USTR Opens China 301 Exclusion Request Portal for Certain Machinery Used in Domestic Manufacturing - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
The Office of the U.S. Trade Representative (“USTR”) has announced that, effective October 15, 2024, it is opening a portal for interested parties to use to request exclusions from the China 301 tariffs for certain machinery of HTS Chapters 84 & 85 used in domestic manufacturing. The specific items are limited to those listed in Annex E of the USTR’s previous notice published in the Federal Register of September 18, 2024.
By way of background, as part of its four-year review of the China 301 tariffs, the USTR took several actions, including:
1. Imposing additional, or increasing existing, China 301 duties on certain products in strategic sectors;
2. Proposing increases in tariff rates for certain tungsten products, wafers, and polysilicon;
3. Excluding from China 301 duties certain solar manufacturing equipment;
4. Identifying a list of subheadings for certain machinery used in domestic manufacturing that would be eligible for consideration under an exclusion process.
The new USTR notice sets forth the procedures for the machinery exclusion process identified immediately above. Further background on recent China 301 actions by the USTR can be found here and here.
Any exclusion request must include the following information (and may be supported by additional relevant materials):
• The 10-digit HTSUS subheading (if no 10-digit breakout, use the 8-digit breakout + ‘‘00’’).
• A complete and detailed description of the manufacturing equipment. For example:
o physical characteristics (e.g., dimensions, weight, material composition, etc.).
o whether the manufacturing equipment is designed to function in or with a particular machine (application).
o principal use.
o unit value (providing a range if necessary).
o Any unique physical features that distinguish it from other manufacturing equipment within the same 10-digit HTSUS subheading.
• Whether the manufacturing equipment is subject to an antidumping or countervailing duty order.
• Whether the manufacturing equipment will be used for domestic manufacturing, how it will be used, and in what manufacturing sector.
• If applicable, documents showing grant funding from, or grant application to, a federal investment program related to the domestic manufacturing, such as the Inflation Reduction Act (IRA), CHIPS and Science Act, Build America Buy America (BABA), and Rural Energy for America Program (REAP).
• Whether the manufacturing equipment (or comparable equipment) is available from U.S. or third country sources (and details of any attempts to obtain the equipment from these alternate sources).
• Whether the requester has purchased the item from a U.S. / third country source in the past five years and why it is no longer available from such source.
• Whether the manufacturing equipment is strategically important or related to “Made in China 2025” or other Chinese industrial programs.
The exclusion request portal will remain open through March 31, 2025, at 11:59 p.m. EST. Interested parties may file responses to individual exclusion requests within 30 days after the exclusion request is posted on the USTR’s online portal. The original requester may file a rebuttal to such a response by the later of 15 days after the posting of the response, or 15 days after the closing of the 30-day response period.
Please do not hesitate to contact any of our attorneys to discuss the impact of the above exclusion action on your company or for assistance in preparing filings with the USTR.
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FMC Monitoring and Review of Surcharges and Fees - Federal Maritime Commission
The Federal Maritime Commission is monitoring the supply chain closely at all major terminals along the U.S. East and Gulf Coasts. The FMC continues to review surcharges and fees announced, implemented, or suspended in connection with last week’s work stoppage. The FMC Audit Program is discussing these surcharges and fees with the major ocean common carriers, with the goal of increasing transparency and identifying best practices.
The FMC is also using its statutory authorities to carefully review surcharges and fees to determine their relevance and legality. All fees and surcharges must be reasonable, clearly defined, and serve a specific measurable purpose.
Information from the public on these topics would be beneficial to the Commission in assessing marketplace developments and identifying when enforcement action is warranted. Accordingly, the FMC now emphasizes that parties who believe they have been wrongly billed for a surcharge or fee can use FMC services to seek an informal solution to their dispute, report an alleged legal violation, or file a complaint.
The Office of Consumer Affairs and Dispute Resolution Services (CADRS) facilitates voluntary outcomes and solutions when there are disagreements between parties involved in containerized ocean shipments.
Allegations of common carrier and MTO conduct violative of the law should be reported to the Bureau of Enforcement, Investigations, and Compliance (BEIC). All reports of misconduct will be reviewed by BEIC and violations will be prosecuted to the fullest extent possible under the law.
