CBP Proposal to Change Non-Preferential Origin Rules for Goods Imported from Canada or Mexico - Comment Period Expires August 5, 2021 - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
CBP has published a proposal that, if adopted, would significantly change its rules for determining the origin of goods imported from Canada or Mexico for non-preferential purposes (i.e., not for USMCA eligibility).
For purposes of determining USMCA eligibility, CBP applies the originating status rules set forth in General Note 11 of the tariff schedule. For purposes of country of origin marking of goods imported from Canada or Mexico, CBP has in the past applied the “NAFTA marking rules” set forth in Part 102 of its regulations. In a separate notice, CBP indicated its intention to continue this practice under the USMCA.
However, with respect to determinations of the country of origin of goods imported from Canada and Mexico for various other purposes (including applicability of the “China 301 tariffs” or the “Section 232” steel and aluminum tariffs), CBP has historically applied the “substantial transformation” origin test based on long line of judicial precedent. A substantial transformation occurs when processing in a country creates an article with a new name, character and use.
As a result, there have been instances in which CBP has ruled that an article processed in Canada or Mexico had different origins for different purposes. For example, CBP has issued rulings in which an article assembled in Mexico from Chinese inputs was to be marked as a product of Mexico (by application of the NAFTA marking rules) but was still considered a product of China for purposes of the China 301 tariffs (as the assembly in Mexico did not rise to the level of substantial transformation).
CBP presents its proposal as a harmonization of origin determinations being made for goods imported from Canada and Mexico. However, in practice, the proposed change can alter the origin outcome for other purposes, most notably the applicability of the China 301 and Section 232 duties noted above. As such, depending on the product and production details, some items currently not covered by such duties may become covered and vice versa. All importers of products from Canada and Mexico should study the impact of this proposed change on their supply chain.
CBP is accepting public comment on this proposal through August 5, 2021.
We are available to discuss the potential impact of this proposal on your company and to assist in the drafting of comments in response. Please contact Arthur W. Bodek or any of our attorneys for further information.
The Department of Homeland Security Issues Withhold Release Order on Silica-Based Products Made by Forced Labor in Xinjiang - U.S. Customs & Border Protection
WASHINGTON — Today (June 24, 2021), Secretary of Homeland Security Alejandro N. Mayorkas announced that DHS’s U.S. Customs and Border Protection (CBP) issued a Withhold Release Order against Hoshine Silicon Industry Co. Ltd., a company located in China’s Xinjiang Uyghur Autonomous Region. The Withhold Release Order instructs personnel at all U.S. ports of entry to immediately begin to detain shipments containing silica-based products made by Hoshine and its subsidiaries.
“As President Biden made clear at the recent G7 summit, the United States will not tolerate modern-day slavery in our supply chains,” said Secretary Mayorkas. “This Withhold Release Order demonstrates we continue to protect human rights and international labor standards and promote a more fair and competitive global marketplace by fulfilling the Biden-Harris Administration’s commitment to ending forced labor.”
The Withhold Release Order applies to silica-based products made by Hoshine and its subsidiaries as well as to materials and goods (such as polysilicon) derived from or produced using those silica-based products. Silica is a raw material that is used to make components for solar panels, electronics, and other goods.
“Forced labor is a human rights abuse that hurts vulnerable workers, weakens the global economy, and exposes consumers to unethically made merchandise,” said Troy Miller, CBP Senior Official Performing the Duties of the Commissioner. “CBP will continue to set a high global standard by aggressively investigating allegations of forced labor in U.S. supply chains and keeping tainted merchandise out of the United States.”
CBP issued a Withhold Release Order based on information reasonably indicating that Hoshine uses forced labor to manufacture silica-based products. This Withhold Release Order was issued following an investigation into silica-based products imported into the United States from the Xinjiang region. During the investigation, CBP identified two of the International Labour Organization’s indicators of forced labor in Hoshine’s production process: intimidation and threats, and restriction of movement.
During the 47th G7 summit earlier this month, the United States and G7 countries committed to removing forced labor from global supply chains. This Withhold Release Order on Hoshine is the latest in a series of actions the United States has taken to address forced labor and other human rights abuses against the Uyghur people and other ethnic and religious minorities in China’s Xinjiang region. Further, in June 2021, the U.S. Department of Labor added polysilicon from Xinjiang to its List of Goods Produced by Child Labor or Forced Labor and the U.S. Department of Commerce imposed additional license requirements on the export, reexport, or in-country transfer of goods from certain Xinjiang-based polysilicon producers due to concerns about those entities’ use of forced labor. More information about these efforts is available here.
