C-AIR TIMES ISSUE #663 - Wednesday, December 30, 2020 12:49

Port Truck Gate Schedule for New Year's Holiday 2020/21

PNCT will be CLOSED New Year's Eve + New Year's Day (12/31 & 1/1)

· Terminals at the Ports of Los Angeles and Long Beach have announced schedules for the New Year’s holiday period of Thursday Dec. 31, 2020, through Sunday Jan. 3, 2021. The schedule is posted below, and a PDF of the schedule can be downloaded by clicking here: https://www.pierpass.org/wp-content/uploads/2020/12/NewYearsEve_2020_1.pdf.

Please continue to monitor the websites of individual terminals for updates.

CBP Issues Revised Country of Origin Marking Requirements for Goods from The West Bank and Gaza - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP

In a Federal Register notice of December 23, 2020, U.S. Customs and Border Protection issued revised country of origin marking requirements for products from the West Bank and Gaza to incorporate guidance provided by the U.S. State Department last month (see https://www.gdlsk.com/u-s-state-department-initiating-new-guidelines-for-the-country-of-origin-marking-of-israeli-and-palestinian-goods-produced-in-the-west-bank/?highlight=israel).

Under the new guidance, the following requirements apply:

Goods produced in the territorial areas of the West Bank where Israel continues to exercise relevant authorities (Area “C” under the Oslo Accords and the area known as “H2” which is under Israeli administrative control consistent with the 1997 Hebron protocol) must be marked as “Israel,” “Product of Israel,” or “Made in Israel.”
Goods produced in Areas “A” and “B” under the Oslo Accords, which are under the civilian oversight of the Palestinian Authority for these purposes, along with the area known as “H1” from the above 1997 Protocol, must be marked as “West Bank,” “Product of West Bank,” or “Made in West Bank.”
Goods produced in Gaza must be marked as “Gaza,” “Product of Gaza,” “Made in Gaza,” “Gaza Strip,” “Product of Gaza Strip,” or “Made in Gaza Strip.”
Goods from any of these territorial areas must not be marked in conjunctive form, such as “West Bank/Gaza,” “West Bank/Gaza Strip,” “West Bank and Gaza,” or words of similar meaning.

While the above position is applicable as of December 23, 2020, a transition period is being provided through March 21, 2021. Any goods entered or withdrawn from warehouse for consumption into the United States after such date must be marked in accordance with the new requirements.

Should you have any questions, please do not hesitate to contact our office.

Federal Register Notices:

This message is to inform the Trade Community of the following U.S. – Mexico – Canada Agreement (USMCA) updates:

Consolidated Appropriations Act of 2021

On December 27, 2020, the Consolidated Appropriations Act of 2021 [H.R.133 — 116th Congress (2019-2020), Pub. Law No. citation pending, herein after “the Appropriations Act”] became law. It includes updates to the U.S. – Mexico – Canada Agreement’s (USMCA) treatment of goods entered through foreign trade zones (FTZ) and merchandise processing fee (MPF) refunds on post-importation claims (i.e. 520(d) and reconciliation claims). These changes, contained in the Appropriations Act’s Title VI, USMCA Implementation Act Technical Corrections, Sec. 601, are retroactively effective as of July 1, 2020.

(1) Foreign Trade Zones

Under NAFTA, non-originating goods used in production processes in FTZs could not qualify as originating as a result of that processing. Specifically, the special rule applicable to FTZs prohibited non-originating goods used in production processes within FTZs from ever qualifying as originating goods even if all conditions under the general rules were otherwise satisfied.

Initially, this prohibition was not incorporated into the USMCA Implementation Act [Pub. Law No: 116-113 (January 29, 2020)]. Title VI, Sec. 601(b) of the Appropriations Act now applies this FTZ prohibition to USMCA preferential treatments claims.

(2) Merchandise Processing Fees

Title VI, Sec. 601(e) of the Appropriations Act authorizes CBP to refund merchandise processing fees (MPF) for post-importation claims (i.e. 520(d) and reconciliation claims) for USMCA preferential treatment.

End of Restrained Enforcement

CBP elected to exercise a period of restrained enforcement, from July 1 through December 31, 2020, on USMCA preferential treatment claims. This was done in order to provide the trade sufficient time to adjust to the new requirements of the Agreement, and in consideration of the business process changes necessary to achieve full compliance. Notice of the restrained enforcement period was included on page 3 of CBP’s USMCA Implementation Instructions, which was posted on June 30, 2020 [CBP Pub. No. 1118-0620; https://www.cbp.gov/document/guidance/usmca-implementation-instructions].

This period of restrained enforcement will conclude on December 31, 2020.

Automobiles – Additional Time for Verifications

Please note that while the USMCA’s restrained enforcement period will end on December 31, 2020, CBP also announced in its USMCA Implementing Instructions that from July 1, 2020 to June 30, 2021, for automotive goods, CBP may allow additional time to respond to a verification (CBP Form 28, Request for Information). Automotive goods are defined as all goods under Harmonized Tariff Schedule of the United States headings 87.01 through 87.08, and the following miscellaneous headings: 40.09; 4009.12; 4009.22; 4009.32; 4009.42; 4010.31; 4010.32; 4010.33; 4010.34; 4010.39; 40.11; 4016.93; 4016.99; 7007.11; 7007.21; 7009.10; 9031.80; 9032.89, per the USMCA Ch. 4 – Rules of Origin – Annex 4B.

The USMCA contains no distinction between new and used automotive goods. All importers seeking USMCA preferential treatment for automotive goods must meet the USMCA's automotive rules of origin provisions.

