pay Section 301 tariffs on your imports from China? Do you wish you could complain to the people in the Government who are responsible for the tariffs? Do you wish you could submit your suggestions through official channels on how to improve the tariffs? Do you feel like the Section 301 tariffs were imposed without much consideration for your company’s needs or the health of the nation? Would like to see tariff exclusions offered again, but this time make them more generous and make the process transparent? Would you like the duties reduced or even eliminated for specific tariff provisions? You’re in luck. The United States Trade Representative (USTR) is offering the public the opportunity to chime in on the future of the Section 301 tariffs. It is soliciting both negative and positive comments, so whether you are a fan or a critic of the tariffs, this is a golden opportunity to campaign for whatever change you want. The USTR is not bound to take any action whatsoever or even respond to all the comments that will be filed, but anytime you get an opportunity to present your case before the agency or department in charge, it is wise to take advantage. Your competitors certainly will. Furthermore, the USTR is likely to be more receptive than it wants to be to your comment thanks largely to the thousands of lawsuits filed in the US Court of International Trade by importers challenging the legality of the Section 301 tariffs and demanding refunds. While that litigation is far from over, the Government was hobbled for failing to incorporate the public’s comments in its tariff decisions. Thus, it is unlikely that the USTR will ignore comments from the public in this instance. The USTR will allow the public to comment on its portal from November 15, 2022 through January 17, 2023. While all comments will be posted online, the USTR's portal will allow for the submission of Business Confidential Information (BCI). Click here for the Federal Register Notice. The USTR already decided that the Section 301 tariffs on Chinese imports should continue and officially the USTR will entertain comments from the public only on the following issues: The effectiveness of the actions in obtaining the elimination of China's acts, policies, and practices related to technology transfer, intellectual property, and innovation. The effectiveness of the actions in counteracting China's acts, policies, and practices related to technology transfer, intellectual property, and innovation. Other actions or modifications that would be more effective in obtaining the elimination of or in counteracting China's acts, policies, and practices related to technology transfer, intellectual property, and innovation. The effects of the actions on the U.S. economy, including U.S. consumers. The effects of the actions on domestic manufacturing, including in terms of capital investments, domestic capacity and production levels, industry concentrations, and profits. The effects of the actions on U.S. technology, including in terms of U.S. technological leadership and U.S. technological development. The effects of the actions on U.S. workers, including with respect to employment and wages. The effects of the actions on U.S. small businesses. The effects of the actions on U.S. supply chain resilience. The effects of the actions on the goals of U.S. critical supply chains outlined in Executive Order 14017 and in subsequent reports and findings. Whether the actions have resulted in higher additional duties on inputs used for additional manufacturing in the United States than the additional duties on particular downstream product(s) or finished good(s) incorporating those inputs. These constraints should not dissuade or prevent you from submitting suggestions for improvement. Of course, the more evidence and the greater support you have from other parties, the more likely you are to be heard. Our law firm will be assisting individual companies and industry groups with preparing and filing public comments. We also represent dozens of importers in the litigation before the US Court of International Trade demanding a refund of Section 301 duties. Please let us know if you are interested in retaining our services. As it promised, CBP rolled out new regulations pertaining to customs brokers. Click here and here to download the Federal Register Notices. 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. CBP is eliminating broker districts and district permits, 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. CBP is also increasing fees for the broker license application. Additionally, CBP is deploying 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. These new rules take effect on December 19, 2022. On November 1, 2022, 11 am - 12 noon Central, the new customs broker regulations will be discussed during our Customs Broker Brainstorming Hour, a monthly online, participatory roundtable that we offer for free to clients and graduates of the Best Customs Broker Course who passed the exam. If interested, please email [email protected] and provide your name and specify that you wish to be included in the November 1, 2022 Customs Broker Brainstorming Hour. RKW Klerks v US, Slip Opinion 22-115 (October 4, 2022) The importer sued when CBP classified its imported synthetic wrap used to wrap bales of harvested crops as “warp knit fabrics” under 6005.39.00, HTS with a duty rate of ten percent. The importer argued that the correct classification was either 8433.90.50 as parts of harvesting machinery or 8436.99.00 as parts of agricultural machinery. The court sided with CBP and entered judgment against the importer. Eteros Technologies v US, Slip Opinion 22-111 (Sept. 21, 2022) This case limits CBP’s ability to seize drug paraphernalia that is imported into a state that has legalized marijuana. The importer imported a machine that separates leaves from cannabis flowers. The importer conceded that the machine was drug paraphernalia under a federal statute prohibiting the importation of drug paraphernalia, but claimed that CBP could not seize the machine because the state of Washington had legalized cannabis and that this legalization was to be construed as an exemption under the federal statute. The court sided with the importer. All One God Faith dba Dr. Bonner Magic Soaps v US and CP Kelco , Case No. 20-001645, Slip Opinion 22-96 (August 18, 2022) Please read this court case if you are illegally evading antidumping duties or know of someone who is illegally evading antidumping duties. While the facts are thick with intrigue (there are several parties involved), there are at least two lessons to learn. First, someone is likely to turn you in to federal enforcement authorities if you are not paying the antidumping duties that you owe. In this case, it was a domestic supplier of xantham gum, a thickener, who blew the whistle on Dr. Bonner. It seems that Dr. Bonner had been claiming that it sourced its xantham gum from India, a country that does not produce xantham gum, to avoid paying antidumping duties for imports from China, the true country of origin. Second, you must be careful in challenging CBP. When CBP had found that Dr. Bonner was guilty of evasion, Dr. Bonner sued in federal court. The problem is that CBP had long ago liquidated the entries. Dr. Bonner timely protested the liquidation, but then CBP denied the protest. While Dr. Bonner sued to overturn CBP’s evasion claim, Dr. Bonner did not sue to challenge CBP’s denial of the protest. As a result, the court did not have jurisdiction to entertain Dr. Banner’s challenge and had to affirm that Dr. Bonner was guilty of evasion. US v Greenlight Organic, Slip Opinion 22-87, Case No. 17-00031 (August 4, 2022) After CBP (through the US Department of Justice) sued an importer to collect penalties and back duties for allegedly misclassifying and undervaluing imported items and double invoicing, the defendant importers requested that the court dismiss the lawsuit because the defendant importers claimed that the statute of limitations had passed. The court declined to dismiss the lawsuit and concluded that trial is the proper time to determine when CBP first discovered the double invoicing scheme. Download for free the International Trade Administration's Export Finance Guide Is your business looking to make that first export sale or expand into more markets, but needs clarity on financing options and methods? Did you know that having open account terms may help win customers in competitive markets? Is insisting on cash-in-advance always a good idea? What are the advantages of exporting on consignment? What should you know about export working capital financing or export credit insurance? Click on the icon above to download the ITA's Trade Finance Guide. What every importer should know about importing cosmetics Webinar, Thursday, Oct 27, 11 am - 12 noon Central CBP Form 28 (Request for Information) Webinar, Thursday, Nov 3, 11 a.m. - 12 noon Centr al CBP Form 29 (Notice of Action) Webinar. Thursday, Nov 17, 11 am - 12 noon Central Registration : $50 each webinar. Free for clients and students of the Best Customs Broker Course, but must still register. Click here to register. Modernization of Customs Broker, Regulations, Monthly Customs Broker