Parties seeking monetary reparations from a common carrier or MTO can initiate an adjudicatory proceeding that will be heard by the FMC’s Office of the Administrative Law Judges. Retaliation by a common carrier or MTO for filing a complaint at the FMC is expressly prohibited by law, and is an offense separate from other complaints about regulated entity behavior. Acts of retaliation carry serious consequences and allegations of such conduct will be fully and vigorously investigated.
The Commission maintains a list of all common carrier tariff locations for Vessel-Operating Common Carrier and Non-Vessel-Operating Common Carrier. Shippers are encouraged to access and review their common carrier’s tariff.
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Federal Register Notices:
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Antidumping Duty Order on Alloy and Certain Carbon Steel Threaded Rod and Countervailing Duty Order on Carbon and Alloy Steel Threaded Rod From the People's Republic of China: Initiation and Preliminary Results of Changed Circumstances Reviews and Intent To Revoke the Antidumping and Countervailing Duty Orders, in Part, and Preliminary Intent To Rescind Scope Inquiry
• Certain Corrosion Inhibitors From the People's Republic of China: Final Results of Antidumping Duty Administrative Review, 2022-2023
• Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From Malaysia: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Determination With Final Antidumping Duty Determination
• Lightweight Thermal Paper From the People's Republic of China: Final Results of Antidumping Duty Administrative Review; 2022-2023
• Carbon and Alloy Steel Threaded Rod From India: Final Results of Antidumping Duty Administrative Review, and Partial Rescission; 2022-2023
• Certain Vertical Shaft Engines Between 99cc and Up to 225cc and Parts Thereof From the People's Republic of China: Notice of Court Decision Not in Harmony With Final Scope Ruling and Notice of Amended Final Scope Ruling Pursuant to Court Decision
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Thermoformed Molded Fiber Products From China and Vietnam; Institution of Antidumping and Countervailing Duty Investigations and Scheduling of Preliminary Phase Investigations
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Antidumping Duty Order on Alloy and Certain Carbon Steel Threaded Rod and Countervailing Duty Order on Carbon and Alloy Steel Threaded Rod From the People's Republic of China: Initiation and Preliminary Results of Changed Circumstances Reviews and Intent To Revoke the Antidumping and Countervailing Duty Orders, in Part, and Preliminary Intent To Rescind Scope Inquiry
• Certain Corrosion Inhibitors From the People's Republic of China: Final Results of Antidumping Duty Administrative Review, 2022-2023
• Crystalline Silicon Photovoltaic Cells, Whether or Not Assembled Into Modules, From Malaysia: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Determination With Final Antidumping Duty Determination
• Lightweight Thermal Paper From the People's Republic of China: Final Results of Antidumping Duty Administrative Review; 2022-2023
• Carbon and Alloy Steel Threaded Rod From India: Final Results of Antidumping Duty Administrative Review, and Partial Rescission; 2022-2023
• Certain Vertical Shaft Engines Between 99cc and Up to 225cc and Parts Thereof From the People's Republic of China: Notice of Court Decision Not in Harmony With Final Scope Ruling and Notice of Amended Final Scope Ruling Pursuant to Court Decision
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Thermoformed Molded Fiber Products From China and Vietnam; Institution of Antidumping and Countervailing Duty Investigations and Scheduling of Preliminary Phase Investigations
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Narrow Woven Ribbons With Woven Selvedge From the People's Republic of China: Final Results of Countervailing Duty Administrative Review; 2022
• Investigations; Determinations, Modifications, and Rulings, etc. Glass Wine Bottles From China
• Initiation of Antidumping and Countervailing Duty Administrative Reviews
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Large Residential Washers From Mexico: Continuation of the Antidumping Duty Order
• Non-Refillable Steel Cylinders From the People's Republic of China: Final Results and Partial Rescission of the Antidumping Duty Administrative Review; 2022-2023
• Certain New Pneumatic Off-the-Road Tires From India: Final Results of Antidumping Duty Administrative Review; 2022-2023
• Circular Welded Non-Alloy Steel Pipe From the Republic of Korea; Certain Oil Country Tubular Goods From the Republic of Korea; Welded Line Pipe From the Republic of Korea; and Large Diameter Welded Pipe From the Republic of Korea: Notice of Preliminary Results of Antidumping Duty Changed Circumstances Reviews
