USTR Further Extends China 301 Exclusions on 81 "Covid Items" - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
In a notice scheduled to be published in the Federal Register on February 7, 2023, the office of the U.S. Trade Representative (USTR) announced that it is again extending the China 301 tariff exclusions on 81 “COVID items” which would have otherwise expired on February 28, 2023. The extensions will run through May 15, 2023. The specific items in question can be accessed here.
By way of background, the USTR had previously announced the extension or modification of a total of 99 exclusions for specified medical-care and/or COVID response products. The exclusions on 18 such items were allowed to expire while those on 81 other items were the subject of several extensions. As part of the continuing efforts to combat COVID, the USTR has determined that a further 75 day extension of the latter 81 COVID-related product exclusions is warranted.
Concurrently, in light of the fluctuating nature of the COVID situation and the increased domestic production of certain products covered by these 81 exclusions, the USTR is seeking comments on whether to extend particular exclusions for COVID products for up to six months. Comments will be accepted via a dedicated portal from February 6, 2023 to March 7, 2023.
Should you have questions in connection with the above or if we can assist in the filing of comments, please do not hesitate to contact Arthur Bodek or any of our other attorneys.
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2.7.2023 China 301 Litigation Update - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
On February 7, 2023, the U.S. Court of International Trade (CIT) heard oral argument in In Re Section 301 Cases, Court No. 21-00052, the lead case for the claims filed by thousands of importers challenging the imposition of Section 301 List 3 and List 4A additional tariffs against certain products from China. Previously, the CIT had found that the United States Trade Representative (USTR) had failed to establish that it had followed the procedural requirements of the Administrative Procedure Act (APA) when it promulgated List 3 and List 4A. The CIT had issued a remand to USTR to give the agency an opportunity to demonstrate that its actions complied with APA requirements.
The sole issue addressed in the oral argument was whether the 90-page remand report filed by USTR was sufficient to establish that the agency’s actions satisfied the APA. Specifically, the parties addressed whether USTR has shown that, prior to acting, it considered comments and testimony from the trade regarding the overall wisdom of the additional tariffs. Those comments addressed whether the aggregate trade levels that were targeted ($200B for List 3 and $300B for List 4) were too high and whether there were better alternatives to the additional tariffs, such as multilateral trade sanctions.
During the oral argument, the judges did seem concerned that there were no documents cited in the remand report directly showing that USTR had considered these issues. However, the judges gave little indication as to how they plan to rule. The options for the CIT are: 1) to order a second remand to USTR to provide further evidence; 2) to find that USTR has met the APA requirements; or 3) to find that USTR failed to meet its requirements and, as a result, the tariffs were unlawfully assessed and must be refunded.
A final decision from the CIT is likely to be issued in the spring. If the CIT were to order the parties to submit additional briefs, its decision could be delayed. In any event, an appeal to the U.S. Court of Appeals for the Federal Circuit is certain following the CIT’s final decision. If you have any questions regarding this case, please contact one of our attorneys.