You’re in luck. The United States Trade Representative (USTR) is offering the public the opportunity to chime in on the future of the Section 301 tariffs. It is soliciting both negative and positive comments, so whether you are a fan or a critic of the tariffs, this is a golden opportunity to campaign for whatever change you want. The USTR is not bound to take any action whatsoever or even respond to all the comments that will be filed, but anytime you get an opportunity to present your case before the agency or department in charge, it is wise to take advantage. Your competitors certainly will. Furthermore, the USTR is likely to be more receptive than it wants to be to your comment thanks largely to the thousands of lawsuits filed in the US Court of International Trade by importers challenging the legality of the Section 301 tariffs and demanding refunds. While that litigation is far from over, the Government was hobbled for failing to incorporate the public’s comments in its tariff decisions. Thus, it is unlikely that the USTR will ignore comments from the public in this instance.

The USTR will allow the public to comment on its portal from November 15, 2022 through January 17, 2023. While all comments will be posted online, the USTR's portal will allow for the submission of Business Confidential Information (BCI).

Click here for the Federal Register Notice.

The USTR already decided that the Section 301 tariffs on Chinese imports should continue and officially the USTR will entertain comments from the public only on the following issues:

The effectiveness of the actions in obtaining the elimination of China's acts, policies, and practices related to technology transfer, intellectual property, and innovation.
The effectiveness of the actions in counteracting China's acts, policies, and practices related to technology transfer, intellectual property, and innovation.
Other actions or modifications that would be more effective in obtaining the elimination of or in counteracting China's acts, policies, and practices related to technology transfer, intellectual property, and innovation.
The effects of the actions on the U.S. economy, including U.S. consumers.
The effects of the actions on domestic manufacturing, including in terms of capital investments, domestic capacity and production levels, industry concentrations, and profits.
The effects of the actions on U.S. technology, including in terms of U.S. technological leadership and U.S. technological development.
The effects of the actions on U.S. workers, including with respect to employment and wages.
The effects of the actions on U.S. small businesses.
The effects of the actions on U.S. supply chain resilience.
The effects of the actions on the goals of U.S. critical supply chains outlined in Executive Order 14017 and in subsequent reports and findings.
Whether the actions have resulted in higher additional duties on inputs used for additional manufacturing in the United States than the additional duties on particular downstream product(s) or finished good(s) incorporating those inputs.

These constraints should not dissuade or prevent you from submitting suggestions for improvement. Of course, the more evidence and the greater support you have from other parties, the more likely you are to be heard.

