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CBP Announces the Issuance of Five Additional Withhold Release Order (WRO) on Certain Products from China - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP

In a sign of the Administration’s ongoing crackdown on imports allegedly the product of forced labor, U.S. Customs and Border Protection has issued a September 14, 2020 press release announcing the issuance of five Withhold Release Orders (WRO) on certain products from China.

The products as identified by CBP (along with the associated rationale) are identified below:

  1. All products made with labor from the Lop County No. 4 Vocational Skills Education and Training Center in Xinjiang Uyghur Autonomous Region, China. Information reasonably indicates that this “re-education” internment camp, which is often called a Vocational Skills Education and Training Center, is providing prison labor to nearby manufacturing entities in Xinjiang. CBP identified forced labor indicators including highly coercive/unfree recruitment, work and life under duress, and restriction of movement.
     
  2. Hair products made in the Lop County Hair Product Industrial Park in Xinjiang Uyghur Autonomous Region, China. Information reasonably indicates this site is manufacturing products with forced labor of the Uyghur people and other minority ethnic groups who are detained in “re-education” internment camps in Xinjiang. CBP identified forced labor indicators including highly coercive/unfree recruitment, work and life under duress, and restriction of movement.
     
  3. Apparel produced by Yili Zhuowan Garment Manufacturing Co., Ltd. and Baoding LYSZD Trade and Business Co., Ltd in Xinjiang Uyghur Autonomous Region, China. Information reasonably indicates that these entities use prison and forced labor in apparel production. CBP identified forced labor indicators including the restriction of movement, isolation, intimidation and threats, withholding of wages, and abusive working and living conditions.
     
  4. Cotton produced and processed by Xinjiang Junggar Cotton and Linen Co., Ltd. in Xinjiang Uyghur Autonomous Region, China. Information reasonably indicates that this entity and its subsidiaries use prison labor in their raw cotton processing operations in Xinjiang. Cotton-processing factories and cotton farms in this region are prison enterprises that use convict labor.
     
  5. Computer parts made by Hefei Bitland Information Technology Co., Ltd. in Anhui, China. Information reasonably indicates that Hefei Bitland uses both prison and forced labor to produce electronics. CBP identified forced labor indicators including abuse of vulnerability, restriction of movement, isolation, and intimidation and threats.

This action follows the August 31, 2020 filing of a petition seeking the issuance of a WRO on all cotton-made goods linked to the Xinjiang region of China (https://www.gdlsk.com/petition-filed-seeking-a-withold-release-order-on-all-cotton-goods-linked-to-xinjiang-region-of-china/) and various other developments on the legislative and other fronts.

Please do not hesitate to contact us with any questions on developments in this area or if we can assist your company in its due diligence efforts.


New Legal Challenge to List 3 and 4 China Tariffs.  Immediate Action Required to Preserve Rights to Refunds - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP

A new challenge has been filed in the US Court of International Trade (CIT) contesting the assessment of the List 3 and List 4 tariffs that have been imposed on goods from China under Section 301 of the Trade Act of 1974.  The lawsuit alleges that the List 3 and List 4 tariffs were imposed untimely.  It also asserts that the List 3 and List 4 tariffs were imposed to retaliate against Chinese tariff measures, rather than to remedy China’s unfair trade practices, and therefore were not authorized under the Trade Act.  The suit further alleges the USTR failed to comply with the Administrative Procedures Act when imposing the tariffs.

If successful, these cases could result in the refund to the plaintiffs of all tariffs they paid on the List 3 and 4 goods over the past two years, and up until the case is resolved.  It is probable that only importers that file their own lawsuits will be able to recover refunds, at least with respect to entries that have been liquidated by CBP.  While importers can file protests on liquidated entries, there is no certainty that CBP would be authorized to issue refunds to importers without a case filed in court.

