China Section 301 Litigation Update - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
As expected, the plaintiffs in the lead Section 301 case filed an appeal to the U.S. Court of Appeals for the Federal Circuit (CAFC) on May 12, 2023, seeking to overturn the trial court’s March 17, 2023, decision. Once the CAFC receives the records from the trial court proceedings, the parties will be required to file briefs. The briefing schedule is approximately four months, however, filing deadlines may be extended by the court. Once briefing is complete, the CAFC will hold an oral argument before issuing its decision on the appeal. We anticipate that the CAFC is likely to reach a decision on the appeal within a year to 18 months from today’s date.
While the appeal is pending, all other cases filed by importers to challenge the List 3 and List 4A Section 301 additional duties will remain suspended; there are no additional filings required at this time. Should you have any questions, please contact one of our attorneys.
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Federal Register Notices:
• National Cybersecurity Center of Excellence (NCCoE) Software Supply Chain and DevOps Security Practices
• Investigations; Determinations, Modifications, and Rulings, etc.: Seamless Carbon and Alloy Steel Standard, Line, and Pressure Pipe From Germany; Scheduling of an Expedited Five-Year Review
• Fine Denier Polyester Staple Fiber From China, India, South Korea, and Taiwan; Notice of Commission Determinations To Conduct Full Five-Year Reviews
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Steel Racks and Parts Thereof From the People's Republic of China: Amended Final Results of Countervailing Duty Administrative Review in Part; 2020
• Sales at Less Than Fair Value; Determinations, Investigations, etc.: Paper File Folders From the People's Republic of China: Preliminary Affirmative Determination of Sales at Less Than Fair Value
• Paper File Folders From the Socialist Republic of Vietnam: Preliminary Affirmative Determination of Sales at Less Than Fair Value, Postponement of Final Determination, and Extension of Provisional Measures
• Paper File Folders From India: Preliminary Affirmative Determination of Sales at Less Than Fair Value, Postponement of Final Determination, and Extension of Provisional Measures
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Large Residential Washers From Mexico: Final Results of Antidumping Duty Administrative Review; 2021-2022
• Sales at Less Than Fair Value; Determinations, Investigations, etc.: Gas Powered Pressure Washers From the People's Republic of China: Postponement of Preliminary Determination in the Less-Than-Fair-Value Investigation
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Freight Rail Couplers and Parts Thereof From the People's Republic of China: Final Affirmative Countervailing Duty Determination and Final Affirmative Critical Circumstances Determination, In Part
• Certain Lined Paper Products From India and the People's Republic of China: Final Results of Expedited Third Sunset Reviews of the Antidumping Duty Orders
• Stilbenic Optical Brightening Agents From Taiwan: Preliminary Results of Antidumping Duty Administrative Review; 2021-2022
• Antidumping Duty Order on Wooden Bedroom Furniture From the People's Republic of China: Preliminary Results of Changed Circumstances Review
• Pure Magnesium From China
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USTR Extends Certain COVID-Related Exclusions from China Section 301 Tariffs - U S. International Trade Commission
WASHINGTON – The Office of the United States Trade Representative today announced the extension of 77 of the 81 COVID-related exclusions in the China Section 301 Investigation. The exclusions were previously scheduled to expire on May 15, 2023. The exclusions have been extended through September 30, 2023, which will allow the United States Trade Representative to continue to consider stakeholder and public feedback. The U.S. Trade Representative is extending all 81 COVID-related exclusions, through May 31, 2023, to allow for a transition period.
The COVID exclusions, which cover medical-care products, were initially granted in December 2020. Additional information is set out in the Federal Register notice, which can be viewed here.
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OTEXA: Announcements - Office of Textile & Apparel
[05/04/2023] – March 2023 Textile and Apparel Import Report
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Dutch Medical Supplier Philips to Pay More Than $62 Million to Settle FCPA Charges - Security & Exchange Commission
A Netherlands-based multinational company will pay more than $62 million to resolve charges that it violated the Foreign Corrupt Practices Act with respect to conduct related to sales in China. This amount includes $15 million in civil penalties and more than $47 million in disgorgement and prejudgment interest.
According to the Securities and Exchange Commission, the company’s subsidiaries in China used special price discounts with distributors that created a risk that excessive distributor margins could be used to fund improper payments to government employees. In addition, employees, distributors, or sub-dealers of those subsidiaries in China engaged in improper conduct by (1) influencing officials to draft technical specifications in public tenders to favor the company’s products and (2) preparing additional bids with other manufacturers’ products to create the appearance of legitimate public tenders and to meet the minimum bids requirement under Chinese public tender laws.