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Federal Register Notices:
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Forged Steel Fluid End Blocks From Italy: Preliminary Results and Rescission of Antidumping Duty Administrative Review in Part; 2020-2021
• Uncovered Innerspring Units From the People's Republic of China: Final Results of Antidumping Duty Administrative Review; 2021-2022
• Investigations; Determinations, Modifications, and Rulings, etc.: COVID-19 Diagnostics and Therapeutics: Supply, Demand, and TRIPS Agreement Flexibilities
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Collated Steel Staples From the People's Republic of China: Final Results of Countervailing Duty Administrative Review; 2019-2020
• Fresh Garlic from the People's Republic of China: Final Results of Expedited Fifth Sunset Review of the Antidumping Duty Order
• Steel Concrete Reinforcing Bar From the Republic of Turkey: Final Results of Antidumping Duty Administrative Review and Final Determination of No Shipments; 2020-2021
• Forged Steel Fluid End Blocks from India: Preliminary Results of Countervailing Duty Administrative Review; 2020-2021
• Forged Steel Fluid End Blocks From Italy: Preliminary Results of Countervailing Duty Administrative Review, and Intent To Rescind Administrative Review in Part; 2020-2021
• Certain Corrosion-Resistant Steel Products From the Republic of Korea: Final Results and Partial Rescission of Countervailing Duty Administrative Review; 2020
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Steel Nails from Malaysia: Final Results of Antidumping Duty Administrative Review; 2020-2021
• Investigations; Determinations, Modifications, and Rulings, etc.: Certain Audio Players and Components Thereof (II); Notice of a Commission Determination Not To Review an Initial Determination Amending Complaint and Notice of Investigation
• Certain Refrigerator Water Filtration Devices and Components Thereof; Notice of Commission Decision Not To Review an Initial Determination Partially Terminating the Investigation as to Certain Respondents Based on Settlement; Request for Written Submissions on Remedy, the Public Interest, and Bonding
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Steel Nails from Malaysia: Final Results of Antidumping Duty Administrative Review; 2020-2021
• Certain Refrigerator Water Filtration Devices and Components Thereof; Notice of Commission Decision Not To Review an Initial Determination Partially Terminating the Investigation as to Certain Respondents Based on Settlement; Request for Written Submissions on Remedy, the Public Interest, and Bonding
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Steel Concrete Reinforcing Bar From the Republic of Turkey, Taiwan, and Japan: Continuation of Antidumping and Countervailing Duty Orders
• Prestressed Concrete Steel Wire Strand From Thailand: Preliminary Results of Antidumping Duty Administrative Review; 2021
• Certain Collated Steel Staples From the People's Republic of China: Final Results of Antidumping Duty Administrative Review; Final Determination of No Shipments; and Partial Rescission; 2020-2021
• Certain Carbon and Alloy Steel Cut-to-Length Plate From Austria, Belgium, Brazil, the People's Republic of China, France, the Federal Republic of Germany, the Republic of Korea, Italy, Japan, South Africa, Taiwan, and the Republic of Turkey: Continuation of Antidumping Duty Order (Austria, Belgium, the People's Republic of China, France, the Federal Republic of Germany, the Republic of Korea, Italy, Japan, South Africa, Taiwan, and the Republic of Turkey) and Revocation of Antidumping Duty Order (Brazil)
• Gray Portland Cement and Cement Clinker From Japan: Continuation of Antidumping Duty Order________________________________________________________________________________
2 Chicago CBP Interceptions Stop Counterfeit Merchandise & Cash - U.S. Customs & Border Protection
CHICAGO – U.S. Customs and Border Protection (CBP) officers at Chicago O’Hare International Airport were busy on February 1. Officers at the International Mail Facility (IMF) stopped over $76,000 of counterfeit currency, while officers performing baggage inspections inside the passenger terminal seized counterfeit merchandise, that would have had a Manufacturer’s Suggested Retail Price (MSRP) over $465,000 if it was genuine.
Overnight on February 1, officers at the IMF held five parcels for inspection that were arriving from different shippers in China. The officers inspected the shipments to determine the admissibility of the parcels and its contents. All five shipments contained counterfeit currency with denominations ranging from $1 to $100 bills totaling $76,054.
The shipments were heading to Houston and Mission, Texas, Greenbush, Minnesota, Oklahoma City, Oklahoma, and Morris, Illinois. Even though these counterfeits are marked and were going to be used as prop money, it is a violation of federal law to reproduce currency. Violators can be arrested. The counterfeit currency was turned over to Homeland Security Investigations and U.S. Secret Service for investigation.
“Today, criminals have relatively easy access to the technology, equipment and know-how required for counterfeiting. It is a lucrative business which is often used to finance criminal activities,” said Ralph Piccirilli, Acting Area Port Director-Chicago. “Criminal groups continuously target our citizens, businesses and the security of the United States financial structure hoping to make a quick buck and damage our economic system. Our officers are there to stop that threat to our nation.”
According to the U.S. Secret Service, special agents, and investigative analysts from around the country continue to work closely with state and local law enforcement partners to minimize risks by informing the public and by apprehending those responsible for passing counterfeit currency. Both consumers and retailers can protect themselves from inadvertently receiving counterfeit currency through scrutinizing banknotes during transactions.
