Compromise Uyghur Forced Labor Prevention Act Passed by House, to be Taken up by the Senate - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
On December 14, 2021, Representative Jim McGovern and Senator Marco Rubio announced agreement on a compromise version of the proposed Uyghur Forced Labor Prevention Act. The bill was promptly passed unanimously by the House of Representatives and is expected to be taken up by the Senate very shortly with an eye towards forwarding it to the President for signature as soon as possible. Different versions of the bill had previously been passed by the Senate (on July 15, 2021) and the House (on December 8, 2021).
Highlights of the current version follow:
1. Development of an enforcement strategy
A Forced Labor Enforcement Task Force, comprised of representatives from several government agencies, is to solicit public comment and hold a hearing as to how to best prevent the importation of goods produced, wholly or in part, with forced labor in China (including by Uyghurs, Kazakhs, Kyrgyz, Tibetans, and members of other persecuted groups in China, particularly in the Xinjiang Uyghur Autonomous Region (XUAR)).
As a result, the Forced Labor Task Force is to develop an enforcement strategy to include
• An assessment of the risk that forced labor goods may be imported (including through third countries) and available measures to address the risk.
• A description of China government programs that extract forced labor from specified minority groups, which is to include: a) a list of XUAR entities using forced labor; b) a list of entities working with the XUAR government in connection with the forced labor of persecuted groups outside of XUAR; c) a list of products produced, wholly or in part, by the above entities; d) a list of entities that exported such products from China to the United States; e) a list of facilities and entities (including the Xinjiang Production and Construction Corps (XPCC)), that source material from XUAR or from persons working with XUAR government forced labor programs; f) a plan for identifying additional such facilities; g) a list of high-priority sectors (to include cotton, tomatoes, and polysilicon); and (h) an enforcement plan for each entity and sector identified above.
• Recommendations for tools CBP can utilize to identify and trace XUAR goods and a description of how CBP plans to enhance its use of available tools (along with a description of additional resources needed by CBP).
• Guidance to importers with respect to: (a) expected due diligence, effective supply chain tracing, and supply chain management measures; and (b) the type, nature, and extent of evidence that demonstrates that goods from China were not produced, wholly or in part, in XUAR or from forced labor.
• A plan to coordinate and collaborate with appropriate NGO’s and private sector entities to implement the enforcement strategy.
2. Rebuttable presumption that goods produced in XUAR or by certain entities are inadmissible
Effective 180 days after the date of the enactment, the bill creates a presumption that any goods produced, wholly or in part, in XUAR or by an entity on the lists described above would be inadmissible under the forced labor statute. An exception applies where the CBP Commissioner determines: a) that the importer has fully complied with the contemplated guidance to be established and has completely responded to all CBP inquiries; and, b) by clear and convincing evidence, that the goods were not produced, or manufactured, wholly or in part, by forced labor.
CBP is to report to Congress the circumstances of any such exceptions.
3. Miscellaneous Provisions
The bill also calls for the establishment of a broad diplomatic strategy with respect to XUAR forced labor as well as the imposition of sanctions on foreign persons associated with such activity. Pursuant to a sunset provision, the substantive provisions of the bill would cease to have effect after the earlier of eight years or the end of the activities targeted by the proposed legislation.
Should you have any questions in connection with the above or with respect to CBP’s ongoing forced labor enforcement generally, please do not hesitate to contact Arthur Bodek or any other of our attorneys.
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Court Invalidates Section 201 Tariffs on Bifacial Solar Modules and Rate Increase on Monofacial Solar Modules - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
The U.S. Court of International Trade (“CIT”) on November 16, 2021 invalidated the government’s imposition of Section 201 safeguard tariffs on “bifacial” solar modules, as well as the increase in 201 tariffs from 15% to 18% on monofacial solar modules. Solar Energy Indus. Ass’n v. United States, Slip Op. 21-154 (CIT Nov. 16, 2021) (“SEIA”): SEIA decision. On December 7, 2021 the CIT enjoined the government from liquidating any entries subject to these tariffs while the government contemplates appeal.
In January 2018 President Trump imposed Section 201 safeguard tariffs on solar products, and in June 2018 the President authorized exclusions from the tariffs on various products including bifacial modules. However, the U.S. Trade Representative (“USTR”) in October 2019 withdrew the exclusion on bifacial modules. This withdrawal was challenged and resulted in the CIT issuing a preliminary injunction in December 2019 against the collection of 201 tariffs on bifacial modules.
