**CBP Announces Issuance of "Known Importer Letters" under UFLPA - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
On April 12, 2022, CBP posted an announcement of its intention to issue “Known Importer Letters” in advance of the June 21st effective date of the rebuttable presumption under the Uyghur Forced Labor Prevention Act (UFLPA).
Under the UFLPA, CBP will presume that goods were imported in violation of the forced labor statute if they were mined, produced, or manufactured wholly or in part in China’s Xinjiang Uyghur Autonomous Region (“XUAR”) or by an entity on a list required to be developed under the statute. Exceptions will apply where the CBP commissioner determines: a) that the importer has fully complied with guidance to be established under the UFLPA and has completely and substantively responded to all associated CBP inquiries; and, b) by clear and convincing evidence, that the goods were not produced, wholly or in part, by forced labor.
In its announcement, CBP indicates that it will be issuing letters to parties identified as having previously imported merchandise that may be subject to the UFLPA to encourage them to examine and address any forced labor issues in their supply chains in a timely manner. The announcement goes on to state that all importers (regardless of whether they receive a letter) are expected to review their supply chains thoroughly and institute reliable measures to ensure imported goods are not produced wholly or in part with convict labor, forced labor, and/or indentured labor (including forced or indentured child labor).
The announcement regarding the issuance of “Known Importer Letters” further signals CBP’s intention to robustly enforce the UFLPA. It serves as the latest reminder to importers that they are expected to enact supply chain due diligence programs which address raw material acquisitions and each step of the production process with the requirements of the UFLPA in mind. We are available to assist in this regard.
Should you have any questions, please do not hesitate to contact Arthur Bodek, Heather Litman or any GDLSK attorney.
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Federal Register Notices:
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Polyethylene Terephthalate Resin From the People's Republic of China and India: Continuation of Countervailing Duty Orders
• Wooden Bedroom Furniture From the People's Republic of China: Final Results of Antidumping Duty Administrative Review; 2020
• Certain Oil Country Tubular Goods From the Socialist Republic of Vietnam: Final Results of Antidumping Duty Administrative Review; 2019-2020
• Certain Carbon and Alloy Steel Cut-to-Length Plate From the Republic of Korea: Final Results and Partial Rescission of Countervailing Duty Administrative Review; 2019; Correction
• Investigations; Determinations, Modifications, and Rulings, etc.: Certain In Vitro Fertilization Products, Components Thereof, and Products Containing the Same; Notice of Commission Final Determination To Issue a Limited Exclusion Order and a Cease and Desist Order; Termination of the Investigation
• Iron Construction Castings From Brazil, Canada, and China; Scheduling of Expedited Five-Year Reviews
• Initiation of Antidumping and Countervailing Duty Administrative Reviews
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Steel Concrete Reinforcing Bar From the Republic of Turkey: Final Results of Countervailing Duty Administrative Review and Rescission, in Part; 2019
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Polyethylene Terephthalate Resin From Canada, the People's Republic of China, India, and the Sultanate of Oman: Continuation of the Antidumping Duty Orders
• Investigations; Determinations, Modifications, and Rulings, etc.: Certain Mobile Access Equipment and Subassemblies Thereof From China
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes From Mexico: Final Results of Antidumping Duty Administrative Review; 2019-2020
• Certain Mobile Access Equipment and Subassemblies Thereof From the People's Republic of China: Antidumping Duty Order
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses From China and Indonesia; Scheduling of Expedited Five-Year Reviews
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FTC Uses Penalty Offense Authority to Seek Largest-Ever Civil Penalty for Bogus Bamboo Marketing from Kohl’s and Walmart - Federal Trade Commission
The Federal Trade Commission used its Penalty Offense Authority today to take action against national retailers Kohl’s, Inc. and Walmart, Inc. for falsely marketing dozens of rayon textile products as bamboo. Both companies also are charged with making deceptive environmental claims, touting that the “bamboo” textiles were made using ecofriendly processes, while in reality converting bamboo into rayon requires the use of toxic chemicals and results in hazardous pollutants.
The Commission has asked the court to order Kohl’s and Walmart to stop making deceptive green claims or using other misleading advertising, and pay penalties of $2.5 million and $3 million, respectively, by far the largest penalties in this area. The complaints and proposed orders were filed by the U.S. Department of Justice on the FTC’s behalf.