WTO Paper Explores Role of Trade Policy in the Rapid Roll-Out of COVID-19 Vaccines - World Trade Organization

The WTO Secretariat has published a new information note on trade-related issues for COVID-19 vaccine production, manufacturing and deployment. The note, entitled “Developing and delivering COVID-19 vaccines around the world,” explores how trade policy can play its part in ensuring the rapid roll-out of vaccines against COVID-19.

CBP Statement on Country of Origin Markings for Israeli and Palestinian Goods - U.S. Customs & Border Protection

WASHINGTON - Today, U.S. Customs and Border Protection published a Federal Register Notice to ensure that country of origin markings for Israeli and Palestinian goods are consistent with the United States’ foreign policy approach. The notice establishes that producers within certain areas designated in the Oslo Accords and the Hebron Protocol must mark their goods as “Israel,” “Product of Israel,” or “Made in Israel” when exporting those goods to the United States. Parties that import these goods into the United States are responsible for ensuring compliance with the marking requirements.

CBP is publishing this Federal Register Notice based upon guidance from the U.S. Department of State that the country of origin marking requirements for goods produced in certain areas of the West Bank be updated to reflect the fact that producers in these areas operate within the economic and administrative framework of Israel. Goods produced in areas of the West Bank where the Palestinian Authority maintains relevant authorities shall be marked as products of  “West Bank” and goods produced in Gaza shall be marked as products of  “Gaza.”  

CBP will authorize a transition period of 90 days for importers to implement markings consistent with this notice. Additional information can be found here.

USITC Release Report Concerning the U.S. Industry, Market, Trade and Supply Chain Challenge - U.S. International Trade Commission

The U.S. International Trade Commission (USITC) today released a report on U.S. industries producing COVID-19 related goods and the supply chain challenges and constraints that impacted the availability of such goods.

The investigation, COVID-19 Related Goods: The U.S. Industry, Market, Trade, and Supply Chain Challenges, was requested by the U.S. House of Representatives’ Committee on Ways and Means and the U.S. Senate Committee on Finance in a letter received on August 13, 2020.

As requested, the USITC, an independent nonpartisan factfinding federal agency, completed the investigation as a follow-on to an earlier report that identified goods related to treating and otherwise responding to the COVID-19 pandemic. Released in May 2020 and updated in June 2020, that report identified the goods’ source countries, tariff classifications, and applicable duty rates.

The new report, focused primarily on the availability of goods from the onset of the COVID-19 pandemic through September 2020, provides overviews of four key industry sectors (medical devices, personal protective equipment, pharmaceuticals, and soaps and cleaning compounds). In addition, the report includes case studies on ventilators, N95 respirators, surgical masks, surgical and isolation gowns, medical and surgical gloves, test kits, vaccines, and hand sanitizer.

Major Findings:

U.S. demand for all products covered in the case studies substantially increased in the first half of 2020, as compared to 2019, leading to significant shortages. Domestic industries were able to continue current operations but faced challenges in ramping up production to meet growing demand. Importers of COVID-19 related goods faced disruptions to normal levels of supply for some products and challenges associated with a rapid increase in global demand.
The United States produced all goods covered in the case studies before the pandemic, as well as many of the inputs. However, the extent of domestic production varied significantly. The U.S. industry supplied only a relatively small share of the domestic market for certain medical PPE, such as medical gloves and gowns, but supplied a large share of the domestic market for goods like ventilators, vaccines, N95 respirators, and hand sanitizer.
U.S. imports of most COVID-19 related goods covered in the case studies increased substantially beginning around April or May 2020, depending on the product. Imports of many products exceeded their normal levels by orders of magnitude. Medical and surgical gloves, however, remain among the most hard-to-find items, with glove imports up only 17 percent during January-September 2020.
Some of the initial supply chain challenges have eased, such as those for ventilators, but a number remain, including for many PPE items. Gloves, for example, are one of the most highly constrained COVID-19 related products, with shortages expected to continue beyond 2021.
The major factors affecting domestic production of COVID-19 related goods include the availability and costs of inputs, the time and cost of bringing additional production capacity online (including purchasing and installing new machinery), and the time needed to recruit and train new workers. For firms entering the market or bringing new products to the market, challenges also include the time associated with designing products and getting them certified, as well as issues related to a hesitancy among purchasers to use unknown suppliers. Finally, U.S. producers faced, and continue to face, a conundrum when deciding whether to invest in domestic production, as there is little certainty about long-term demand and the ability to recoup investments, and a concern that post-pandemic purchasers will revert to buying from the lowest-cost suppliers, which often manufacture overseas.
The most significant factor affecting imports was that global demand significantly exceeded available supply of many COVID-19 related goods, making it difficult for U.S. importers to procure sufficient quantities. Other major factors included substantially higher prices for imports, foreign export restrictions, logistics disruptions and cost increases, quality concerns (a significant increase in the number of counterfeit, illicit, and flawed products), and imported products differing from those used in the U.S. market.

COVID-19 Related Goods: The U.S. Industry, Market, Trade, and Supply Chain Challenges (Investigation No. 332-580, USITC Publication 5145, December 2020) is available on the USITC website at: https://www.usitc.gov/publications/332/pub5145.pdf.

USITC general factfinding investigations cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the House Committee on Ways and Means, or the Senate Committee on Finance. The resulting reports convey the Commission's objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the USITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public, unless they are classified by the requester for national security reasons.

Port Director Delivers Final Executive Broadcast of 2020 - Port of NY/NJ - Breaking Waves

In the final executive broadcast of 2020, Port Director Sam Ruda provides updates and reviews the challenging year at the Port of New York and New Jersey. The video covers topics ranging from COVID-19 adjustments to performative metrics in Q3 and Q4. Ruda details the measures taken to overcome the pandemic’s challenges and discusses the year-end rebound of container volumes, rail, and auto sectors.