In an effort to cure its procedural defects, the USTR in April 2020 again attempted to withdraw the bifacial exclusion – this time through a notice and comment period. The CIT again blocked the attempted withdrawal. Consequently, on October 10, 2020, the President issued Proclamation 10101 that: (1) assessed Section 201 tariffs on bifacial solar modules; and (2) increased the Section 201 tariff rate from 15% to 18% on all solar modules for the period February 7, 2021 to February 6, 2022. The CIT did not block Proclamation 10101, and as a result, U.S. Customs and Border Protection (“CBP”) began collecting Section 201 tariffs on bifacial solar modules entered on or after October 25, 2020, and increased tariffs of 18% on other solar products entered from February 7, 2021.
A new case was filed in late 2020 to overturn Proclamation 10101. The CIT issued a decision on November 16, 2021, invalidating Proclamation 10101 as exceeding the President’s authority under Section 201. The CIT’s order prohibits CBP from collecting Section 201 tariffs on bifacial solar modules, and also prohibits CBP from assessing 201 tariffs on other solar products at a rate of 18%, rather than 15% ad valorem. The CIT also ordered the government to refund any excess tariffs paid by the plaintiffs. The government has until January 16, 2022 to file an appeal. It is important to note that the CIT’s refund order only applies to the plaintiffs in that lawsuit, and does not extend to other importers that paid the increased 201 tariffs. Other importers may need to file their own lawsuits to preserve their potential rights to refunds.
The CIT decision is effective immediately, and consequently current imports of bifacial modules can enter duty free under the exclusion, and imports of monofacial modules are subject to a lower 15% tariff rate. Note, however, that on December 7, 2021, and at the government’s request, the CIT issued an injunction suspending liquidation of all unliquidated entries of solar modules covered by Proclamation 10101. The suspension of liquidation will impact importers in two ways. First, for entries made prior to November 17, 2021 with payment of the disputed tariffs, CBP will not be able to liquidate subject entries and issue refunds while an appeal is pending. Second, for solar modules imported on or after November 17, 2021 without payment of 201 tariffs on bifacial modules, or at the lower 15% tariff rate for monofacial modules, the suspension will allow CBP to later liquidate these entries with an assessment of the tariffs on bifacial solar modules, and/or the higher 18% rate on monofacial modules, should the government successfully appeal the CIT decisions. Importers should therefore be aware that while companies can now import solar modules without payment of the disputed tariffs, there is a potential for retroactive assessment of these 201 tariffs if the CIT decisions are reversed on appeal.
Companies that have paid Section 201 tariffs on bifacial solar modules, or have been issued bills on such products, should evaluate the best course of action to preserve rights to potential refunds, and avoid possible CBP sanctions for non-payment of bills. Although the CIT has suspended liquidation of entries as of December 7, 2021, it is probable that many entries of bifacial solar modules liquidated prior to that date. Protests and/or a lawsuit will be necessary to preserve potential refunds on these liquidated entries. In addition, companies that imported monofacial solar modules on or after February 7, 2021, may be eligible for a refund of 201 duties equivalent to 3% of the entered value of the goods. Liquidation status of these entries should be monitored.
Should you have questions regarding the above, or other questions regarding the Section 201 tariffs, please feel free to contact Erik Smithweiss, Jordan Kahn or any other attorney in the firm.
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Bureau of Industry and Security: Removal of Certain General Approved Exclusions (GAEs) under the Section 232 Steel and Aluminum Tariff Exclusions Process - BIS
(12/10/2021): Removal of Certain General Approved Exclusions (GAEs) under the Section 232 Steel and Aluminum Tariff Exclusions Process
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Federal Register Notices:
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Steel Wheels 12 to 16.5 inches in Diameter From the People's Republic of China: Notice of Court Decision Not in Harmony With the Final Determination of Antidumping Investigation and Notice of Amended Final Antidumping Determination
• Certain Steel Wheels 12 to 16.5 Inches in Diameter From the People's Republic of China: Notice of Court Decision Not in Harmony With the Final Determination of Countervailing Duty Investigation and Notice of Amended Final Countervailing Duty Determination
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Cold-Rolled Steel Flat Products From Brazil, China, India, Japan, Korea, and the United Kingdom; Scheduling of Full Five-Year Reviews
• Investigations; Determinations, Modifications, and Rulings, etc.: Polyester Textured Yarn From Indonesia, Malaysia, Thailand, and Vietnam
• Certain Corrosion-Resistant (CORE) Steel Products From China, India, Italy, South Korea, and Taiwan; Scheduling of Full Five-Year Reviews
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Uncoated Paper From Brazil, the People's Republic of China, and Indonesia: Affirmative Final Determinations of Circumvention of the Antidumping Duty Orders and Countervailing Duty Orders for Certain Uncoated Paper Rolls
• Polyester Textured Yarn From Indonesia, Malaysia, Thailand, and the Socialist Republic of Vietnam: Antidumping Duty Orders
• Investigations; Determinations, Modifications, and Rulings, etc.: Crystalline Silicon Photovoltaic Cells, Whether or Not Partially or Fully Assembled Into Other Products: Extension of Action
• Limitation of Duty-Free Imports of Apparel Articles Assembled in Haiti Under the Caribbean Basin Economic Recovery Act (CBERA), as Amended by the Haitian Hemispheric Opportunity Through Partnership Encouragement Act (HOPE)
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From the People's Republic of China: Final Results of Changed Circumstances Reviews, and Revocation of the Antidumping and Countervailing Duty Orders, in Part
• Investigations; Determinations, Modifications, and Rulings, etc.: Certain Routers, Access Points, Controllers, Network Management Devices, Other Networking Products, and Hardware and Software Components Thereof; Notice of Request for Statements on the Public Interest
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Cincinnati CBP Seize Fake Jewelry and Scarves Worth over $3 Million - U.S. Customs & Border Protection
CINCINNATI — On November 30, U.S. Customs and Border Protection (CBP) officers in Cincinnati seized a shipment containing counterfeit designer jewelry and scarves. The fakes, which came from China, would have been worth a total of $3.09 million had they been genuine.
