C-AIR TIMES ISSUE #674 - Friday, March 19, 2021 08:18

China Section 301 Litigation Update: Government Files its Initial Response - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP

On March 12, 2021, the U.S. Department of Justice (DOJ) filed a “master answer” in the China Section 301 litigation. The U.S. Court of International Trade three-judge panel that is hearing this case had directed DOJ to file a generic answer to the allegations that are common to the over 3,700 complaints that have been filed to date challenging the imposition of List 3 and List 4A additional duties.

The government’s answer largely consists of general denials of the facts and claims alleged in the filed complaints. Most significantly, the master answer identifies certain affirmative defenses that the government is likely to raise as the case moves forward. These defenses include the following: 1) the Administrative Procedure Act (APA) does not apply because the imposition of the Section 301 duties was a presidential act; 2) the imposition of the Section 301 duties cannot be reviewed by the court because they arose either out of the president’s political discretion or out of the foreign affairs exemption; 3) the actions of the United States Trade Representative (USTR) complied with the statutory requirements of the Trade Act of 1974; and 4) USTR is entitled to deference as regarding its imposition of the duties. DOJ noted that it reserves the right to raise additional defenses in future filings.

The next step in the case will see the plaintiffs filing a response to the court’s scheduling order that 1) identifies the proposed members of the Plaintiff’s Steering Committee (which includes GDLSK); 2) addresses the sample case selection; and 3) provides an update on the issue of refunds for liquidated entries. Plaintiff’s response is due March 19, 2021.

If you have any questions regarding this case or if you would like to receive a copy of the master answer, please contact one of our attorneys.

Federal Register Notices:

Operation Stop the Flow Yields More than $500K of Counterfeits Seized by Kansas City CBP Officers - U.S. Customs & Border Protection

KANSAS CITY, Mo — As part of the U. S. Customs and Border Protection (CBP) Fiscal Year 2021 prioritization of enforcement actions the Kansas City Port of Entry conducted Operation Stop the Flow from February 15 to March 15 to interrupt the flood of counterfeits that threaten public safety.

The operation was intended to help protect the public, U.S. economic interests and corporations.

The officers were inspecting selected shipments for potential violations. CBP examined parcels arriving from many locations, but the primary focus was merchandise exported from the People’s Republic of China or Hong Kong via express consignment. CBP’s primary focus of the operation was public safety concentrating on counterfeit medical equipment or supplies.

During the 28 days officers inspected 952 shipments and made 25 seizures. While some of the shipments were medical items such as adulterated medications and animal vaccines, officers also seized 469 counterfeit professional sports jerseys and 163 counterfeit designer handbags, sunglasses, counterfeit electronics, and controlled substances. The shipments were arriving from China, Laos, South Korea, United Arab Emirates, and other locations. The shipments were destined for businesses and residential addresses across the U.S. If the items were real, they would have had a MSRP of $504,000.

“This just goes to show you how criminals are using the mail system to ship their items to unsuspecting consumers endangering their personal health and safety, as well as damaging our economy,” said Steve Ellis, Port Director-Kansas City. “I want to congratulate our officers for the outstanding job they did during this operation. CBP is the first line of defense and we will continue to protect the health and safety of consumers.”

The rapid growth of e-commerce enables consumers to search for and easily purchase millions of products through online vendors, but this easy access gives counterfeit and pirated goods more ways to enter the U.S. economy. U.S. consumers spend more than $100 billion every year on intellectual property rights (IPR) infringing goods, falling victim to approximately 20% of the counterfeits that are illegally sold worldwide.

Commonly, these goods are sold in underground outlets and on third party e-commerce websites. Counterfeit commodities fund smugglers and members of organized crime. Consumers often believe they are buying a genuine product but soon realize the item is substandard.

CBP Trade protects the intellectual property rights of American businesses through an aggressive Intellectual Property Rights enforcement program, safeguarding them from unfair competition and use for malicious intent while upholding American innovation and ingenuity. Suspected violations can be reported to CBP here.

Every year, CBP seizes millions of counterfeit goods from countries around the world as part of its mission to protect U.S. businesses and consumers. These goods include fake versions of popular products, such as smartphones and related accessories, electronics, apparel, shoes, cosmetics, and high-end luxury goods, as well as goods posing significant health and safety concerns, such as counterfeit pharmaceuticals, bicycle and motorcycle helmets, medical devices, supplements and other consumables. Sold online and in stores, counterfeit goods hurt the U.S. economy, cost Americans their jobs, threaten consumer health and safety, and fund criminal activity. Visit the National IPR Coordination Center for more information about IPR including counterfeiting and piracy.

