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UPDATE: Section 301 Trade Remedies Assessed on Certain Products from China - U.S. Customs & Border Protection

UPDATE: Section 301 Trade Remedies Assessed on Certain Products from China; Additional List of
Products Subject to Section 301 Remedy. 

BACKGROUND:

On August 18, 2017, the Office of the United States Trade Representative (USTR) initiated an investigation under Section 301 of the Trade Act of 1974 into the government of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. On June 20, 2018, the USTR published a Notice of Action and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301, imposing additional import duties on a list of Chinese products.  See Federal Register 83 FR 28710 (June 20, 2018). 

On August 16, 2018, the USTR published a Notice of Action providing for the imposition of additional import duties on a second list of Chinese Products.  The August 16, 2018 list of products covered by the Section 301 remedy, which comprises 279 eight-digit Harmonized Tariff Schedule of the United States (HTSUS) subheadings, can be found in Annex A to the USTR’s August 16, 2018 notice of action.  See Federal Register 83 FR 40823 (August 16, 2018). 

GUIDANCE: 

Products Covered by the June 20, 2018 List for the Section 301 Action

The additional import duties for Chinese goods covered by the June 20, 2018 list were effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 AM Eastern Daylight Time on July 6, 2018. 

In addition to reporting the Chapters 1-97 HTSUS classification of the imported merchandise, importers shall also report the 9903.88.01 special tariff number for goods subject to the additional duty assessment of 25% ad valorem as a result of the Section 301 trade remedy. 

9903.88.01: 25% ad valorem additional duty for articles the product of China 

Products Covered by the August 16, 2018 List for the Section 301 Action

The additional import duties for Chinese goods covered by the August 16, 2018 list of products subject to the Section 301 action are effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 AM Eastern Daylight Time on August 23, 2018. 

Any article classified in a subheading covered by the August 16 list that is a product of China is subject to a 25% ad valorem duty rate, in addition to the general (Column 1) rate of duty for that particular subheading.

In addition to reporting the Chapter 1-97 HTSUS classification of the imported merchandise, importers shall also report the 9903.88.02 special tariff number for goods subject to the additional duty assessment of 25% ad valorem as a result of the Section 301 trade remedy. 

9903.88.02: 25% ad valorem additional duty for articles the product of China 

All Products Covered by Section 301 Duties

The Section 301 duties only apply to products of China, and are based on the country of origin, not country of export. 

CHAPTER 98

The USTR’s August 16, 2018 notice of action has provided updated instructions in respect to the use of Chapter 98 provisions for all merchandise on the June 20, 2018 and August 16, 2018 lists covered by the Section 301 remedy. 

The additional duties imposed by headings 9903.88.01 and 9903.88.02 do not apply to goods for which entry is properly claimed under a provision of chapter 98 of the HTSUS, except for goods entered under headings 9802.00.40, 9802.00.50, 9802.00.60, and 9802.00.80.  For headings 9802.00.40, 9802.00.50, and 9802.00.60, the additional duties apply to the value of repairs, alterations, or processing performed abroad, as described in the applicable heading. For heading 9802.00.80, the additional duties apply to the value of the article less the cost or value of such products of the United States, as described in heading 9802.00.80.  

The provisions related to goods entered under headings 9802.00.40, 9802.00.50, 9802.00.60, and 9802.00.80 are effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 AM Eastern Daylight Time on August 23, 2018. 

CHAPTER 98 FILING INSTRUCTIONS

When submitting an entry in which a heading or subheading in Chapter 98 is claimed on merchandise covered by the Section 301 remedy, the following instructions will apply. 

When submitting an entry using a Chapter 98 provision that normally requires the reporting of a secondary Chapter 1-97 HTSUS classification, a filer must first report subheading 9903.88.01 or 9303.88.02, as applicable, followed by the applicable Chapter 98 subheading, and the Chapter 1-97 HTSUS classification for the commodity being imported. 

When submitting an entry using a Chapter 98 provision that does not normally require the reporting of a secondary Chapter 1-97 HTSUS classification, neither 9903.88.01/02 nor the Chapter 1-97 HTSUS should be reported. 

When submitting an entry for a Temporary Importation under Bond (TIB), a filer must first report the applicable subheading in Chapter 98 (i.e., in heading 9813), followed by subheading 9903.88.01/02, and the Chapter 1-97 HTSUS for the commodity being imported. 

TRADE PREFERENCE PROGRAMS AND TEMPORARY REDUCTIONS IN RATES OF DUTY

Products of China that are covered by the Section 301 remedy and that are eligible for special tariff treatment under general note 3(c)(i) to the tariff schedule, or that are eligible for temporary duty exemptions or reductions under subchapter II to chapter 99, shall be subject to the additional 25 percent ad valorem rate of duty imposed by headings 9903.88.01 and 9903.88.02. 