“Kohl’s and Walmart are paying millions of dollars under the FTC’s Penalty Offense Authority for mislabeling their rayon products as bamboo,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “False environmental claims harm both consumers and honest businesses, and companies that greenwash can expect to pay a price.”
The FTC’s complaints against Kohl’s and Walmart are similar in their structure and allegations. According to the complaints, since at least January 2015, Kohl’s, headquartered in Menomonee Falls, Wisconsin, and Walmart, based in Bentonville, Arkansas, have each marketed at least two dozen items as made of bamboo in both product titles and descriptions. In addition, the companies have marketed some of the “bamboo-derived” products as providing general environment benefits, such as being produced “free of harmful chemicals, using clean, non-toxic materials.”
As the complaints allege, Kohl’s and Walmart’s supposed “bamboo” textiles are actually made of rayon derived from bamboo, which was not disclosed to consumers, in violation of the FTC Act and the Textile Act and Rules. Further, the complaints allege the claimed environmental benefits of the products are false and misleading because the rayon manufacturing process uses toxic chemicals and results in the emission of hazardous pollutants.
Enforcement Action
The proposed orders settling the FTC’s complaints against Kohl’s and Walmart prohibit the companies from conduct alleged in the complaint. The companies must:
• Shut down bogus bamboo marketing claims: Stop claiming that a textile product is made of bamboo or bamboo fiber, unless they can substantiate it;
• Stop making unsubstantiated green marketing claims: For products made of bamboo or bamboo fiber, stop claiming that it is produced free of harmful chemicals, using non-toxic materials, or in a way that is safe for the environment or non-polluting, or has any other environmental benefits because it is derived from bamboo, unless they can substantiate it;
• Stop Textile Rule violations: Stop violating the FTC’s Textile Act and Rules by deceptively advertising textile contents; and
• Pay $5.5 million in penalties: Kohl’s and Walmart must pay civil penalties of $2.5 million and $3 million, respectively, under the FTC’s Penalty Offense Authority.
The FTC’s Penalty Offense Authority enables the agency to seek civil penalties provided that: 1) the company knew the conduct was unfair or deceptive in violation of the FTC Act; and 2) the FTC had already issued a written decision that such conduct is unfair or deceptive. Over the last six months, the Commission has revived this authority and expanded it to address false earnings claims, false job placement claims, and deceptive reviews.
In conjunction with this announcement, the FTC is reviving additional Notices of Penalty Offenses that were issued in the 1970s or 1980s but remain valid and relevant today. These notices cover, for example, textiles, energy savings, fur products, home improvement products, auto rentals, bait and switch, toys, and weight reduction. Businesses in these industries should familiarize themselves with the Commission’s determinations in these areas.
The Commission vote to authorize the staff to refer the complaints to the DOJ and to approve the proposed orders was 4-0. The DOJ filed the complaints and proposed orders on behalf of the Commission in U.S. District Court for the District of Columbia.
NOTE: The Commission authorizes the filing of a complaint when it has “reason to believe” that the named defendants are violating or are about to violate the law and it appears to the Commission that a proceeding is in the public interest. Consent orders have the force of law when approved and signed by the District Court judge.
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$81 Million in Fake Watches Intercepted by Louisville CBP in 6 Months - U.S. Customs & Border Protection
LOUISVILLE, Ky — Cheap, gaudy, and worthless is how you can characterize the more than 3,200 counterfeit designer watches U.S. Customs and Border Protection (CBP) officers in Louisville have seized since October 1 through March.
The 3,229 counterfeit watches bore the names of Rolex, Audemar Piguet, Cartier, Gucci, and the ever- popular Richard Mille trademarked logos. The shipments were mostly from China and were destined for addresses all over the U.S. Had these watches been real the Manufacturer’s Retailed Price would have been north of $81.5 million.
“Legitimate cross-border trade powers the U.S. economy,” said LaFonda D. Sutton-Burke, Director, Field Operations-Chicago Field Office. “As trade grows at unprecedented rates, our officers are working hard to identify threats and shut down illicit suppliers.”