Nationwide in Fiscal Year 2020, CBP seized 26,503 shipments containing goods that violated intellectual property rights. The total estimated value of the seized goods, had they been genuine, was nearly $1.3 billion. 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.

CBP has established an educational initiative, Truth Behind Counterfeits, to raise consumer awareness about the consequences and dangers that are often associated with the purchase of counterfeit and pirated goods. The agency encourages anyone with information about counterfeit merchandise illegally imported into the United States to submit an e-Allegation. The e-Allegation system provides a means for the public to anonymously report to CBP any suspected violations of trade laws or regulations related to the importation of goods in the U.S.

CBP's border security mission is led at 328 ports of entry by CBP officers from the Office of Field Operations. Please visit CBP Ports of Entry to learn more about how CBP’s Office of Field Operations secures our nation’s borders. Learn more about CBP at www.CBP.gov.

One Month: Over 500lbs of Drugs & Over 600 Counterfeit IDs Seized - U.S. Customs & Border Protection

LOUISVILLE, Ky — U.S. Customs and Border Protection (CBP) officers are working 24 hours a day, seven days a week to keep Americans safe from the dangerous items and activities that threaten communities around the U.S. CBP officers in Louisville seized a total of 518 pounds of illicit drugs and 676 counterfeit IDs, which includes fake ID and passports, during the month of February.

The narcotics arrived from Mexico, Canada, Netherlands, United Kingdom, China, Hong Kong, and other high-risk countries. CBP officers seized: 229 pounds of prescription medication/chemical, 198 pounds of Marijuana, 33 pounds of cocaine, 32 pounds of Ketamine, 24 pounds of Crystal Methamphetamine and two pounds of Fentanyl. All these narcotics would have been worth close to one million dollars

The 676 counterfeit ID and passports were seized in shipments arriving from other countries destined for different states across the U.S. Most of the fakes were for college kids, but these IDs could be used for other nefarious activities like identity theft, worksite enforcement, critical infrastructure protection, fraud linked to immigration-related crimes such as human smuggling and human trafficking, and these documents can also be used by those individuals associated with terrorism to minimize scrutiny from travel screening measures. CBP Officers coordinate findings with CBP’s Fraudulent Document Analysis Unit (FDAU), Homeland Security Investigations and other federal partners to combat this illicit activity.

“The FDAU’s mission is to remove fraudulent travel documents from circulation and prevent the use of these documents by mala fide travelers attempting to enter the United States,” said Frances Garcia, Director, Fraudulent Document Analysis Unit. “This specialized unit performs in-depth analysis of documents seized nationwide and produces intelligence from fraudulent documents to uncover global patterns and trends to strengthen CBP’s enforcement posture.”

“These seizures are the dangers our officers see every night and it doesn’t stop,” said Thomas Mahn, Port Director-Louisville. “Our officers do an outstanding job stopping these shipments. These criminals keep trying different ways to sneak their contraband in and our officers do a better job of finding it and stopping it in its tracks.”

CBP's border security mission is led at ports of entry by CBP officers from the Office of Field Operations. Please visit CBP Ports of Entry to learn more about how CBP’s Office of Field Operations secures our nation’s borders. Learn more about CBP at www.CBP.gov.

Neal, Blumenauer Statement on the U.S. International Trade Commission's Report "Seafood Obtained via Illegal, Unreported, and Unregulated Fishing: U.S. Imports and Economic Impact on U.S. Commercial Fisheries" - Way and Means Committee

WASHINGTON, DC — Today, the U.S. International Trade Commission released their findings pursuant to a Tariff Act of 1930 section 332 investigation requested by Chairman Richard E. Neal (D-MA) and Trade Subcommittee Chairman Earl Blumenauer (D-OR) on the economic impact of illegal, unreported, and unregulated (IUU) seafood, including the use of forced labor, on the U.S. fishing industry. The report found that the U.S. imported $2.4 billion worth of illegal seafood in 2019 and that addressing the illegal imports would create U.S. jobs, protect U.S. consumers and benefit U.S. fishers by an estimated $60.8 million.

“Far too much illegal seafood is making its way onto our dinner plates and more must be done,” said Chairman Neal. “By building on what we fought to include in USMCA, enhancing the tracing of our seafood supply chains, and cracking down on IUU fishing practices, we can better protect our oceans and ultimately give Americans the peace of mind that they are eating safe, legal seafood.”