While this seizure was wrapping up, another was unfolding inside Terminal 5. A returning U.S. citizen was referred to secondary baggage. There he stated he had purchased $1,000 in items while abroad in Turkey for family and friends. Officers inspected the baggage and found 61 designer watches, clothing, handbags, sunglasses, and jewelry. Had these items been real, the MSRP would have been $465,798.
“Counterfeit goods pose a very real threat to the safety and economic prosperity of the American people,” said LaFonda D. Sutton-Burke, Director, Field Operations-Chicago Field Office. “CBP will continue to use all methods at its disposal to ensure items entering the U.S. do not harm Americans and to foster a fair and competitive trade environment for American manufacturers.”
Counterfeiting and intellectual property rights piracy cost the U.S. economy between $200 billion and $250 billion per year, are responsible for the loss of 750,000 American jobs, and pose a threat to health and safety. CBP and HSI protect 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.
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. 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 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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CBP Modifies Withhold Release Order on YTY Industry Holdings Sdn Bhd (YTY Group) in Malaysia - U.S. Customs & Border Protection
Agency will no longer detain disposable gloves from YTY Group
WASHINGTON — U.S. Customs and Border Protection (CBP) has modified the Withhold Release Order (WRO) issued on January 28, 2022 against imports of synthetic disposable gloves manufactured by YTY Industry Holdings Sdn. Bhd. (YTY Group). Effective immediately, the U.S. will allow YTY Group shipments to enter the U.S. provided they are otherwise in compliance with U.S. laws. Shipments of YTY Group’s synthetic gloves received on or after February 8, 2023, will no longer be detained at U.S. ports of entry. This is the second modification the agency has issued in 2023.
“CBP is setting the global standard for responsible business practices through our forced labor enforcement,” said CBP Acting Commissioner Troy A. Miller. “This latest modification is further proof that CBP’s efforts are leading companies to find ways to change their practices to ensure forced labor is not in their supply chain.”
“This modification is yet another example of how CBP’s leadership in combatting forced labor is a catalyst for global action, improving living and working conditions for tens of thousands of workers around the world, and elevating the moral and ethical standard for goods entering the United States. We are witnessing a global shift in behavior from importers and businesses as they identify and eliminate forced labor from their supply chains so that they can do business in the U.S. We are proud to be a part of this positive change that directly impacts so many lives, and we will continue to prioritize this work until forced labor ceases to exist in U.S. supply chains,” said AnnMarie R. Highsmith, Executive Assistant Commissioner of CBP’s Office of Trade.
In January 2022, CBP issued a WRO against synthetic disposable gloves produced by YTY Group and its subsidiaries in Malaysia. CBP issued the WRO based on evidence reasonably indicating the presence of several International Labour Organization forced labor indicators within YTY Group’s production and employee housing facilities, including abuse of vulnerability, intimidation and threats, debt bondage, retention of identity documents, abusive living and working conditions, deception, and excessive overtime.
Since the implementation of the WRO, YTY Group has taken numerous actions to remediate forced labor indicators within its manufacturing process and employee housing facilities. YTY Group’s remediation efforts included drafting and implementing a corrective action plan to address indicators of forced labor, reimbursing recruitment fees paid by its migrant workers, commissioning an independent social compliance audit, and submitting comprehensive documentation which sufficiently demonstrates YTY Group’s sustained commitment to remediate conditions of forced labor in its production and housing facilities. Accordingly, CBP determined that YTY Group’s disposable gloves are no longer being produced using forced labor and, specifically, that the conditions of forced labor identified in the January 2022 WRO no longer exist.
19 U.S.C. § 1307 prohibits the importation of “[a]ll goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in Follow CBP Office of Trade on Twitter @CBPTradeGov.any foreign country by convict labor or/and forced labor or/and indentured labor … includ[ing] forced or indentured child labor.” When CBP has information reasonably indicating that imported goods are made by forced labor, the agency will order personnel at U.S. ports of entry to detain shipments of those goods. Such shipments will be excluded and subject to seizure and forfeiture if the importer fails to demonstrate proof of admissibility, in accordance with 19 CFR §12.43, or export the shipment.
CBP has established a process through which interested parties may request the modification or revocation of a WRO or Finding. The required evidence and timeline for modification or revocation may vary depending upon the specific circumstances of each individual case. CBP does not modify WROs or Findings until the agency has evidence demonstrating that the subject merchandise is no longer produced, manufactured, or mined using forced labor.