CBP officers inspected the shipment and found 1,830 scarves, bracelets, rings, and earrings from designers like Louis Vuitton, Gucci, Cartier, Hermes, Versace, and Chanel. Officers suspected the items were counterfeit based on the packaging and the poor quality of the material. All the items were determined to be counterfeit by CBP’s Centers for Excellence and Expertise (CEEs), the agency’s trade experts. The shipment was enroute to a private residence in Flushing, New York.
“In addition to the impact on businesses and the economy, purchasing counterfeit goods carry harmful risks to shoppers,” said LaFonda Sutton-Burke, Director, Field Operations-Chicago. “It is vital that consumers be aware of what they are purchasing and know the dangers that may be involved.”
CBP’s enforcement of counterfeit and pirated goods is accomplished through the cooperative efforts of its officers, other government agencies, and the trade community. Additionally, CBP has an on-line recordation system, Intellectual Property Rights (IPR) e-Recordation, which allows rights owners to electronically record their trademarks and copyrights with CBP. Recordation facilitates IPR enforcement by making information on trademarks and copyrights readily available to CBP personnel at ports of entry nationwide.
IPR violations are associated with smuggling and other criminal activities, and often funds criminal enterprises. CBP Trade protects the intellectual property rights of American businesses, safeguarding them from unfair competition and use for malicious intent while upholding American innovation and ingenuity.
“As the holiday is approaching, I urge consumers to purchase their gifts from legitimate retailers and websites,” said Cincinnati Port Director Richard Gillespie, “counterfeit goods impact our economic success in a negative way, and purchasing these items fund criminal networks. Our officers in Cincinnati work around the clock to intercept and stop illegal shipments like this one daily.”
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.
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USITC Votes to Continue Investigation Concerning Superabsorbent Polymers from South Korea - U.S. International Trade Commission
The United States International Trade Commission (USITC) today determined that there is a reasonable indication that a U.S. industry is materially injured by reason of imports of superabsorbent polymers from South Korea that are allegedly sold in the United States at less than fair value.
Chair Jason E. Kearns, Vice Chair Randolph J. Stayin, and Commissioners David S. Johanson, Rhonda K. Schmidtlein, and Amy A. Karpel voted in the affirmative.
As a result of the Commission’s affirmative determination, the U.S. Department of Commerce will continue its investigation of imports of superabsorbent polymers from South Korea, with its preliminary antidumping duty determination due on or about April 11, 2022.
The Commission’s public report Superabsorbent Polymers from South Korea (Inv. No. 731-TA-1574 (Preliminary), USITC Publication 5273, December 2021) will contain the views of the Commission and information developed during the investigation.
The report will be available after January 18, 2022; when available, it may be accessed on the USITC website at: https://www.usitc.gov/commission_publications_library.
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UNITED STATES INTERNATIONAL TRADE COMMISSION
Washington, DC 20436
FACTUAL HIGHLIGHTS
Superabsorbent Polymers from South Korea
Investigation No. 731-TA-1574 (Preliminary)
Product Description: The merchandise covered by this investigation is superabsorbent polymers (SAP), which is cross-linked sodium polyacrylate most commonly conforming to Chemical Abstracts Service (CAS) registry number 9003-04-7, where at least 90 percent of the dry matter, by weight on a nominal basis, corrected for moisture content, is comprised of a polymer with a chemical formula of (C3H3O2NaxH1-x)n, where x is within a range of 0.00-1.00 and there is no limit to n. The subject merchandise also includes merchandise with a chemical formula of {(C2H3)COONayH(1-y)}n, where y is within a range of 0.00-1.00 and there is no limit to n. The subject merchandise includes SAP which is fully neutralized as well as SAP that is not fully neutralized. The subject merchandise may also conform to other CAS numbers. All forms and sizes of SAP, regardless of packaging type, including but not limited to granules, pellets, powder, fibers, flakes, liquid, or gel are within this investigation. It also includes SAP whether or not it incorporates additives for anticaking, anti-odor, anti-yellowing, or similar functions. The investigation also includes SAP that is combined, commingled, or mixed with other products after final sieving. For such combined products, only the SAP component is covered in this investigation.