The lawsuit is based upon the court’s residual jurisdiction, 28 USC 1581(i).  The deadline to file in court is two (2) years after the cause of action accrues.  The USTR published notice imposing the List 3 duties on September 21, 2018, and the duties took effect on all entries for consumption on or after September 24, 2018.  The safest course of action to ensure meeting the two year deadline with respect to List 3 tariffs would be to file a court claim on or before September 20, 2020.  Importers not meeting that deadline may still be able to assert that the two year deadline runs from the date the tariffs were paid, and thus a later filed lawsuit would be timely with respect to any tariffs paid during the previous two years.  We caution that, based upon prior court precedent, there is uncertainty as to whether the two-year filing deadline runs from date of the USTR decision or date of payment of the tariffs.

Please contact our offices as soon as possible if you would like to file a lawsuit in the CIT to preserve your company’s potential rights to refunds on the List 3 and List 4 duties or need further advice concerning this issue.


Notice of China 301 List 3 Product Exclusion Extension Amendment - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP

The USTR has announced the following technical amendment of a China 301 List 3 product exclusion extension: The extended exclusion described as “Lockers, of steel (described in statistical reporting number 9403.20.0050)” has been amended to read “Lockers, of steel (described in statistical reporting number 9403.20.0050 or 9403.20.0078).”

This extended exclusion still runs through December 31, 2020.

Please let us know if you have any questions with respect to any China 301 exclusions.


Federal Register Notices:

Washington, DC –  After consultations with the Canadian government, the United States has determined that trade in non-alloyed, unwrought aluminum is likely to normalize in the last four months of 2020, with imports declining sharply from the surges experienced earlier in the year.  Average monthly imports are expected to decline 50 percent from the monthly average in the period of January through July.  Accordingly, the United States will modify the terms of the 10 percent tariff imposed in August on imports of Canadian non-alloyed unwrought aluminum. 

The United States expects that shipments of non-alloyed, unwrought aluminum from Canada for the remainder of 2020 will be no greater than the following monthly volumes: 

September

83,000 tons

October

70,000 tons

November

83,000 tons

December

70,000 tons

Based on these expectations, the United States will resume duty-free treatment of non-alloyed, unwrought aluminum retroactive to September 1, 2020.  Six weeks after the end of any month during this period, the United States will determine whether actual shipments met expectations.  If actual shipments exceeded 105 percent of the expected volume for any month during the four-month period, then the United States will impose the 10 percent tariff retroactively on all shipments made in that month. 

If shipments in any month exceed the expected volume, the United States expects that shipments in the next month will decline by a corresponding amount. 


DHS Cracks Down on Goods Produced by China’s State-Sponsored Forced Labor - U.S. Department of Homeland Security

WASHINGTON – U.S. Customs and Border Protection (CBP) issued five Withhold Release Orders (WRO) today on products from the People’s Republic of China (PRC). The products subject to the WROs are produced with state-sponsored forced labor in the Xinjiang Uyghur Autonomous Region, where the Chinese government is engaged in systemic human rights abuses against the Uyghur people and other ethnic and religious minorities.

“By taking this action, DHS is combating illegal and inhumane forced labor, a type of modern slavery, used to make goods that the Chinese government then tries to import into the United States. When China attempts to import these goods into our supply chains, it also disadvantages American workers and businesses,” said Acting DHS Deputy Secretary Ken Cuccinelli. “President Trump and this Department have, and always will, put American workers and businesses first and protect American citizens from participating in these egregious human rights violations.”

“The Trump Administration will not stand idly by and allow foreign companies to subject vulnerable workers to forced labor while harming American businesses that respect human rights and the rule of law,” said Acting CBP Commissioner Mark A. Morgan. “Today’s Withhold Release Orders send a clear message to the international community that we will not tolerate the illicit, inhumane, and exploitative practices of forced labor in U.S. supply chains.”

The new WROs direct CBP Officers at all ports of entry to withhold release on the following goods:

All products made with labor from the Lop County No. 4 Vocational Skills Education and Training Center in Xinjiang Uyghur Autonomous Region, China. Information reasonably indicates that this “re-education” internment camp, which is often called a Vocational Skills Education and Training Center, is providing prison labor to nearby manufacturing entities in Xinjiang. CBP identified forced labor indicators including highly coercive/unfree recruitment, work and life under duress, and restriction of movement.

