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Generalized System of Preferences (GSP) - U.S. Customs & Border Protection

The Generalized System of Preferences (GSP) provides duty-free treatment to goods of designated beneficiary countries. The program was authorized by the Trade Act of 1974 to promote economic growth in the developing countries and was implemented on January 1, 1976.

The GSP periodically expires and must be renewed by Congress to remain in effect. The 2015 GSP reauthorization (H.R. 1295) will expire on December 31, 2017. All previous GSP renewals that have taken effect after a lapse have included a retroactive clause providing refunds to importers of eligible goods imported during the lapse period.

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Generalized System of Preferences (GSP) Due to Expire December 31, 2017

Barring Congressional action, the Generalized System of Preferences (GSP), special program indicator (SPI) “A,” “A+” and “A*” is due to expire for goods entered or withdrawn from warehouse after midnight, December 31, 2017.

Special Procedures for GSP-Eligible Goods

In the event of a lapse and until further notice, importers are strongly encouraged to continue to flag GSP-eligible importations with the SPI “A,” even as they pay normal trade relations (column 1) duty rates on otherwise GSP-eligible importations.

Programming

CBP is working to have programming in place that, in the event that GSP is renewed with a retroactive refund clause, will allow CBP to automate the duty refund process.

Post-Importation GSP Claims Made via PSCs and Protest

CBP will continue to allow post-importation GSP claims made via post summary correction (PSC) and protest (19 USC 1514, 19 CFR 174) subsequent to the expiration of GSP, for importations made while GSP was still in effect. CBP will not allow post-importation GSP claims made via PSC or protest subsequent to the expiration of GSP, for importations made subsequent to expiration.

African Growth and Opportunity Act (AGOA)

The pending expiration of GSP has no effect on goods entered with African Growth and Opportunity Act (AGOA) preference. Effective January 1, 2017, the Harmonized Tariff Schedule of the United Sates (HTSUS) was modified so that all non-textile, AGOA-eligible tariff items indicate SPI “D” in the “Special” column. As such, since January 1, 2017, all non-textile AGOA claims have been made using the SPI “D”. AGOA preference remains in effect through September 30, 2025, irrespective of any lapse in GSP.

Merchandise Processing Fee (MPF)

Since the GSP does not provide an MPF exemption, its expiration has no impact on the collection of the MPF. Goods of least-developed beneficiary developing countries (LDBDCs) listed in HTSUS General Note 4(b)(i) maintain their MPF exemption per 19 CFR 24.23(c)(1)(iv).

Time of Entry

When GSP is about to expire, importers may try to “pull forward” the time of entry. Per 19 CFR 141.68(a)(2) & (3), the time of entry can be as early as the time that the entry documents are filed, as long as the merchandise is within the port limits and such has been requested. For additional information on the significance of time of entry and how to calculate it, please see page 11 of the Informed Compliance Publication “What Every Member of the Trade Community Should Know About: Entry” available at www.cbp.gov/sites/default/files/documents/icp073_3.pdf.

Extension of Liquidation

Requests for the suspension of liquidation under 19 CFR 159.12 pending the pending the reinstatement of GSP should be denied.


USITC:  New Releases, New Documents and Announcements - U.S. International Trade Commission

11/9/2017 Final Determinations in the Countervailing Duty Investigations of imports of Biodiesel from Argentina and Indonesia


CBP Combats Modern-Day Slavery with the Passage of the Countering America’s Adversaries through Sanctions Act - U.S. Customs & Border Protection

WASHINGTON – U.S. Customs and Border Protection (CBP) has initiated a significant communications outreach to trade stakeholders in the wake of the passage of the Countering America’s Adversaries through Sanctions Act (P.L. 115-44). That legislation contains a provision affecting the entry of merchandise with a nexus to North Korean nationals or citizens, and CBP is committed to ensuring that importers are aware of the risks associated with forced labor, their compliance responsibilities, and ways they can validate that their supply chains are free of forced labor.

Under the new law, passed on August 2, 2017, any significant merchandise mined, produced, or manufactured wholly or in part by North Korean nationals or citizens is prohibited from entry into the United States unless CBP finds through clear and convincing evidence that the merchandise was not produced with a form of prohibited labor. Where CBP finds such evidence of North Korean labor, CBP will deny entry, which may include seizure of the merchandise, and refer the issue to Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) with a request to initiate a criminal investigation for violation of U.S. law.