• Investigations; Determinations, Modifications, and Rulings, etc.: Certain Botulinum Toxin Products and Processes for Manufacturing or Relating to Same; Notice of a Commission Determination To Review in Part and, on Review, To Affirm With Modifications a Final Initial Determination Finding No Violation of Section 337; and To Deny a Request for Oral Argument; Termination of Investigation
• Certain Fiber-Optic Connectors, Adapters, Jump Cables, Patch Cords, Products Containing the Same, and Components Thereof; Notice of Commission Determination Not To Review an Initial Determination Terminating the Investigation Based on Settlement; Termination of the Investigation
• Utility Scale Wind Towers From China and Vietnam
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Carbon and Alloy Steel Wire Rod From the Republic of Korea: Final Results of Antidumping Duty Administrative Review; 2022-2023
• Large Diameter Welded Pipe From the Republic of Türkiye: Final Results of Countervailing Duty Administrative Review; 2022
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CBP modifies Withhold Release Order on Brightway Group in Malaysia - U.S. Customs & Border Protection
Agency will no longer detain Brightway Group disposable gloves
WASHINGTON — U.S. Customs and Border Protection (CBP) modified the withhold release order (WRO) issued on December 20, 2021 against disposable gloves produced by Brigthway Holdings Sdn. Bhd., Laglove (M) Sdn., and Biopro (M) Sdn. Bhd. (collectively, Brightway Group) in Malaysia. Effective immediately, the U.S. will allow disposable gloves produced by the Brightway Group to enter the U.S. provided they are otherwise compliant with U.S. laws. As of October 11, 2024, the U.S. will no longer detain disposable gloves produced by the Brightway Group at U.S. ports of entry.
This is the agency’s second modification issued in 2024. CBP’s forced labor enforcement efforts have improved living and working conditions for tens of thousands of workers, including the repayment of more than $62 million in withheld wages and recruitment fees used to trap workers in debt bondage.
“Facilitation of legitimate trade is just as important as CBP’s enforcement against illegal trade practices,” said CBP’s Senior Official Performing the Duties of the Commissioner Troy A. Miller. “When companies can document compliance with U.S. trade laws, forced labor or otherwise, they’ll have access to the U.S. market. It’s that simple.”
“CBP’s efforts are making a real impact toward eliminating forced labor from U.S. supply chains.” said AnnMarie R. Highsmith, Executive Assistant Commissioner of CBP’s Office of Trade. “Industry has noticed CBP’s strong, consistent enforcement stance and businesses are changing their behaviors. Many are proactively implementing due diligence into their supply chains using the many resources CBP has made available.”
On December 20, 2021, CBP issued a WRO against imported disposable gloves produced using forced labor, wholly or in part, by the Brightway Group. CBP issued the WRO based on evidence reasonably indicating that the working conditions at the Brightway Group exposed workers to 10 of the 11 International Labour Organization forced labor indicators.
Since the implementation of the WRO, the Brightway Group has taken actions to fully remediate the forced labor indicators within its manufacturing process.
Title 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 any foreign country by convict labor or/and forced labor, or/and indentured labor, including 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, alternatively, exports 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 case. CBP does not modify WROs or Findings until the agency has evidence demonstrating that the producer of subject merchandise no longer produces, manufactures, or mines the subject goods using forced labor.
Any person or organization that has reason to believe merchandise produced with the use of forced labor is being, or likely to be, imported into the United States, can report detailed allegations by contacting CBP through the e-Allegations Online Trade Violation Reporting System or by calling 1-800-BE-ALERT.
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Port of Buffalo CBP Officers Discover Shipments of Psilocybin Chocolate - U.S. Customs & Border Protection
Estimated street value for the drugs is approximately $165K
BUFFALO, N.Y. – U.S. Customs and Border Protection (CBP) officers at the Port of Buffalo have discovered multiple commercial shipments containing psilocybin throughout the previous 30 days at the Peace Bridge warehouse.
CBP officers working in the Peace Bridge cargo facility discovered multiple shipments manifested as “chocolate and other food preparations”. Upon further inspection of these shipments, it was discovered that the chocolate bricks contained psilocybin, a schedule 1 controlled substance. The suspected narcotics were field tested by CBP officers, verifying that they indeed tested positive for the properties of psilocybin.