Charles Cain, chief of the SEC Enforcement Division’s FCPA Unit, noted that “despite remediation done in connection with its prior violations” (for which it was charged in 2013), the company “nevertheless failed over the course of several years to implement sufficient internal accounting controls,” which led to the alleged violations in this case.
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USITC Releases Report Concerning the Impact of U.S. Foreign Trade Zones and Similar Programs in Canada and Mexico - U.S. International Trade Commission
The U.S. International Commission (USITC) today released a report on the operation of the U.S. Foreign-Trade Zones (FTZ) program and similar programs (FTZ-type programs) in Canada and Mexico, as well as the impacts of these programs on employment and the cost-competitiveness of products of firms operating in U.S. FTZs.
The investigation, Foreign Trade Zones (FTZs): Effects of FTZ Policies and Practices on U.S. Firms Operating in U.S. FTZs and Under Similar Programs in Canada and Mexico, was requested by the U.S. Trade Representative in a letter received on December 14, 2021.
As requested, the USITC, an independent, nonpartisan, factfinding federal agency, reported on the operations of U.S. FTZs and FTZ-type programs, and the effects of relevant policies and practices on employment and the cost-competitiveness of goods produced in U.S. FTZs. As part of its investigation, the Commission conducted a survey of firms producing in U.S. FTZs and used the questionnaire results in its quantitative and qualitative analyses. Per the request, the report includes:
• An overview of economic activity in FTZs operating in the United States, Canada, and Mexico, including but not limited to employment, leading sectors, shipments, exports, and foreign direct investment in FTZs;
• An overview of current FTZ policies and practices in the United States, Canada, and Mexico;
• An analysis of the cost-competitiveness effects of current FTZ policies and practices in the United States, Canada, and Mexico, including effects on relative production costs and U.S. employment; and
• Case studies on the impact of U.S. FTZs and FTZ-type programs on the automotive, upholstered furniture manufacturing, petroleum refining, pharmaceutical manufacturing, and warehousing and distribution industries.
• Detailed highlights of the Commission's findings can be found in the report's Executive Summary.
Findings include:
• Central features of the U.S. FTZ program and FTZ-type programs in Canada and Mexico are the special tariff treatments, principally duty deferral, duty exemption, duty reduction, and duty drawback.
• The cost-competitiveness effects of the U.S. FTZ program and FTZ-type programs in Canada and Mexico are impacted by multiple factors, including the design of the programs, national tariff regimes and applicable rates of duty, other trade policies, and material sourcing and destination markets for firms’ shipments.
• Canada and Mexico carried out substantial unilateral tariff reductions since the early 1990s (coinciding with the signature and implementation of NAFTA) which impact the attractiveness and usage of their respective FTZ-type programs. Other examples of policies that affect the programs are the restrictions in the North American Free Trade Agreement and the United States-Mexico-Canada Agreement (USMCA) on the use of drawback and duty exemption for goods produced in FTZs and exported to USMCA partner countries. Such restrictions limit duty benefits available under U.S. FTZs and FTZ-type programs in Canada and Mexico.
• Overall, U.S FTZs improve cost-competitiveness of U.S. firms primarily through duty reduction on shipments that make customs entry in the United States and duty exemption on direct export shipments from U.S. FTZs. Firms producing in FTZs experienced duty cost savings of $1.2 billion in 2021 using these two features of U.S. FTZs.
• Although most firms producing in U.S. FTZs experience net cost savings through use of the program, fewer firms consider their FTZ use to be a factor causing increases in investment, output, or employment in the United States.
• The reasons for and benefits of using the programs vary across sectors. In certain sectors, such as the automotive industry, firms cannot use the U.S. FTZ program to reduce their duty costs to zero due to the non-free normal trade relation (NTR) rates of duty applicable to automotive inputs and finished goods. This may put U.S. producers at a competitive disadvantage relative to firms operating in Canada and Mexico due to free rates of duty applicable to most inputs (in the case of Canada) or to the particular features of the FTZ-type programs (in the case of Mexico).
Foreign Trade Zones (FTZs): Effects of FTZ Policies and Practices on U.S. Firms Operating in U.S. FTZs and Under Similar Programs in Canada and Mexico (Investigation No. 332-588, USITC Publication 5423, April 2023) is available on the USITC’s website at https://usitc.gov/publications/332/pub5423.pdf.
