C-AIR TIMES ISSUE #649 - Friday, September 25, 2020 08:39

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.

CBP Seizes 4,200 Shipments, 2,400 Agriculture Violations through Operation Mega Flex - U.S. Customs & Border Protection

Ongoing operation stops illicit goods from China, improves CBP targeting

WASHINGTON — U.S. Customs and Border Protection (CBP) announced today that Operation Mega Flex has yielded more than 4,200 seizures of illicit goods and 2,400 agriculture violations over the past 15 months. The seizures included counterfeit goods, illegal narcotics, fake identity documents, prohibited plant and animal products, and other items that threaten the health and safety of consumers, undermine the competitiveness of U.S. businesses, and put U.S. agriculture and the environment at risk.

Operation Mega Flex is a CBP-led, interagency effort that was initiated in July 2019 to measure compliance and assess illicit networks in the international mail environment through periodic enhanced inspections. The ongoing operation is part of the Trump Administration’s commitment to protecting U.S. businesses and consumers from unfair Chinese trade practices. CBP conducts Mega Flex operations at international mail facilities and express consignment hubs nationwide in close coordination with U.S. Immigration and Customs Enforcement and the U.S. Postal Inspection Service.

The explosive growth of e-commerce has generated a substantial increase in international mail and express consignment shipments. Foreign sellers, particularly those in China, are exploiting this trend to ship counterfeit and other illicit goods into the United States and to commit other trade violations.

“The Trump Administration and CBP are strongly committed to putting an end to both the Made in China contraband inundating America through small parcels and the role that e-commerce platforms are playing in facilitating such illegal trafficking,” said Dr. Peter Navarro, Assistant to the President and Director of the Office of Trade and Manufacturing Policy. “If e-commerce platforms like Alibaba, Amazon, and eBay fail to increase their scrutiny of China’s contraband trafficking and continue to refuse to accept their full and fair share of policing this dangerous problem, they will be held accountable. American lives and livelihoods are both at stake, and the Trump Administration and CBP will continue to do everything necessary to protect both.”

“Every day, hundreds of thousands of parcels arrive from China through the international mail, many of which contain illegitimate goods that threaten our economic security and the health and safety of American consumers,” said CBP Acting Commissioner Mark A. Morgan. “Through Operation Mega Flex, CBP is taking decisive action to address unfair trade practices and stopping dangerous goods from entering the United States.”

On average CBP processes more than 420,000 parcels of mail and 180,000 express consignment shipments from China each day. Through Operation Mega Flex, CBP has found that approximately 12.5% of targeted parcels contain counterfeit goods or contraband:

In September 2020, CBP Officers in Memphis seized more than a kilogram of a white, powdery substance manifested as “Silicon Dioxide” in a shipment from China. After laboratory testing, CBP determined the substance to be Xylazine, a horse tranquilizer that is sometimes used to cut heroin and fentanyl.
In September 2020, CBP Officers at the International Mail Facility in Miami seized two illegal firearm suppressers in a parcel from China. Defense articles cannot be imported into the United States from China under U.S. law.

On a single day in August 2020, CBP Officers at the International Mail Facility at John F. Kennedy International Airport made 130 intellectual property rights seizures - including handbags, footwear, purses and watches. Counterfeit goods are sold at low prices to undermine legitimate U.S. businesses and multiply the illegal profits of smugglers and traffickers.

In June 2020, CBP Officers in Indianapolis seized more than 12,000 counterfeit pharmaceutical pills from China. Counterfeit medicines can harm or even kill American consumers.

CBP urges consumers nationwide to exercise diligence when making online purchases or otherwise ordering products through the international mail. The illicit and potentially dangerous goods seized in Operation Mega Flex have been destined for locations throughout the United States, including Castle Rock, Colorado; Grandview, Missouri; Palm Harbor, Florida; and Philadelphia, Pennsylvania.

“Whether purchased online or in stores, counterfeit and illicit products threaten the security and prosperity of Americans throughout the country,” said William A. Ferrara, CBP Executive Assistant Commissioner of the Office of Field Operations. “The dedicated men and women of CBP will continue to use all available means to protect Americans and our businesses from dangerous goods.”

If you have any suspicion of or information regarding suspected fraud or illegal trade activity, please report the information to the e-Allegations Online Trade Violation Reporting System or by calling 1-800-BE-ALERT.

For more information about CBP cargo security and examinations, please visit CBP.gov. More information about CBP agriculture inspections can be found here.