A total of 15 seizures of psilocybin chocolate shipments, with a weight of more than 20 pounds were intercepted throughout the past 30 days, including approximately seven pounds seized on October 9.
“Utilizing their training and experience, our CBP officers continue to intercept narcotic shipments,” said Area Port Director Gaetano Cordone. “All of our CBP employees work tirelessly each and every day to protect our country and communities from unregulated drugs that can become fatal to consumers.”
The smuggling attempt remains under CBP investigation.
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USTR Opens Exclusion Process for Certain Machinery Used in Domestic Manufacturing - U.S. Trade Representative
WASHINGTON – The Office of the United States Trade Representative today announced that it is opening a process for interested persons to request that certain machinery be temporarily excluded from Section 301 duties in the Investigation of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation.
Consistent with the President’s direction, the exclusion process covers particular machinery used in domestic manufacturing classified within a subheading under chapters 84 and 85 of the Harmonized Tariff Schedule of the United States. A list of eligible subheadings is available here.
As explained in a formal notice, the docket for submitting exclusions opens on October 15, 2024. The deadline for submitting exclusion requests is March 31, 2025.
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Federal Trade Commission Announces Final “Click-to-Cancel” Rule Making It Easier for Consumers to End Recurring Subscriptions and Memberships - Federal Trade Commission
Agency acts after receiving more than 16,000 comments from the public
The Federal Trade Commission today announced a final “click-to-cancel” rule that will require sellers to make it as easy for consumers to cancel their enrollment as it was to sign up. Most of the final rule’s provisions will go into effect 180 days after it is published in the Federal Register.
“Too often, businesses make people jump through endless hoops just to cancel a subscription,” said Commission Chair Lina M. Khan. “The FTC’s rule will end these tricks and traps, saving Americans time and money. Nobody should be stuck paying for a service they no longer want.”
The Commission’s updated rule will apply to almost all negative option programs in any media. The rule also will prohibit sellers from misrepresenting any material facts while using negative option marketing; require sellers to provide important information before obtaining consumers’ billing information and charging them; and require sellers to get consumers’ informed consent to the negative option features before charging them.
The final rule announced today is part of the FTC’s ongoing review of its 1973 Negative Option Rule, which the agency is modernizing to combat unfair or deceptive practices related to subscriptions, memberships, and other recurring-payment programs in an increasingly digital economy where it’s easier than ever for businesses to sign up consumers for their products and services.
Commission approval and publication follows the March 2023 announcement of a notice of proposed rulemaking which resulted in more than 16,000 comments from consumers and federal and state government agencies, consumer groups, and trade associations.
While negative option marketing programs can be convenient for sellers and consumers, the FTC receives thousands of complaints about negative option and recurring subscription practices each year. The number of complaints has been steadily increasing over the past five years and in 2024 the Commission received nearly 70 consumer complaints per day on average, up from 42 per day in 2021.
The final rule will provide a consistent legal framework by prohibiting sellers from:
• misrepresenting any material fact made while marketing goods or services with a negative option feature;
• failing to clearly and conspicuously disclose material terms prior to obtaining a consumer’s billing information in connection with a negative option feature;
• failing to obtain a consumer’s express informed consent to the negative option feature before charging the consumer; and
• failing to provide a simple mechanism to cancel the negative option feature and immediately halt charges.
Following an evaluation of public comments, the Commission has voted to adopt a final rule with certain changes, most notably dropping a requirement that sellers provide annual reminders to consumers of the negative option feature of their subscription, and dropping a prohibition on sellers telling consumers seeking to cancel their subscription about plan modifications or reasons to keep to their existing agreement without first asking if they want to hear about them.
The Commission vote approving publication of the final rule in the Federal Register was 3-2, with Commissioners Melissa Holyoak and Andrew N. Ferguson voting no. Commissioner Rebecca Kelly Slaughter issued a separate statement and Commissioner Holyoak issued a separate dissenting statement. Commissioner Ferguson’s dissenting statement is forthcoming.
FTC staff has developed a fact sheet summarizing the changes to the rule. The primary staffer on this matter is Katherine Johnson in the FTC’s Bureau of Consumer Protection.