CBP Issues UFLPA Operational Guidance - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
On June 13, 2022, CBP issued its operational guidance as to how it will process shipments under the Uyghur Forced Labor Prevention Act (“UFLPA” or “the Act”) that will take effect on June 21st. Under this statute goods made wholly or in part in Xinjiang, or by entities identified on a forthcoming UFLPA Entity List, will be presumed to be made using forced labor and, hence, inadmissible. This CBP guidance is separate from an enforcement strategy and associated guidance to be issued by a multi-agency Forced Labor Enforcement Task Force (“FLETF”) on June 21st. Previous GDLSK bulletins and information on the UFLPA may be accessed here.
Under the CBP guidance, the agency may take various enforcement actions (to include decisions to detain, exclude, and/or seize and forfeit shipments) with respect to goods covered by the Act.
An importer may contest the detention of a shipment within 30 days from the date the merchandise was presented for examination to CBP. Although not set forth in the guidance, CBP has indicated that the importer may request an extension of the detention period. A challenge to a detention may either demonstrate that the goods: a) are not covered by the UFLPA because they and their inputs are sourced completely from outside Xinjiang and have no connection to entities on the UFLPA Entity List; or, 2) although covered by the Act, an exception applies because no forced labor was used. In its guidance, CBP identifies the type of documentation it will require with respect to each type of importer response. CBP also identifies additional documentary considerations with respect to cotton, polysilicon and tomatoes.
In the event that the importer does not timely provide a response that satisfies CBP that the forced labor presumption has been rebutted, the detained goods will be excluded. An exclusion may be challenged by the filing of an administrative protest. The guidance also indicates that CBP may seize goods that violate the Act. A seizure may be challenged through the Fines, Penalties and Forfeitures petition process.
We are available to help importers in understanding the CBP guidance and to discuss steps that should be taken in preparation for UFLPA enforcement actions. Please contact Arthur Bodek or any other GDLSK attorney with questions or to discuss further.
UFLPA Operational Guidance for Importers - U.S. Customs & Border Protection
CBP has released importer guidance to assist the trade community in preparing for the implementation of the UFLPA rebuttable presumption that goes into effect on June 21, 2022. Please be aware that this is CBP’s importer guidance, which provides transparency to CBP’s operational approach, and not the Forced Labor Enforcement Task Force’s Strategy, which will provide additional importer guidance, required by the UFLPA.
UFLPA Operational Guidance for Importers
Federal Register Notices:
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Polyethylene Retail Carrier Bags From the People's Republic of China: Final Determination of No Shipments; 2020-2021
• Pure Magnesium From the People's Republic of China: Final Results of Expedited Fifth Sunset Review of the Antidumping Duty Order
• Coated Paper Suitable for High-Quality Print Graphics Using Sheet-Fed Presses From Indonesia and the People's Republic of China: Continuation of Antidumping and Countervailing Duty Orders
• Certain Steel Nails From Taiwan: Preliminary Results of Antidumping Duty Administrative Review, Preliminary Determination of No Shipments, and Partial Rescission of Review; 2020-2021
• Citric Acid and Certain Citrate Salts From Belgium: Notice of Initiation and Preliminary Results of Antidumping Duty Changed Circumstances Review
• Final Results of Fifth Sunset Review and Revocation of Order: Helical Spring Lock Washers From People's Republic of China and Taiwan: Final Results of Fifth Sunset Review and Revocation of Order
• Investigations; Determinations, Modifications, and Rulings, etc.: Certain Electronic Devices and Semiconductor Devices With Timing-Aware Dummy Fill and Components Thereof; Institution of Investigation
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Antidumping Duty Orders on Sulfanilic Acid From India and the People's Republic of China and Countervailing Duty Order on Sulfanilic Acid From India: Final Results of Sunset Reviews and Revocation of Orders
• Investigations; Determinations, Modifications, and Rulings, etc.: Certain Integrated Circuit Products and Devices Containing the Same; Commission Determination Not To Review an Initial Determination Granting Complainant's Motions To Terminate the Investigation Based on Withdrawal and Settlement; Termination of the Investigation In Its Entirety
• Pure Magnesium From China; Notice of Commission Determination To Conduct a Full Five-Year Review