Recent images from Operation Mega Flex can be found here.

FDA Announces FSMA Food Traceability Proposed Rule, A Major Milestone in the New Era of Smarter Food Safety - Food & Drug Administration

Today, the U.S. Food and Drug Administration (FDA) announced a proposed rule to establish additional traceability recordkeeping requirements for certain foods. The FDA also published a draft “Food Traceability List,” which describes the foods that would be subject to the proposed requirements. The list includes leafy greens, fresh cut fruits and vegetables, some types of fish, shell eggs, nut butters, and more.

The proposed rule, “Requirements for Additional Traceability Records for Certain Foods” (Food Traceability Proposed Rule) is a key component of the FDA’s New Era of Smarter Food Safety Blueprint and would implement Section 204(d) of the FDA Food Safety Modernization Act (FSMA). If finalized, the proposal would standardize the data elements and information firms must establish and maintain, and the information they would need to send to the next entity in the supply chain to facilitate rapid and accurate traceability. While limited to only certain foods, this proposal lays the foundation for a standardized approach to traceability recordkeeping, paving the way for industry to adopt, harmonize, and leverage more digital traceability systems in the future. Where possible, FDA has drawn on existing consensus standards that industry members may already be using.

Existing FDA regulations require much of the food industry to establish and maintain records to identify the immediate previous sources and the immediate subsequent recipients of foods (commonly referred to as “one-up, one-back” recordkeeping). These requirements form a baseline for traceability recordkeeping, but they provide limited information to effectively and rapidly link shipments of food through each point in the supply chain. This -- and the fact that recordkeeping systems can be largely paper-based and lack a universal lexicon throughout industry-- can make it difficult to trace a product to its original source when necessary.

As a result, many foodborne illness outbreak investigations have been slowed, resulting in more illnesses and economic loss. Improved traceability, as envisioned by the proposed rule, would allow the FDA to more quickly identify the source of a contaminated product, reduce the scope of product recalls, and conduct more timely root-cause investigations to learn more about how contamination occurred in order to prevent future outbreaks.

At the heart of the proposal is a requirement for those who manufacture, process, pack, or hold a food on the Food Traceability List (FTL) to establish and maintain records associated with specific Critical Tracking Events (CTEs): growing, receiving, transforming, creating, and shipping. For each CTE, entities would be required to establish and maintain records containing Key Data Elements (KDEs). Examples of KDEs include the traceability lot code, the date the product was received, the date the product was shipped, and a product description. The traceability lot code is an important KDE throughout the supply chain intended to establish critical linkages that will help to facilitate rapid traceback and traceforward investigations during foodborne illness outbreaks and recall events. In addition, those subject to the rule would also be required to create and maintain records related to their internal traceability program, which would help regulators better understand a firm’s recordkeeping practices and traceability operations.

The proposed rule would require records to be maintained as either electronic, original paper records, or true copies. In addition, the proposal states that in the event of a foodborne illness outbreak, a product recall, or other threat to public health, the FDA could require that firms submit, within 24 hours, an electronic sortable spreadsheet containing relevant traceability information for specific foods and date ranges. More generally, the FDA encourages all food businesses to maintain their traceability records electronically whenever possible, to expedite the identification of traceability information when needed to address threats to public health.

The requirements of the proposed rule would only apply to foods that are on the FTL, which includes foods that have listed foods as ingredients. The proposed rule includes several exemptions, including that the additional traceability records would not be required after a kill-step (a process that significantly minimizes pathogens in a food) is applied to a food, but documentation of the kill-step application would have to be established and maintained.

The proposed rule and draft Food Traceability List are available for public comment for a 120 days from the date of publication. The FDA will also be holding three public meetings during the public comment period. Information about the public meetings will be provided in a forthcoming announcement.

FDA Clarifies Types of Evidence Relevant to Determining the “Intended Use” of FDA-Regulated Products - Food & Drug Administration

Today (9/22/20), we proposed updates to our regulations to clarify the types of evidence the FDA considers when determining the “intended use” of a product. A product’s intended use determines whether it is a medical product within the scope of FDA’s jurisdiction. This proposed rule, Amendments to Regulations Regarding “Intended Uses,” is an important step forward in fulfilling our public health mission and our promise to provide better clarity to regulated industry and other stakeholders.

The proposed revisions to the intended use regulations do not reflect a change in the FDA’s policies and practices, but rather seek to clarify the regulatory language describing the types of evidence we consider relevant to determining a product’s intended uses. The purpose of our proposal is to update our regulations to better reflect the FDA’s longstanding approach to intended use and provide greater clarity for regulated parties.

