Customs and Trade Law Weekly Snapshot

Here is a recap of the latest customs and international trade law news:

Customs and Border Protection (CBP)

• President Biden signed H.R. 8982, the Bulk Infant Formula to Retail Shelves Act on October 10, 2022. Duty-free treatment will only be provided to importers of base powder to be manufactured into infant formula authorized to be marketed in the United States or subject to an enforcement discretion letter from the Food and Drug Administration (FDA). The effective date is October 13, 2022, the third day after signature.
  • Should you have questions regarding enforcement discretion, please refer to the Enforcement Discretion to Manufacturers to Increase Infant Formula Supplies FDA website.

The Office of the United States Trade Representative

• The Office of the United States Trade Representative announced the next steps in the statutory four-year review of the tariff actions in the Section 301 investigation of China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation following requests for continuation from representatives of domestic industries
  • USTR is seeking public comments, consistent with the statutory directive, to consider the effectiveness of the actions in achieving the objectives of the investigation, other actions that could be taken, and the effects of the actions on the United States economy, including consumers.

United States Department of Commerce (DOC)

• Department of Commerce (DOC) announced on October 3, 2022, an opportunity to request administrative review and join annual inquiry service list for products on AD/CVD lists.  
• DOC is issuing a final rule to implement Proclamation 10414, “Declaration of Emergency and Authorization for Temporary Extensions of Time and Duty- Free Importation of Solar Cells and Modules from Southeast Asia.” 
• DOC is amending the Export Administration Regulations (EAR) in response to Russia’s further invasion of Ukraine on February 24, 2022.
• DOC and the International Trade Commission (USITC) announced a petition filed on Oct. 12 which alleges paper file folders from China, India, and Vietnam are being sold at less than fair value in the U.S. market, and in India benefiting from countervailable subsidies. The alleged average dumping margins are 116.69 percent for China, 174.19 percent for India, and 214.53 percent for Vietnam.
• DOC and the U.S. International Trade Commission (USITC) announced on October 12, that revocation of the antidumping duty  order on certain artist canvas from China would likely lead to a continuation or recurrence of dumping and material injury to an industry in the U.S. 
• DOC determined on October 12, that POSCO and its affiliated companies, made sales of subject merchandise in the United States at less than normal value during the period of review May 1, 2020, through April 30, 2021.
  • DOC intends to disclose the
    calculations for these final results of
    review within five days of the date of
    publication of this notice in the Federal
    Register.
• DOC and the U.S. International Trade Commission (USITC) announced on October 12, that revocation of the AD/CVD orders on certain biaxial integral geogrid products from China would likely lead to continuation or recurrence of dumping, countervailable subsidies, and material injury to an industry in the U.S.
• DOC determines that certain steel nails from the United Arab Emirates were sold in the United States at less than normal value during the period of review May 1, 2020, through April 30, 2021.
  • DOC plans to adopt the Preliminary Results as the
    final results of their review.
• DOC continues to determine that the 30 companies subject to this administrative review of the antidumping duty order on  magnesia carbon bricks from China are part of the China-wide entity because they did not demonstrate eligibility for separate rates.
  • The period of review is September 1, 2020, through August 31, 2021.

U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC)

• U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned three individuals on October 6, 2022, and one entity connected to Burma’s military regime pursuant to Executive Order (E.O.) 14014. Following the February 1, 2021, coup that overthrew Burma’s democratically elected civilian government, the military has committed numerous atrocities against people in Burma, including the violent repression of political dissent, the killing of over 2,300 innocent civilians, and displacement of more than 900,000 people. 
• OFAC on October 6, 2022, designated seven senior leaders within Iran’s government and security apparatus for the shutdown of Iran’s Internet access and the continued violence against peaceful protesters in the wake of the tragic death of 22-year-old Mahsa Amini, who was arrested for allegedly wearing a hijab improperly, and died in the custody of Iran’s Morality Police. 
• OFAC on September 30, 2022, placed hundreds of Russian individuals and entities on the Specially Designated Nationals (SDN) List in response to Russia’s illegal annexation of Ukrainian territories.  
• OFAC on September 29, 2022, sanctioned an international network of companies involved in the sale of hundreds of millions of dollars’ worth of Iranian petrochemicals and petroleum products to end users in South and East Asia. 
• OFAC on October 7,2022, designated Malaysian national Teo Boon Ching, the Teo Boon Ching Wildlife Trafficking Transnational Criminal Organization (TCO), and the Malaysian company Sunrise Greenland Sdn. Bhd. for the cruel trafficking of endangered and threatened wildlife and the products of brutal poaching. 
• OFAC on October 7, 2022, designated two individuals and three entities for activities related to the exportation of petroleum to the Democratic People’s Republic of Korea (DPRK), which directly supports the development of DPRK weapons programs and its military. 
• OFAC and Financial Crimes Enforcement Network (FinCEN) announced settlements for over $24 million and $29 million, respectively, with Bittrex, Inc. (Bittrex), a virtual currency exchange based in Bellevue, Washington. 
• OFAC is publishing one general license (GL) issued pursuant to the Iranian Transactions and Sanctions Regulations: GL D-2, which was previously made available on OFAC’s website.
• OFAC is publishing one sectoral determination issued pursuant to an April 15, 2021 Executive order, as well as a category of services determination issued pursuant to an April 6, 2022 Executive order.
• OFAC is publishing one general license (GL) issued pursuant to the Russian Harmful Foreign Activities Sanctions Regulations: GL 13B, which was previously issued on OFAC’s website.
• OFAC is publishing nine general licenses (GLs) issued in the Venezuela Sanctions Regulations program: GLs 3, 3A, 3B, 3C, 3D, 3E, 3F, and 3G, each of which was previously issued on OFAC’s website and is now expired, as well as GL 3H, which was also previously issued on OFAC’s website.
• OFAC is publishing eight general licenses (GLs) issued in the Venezuela Sanctions Regulations program: GLs 9, 9A, 9B, 9C, 9D, 9E, and 9F, each of which was previously issued on OFAC’s website and is now expired, as well as GL 9G, which was also previously issued on OFAC’s website.
• OFAC published the names of one or more persons that have been placed on OFAC’s Specially Designated Nationals and Blocked Persons List (SDN List) based on OFAC’s determination that one or more applicable legal criteria were satisfied. All property and interests in property subject to U.S. jurisdiction of these persons are blocked, and U.S. persons are generally prohibited from engaging in transactions with them.