Our law firm will be assisting individual companies and industry groups with preparing and filing public comments. We also represent dozens of importers in the litigation before the US Court of International Trade demanding a refund of Section 301 duties. Please let us know if you are interested in retaining our services.

As it promised, CBP rolled out new regulations pertaining to customs brokers. Click here and here to download the Federal Register Notices. 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. CBP is eliminating broker districts and district permits, 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. CBP is also increasing fees for the broker license application. Additionally, CBP is deploying 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. These new rules take effect on December 19, 2022.

On November 1, 2022, 11 am - 12 noon Central, the new customs broker regulations will be discussed during our Customs Broker Brainstorming Hour, a monthly online, participatory roundtable that we offer for free to clients and graduates of the Best Customs Broker Course who passed the exam. If interested, please email [email protected] and provide your name and specify that you wish to be included in the November 1, 2022 Customs Broker Brainstorming Hour.

RKW Klerks v US, Slip Opinion 22-115 (October 4, 2022)

The importer sued when CBP classified its imported synthetic wrap used to wrap bales of harvested crops as “warp knit fabrics” under 6005.39.00, HTS with a duty rate of ten percent. The importer argued that the correct classification was either 8433.90.50 as parts of harvesting machinery or 8436.99.00 as parts of agricultural machinery. The court sided with CBP and entered judgment against the importer.

Eteros Technologies v US, Slip Opinion 22-111 (Sept. 21, 2022)

This case limits CBP’s ability to seize drug paraphernalia that is imported into a state that has legalized marijuana. The importer imported a machine that separates leaves from cannabis flowers. The importer conceded that the machine was drug paraphernalia under a federal statute prohibiting the importation of drug paraphernalia, but claimed that CBP could not seize the machine because the state of Washington had legalized cannabis and that this legalization was to be construed as an exemption under the federal statute. The court sided with the importer.

All One God Faith dba Dr. Bonner Magic Soaps v US and CP Kelco , Case No. 20-001645, Slip Opinion 22-96 (August 18, 2022)

Please read this court case if you are illegally evading antidumping duties or know of someone who is illegally evading antidumping duties. While the facts are thick with intrigue (there are several parties involved), there are at least two lessons to learn. First, someone is likely to turn you in to federal enforcement authorities if you are not paying the antidumping duties that you owe. In this case, it was a domestic supplier of xantham gum, a thickener, who blew the whistle on Dr. Bonner. It seems that Dr. Bonner had been claiming that it sourced its xantham gum from India, a country that does not produce xantham gum, to avoid paying antidumping duties for imports from China, the true country of origin. Second, you must be careful in challenging CBP. When CBP had found that Dr. Bonner was guilty of evasion, Dr. Bonner sued in federal court. The problem is that CBP had long ago liquidated the entries. Dr. Bonner timely protested the liquidation, but then CBP denied the protest. While Dr. Bonner sued to overturn CBP’s evasion claim, Dr. Bonner did not sue to challenge CBP’s denial of the protest. As a result, the court did not have jurisdiction to entertain Dr. Banner’s challenge and had to affirm that Dr. Bonner was guilty of evasion.

US v Greenlight Organic, Slip Opinion 22-87, Case No. 17-00031 (August 4, 2022)

After CBP (through the US Department of Justice) sued an importer to collect penalties and back duties for allegedly misclassifying and undervaluing imported items and double invoicing, the defendant importers requested that the court dismiss the lawsuit because the defendant importers claimed that the statute of limitations had passed. The court declined to dismiss the lawsuit and concluded that trial is the proper time to determine when CBP first discovered the double invoicing scheme.

Download for free the International Trade Administration's Export Finance Guide

Is your business looking to make that first export sale or expand into more markets, but needs clarity on financing options and methods? Did you know that having open account terms may help win customers in competitive markets? Is insisting on cash-in-advance always a good idea? What are the advantages of exporting on consignment? What should you know about export working capital financing or export credit insurance? Click on the icon above to download the ITA's Trade Finance Guide.

What every importer should know about importing cosmetics Webinar, Thursday, Oct 27, 11 am - 12 noon Central
CBP Form 28 (Request for Information)
Webinar, Thursday, Nov 3, 11 a.m. - 12 noon Central
CBP Form 29 (Notice of Action) Webinar. Thursday, Nov 17, 11 am - 12 noon Central

Registration: $50 each webinar. Free for clients and students of the Best Customs Broker Course, but must still register. Click here to register.

Modernization of Customs Broker, Regulations, Monthly Customs Broker Brainstorming Hour, Tuesday, Nov 1, 2012, 11 am - 12 noon Central.

Registration: This participatory roundtable is free to clients and graduates of the Best Customs Broker Course who passed the customs broker exam. If interested, please email [email protected] and provide your name and specify that you wish to be included in the November 1, 2022 Customs Broker Brainstorming Hour.