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CPSC Warns Consumers to Immediately Stop Using BQQZHZ Combination Smoke and Carbon Monoxide Detectors Due to Failure to Alert Consumers to Deadly Smoke and Fire; Sold on Amazon.com - Consumer Product Safety Commission
Washington, D.C. -- The U.S. Consumer Product Safety Commission (CPSC) is warning consumers about the risk of smoke inhalation and death associated with the use of BQQZHZ combination smoke and carbon monoxide (CO) detectors. The detectors can fail to alert consumers to the presence of hazardous smoke and fire.
In typical residential fire scenarios, occupants may have as little as one or two minutes to escape after the smoke alarm sounds before the conditions in the home become incapacitating or deadly. More than 2,390 people in the United States die every year from residential structure fires. Furthermore, according to NFPA research, the risk of dying in a fire is twice as high in homes without a working smoke alarm (1.18 deaths per 100 fires), as compared to homes with smoke alarms (0.53 per 100 fires).
BQQZHZ detectors can fail to alert when exposed to dangerous concentrations of smoke, in violation of UL 217, a voluntary safety standard. Consumers should stop using and dispose of these products immediately and install working smoke detectors.
The combination detectors are battery powered, white, and feature a digital display. They are advertised to detect dangerous levels of smoke or carbon monoxide and alert with an audible alarm. These detectors were sold under the Amazon ASIN B07QHYJR7F. The combination smoke and CO detectors were sold on Amazon.com for about $46.
CPSC urges consumers not to use, purchase, or sell these combination detectors. In the interest of consumer safety, CPSC is warning the public regarding the danger from non-working smoke detectors and carbon monoxide alarms. This is a situation involving foreign firms who have not responded to requests for a recall.
Note: Consumers should install combination smoke and CO detectors on each level of their homes and outside separate sleeping areas. Combination smoke and CO detectors should be battery operated or have battery backup. Test combination smoke and CO detectors frequently and replace batteries as needed. Consumers should only buy combination smoke and CO detectors that meet both the UL 2034 and UL 217 safety standards.
Report a dangerous product or a product-related injury on www.SaferProducts.gov.
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FTC Sues to Stop VoIP Service Provider That Assisted and Facilitated Telemarketers in Sending Hundreds of Millions of Illegal Robocalls to Consumers Nationwide - Federal Trade Commission
XCast Labs, Inc. was warned multiple times about likely illegal conduct
The Federal Trade Commission sued to stop a Voice over Internet Protocol (VoIP) provider, XCast Labs, Inc., that continued to funnel hundreds of millions of illegal robocalls through its network, even after receiving multiple warnings. The Department of Justice filed the complaint in the Central District of California on the FTC’s behalf.
“XCast Labs played a key role in helping telemarketers flood homes with unlawful robocalls, including robocalls impersonating the Social Security Administration,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “VoIP providers like XCast Labs that bury their heads in the sand when their customers use their services to break the law can expect to hear from the FTC.”
XCast Labs, headquartered in Los Angeles, California, is a nationwide provider of VoIP technology, providing services that allow its customers to send and receive phone calls, including robocalls (calls that play a prerecorded message), over the Internet. Telemarketers who blast illegal robocalls typically use VoIP service providers like XCast Labs to transmit their calls.
According to the complaint, in January 2020, the FTC sent letters to a number of VoIP providers, including XCast Labs, warning them that assisting and facilitating illegal telemarketing or robocalling was against the law. The complaint also alleges that XCast Labs received dozens of “traceback” inquiries from US Telecom’s Industry Traceback Group regarding suspected illegal calls that originated on XCast Labs’ network, as well as inquiries from law enforcement agencies about transmission of suspected illegal traffic on the XCast Labs network. Even after receiving these direct warnings, the FTC alleges that XCast Labs transmitted illegal robocalls to consumers.
In addition, the FTC discovered that many of these suspect robocalls were part of organized campaigns designed to generate telemarketing leads by, for example, impersonating federal officials from the Social Security Administration. Lead generators sell the information they gather to telemarketers, who then use consumers’ information to pester them with even more unwanted, illegal calls.
The Commission vote authorizing the staff to refer the complaint to the Department of Justice for filing was 4-0, and was taken before Commissioner Christine S. Wilson left the FTC. The DOJ filed the complaint in the U.S. District Court for the Central District of California. Thomas Biesty and Frances Kern of the Bureau of Consumer Protection were the primary FTC staff on this matter.
NOTE: The Commission refers a complaint for civil penalties to the DOJ for filing when it has “reason to believe” that the named defendants are violating or are about to violate the law and that a proceeding is in the public interest. The case will be decided by the court.
The Federal Trade Commission works to promote competition and protect and educate consumers. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.