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CBP Agriculture Specialists Stop and Smell the Roses for a Pest-Free Valentine’s Day - U.S. Customs & Border Protection
Chrysanthemums, Murraya Not Permitted at Passenger Ports of Entry
SAN DIEGO – Valentine’s Day is just around the corner. U.S. Customs and Border Protection agriculture specialists are busy working at U.S. ports of entry to ensure that flowers that are being imported, are free from pests and diseases that could harm the agricultural and floral industry of the United States.
“We understand that travelers would like to bring unique gifts, especially flower bouquets for their loved ones; however, protecting the integrity of our floral and agriculture industry from invasive pests and diseases, is a top priority,” said Sidney Aki, CBP Director of Field Operations for the San Diego Field Office. “If established, these pests and diseases can have a severe impact on the economic vitality of our floral and agriculture industry within the United States.”
A common cut-flower called “Chrysanthemums” from Mexico, are prohibited through the passenger ports of entry. The current restrictions are to prevent fungi, such as “Chrysanthemum White Rust”, from entering the United States. Chrysanthemum White Rust is caused by the fungus Puccinia horiana P. Henn. If established in the U.S., this plant disease has the potential to have an extremely damaging impact on our agricultural and floral industry. To learn more about this type of plant disease, visit Chrysanthemum White Rust.
Additionally, certain types of cut greenery, that are used to fill a bouquet, may have pests and diseases. An example is the Murraya (common name “orange jasmine”) it is a host for Asian citrus psyllid; a dangerous pest found in citrus. If any portion of a bouquet has pests, the entire bouquet will be confiscated upon entry into the United States.
Roses, carnations, and many other flowers are allowed into the United States after they undergo inspection. However, plants for growing require a permit to be admissible, and soil cannot be imported from Mexico. Travelers must declare all flowers and plants to CBP officers.
If a traveler declares a bouquet that has prohibited flowers and greenery, it will be seized. If it does not, CBP agriculture specialists will inspect the bouquet for pests and diseases. If CBP agriculture specialists do not discover any pests or diseases, the traveler will be allowed to keep the bouquet and enter the U.S.
CBP encourages travelers to declare all agricultural items to a CBP officer upon arrival to avoid penalties. Travelers should not attempt to bring fruits, vegetables, or meats into the United States without first confirming they are permitted. Raw eggs and poultry from Mexico are prohibited and will be confiscated at the port. For more information, travelers are encouraged to visit the Bringing Agricultural Products into the United States section of the CBP website.
CBP officers at the border crossing in Southern California stop illegal activity while processing millions of legitimate travelers into the United States. Those statistics can be found here: CBP-enforcement-statistics.
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OTEXA: Announcements - Office of Textile & Apparel
• [2/07/2022] – December 2022 (Full Year) Textile and Apparel Import Report
• [2/07/2022] – The Office of the U.S. Trade Representative (USTR) extends the exclusion of products from additional duties imposed under the Section 301 investigation of China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation. USTR has extended exclusions for 81 COVID related products through May 15, 2023 to allow for consideration of public comments regarding whether to further extend particular exclusions. The public docket for interested persons to submit comments will be open until March 7, 2023. For more details see Federal Register notice 88 FR 8027. USTR previously extended the exclusion of 352 products from additional duties through September 30, 2023. For more details see Federal Register notice 87 FR 78187.
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Treasury Sanctions Companies Involved in Production, Sale, and Shipment of Iranian Petrochemicals and Petroleum - U.S. Department of Treasury
WASHINGTON — Today (2/9/23), the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned nine entities across multiple jurisdictions that have played a critical role in the production, sale, and shipment of hundreds of millions of dollars’ worth of Iranian petrochemicals and petroleum to buyers in Asia. Treasury is targeting six Iran-based petrochemical manufacturers or their subsidiaries, and three firms in Malaysia and Singapore involved in facilitating the sale and shipment of petroleum and petrochemicals on behalf of Triliance Petrochemical Co. Ltd., which OFAC designated on January 23, 2020 for facilitating the sale of Iranian petroleum products from the National Iranian Oil Company (NIOC).