“CBP is committed to establishing a strong and effective interagency response to human trafficking and forced labor, and we are an active participant in the DHS led Forced Labor Interagency Work Group,” said Acting Commissioner Kevin McAleenan. “CBP undertook a comprehensive review of our approach to exclude goods made with forced labor, consulting with numerous public and private sector stakeholders, resulting in a number of changes in our approach.”

CBP has engaged the Commercial Customs Operations Advisory Committee (COAC) Forced Labor Work Group and has acted on many of its recommendations. CBP also participates in civil society organizations dialogue to stay informed about stakeholder concerns and developments.

CBP reminds importers of their obligation to exercise reasonable care and take all necessary and appropriate steps to ensure that goods entering the United States comply with all laws and regulations, including 19 USC § 1307 and The Countering America’s Adversaries Through Sanctions Act. To assist importers in understanding these obligations, CBP recently updated and published an Informed Compliance Publication, What Every Member of the Trade Community Should Know: Reasonable Care. This newly issued publication includes a section on Forced Labor and is published on CBP.gov. CBP has also published seven factsheets on various topics related to forced labor, including Forced Labor – Importer Due Diligence. These are also posted on CBP.gov.

CBP is committed to preventing the importation of merchandise produced with forced labor or the labor of North Korean nationals or citizens anywhere in the world. CBP can take a variety of actions to combat the entry of such merchandise, including issuing a CBP summons or Request for Information, and, where appropriate, detaining, excluding, seizing, or withholding release of merchandise that violates of applicable laws and regulations.

CBP will continue to engage its interagency partners to assess how this change affects the supply chain risk associated with merchandise produced in any foreign location and imported or likely to be imported into the United States. CBP welcomes allegations on forced labor at its eAllegation portal, and parties who provide original information that leads to the recovery of any penalty, fine, or forfeiture of merchandise are eligible to seek compensation under 19 U.S.C. § 1619. Compensation may be up to $250,000.


U.S. Dolphin Safe-Labeling Requirements Found Compliant with WTO Rules - Office of U.S. Trade Representative

In Major Win, U.S. Rights Vindicated After Years of Litigation with Mexico

Washington, D.C.—The Office of the U.S. Trade Representative today announced that the World Trade Organization (WTO) has issued a complete and resounding victory for the United States in finding that U.S. “dolphin-safe” labeling requirements comply with WTO rules.

For years, the United States has been defending its dolphin-safe labeling requirements in WTO dispute proceedings brought by Mexico, whose stakeholders employ a tuna fishing method involving chasing and capturing dolphins in nets. The United States has long argued that its requirements do not discriminate against any country.

The WTO panels have now decisively rejected Mexico’s claim that the United States discriminates against Mexican tuna product produced by chasing and capturing dolphins. Instead, the panels found that the United States’ environmental measure does not discriminate; the labeling requirements prevent Mexican tuna product produced by chasing and capturing dolphins from being inaccurately marketed to U.S. consumers as “dolphin safe.”

“I am pleased that WTO panels have finally agreed with the overwhelming evidence that U.S. dolphin-safe labeling requirements are accurate and fair,” said U.S. Trade Representative Robert Lighthizer. “The Trump Administration is committed to defending U.S. rights to enforce environmental measures that protect wildlife and facilitate fair trade.”

Background

Since 2008, Mexico has challenged the U.S. dolphin-safe labeling requirements as WTO-inconsistent because the requirements deny the label for tuna product produced by chasing and capturing dolphins (“setting on dolphins”). This is the fishing method that the Mexican fleet often elects to use to catch tuna. In the original proceeding and the first compliance proceeding in this dispute, the WTO panel and Appellate Body did not agree with Mexico that setting on dolphins is “dolphin safe” but found that certain aspects of the U.S. labeling requirements were WTO-inconsistent. The United States strongly disagreed that its labeling requirements breached WTO rules. However, to address the WTO findings, on March 22, 2016 NOAA issued an Interim Final Rule (IFR) that made changes. The findings released today confirm that the dolphin-safe labeling requirements as amended by the IFR are consistent with relevant WTO obligations.