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Quartz Surface Products From India: Preliminary Results and Rescission in Part of Countervailing Duty Administrative Review; 2019-2020
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Multilayered Wood Flooring From the People's Republic of China: Final Results and Partial Rescission of Countervailing Duty Administrative Review; 2019
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Hot-Rolled Steel Flat Products From Australia, Brazil, Japan, Korea, Netherlands, Russia, Turkey, and the United Kingdom; Scheduling of Full Five-Year Reviews
OTEXA: Announcements - Office of Textile & Apparel
06/07/2022 – March 2022 Textile and Apparel Import Report
06/14/2022 - The U.S. Customs and Border Protection (CBP) has released importer guidance to assist the trade community in preparing for the implementation of the Uyghur Forced Labor Prevention Act (UFLPA) rebuttable presumption that goes into effect on June 21, 2022. The UFLPA requires CBP to apply a presumption that imports of all goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China, or by entities identified by the U.S. government on the UFLPA Entity List, are presumed to be made with forced labor and are prohibited from entry into the United States. See the UFPLA Operational Guidance for Importers on the CBP website
United States and Kenya Discuss Further Trade Engagement - U.S. Trade Representative
GENEVA – United States Trade Representative Katherine Tai and Kenya's Ministry of Industrialization, Trade and Enterprise Development Cabinet Secretary Betty Maina met today on the margins of the World Trade Organization's 12th Ministerial Conference. This followed a successful consultative meeting of experts from the two countries held in Kenya in May 2022 on ways to enhance trade and investment relations between the two countries. Ambassador Tai and Cabinet Secretary Maina agreed to explore pathways towards a deeper bilateral trade and economic relationship that: promotes sustainable and inclusive economic growth; benefits workers, consumers, and businesses (including micro-, small-, and medium-sized enterprises); and supports African regional economic integration.
They discussed a number of issues where the United States and Kenya could develop an ambitious roadmap for enhanced cooperation and, where appropriate, explore negotiating high-standard commitments. The issues discussed include trade facilitation and customs, standards, services digital trade, environment and climate change, and agriculture. As a next step, the two countries will work to finalize a list of areas for cooperation to deepen economic engagement, and the two ministers agreed to meet again in the coming weeks to announce next steps.
FMC Approves $2 Million Settlement Agreement with Hapag-Lloyd - Federal Maritime Commission
The Federal Maritime Commission today approved a settlement agreement reached between its Bureau of Enforcement (BoE) and Hapag-Lloyd AG (Hapag-Lloyd) where the ocean carrier will pay a $2 million civil penalty to address alleged violations related to their detention and demurrage practices.
“To restore full confidence in our ocean freight system, vigorous enforcement of FMC rules is necessary. Specifically, we must ensure powerful ocean carriers obey the Shipping Act when dealing with American importers and exporters. The case that was concluded today is just part of an ongoing effort to investigate any conduct alleged to violate FMC rules – and in particular, the interpretive rule on detention and demurrage charges,” Chairman Daniel Maffei said.
Today’s order approving the settlement agreement follows an April 22, 2022, Initial Decision issued by the Commission’s Administrative Law Judge (ALJ) finding Hapag-Lloyd violated the law by knowingly and willfully failing to establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing or delivery property, by unreasonably refusing to waive detention charges, in violation of 46 USC 41102(c). The ALJ ordered an $822,220 civil penalty and for Hapag-Lloyd to cease and desist their violative actions. The case, Hapag-Lloyd, A.G. and Hapag-Lloyd (American) LLC—Possible Violations 46 USC 41102(c) (Docket No. 21-09), was initiated by the Commission on November 10, 2021, at the request of BoE and following their investigative work.
The $2 million civil penalty will be paid to the U.S. Department of the Treasury and will be deposited into the General Fund.
One Parcel Worth $22.5 Million Seized by CBP Officers in Louisville - U.S. Customs & Border Protection
LOUISVILLE, Ky — Over 90% of all U.S. Customs and Border Protection (CBP) counterfeit seizures occur in the international mail and express consignment environments, and June 2 was no exception. CBP officers in Louisville seized a parcel containing counterfeit designers watches that, if real, would have had a Manufacturer’s Retailed Price (MSRP) over $22.5 million.