FOR FURTHER INFORMATION:

For further information, please refer to the USTR’s Notice of Action and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation, 83 FR 28710 (June 20, 2018); and the August 16, 2018 Notice of Action Pursuant to Section 301, 83 FR 40823 (August 16, 2018).

Questions related to Section 301 entry filing requirements should be emailed to traderemedy@cbp.dhs.gov. Questions from the importing community concerning ACE rejections should be referred to their Client Representative. 


OFAC:  Announcements

  • Scheduled Expiration of the Dominican Republic Earned Import Allowance Program (DR 2-for-1): The Dominican Republic Earned Import Allowance Program (DR 2-for-1) was established as an amendment to the CAFTA-DR, under the Andean Trade Preference Extension Act of 2008 and became effective on December 1, 2008, for a 10-year period. The 10-year period is set to expire on December 1, 2018. Entries of qualifying apparel under the DR 2-for-1 program may only qualify for duty-free treatment under the CAFTA-DR prior to the date of expiration. Entries on or after December 1, 2018, may no longer use allowances to qualify for duty free treatment under the DR 2-for-1 program. If you have any questions regarding the DR 2-for-1 program, please contact Maria Goodman at (202) 482-3651 or Maria.Goodman@trade.gov.
    Treasury Targets Russian Shipping Companies for Violations of North Korea-related United Nations Security Council Resolutions
    US Depatment of the Treasury

WASHINGTON – The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today announced North Korea-related designations, continuing the implementation of existing United Nations (UN) and U.S. sanctions.  Today’s action against two entities and six vessels was taken pursuant to Executive Order 13810 of September 20, 2017, and targets persons involved in the ship-to-ship transfer of refined petroleum products with North Korea-flagged vessels, an activity expressly prohibited by the UN Security Council (UNSC).

“Ship-to-ship transfers with North Korea-flagged vessels from Russia or elsewhere of any goods being supplied, sold, or transferred to or from the DPRK are prohibited under the UN Security Council resolutions on North Korea and are sanctionable under U.S. law,” said Treasury Secretary Steven Mnuchin.  “Consequences for violating these sanctions will remain in place until we have achieved the final, fully verified denuclearization of North Korea.”

Today OFAC designated Vladivostok, Russia-based shipping companies Primorye Maritime Logistics Co Ltd (Primorye) and Gudzon Shipping Co LLC (Gudzon), the registered ship owners and managers of Russia-flagged merchant vessel (M/V) PATRIOT (IMO 9003550).  In early 2018, the PATRIOT conducted two ship-to-ship transfers of oil for the benefit of North Korea, including 1,500 tons of oil to the North Korea-flagged M/V CHONG RIM 2 (IMO 8916293) and 2,000 tons of oil to the North Korea-flagged M/V CHON MA SAN (IMO 8660313).  The ultimate buyer was UN- and U.S.-designated Taesong Bank, a North Korean entity subordinate to the UN- and U.S.-designated Workers’ Party of Korea Office 39, which engages in illicit economic activities for North Korean leadership.  The CHONG RIM 2 was listed by the UN and the United States in March 2016.  The CHON MA SAN was blocked by the United States in February 2018, and subsequently it was listed by the UN in March 2018 for its involvement in a UN-prohibited ship-to-ship transfer in mid-November 2017.

The following vessels have also been identified by OFAC as property in which Gudzon has an interest:

Russia-flagged vessel NEPTUN (IMO 8404991)
Russia-flagged vessel BELLA (IMO 8808264)
Russia-flagged vessel BOGATYR (IMO 9085730)
Russia-flagged vessel PARTIZAN (IMO 9113020)
Russia-flagged vessel SEVASTOPOL (IMO 9235127)

Identifying information on the individual, entities, and vessels sanctioned today. 


33 Charged in Half a Billion Dollar Smuggling Scheme of Counterfeit Luxury Goods - U.S. Immigration and Customs Enforcement

Defendants trafficked items that included fake Louis Vuitton and Tory Burch handbags, Michael Kors wallets, Hermes belts and Chanel perfume​

NEW YORK — 33 individuals were charged Thursday following an investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) into a scheme to illegally bring into the United States millions of dollars of Chinese-manufactured goods by smuggling them through ports of entry on the East and West Coasts.  One defendant is also charged with unlawful procurement of naturalization. 

The charges include conspiracy to traffic, and trafficking, in counterfeit goods; conspiracy to smuggle, and smuggling, counterfeit goods into the United States; money laundering conspiracy; immigration fraud and unlawful procurement of naturalization.  In addition, the government restrained nine real properties in Queens, Staten Island and Brooklyn, New York belonging to the defendants.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Richard P. Donoghue for the Eastern District of New York, Special Agent in Charge Angel M. Melendez of HSI New York and Commissioner James P. O’Neill of the New York City Police Department (NYPD), announced the charges. Charges were also announced in a related state case being prosecuted by the Queens District Attorney’s Office.