“When people go to the grocery store, they want to know that the seafood is safe and legally caught, responsibly sourced, and honestly labeled. Unfortunately, too much illegal seafood is currently making its way into the country, undermining our hardworking U.S. fishing industry and putting consumers at risk,” Blumenauer said. “It’s clear that we need stronger enforcement standards to protect individuals, workers, and fishing habitats.”

Chairman Neal and Trade Subcommittee Chairman Blumenauer are joined by Oceana and WWF in recognizing the study.

“Illegal, unreported and unregulated fishing not only wreaks havoc on fisheries and ocean wildlife, but also undermines domestic fishers and seafood consumers. The United States has advanced programs to combat IUU fishing and seafood fraud, but it’s clear that more needs to be done. The U.S. must expand Seafood Import Monitoring Program to all seafood, trace fish from boat to plate and expand transparency of fishing to help stop IUU products from entering the U.S. and competing with legally sourced seafood,” said Beth Lowell, Deputy Vice President of U.S. Campaigns at Oceana.

Michele Kuruc, Vice President of Ocean Policy at WWF noted that, “this report reminds us that the ramifications of illegal fishing go far beyond the health of our oceans. It depletes our oceans, fuels labor and human rights abuses, and leaves our domestic producers at an economic disadvantage. People are harmed, economies are hurt, and our oceans and planet are in peril. Eradicating illegal fishing requires a whole of government approach, as our current definitions, processes and efforts have far-reaching limitations. The good news is we have the tools, but they need to be strengthened to get the job done. The U.S. needs to expand the species covered by our current monitoring program. We need to track all imported species, not just a small group, to truly tackle this issue and protect our oceans, foster economic growth and empower people who rely on oceans for food and income.”

A copy of the full report released today can be found here.

Destroy! Don’t Dump! - Food & Drug Administration

Invasive zebra mussels have been found in "moss balls,” an aquarium plant product sold at aquarium and pet supply stores. Zebra mussels are regarded as one of the most destructive invasive species in North America.

Zebra mussels can quickly take over once they get established in a waterbody and cause significant damage including disrupting the food chain, changing the chemistry of the water (which can cause more blue green algae outbreaks or offensive taste), and clogging water intake and delivery systems. The concern is that live mussels released into a storm drain or flushed could be introduced into a waterway.

What are “moss balls?”

A moss ball is a species of green algae that is formed into a ball and is 2 to 5 inches in diameter. Moss balls are purchased for home aquariums are found in pet stores nationwide.

What should I do if I recently purchased moss balls for my aquarium? DESTROY, DISPOSE, DRAIN

Do not dispose of the moss balls in drains, waterways, or gardens. Moss balls must be destroyed and disposed of in a sealed container in the trash.

When following any of the methods listed below, ensure that the disposal method you choose is in compliance with your local state laws and animal welfare regulations.

DESTROY in one of three ways:

Freeze - Place the moss ball into a sealable plastic bag and freeze for at least 24 hours.
Boil - Place the moss ball in boiling water for at least 1 full minute.
Bleach / Vinegar - Submerge the moss ball in chlorine bleach or undiluted white vinegar for 20 minutes.

DISPOSE of the moss ball and any of its packaging in a sealed plastic bag in the trash. If vinegar, boiling water, or bleach was used, the liquid can be disposed down a household drain —never down a storm drain where it could enter and damage local waterways.

DRAIN and clean the aquarium. (Updated with additional guidance on 3/11/21)

Collect any fish or other living organisms and place them in another container, with water from a separate, uncontaminated water source. Remove contaminated water from the tank and sterilize by adding 1 cup of bleach for each gallon of water. Let the water sit for 10 minutes and then dispose the sterilized water down a household drain.

Clean the aquarium and accessories using ONE of the following methods, ensuring that the decontaminate method you choose is in accordance with manufacturers’ recommendations:

1. Hot Water Method:

· Use water that is 120 degrees F to flush and coat the tank and all accessory surfaces for at least two minutes.

2. Salt Water Method:

· Make a saline solution using ½ cup of salt per gallon of water and soak aquarium substrate, rocks, décor, and filter media in salt water solution for at least 24 hours.

· Dispose of the treated water in a household drain and rinse all items prior to setting up the aquarium.

3. Bleach Disinfection Method:

· Make a disinfection solution using 1 cup of bleach per gallon of water.

· Soak the aquarium, substrate, rocks, décor, and filter media in the bleach water solution for 10 minutes.

· Rinse off all items prior to setting up the aquarium.

· Dispose of the previously used filter media and replace with new media.

· Use a dechlorinating product to neutralize any residual chlorine prior to reintroducing aquatic life.

A more detailed list of DESTROY, DISPOSE, DRAIN instructions can be found here. (Updated 3/11/21)