“Iran increasingly turning to buyers in East Asia to sell its petrochemical and petroleum products, in violation of U.S. sanctions,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. “The United States remains focused on targeting Tehran’s sources of illicit revenue, and will continue to enforce its sanctions against those who wittingly facilitate this trade.”
Today’s action was taken pursuant to Executive Order (E.O.) 13846 and follows OFAC’s November 17, 2022 designation of 13 companies in the UAE and Hong Kong for facilitating the sale of Iranian petrochemicals and petroleum products to buyers in East Asia on behalf of Triliance and sanctioned Iranian petrochemical broker Persian Gulf Petrochemical Industry Commercial Co. (PGPICC), as well as on behalf of NIOC and its marketing arm, Naftiran Intertrade Company Ltd. (NICO).
IRANIAN PETROCHEMICAL PRODUCERS
OFAC is designating Iranian petrochemical producer Amir Kabir Petrochemical Company (AKPC), a major polyethylene producer. Triliance has purchased millions of dollars’ worth of low density polyethylene (LDPE) produced by AKPC for shipment to buyers in the People’s Republic of China (PRC). OFAC is also adding Simorgh Petrochemical Company, a fully owned subsidiary of AKPC, to the List of Specially Designated Nationals and Blocked Persons (“SDN List”).
OFAC is designating AKPC pursuant to E.O. 13846 for, on or after November 5, 2018, having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Triliance. OFAC is adding Simorgh Petrochemical Company to the SDN List for being owned in the aggregate, directly or indirectly, 50 percent or more by AKPC.
OFAC is also taking action against four subsidiaries of Iran’s Marun Petrochemical Company, which OFAC designated on June 16, 2022 for its role in supplying millions of dollars’ worth of petrochemicals to Triliance. Iran-based Laleh Petrochemical Company, Marun Tadbir Tina Company, Marun Sepehr Ofogh Company, and Marun Supplemental Industries Company, each of which operate in different capacities within the petrochemical and industrial sectors, are majority- or fully owned by Marun Petrochemical Company.
OFAC is adding Laleh Petrochemical Company, Marun Tadbir Tina Company, Marun Sepehr Ofogh Company, and Marun Supplemental Industries Company to the SDN List for being owned in the aggregate, directly or indirectly, 50 percent or more by Marun Petrochemical Company.
TRILIANCE NETWORK ENABLERS
Since late 2021, Singapore-based Asia Fuel PTE. Ltd. (Asia Fuel) has facilitated the shipment of petroleum products worth millions of dollars to customers in East Asia. Asia Fuel also arranged to pay storage fees on behalf of Triliance to house petroleum products in a Malaysia-based floating storage vessel.
Sense Shipping and Trading SDN. BHD. (Sense Shipping) is a Kuala Lumpur, Malaysia-based front company for Triliance that has facilitated Triliance’s shipment of tens of thousands of metric tons of petrochemicals to foreign customers. Sense Shipping previously operated under the name Eastchem Shipping SDN. BHD.
Singapore-based Unicious Energy PTE. Ltd. serves an important role in Triliance’s network, coordinating millions of dollars in petroleum-related payments for other companies within the network and aiding Triliance in its sale of hundreds of millions of dollars of petroleum products.
OFAC is designating Asia Fuel PTE. Ltd., Sense Shipping and Trading SDN. BHD., and Unicious Energy PTE. Ltd., pursuant to E.O. 13846 for, on or after November 5, 2018, having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Triliance, a person included on the SDN List whose property and interests in property are blocked pursuant to section 1(a) of E.O. 13846.
SANCTIONS IMPLICATIONS
As a result of today’s action, all property and interests in property of these targets that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked. OFAC’s regulations generally prohibit all dealings by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of blocked or designated persons.
In addition, persons that engage in certain transactions with the individuals and entities designated today may themselves be exposed to sanctions or subject to an enforcement action. Furthermore, unless an exception applies, any foreign financial institution that knowingly facilitates a significant transaction for any of the individuals or entities designated today could be subject to U.S. sanctions.
The power and integrity of OFAC sanctions derive not only from its ability to designate and add persons to the SDN List, but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897 here. For detailed information on the process to submit a request for removal from an OFAC sanctions list, please click here.
Click here for identifying information on the entities designated today