Hair products made in the Lop County Hair Product Industrial Park in Xinjiang Uyghur Autonomous Region, China. Information reasonably indicates this site is manufacturing products with forced labor of the Uyghur people and other minority ethnic groups who are detained in “re-education” internment camps in Xinjiang. CBP identified forced labor indicators including highly coercive/unfree recruitment, work and life under duress, and restriction of movement.

Apparel produced by Yili Zhuowan Garment Manufacturing Co., Ltd. and Baoding LYSZD Trade and Business Co., Ltd in Xinjiang Uyghur Autonomous Region, China. Information reasonably indicates that these entities use prison and forced labor in apparel production. CBP identified forced labor indicators including the restriction of movement, isolation, intimidation and threats, withholding of wages, and abusive working and living conditions.

Cotton produced and processed by Xinjiang Junggar Cotton and Linen Co., Ltd. in Xinjiang Uyghur Autonomous Region, China. Information reasonably indicates that this entity and its subsidiaries use prison labor in their raw cotton processing operations in Xinjiang. Cotton-processing factories and cotton farms in this region are prison enterprises that use convict labor.

Computer parts made by Hefei Bitland Information Technology Co., Ltd. in Anhui, China. Information reasonably indicates that Hefei Bitland uses both prison and forced labor to produce electronics. CBP identified forced labor indicators including abuse of vulnerability, restriction of movement, isolation, and intimidation and threats.

“The series of actions CBP has taken against imports from China demonstrates the pervasive use of unethical and inhumane labor conditions in China, and CBP will not turn a blind eye,” said Brenda Smith, Executive Assistant Commissioner of CBP’s Office of Trade. “Allowing goods produced using forced labor into the U.S. supply chain undermines the integrity of our imports. American consumers deserve and demand better.”

In Fiscal Year 2020, CBP has issued an unprecedented 12 WROs in a single fiscal year, including 8 WROs on products from China. All WROs are publicly available and listed by country on CBP’s Forced Labor Withhold Release Orders and Findings webpage.

Section 307 of the Tariff Act of 1930 (19 U.S.C. 1307) prohibits the importation of all goods and merchandise mined, produced, or manufactured wholly or in part in any foreign country by forced labor, convict labor, or/and indentured labor under penal sanctions, including forced child labor. CBP combats import risks, detects high-risk activity, deters non-compliance, disrupts fraudulent behavior, and thoroughly investigates allegations of forced labor.

CBP receives allegations of forced labor from a variety of sources, including the general public. Any person or organization that has reason to believe merchandise produced with the use of forced labor is being, or likely to be, imported into the United States can report detailed allegations by contacting CBP through the e-Allegations Online Trade Violation Reporting System or by calling 1-800-BE-ALERT.


Cincinnati CBP Officers Seize Over 2,200 Fraudulent IDs This Year - U.S. Customs & Border Protection

CINCINNATI –- CBP officers in Cincinnati routinely encounter fraudulent driver’s licenses shipped into the United States through falsely manifested cargo.

Since the beginning of the year, Cincinnati CBP officers have seized 343 shipments containing 2,233 counterfeit drivers’ licenses, 1,607 laminates or cards for illicit production of drivers’ licenses, two stolen social security cards, five counterfeit or stolen passports, and one stolen visa.

The counterfeit licenses originated in China and the passports were from various countries in Africa and South America. The shipments containing the fake documents were going to addresses across the United States, and many documents shared the same photograph with different names.

Fraudulent identity documents can lead to identity theft, worksite enforcement, and fraud linked to immigration-related crimes such as human smuggling and human trafficking. Fake documents can also be used by individuals associated with terrorism to minimize scrutiny from travel screening measures.

“The use of counterfeit IDs is often linked to terrorist cells, human trafficking, and other illicit and dangerous acticities,” said Richard Gillespie, Cincinnati Port Director. “Our officers are trained to identify many different kinds of fake or illegally modified documents and they work 24/7 to stop them from coming into the country.”

CBP officers coordinate findings with CBP’s Fraudulent Document Analysis Unit, Homeland Security Investigations and other federal partners in an effort to combat this illicit activity.

CBP routinely conducts inspection operations on arriving and departing international flights and intercepts narcotics, weapons, currency, prohibited agriculture products, counterfeit goods, and other illicit items at our nation’s 328 international ports of entry.

 
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