Federal statute 19 U.S.C. 1307 prohibits the importation of merchandise produced, wholly or in part, by convict labor, forced labor, and/or indentured labor under penal sanctions, including forced or indentured child labor. CBP investigates allegations of forced labor in U.S. supply chains and issues Withhold Release Orders that instruct personnel at ports of entry to detain shipments that contain goods suspected of being made by forced labor. Withhold Release Orders are not outright bans. Pursuant to U.S. regulations, importers of detained shipments have an opportunity to demonstrate that the merchandise was not imported in violation of section 1307 or to export their shipments.
CBP’s forced labor investigations have produced six Withhold Release Orders in Fiscal Year 2021, including one on cotton and tomato products from the Xinjiang region and another on cotton products originating from the Xinjiang Production and Construction Corps. Eight of the 13 Withhold Release Orders that CBP issued in Fiscal Year 2020 were on goods made by forced labor in China. The full list of Withhold Release Orders is available at CBP.gov.
Federal Register Notices:
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review
• Light-Walled Rectangular Pipe and Tube From Turkey: Final Results of Antidumping Duty Administrative Review; 2019-2020
• Strontium Chromate From France: Preliminary Results of Antidumping Duty Administrative Review; 2019-2020
• Polyethylene Terephthalate Film, Sheet, and Strip From Taiwan: Preliminary Results of Antidumping Duty Administrative Review and Preliminary Determination of No Shipments; 2019-2020
• Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Advance Notification of Sunset Review
• Diamond Sawblades and Parts Thereof From the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review and Preliminary Determination of No Shipments; 2019-2020
• Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes From Mexico: Final Results of Antidumping Duty Administrative Review; 2018-2019
• Polyethylene Terephthalate Film, Sheet, and Strip From India: Preliminary Results of Countervailing Duty Administrative Review, Rescission in Part, and Intent To Rescind in Part; 2019
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes from Korea, Mexico, and Turkey; Institution of Five-Year Reviews
• Methionine From Japan and Spain; Supplemental Schedule for the Final Phase of Anti-Dumping Duty Investigations
• Narrow Woven Ribbons With Woven Selvedge From China and Taiwan; Institution of Five-Year Reviews
• Investigations; Determinations, Modifications, and Rulings, etc.: Certain Tobacco Heating Articles and Components Thereof; Commission Determination To Review in Part a Final Initial Determination Finding a Violation of Section 337; Schedule for Filing Written Submissions on Issues Under Review and on Remedy, Public Interest, and Bonding
• Initiation of Antidumping and Countervailing Duty Administrative Reviews
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Steel Nails From Malaysia: Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review; 2019-2020
• Emulsion Styrene-Butadiene Rubber From Mexico: Final Results of Antidumping Duty Administrative Review; 2018-2019
• Certain Pasta From the Republic of Turkey: Preliminary Results of Countervailing Duty Administrative Review; 2019
• Pure Magnesium From the People's Republic of China: Final Results of Antidumping Duty Administrative Review, Final Determination of No Shipments; 2019-2020
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Polyethylene Terephthalate Film, Sheet, and Strip From India: Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review; 2019-2020
• Utility Scale Wind Towers From Malaysia: Countervailing Duty Order
• Carbon and Alloy Steel Wire Rod From the Republic of Korea: Preliminary Results of Antidumping Duty Administrative Review; 2019-2020
• Certain Carbon and Alloy Steel Cut-To-Length Plate From Italy: Preliminary Results of Antidumping Duty Administrative Review and Preliminary Determination of No Shipments; 2019-2020
• Large Diameter Welded Pipe From Canada: Preliminary Results of Antidumping Duty Administrative Review and Preliminary Determination of No Shipments; 2018-2020
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Large Diameter Welded Pipe From the Republic of Korea: Preliminary Results of Countervailing Duty Administrative Review; 2018-2019
• Xanthan Gum From the People's Republic of China: Preliminary Results of the Antidumping Duty Administrative Review, Partial Rescission of the Antidumping Duty Administrative Review, and Preliminary Determination of No Shipments; 2019-2020
• Certain Corrosion-Resistant Steel Products From the Republic of Korea: Preliminary Results of Antidumping Duty Administrative Review; 2019-2020
• Certain Carbon and Alloy Steel Cut-to-Length Plate From the Republic of Korea: Preliminary Results of Countervailing Duty Administrative Review, and Intent To Rescind Review, in Part; 2019
• Standard Steel Welded Wire Mesh From Mexico
• Certain Semiconductor Devices, Wireless Infrastructure Equipment Containing the Same, and Components Thereof; Notice of a Commission Determination Not To Review an Initial Determination Granting a Joint Motion To Terminate the Investigation in Its Entirety Based Upon Settlement; Termination of Investigation
• Certain Electronic Devices With Wireless Connectivity, Components Thereof, and Products Containing Same; Notice of Commission Determination Not To Review an Initial Determination Terminating an Investigation Based on a Settlement Agreement; Termination of Investigation
Brownsville CBP Agriculture Specialists Intercept Rare First in Nation Pest in Flower Shipment - U.S. Customs & Border Protection
BROWNSVILLE, Texas — Agriculture Specialists with U.S. Customs and Border Protection, Office of Field Operations (OFO) at the Veterans International Bridge import cargo lot intercepted a rare “First in Nation” pest in a shipment of flowers.