“This investigation exposed the global nature of intellectual property crimes, allegedly being executed by those arrested today.  Counterfeit goods manufactured and smuggled from China with a suggested value close to half a billion dollars, were intended to make its way into U.S. markets and into the hands of unsuspecting consumers,” said HSI Special Agent-in-Charge Melendez.  “This investigation should be a crystal clear message that counterfeiting and intellectual property rights violations is anything but a victimless crime as it harms legitimate businesses, consumers and governments.”

“The defendants allegedly smuggled millions of dollars of counterfeit luxury goods into our country, depriving companies of their valuable and hard-earned intellectual property,” said Assistant Attorney General Benczkowski.  “The illegal smuggling of counterfeit goods poses a real threat to honest businesses, and I commend our federal prosecutors and partners at HSI and the NYPD for their outstanding work on this important investigation.  The Department of Justice is committed to holding accountable those who seek to exploit our borders by smuggling counterfeit goods for sale on the black market.”

“As alleged, the defendants used many forms of deception to smuggle large quantities of counterfeit luxury brand goods from China into the United States, and then profited by distributing and selling the fake merchandise,” said U.S. Attorney Donoghue.  “This Office, working with our law enforcement partners, is committed to securing our country’s ports of entry, as well as to protecting the integrity of intellectual property upon which free and fair international trade and markets depend.”  

According to the court filings, the defendants played various roles in the trafficking of counterfeit goods manufactured in China, brought by ocean-going ships to the United States in 40-foot shipping containers, smuggled through ports of entry disguised as legitimate imports and distributed throughout the country.  The counterfeit goods included items such as fake Louis Vuitton and Tory Burch handbags, Michael Kors wallets, Hermes belts and Chanel perfume.  The defendants’ roles included:

The charges in the indictments and criminal complaint are allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The investigation was conducted by HSI Intellectual Property Group and HSI Border Enforcement Security Task Force and the NYPD Border Security Enforcement Task Force.  Assistance was provided by U.S. Customs and Border Protection, the New York State Police and the Brooklyn District Attorney’s Office.  The government’s cases are being prosecuted by Senior Counsel James S. Yoon of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS), Assistant U.S. Attorneys William P. Campos and Temidayo Aganga-Williams of the Eastern District of New York and Special Assistant U.S. Attorney Robert Kaftal of the Brooklyn District Attorney’s Office.  Assistant U.S. Attorney Claire S. Kedeshian is handling the forfeiture aspect of this case.  The investigation was previously led by Senior Counsel Evan Williams of CCIPS.

The Department of Justice’s Task Force on Intellectual Property (IP Task Force) contributed to this case.  The IP Task Force is led by the Deputy Attorney General to combat the growing number of domestic and intellectual property crimes, to protect the health and safety of American consumers and to safeguard the nation’s economic security against those who seek to profit illegally from American creativity, innovation and hard work.


CBP Officers Seize Mattress Unsafe Shipment in Tacoma - U.S. Customs & Border Protection

TACOMA, Wash. — U.S. Customs and Border Protection (CBP) Office of Field Operations officers seized a shipment of more than 300 potentially unsafe mattresses Wednesday worth more than $50,000 at the Port of Tacoma.

The merchandise was seized due to consumer safety concerns for the flammability of materials used in the manufacturing process.

“CBP is focused on identifying and intercepting imported consumer products that do not meet our country’s consumer product safety standards.  The enforcement of U.S. consumer safety laws at our ports of entry is, and will continue to be, a high-priority,” said Mark Wilkerson, director of CBP’s Area Port of Seattle. “The importation of unsafe consumer products threatens the well-being of the American people and can damage the economy of the United States.”

CBP is responsible for enforcing nearly 500 U.S. trade laws and regulations on behalf of 47 federal agencies, facilitating legitimate trade, collecting revenue, and protecting the U.S. economy and its consumers from harmful imports and unfair trade practices.

With the growth of foreign trade, unscrupulous companies have profited billions of dollars from the sale of pirated goods and merchandise that fails to meet safety standards. To combat the illicit trade of merchandise violating laws relating to Intellectual Property Rights (IPR), trademark and copyright holders may register with CBP through an online system. Such registration assists CBP Officers and Import Specialists in identifying merchandise that violate U.S. law.

CBP’s IPR and consumer safety enforcement strategy is multi-layered and includes seizing illegal merchandise at our borders, pushing the border “outward” through audits of suspect importers, cooperating with our international trading partners, and collaborating with industry and governmental agencies to enhance these efforts.
 
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