E-Commerce sales have contributed to large volumes of low-value, small packages being imported into the United States. Over 90 percent of all counterfeit seizures occur in the international mail and express environments which are channels that small, e-commerce packages destined for U.S. addresses travel through. Many of these shipments contain counterfeit goods that pose the same health, safety, and economic security risks as large, containerized shipments. Make sure to shop from reputable sources online. To learn more about CBP’s E-Commerce strategy, visit CBP’s E-Commerce website.
“Consumers should be aware that if a known high-value brand is being offered for an unusually low price, it could very well be fake. CBP encourages the use of reputable vendors for your valuable purchases,” said Thomas Mahn, Port Director-Louisville. “Our officers are dedicated to preventing counterfeiters from defrauding consumers and legitimate businesses.”
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 and potentially dangerous.
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.
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
ttps://www.cbp.gov/FakeGoodsRealDangers.
CBP conducts operations at ports of entry throughout the United States, and regularly screens arriving international passengers and cargo for narcotics, weapons, and other restricted or prohibited products. CBP strives to serve as the premier law enforcement agency enhancing the Nation’s safety, security, and prosperity through collaboration, innovation, and integration.
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Counterfeit Scarves Worth Over $285K Seized - U.S. Customs & Border Protection
ALEXANDRIA BAY, N.Y. – U.S. Customs and Border Protection (CBP) officers at the Alexandria Bay Port of Entry seized designer scarves worth more than $285,000, due to trademark violations.
Earlier this month, a shipment that was manifested as "clothing" was seized after a thorough examination determined the contents to be counterfeit scarves. A total of 588 scarves were seized by CBP, as they violated Intellectual Property Rights (IPR) of the Louis Vuitton trademark. This week, CBP officers determined that the scarves had a total Manufacturers Suggested Retail Price (MSRP) value of approximately $285K dollars.
IPR violations pertain to products that infringe upon U.S. trademarks, copyrights, and patents. Other violations can include misclassification of merchandise, false country-of-origin markings, health and safety issues, and valuation issues. These violations can threaten the health and safety of American consumers, the economy and national security.
“Our CBP officers focus on processing legitimate trade and travel and do a great job of intercepting fraudulent goods,” said Alexandria Bay Port Director Timothy Walker. “We continue to have a pivotal role in protecting both the consumer and businesses from imported counterfeit items.”
If you have information about counterfeit merchandise being illegally imported into the U.S., CBP encourages you to submit an E-Allegation. The E-Allegation 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 into the U.S.
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FTC Enforces New Made in USA Rule against Lithionics and Owner Steven Tartaglia for Falsely Labeling Foreign-Made Batteries as American - Federal Trade Commission
The Federal Trade Commission (FTC) today used its authority under the Made in USA Labeling Rule, which took effect on Aug. 13, 2021, to bring a complaint against Lithionics Battery LLC and its owner, Steven Tartaglia for illegally misrepresenting that its lithium ion cells are made in the United States. The FTC’s complaint alleges that, since at least 2018, Lithionics has falsely labeled its battery products with an American flag image surrounded by the words “Made in U.S.A.,” often accompanied by the statement “Proudly Designed and Built in USA,” when these products are primarily made overseas. The Commission is asking the court to order Lithionics and Tartaglia to stop making deceptive Made in USA claims and pay a penalty for Lithionics’ past claims.
“As our country works to onshore production of lithium ion batteries, it’s critical that honest businesses have a chance to compete, and that consumers can buy American,” said Sam Levine, Director of the FTC’s Bureau of Consumer Protection. “Falsely labeling batteries as made in the United States is against the law, and the FTC is using its new Made in USA rule to make sure this misconduct comes with a price.”
Florida-based Lithionics designs and sells battery products for recreational vehicles, amusement park rides, marine applications, and low-speed electric vehicles. Although the defendants have repeatedly represented that their battery, battery module, and battery management system products are all or virtually all made in the United States, in fact all Lithionics battery and battery module products incorporate imported lithium ion cells, and all Lithionics battery management systems incorporate significant imported components.
Photographs of products bearing this label and other Made in USA claims appeared on the company website, on its social media accounts, and in mail order catalogs, according to the complaint. YouTube videos featured Tartaglia and other employees printing Made in USA labels and putting them on Lithionics products. Lithionics published a chart in its marketing materials juxtaposing its own products with “imports,” and highlighting “advantage[s] of Lithionics battery systems” over imported competing products. Lithionics also misrepresented in mail order catalogues that its products were made in the United States.
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