Separately, on May 22, 2017, following an arbitration proceeding based on the requirements that existed as of 2013, Mexico received WTO authorization to impose countermeasures on U.S. products at a level up to $163 million per year. To date, Mexico has not applied any countermeasures on U.S. exports.

The findings released today confirm that, because U.S. dolphin-safe labeling requirements are consistent with U.S. WTO obligations, Mexico should not be entitled to impose the countermeasures on U.S. goods.

After years of litigation, today’s panel reports demonstrate that U.S. dolphin-safe labeling requirements do not discriminate against any imported tuna products and therefore are WTO-consistent. Under WTO rules, a panel report will be adopted if either party so requests within 60 days of the report’s circulation, or either party may appeal the report before it is adopted.


Port Sets Record for October Cargo - Port of Long Beach

Long Beach on pace for highest-ever volumes in 2017

A year of records continues at the Port of Long Beach, where this October was the busiest in history, as container volumes surged 15 percent compared to the same month a year ago.

Trade has been growing so rapidly in 2017 that the record-setting October — at 669,218 twenty-foot-equivalent units (TEUs), one of the Port’s strongest all-time results — was only the fourth-busiest month of the year behind July, September and August.

“October used to be the industry’s busiest month of the year, with retailers preparing for Christmas,” said Port of Long Beach Executive Director Mario Cordero. “Now, with other popular shopping seasons like back-to-school, Halloween and Black Friday, ocean carriers are spreading shipments across more months to maximize the services we have developed to serve them.”

Inbound containers destined for retailers jumped 14.3 percent to 339,013 TEUs. Export boxes decreased slightly, 0.5 percent, to 126,150 containers. Empty containers sent overseas to be refilled with goods increased 28.9 percent, to 204,055 TEUs.

“By taking a long view of our finances and embarking on a $4 billion modernization — the largest of any U.S. seaport — we’ve positioned the Port of Long Beach to be one of today’s most attractive, dependable gateways,” said Harbor Commission President Lou Anne Bynum. “With two months left in 2017, we’re on track to have our best year ever.”

Through the first 10 months of the year, 6,234,930 TEUs have been moved through the Port, a 9.5 percent increase over the same period in 2016.


CPSC Issues Decision on Zen Magnets - Consumer Product Safety Commission

WASHINGTON, D.C. – The U.S. Consumer Product Safety Commission (CPSC) issued a Final Decision and Order on October 26, 2017, holding that Zen Magnets and Neoballs rare-earth magnet sets (Zen Magnets) are a substantial product hazard. The Commission ordered a stop sale of Zen Magnets and ordered the parties to submit to the Commission within 30 days a proposed corrective action plan that includes a refund and notice to the public. The Commission’s Final Decision and Order sets aside a March 2016 administrative law judge’s ruling that Zen Magnets did not present a substantial product hazard when accompanied by warnings and proper age recommendations and that had ordered only a partial recall of Zen Magnets. 

In issuing the Final Decision and Order, CPSC Commissioners Marietta S. Robinson, Robert S. Adler and Elliot F. Kaye held that Zen Magnets are defective, that the defect creates a substantial risk of injury to the public, and that warnings do not mitigate the risk. The Commission held that it is reasonably foreseeable that children will ingest Zen Magnets. When two or more magnets are ingested, they can attract to each other, or to other metallic objects that are ingested, across loops of bowel or other tissue; once attached, the magnets become lodged in the digestive system and cannot separate on their own. Ingested magnets that press against digestive tissue and are not removed within approximately 8 hours can cause catastrophic injuries and death. Surgery to remove multiple magnets from the gastrointestinal tracts of children has been required, and tragically, a 19-month-old girl died after ingesting similar high-powered magnets.

Acting Chairman Ann Marie Buerkle issued an opinion concurring with the majority’s decision to recall a portion of the magnets, but dissenting from the majority’s view that a design defect can arise solely as a result of product misuse.

In August 2012, CPSC staff filed an administrative complaint against Zen Magnets LLC, alleging that the magnet sets contain product defects that create a substantial risk of injury to the public. The complaint sought an order for Zen Magnets LLC to stop sale of the magnet sets, notify consumers of the recall, issue refunds and destroy all remaining recalled magnets.

It is illegal under federal law for any person to sell, offer for sale, manufacture, distribute in commerce, or import into the United States any Zen Magnets and Neoballs.
 
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