Status of Proceedings:
1. Type of investigation: Preliminary antidumping duty investigation.
2. Petitioners: Ad Hoc Coalition of American SAP Producers, whose members include BASF Corporation, Florham Park, NJ; Evonik Superabsorber LLC, Greensboro, NC; and Nippon Shokubai America Industries, Inc., Pasadena, TX.
3. USITC Institution Date: Tuesday, November 2, 2021.
4. USITC Conference Date: Tuesday, November 23, 2021.
5. USITC Vote Date: Wednesday, December 15, 2021.
6. USITC Notification to Commerce Date: Friday, December 17, 2021.
U.S. Industry in 2020:
1. Number of U.S. producers: 3.
2. Location of producers’ plants: Louisiana, North Carolina, and Texas.
3. Production and related workers: 368.
4. U.S. producers’ U.S. shipments: $462 million.
5. Apparent U.S. consumption: 1
6. Ratio of subject imports to apparent U.S. consumption: 1
U.S. Imports in 2020:
1. Subject imports: [1]
2. Nonsubject imports: 1
3. Leading import sources: South Korea, the European Union, and Japan.
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[1] Withheld to avoid disclosure of business proprietary information.
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FAS China: U.S. Turkeys Return to the Spotlight - USDA
12/9/21 - After a gap of six years, whole U.S. turkeys are back on the menu in the People’s Republic of China (China). Promotional events were in full swing throughout the month of November across China by the U.S. Agricultural Trade Offices (ATO) of the U.S. Department of Agriculture, Foreign Agricultural Service. ATOs and their partners in Beijing, Shanghai, Guangzhou, Shenyang, and Wuhan spotlighted U.S. turkeys (provided by the USA Poultry and Egg Export Council), with recipe ideas at markets, presentations about Thanksgiving dinner traditions and typical side dishes to local shoppers, and a traditional Thanksgiving dinner for key hotel and restaurant interlocutors. These events were designed to increase awareness of the U.S. turkey – and Thanksgiving purchases – with food bloggers and influencers, hospitality managers and hoteliers, regional food importers and distributors, retail market consumers, and even with chefs and culinary schools in China.
U.S. turkeys were not available in China because of a ban on U.S. poultry beginning in January 2015, due to a December 2014 outbreak of avian influenza. The long-awaited return of turkeys was made possible by two major developments in the U.S.-China trade relationship. First, the Government of China lifted its ban on poultry imports from the United States in November 2019, opening the door for American poultry farmers to export more than $1 billion worth of poultry and poultry products each year to the country. Further progress for poultry was achieved in 2020, when the United States and China entered into the U.S.-China Phase One Economic and Trade Agreement to address structural barriers to trade and support expanding exports of U.S. food, agriculture and seafood products. China’s government maintains regularly updated lists of U.S. facilities that are eligible to export beef, pork, poultry, seafood, dairy, and infant formula products to its shores. More than 500 U.S poultry facilities are currently eligible to export to China, making more opportunities available for U.S. turkeys to be imported by China.
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CBP Warns Residents of Phone Scam - U.S. Customs & Border Protection
GRAND FORKS N.D. — A telephone scam is targeting residents nationwide in an attempt to gain banking information from unsuspecting residents.
U.S. Customs and Border Protection agents and officers nationwide are continuing to receive numerous calls from residents concerned about unsolicited calls from scammers posing as U.S. Border Patrol agents and U.S. Customs and Border Protection officers. Residents are reporting the calls are a pre-recorded message stating, “a box of drugs and money being shipped has your (callers) name on it and it has been intercepted.” The caller is then instructed to press #1 to speak with a CBP Officer/Agent, which then attempts to get the callers banking information. There have also been reports of this same type of scam, however, the caller is an actual person, not a pre-recorded message.
These calls, whether a pre-recorded message or live person, are phone scams/phishing attempts and residents are urged to not provide the caller with any information. The Department of Homeland Security and CBP does not solicit money over the phone. If such calls are received, people should make a note of the number, any pertinent details about the call/caller, and immediately hang up. Residents are encouraged to report the incidents as soon possible. Phone scams can be reported to the Federal Trade Commission online at https://reportfraud.ftc.gov/.
“I encourage everyone who receives one of these scam calls to report it,” said Grand Forks Sector Border Patrol Chief Anthony S. Good. “Remember to keep your personal information safe and just hang up when solicited by one of these scammers.”