“The work performed by our CBP agriculture specialists is an important element in safeguarding our nation’s agriculture by preventing the entry of pests and animal and plant diseases not known to exist in the U.S.,” said Port Director Tater Ortiz, Brownsville Port of Entry.
The interception occurred on June 9, at the Veterans International Bridge import lot when a commercial shipment of cut flowers was referred to secondary for an agriculture examination. Upon inspection of the Aster sp. cut flowers, CBP agriculture specialists intercepted the pest which was submitted for identification to a local U.S. Department of Agriculture area entomologist. The initial identification was later confirmed by a national specialist as Alampyris fuliginea Bates, 1881 (Cerambycidae) a quarantine significant pest requiring phytosanitary action.
On July 28, the initial identification of the pest found was confirmed by a National Specialist with USDA Animal and Plant Health Services (APHIS), Plant Pest Quarantine (PPQ) National Identification Services (NIS) as a First-in-Nation interception.
Given the quarantine status of Alampyris fuliginea, the shipment of flowers was re-exported as a precautionary measure.
For more information about CBP, please click on the attached link.
Follow the Director of CBP’s Laredo Field Office on Twitter at @DFOLaredo and on Instagram at @dfolaredo and also U.S. Customs and Border Protection at @CBPSouthTexas for breaking news, current events, human interest stories and photos.
CBP issues Withhold Release Order on Seafood Harvested with Forced Labor by the Hangton No. 112 - U.S. Customs & Border Protection
WASHINGTON — Effective August 4, 2021, U.S. Customs and Border Protection personnel at all U.S. ports of entry will detain tuna and other seafood harvested by the Hangton No. 112, a Fijian flagged and owned fishing vessel.
CBP issued a Withhold Release Order against the longliner fishing vessel based on information that reasonably indicates the use of forced labor in the vessel’s fishing operations. CBP identified at least three of the International Labour Organization’s 11 indicators of forced labor during its investigation: withholding of wages, debt bondage, and retention of identity documents.
“Foreign fishing vessels like the Hangton No. 112 continue to lure vulnerable migrant workers into forced labor situations so that they can sell seafood below market value, which threatens the livelihoods of American fishermen,” said CBP Acting Commissioner Troy Miller. “CBP will continue to stand up against these vessels’ abusive labor practices by preventing the introduction of their unethically-harvested seafood into the U.S. market.”
The International Labour Organization estimates that 25 million workers suffer under conditions of forced labor worldwide. The distant water fishing industry is at high risk of forced labor as foreign companies often coerce vulnerable migrant workers to perform hazardous labor for little or no pay aboard fishing vessels that may spend months at sea without making port calls.
Foreign companies exploit forced labor to sell goods below market value, which hurts law-abiding businesses, threatens American jobs, and exposes consumers to making unethical purchases. Forced labor is often linked to illegal, unreported, and unregulated fishing that damages ocean ecosystems and threatens the livelihoods of law-abiding American seafood producers.
19 U.S.C. 1307 prohibits the importation of merchandise produced, wholly or in part, by convict labor, forced labor, and/or indentured labor, including forced or indentured child labor. CBP detains shipments of goods suspected of being imported in violation of this statute. Importers of detained shipments have the opportunity to export their shipments or demonstrate that the merchandise was not produced with forced labor.
CBP has issued Withhold Release Orders on other fishing vessels, including the Lien Yi Hsing No. 12, the Da Wang, and the Yu Long No. 2. In May 2021, CBP issued a Withhold Release Order on seafood caught by a fishing fleet owned by the Dalian Ocean Fishing Co. Ltd. All Withhold Release Orders are publicly available and listed by country on CBP.gov.
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 Violations Reporting System or by calling 1-800-BE-ALERT.
OTEXA: Announcements - Office of Textile & Apparel
08/05/2021 – June 2021 Textile and Apparel Import Report