The 584 counterfeit watches bore two trademarked logos: Rolex and Cartier. The shipment was arriving from an individual in Hong Kong and was destined for a resident in Jamaica, New York. Had these watches been real, the MSRP would have been $22.59 million.
“Intellectual property theft threatens America’s economic vitality and funds criminal activities and organized crime,” said LaFonda D. Sutton-Burke, Director, Field Operations-Chicago Field Office. “Our officers are dedicated to protecting private industry and consumers by removing these kinds of shipments from our commerce.”
E-Commerce sales have contributed to large volumes of low-value, small packages being imported into the United States. During the last four fiscal years, seized counterfeit watches have been worth the most according to their MSRP- last year that total was $1.18 billion. Consumer should make sure they shop from reputable sources online. To learn more about CBP’s E-Commerce strategy, visit CBP’s E-Commerce website.
“Consumers are always looking for the best deal, the unfortunate part is criminals are also online pedaling their counterfeit products,” said Thomas Mahn, Port Director-Louisville. “Our CBP officers will continue to seize counterfeit items that threaten the safety and health of consumers and weaken the U.S. economy.”
This seizure was just one of many that happened that night. Another parcel contained six counterfeit Richard Millie watches that would have been worth $755,000 had they been genuine.
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.
Trade in counterfeit and pirated goods threatens America’s innovation, the competitiveness of our businesses, the livelihoods of U.S. workers and, in some cases, the health and safety of consumers and U.S. national security. CBP is on the frontline of Intellectual Property Rights (IPR) enforcement, partnering with industry, other federal agencies, and foreign governments to fight cross-border trade of harmful and dangerous illicit goods.
When rights holders record their federally registered trademarks and copyrights with CBP, the agency can enforce those rights to protect them at the border. As of September 30, 2021, CBP was enforcing 20,758 active recorded copyrights and trademarks. In FY2021, CBP seized over 27,000 shipments with IPR violations. If the seized products were genuine, the total MSRP of the items would have been valued at over $3.3 billion. This represents a 152% increase compared to FY2020, when goods valued at $1.31 billion MSRP were seized for IPR violations. A return to pre-pandemic trading levels and an overall increase in the number of CBP seizures of counterfeit products account for the significant rise in MSRP.
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.
Commercial Flooring Contractor and Its Former President Plead Guilty to Antitrust Charges - Department of Justice
Fourth Corporation and Seventh Individual Charged in an Ongoing Investigation
Commercial Carpet Consultants Inc., a Chicago-based commercial flooring contractor, and its former president, Jerry P. Watson, have been charged for a long-running conspiracy to rig bids and fix prices for commercial flooring products and services.
Commercial Carpet Consultants Inc. pleaded guilty to a violation of the Sherman Antitrust Act and agreed to pay a $1.2 million criminal fine. It is the fourth corporation charged in the ongoing investigation. Jerry P. Watson also pleaded guilty and is the sixth individual to plead guilty in the investigation.
“The Antitrust Division and its law enforcement partners are committed to safeguarding competition in the American marketplace,” said Assistant Attorney General Jonathan Kanter of the Department of Justice’s Antitrust Division. “These latest guilty pleas in the government’s investigation demonstrate our commitment to prosecuting anticompetitive conduct and holding companies and executives accountable.”
“There is no place for illegal price-fixing in the American marketplace,” said Special Agent in Charge Emmerson Buie Jr. of the FBI’s Chicago Field Division. “Anyone looking to profit by market manipulation should know that we won’t stop investigating unlawful collusion until justice is done.”
According to the one-count felony charge and plea agreements filed in U.S. District Court in Chicago, Illinois, from at least as early as 2009 until at least June 22, 2017, the defendants engaged in a conspiracy to suppress and eliminate competition in the commercial flooring market by agreeing with other companies and individuals to submit complementary bids so that the designated company would win the contract.
A violation of the Sherman Act carries a statutory maximum penalty of a $100 million criminal fine for corporations. For individuals, violations of the Sherman Act carry maximum penalties of 10 years in prison and a $1 million criminal fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either of those amounts is greater than the statutory maximum fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The charges are the result of an ongoing federal antitrust investigation into bid rigging, price fixing and other anticompetitive conduct in the commercial flooring industry, conducted by the Antitrust Division’s Chicago Office and the FBI’s Chicago Field Division.