FDA's longstanding position is that, in evaluating a product's intended use, any relevant source of evidence may be considered. This longstanding position remains unchanged in the regulations being proposed today. However, the proposed revisions clarify an important point: that a firm’s knowledge that a health care provider has prescribed or used an approved or cleared medical product for an unapproved use, standing alone, is not sufficient to establish the product’s intended use. We believe that this update will provide greater certainty and predictability for regulated parties.

In the preamble to the proposed rule, we provide additional clarity by describing examples of types of evidence we would consider relevant to determining the intended use of a product, including a variety of direct and circumstantial evidence. The preamble also outlines several examples of types of evidence that, standing alone, would not be determinative of intended use. We believe these examples will help regulated parties to navigate common scenarios with greater certainty.

In recent years, we have worked to revise certain language that is currently included in our intended use regulations and that does not accurately reflect current FDA policies. In 2015, we issued a proposed rule that, among other things, would have revised that language. The agency considered the feedback and support we received on the proposed rule and made additional changes when we published the 2017 final rule. In light of questions and concerns that arose from the changes made in the final rule, FDA decided to delay the effective date of the relevant portion of that 2017 final rule until further notice, to allow for additional consideration of the substantive issues raised in the public comments we received related to the final rule.

Since then, we have considered the issues raised by the 2017 final rule, including feedback and input from regulated industry and other stakeholders, and we are now proposing to repeal and replace the intended use portion of the 2017 final rule. We received many useful comments that assisted in our policy development. Public comment is an important part of the rulemaking process that can inform and influence the agency on critical regulatory matters. We look forward to receiving input on today’s proposed rule.

We believe that by revising the text of our intended use regulations to better reflect our longstanding practice, and by providing additional examples and explanation in the preamble, we will give clarity to stakeholders and enhance consistency in our regulatory approach. Such clarity and consistency are critical to ensuring that parties understand their regulatory obligations and that the FDA can exercise effective oversight responsibility. For this reason, this rulemaking is an important priority for the FDA.

The FDA, an agency within the U.S. Department of Health and Human Services, protects the public health by assuring the safety, effectiveness, and security of human and veterinary drugs, vaccines and other biological products for human use, and medical devices. The agency also is responsible for the safety and security of our nation’s food supply, cosmetics, dietary supplements, products that give off electronic radiation, and for regulating tobacco products.

Federal Register Notices:

[09/18/2020] – Limitations on Duty and Quota-Free Imports of Apparel Articles Assembled in Beneficiary Sub-Saharan African Countries under the African Growth and Opportunity Act (AGOA). The new AGOA caps are for the one-year period from October 1, 2020-September 30, 2021.

Counterfeit Designer Shoes, Handbags, & Clothes Seized by CBP in Louisville - U.S. Customs & Border Protection

LOUISVILLE, Ky — U.S. Customs and Border Protection (CBP) officers in Louisville recently seized a shipment containing two boxes of high end designer items worth more than $193,000.

Last night a CBP officer in Louisville held a shipment, manifested as women’s clothes, for inspection. The parcels was inspected to determine the admissibility of its contents in accordance with CBP regulations. When the shipment was opened designer shoes, handbags, and clothes were found inside. The items were inspected by an import specialist who determined the items were counterfeit. In all, 95 items were seized. If these items were real, the total MSRP for these would have been $193,740. The packages were coming from Vietnam and were heading to Westminster, California.

“Our officers continue to be vigilant and committed in stopping shipments of illicit goods,” said Thomas Mahn, Port Director, Louisville. “These shipments are distributed throughout the nation in an effort to con consumers into spending their money on cheap counterfeits, when they think they are buying the real thing.”

Intellectual property rights (IPR) protection is a priority trade issue for CBP. In Fiscal Year (FY) 2019, CBP and their partner agency Homeland Security Investigation (HSI) seized 27,599 shipments containing IPR violations with a manufacturer’s suggested retail price (MSRP) of over $1.5 billion had the goods been genuine. Watches and jewelry represent 15 percent of all IPR seizures, and continue to top the list of all seized IPR materials.

CBP has established an educational initiative to raise consumer awareness about the consequences and dangers that are often associated with the purchase of counterfeit and pirated goods. Information about the Truth Behind Counterfeits public awareness campaign can be found at
https://www.cbp.gov/FakeGoodsRealDangers