United States International Trade Commission (USITC)

• United States International Trade Commission (USITC) hereby gives notice of the institution of investigations and commencement of preliminary phase antidumping and countervailing duty investigation Nos. 701-TA-682 and 731-TA-1592-1593 (Preliminary) pursuant to the Tariff Act of 1930 (“the Act”) to determine whether there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury, or the establishment of an industry in the United States is materially retarded, by reason of imports of certain freight rail couplers and parts thereof from China and Mexico, provided for in subheadings 8607.30.10 and 7326.90.86 of the Harmonized Tariff Schedule of the United States, that are alleged to be sold in the United States at less than fair value and alleged to be subsidized by the Government of China. 

United States Department of Labor (DOL)

• Department of Labor (DOL) has updated its list of goods produced by child or forced labor on September 28, 2022, and is now comprised of 158 goods from 77 countries.  

The White House and Congress

• President Biden issued an executive order on September 15, 2022, elaborating upon existing statutory factors and include additional national security factors the Committee on Foreign Investment in the United States (CFIUS or “Committee”) must consider in its review process of a covered transaction. 
• United States Senate on September 21, 2022, ratified the Kigali Amendment which will phase down global production and consumption of hydrofluorocarbons (HFCs), super-polluting chemicals in technology markets.  
• President Biden on September 15, 2022, issued an executive order elaborating on statutory factors and additional national security factors the Committee on Foreign Investment in the United States must consider in its review process of covered transactions.

Bureau of Industry and Security (BIS)

• The Bureau of Industry and Security (BIS) is amending the Export Administration Regulations (EAR) to implement necessary controls on advanced computing integrated circuits (ICs), computer commodities that contain such ICs, and certain semiconductor manufacturing items.
  • In addition, BIS is expanding controls on transactions involving items for supercomputer and semiconductor manufacturing end uses.
• BIS is amending the Export Administration Regulations (EAR) by adding 31 persons to the Unverified List (UVL). The 31 persons of China are added to the UVL on the basis that BIS was unable to verify their bona fides because an end-use check could not be completed satisfactorily for reasons outside the U.S. Government’s control.

British Broadcasting Channel (BBC)

• BBC reports that shares in major Asian computer chipmakers have fallen following the U.S. implementing a ban on American firms from selling certain chips.

Customs and Border Protection (CBP) Bulletin Weekly, Vol. 56, October 5, 2022, No. 39

• Extension and Amendment of Import Restrictions on Archaeological and Ethological Materials from Mali
  • This document amends the U.S. Customs and Border Protection (CBP) regulations to reflect an extension and amendment of import restrictions on certain categories of archaeological and ethnological material from the Republic of Mali (Mali) to fulfill the terms of the new agreement, titled ‘‘Agreement Between the Government of the United States of America and the Government of the Republic of Mali Concerning the Imposition of Import Restrictions on Categories of Archaeological and Ethnological Material of Mali.’’
  • The Designated List, which was last described in CBP Dec. 17–12, is amended in this document to reflect additional categories of archaeological material found throughout the entirety of Mali and additional categories of ethnological material associated with religious activities, ceremonies, or rites, and enforcement of import restrictions is being extended for an additional five years by this final rule
• Quarterly interest rates used in calculating interest on overdue accounts and refunds on Customs duties
  • This notice advises the public that the quarterly Internal Revenue Service interest rates used to calculate interest on overdue accounts (underpayments) and refunds (overpayments) of customs duties will increase from the previous quarter.
  • For the calendar quarter beginning October 1, 2022, the interest rates for overpayments will be 5 percent for corporations and 6 percent for non-corporations, and the interest rate for underpayments will be 6 percent for both corporations and non-corporations
• Proposed revocation of two ruling letter and proposed revocation of treatment relating to the tariff classification of pan masala betel nut food product
  • In NY 830068 and DD H890859, CBP classified the pan masala betel nut food product in heading 2106, HTSUS, specifically in subheading 2106.90.6099, HTSUS Annotated (HTSUSA) (currently subheading 2106.90.99, HTSUS, under the 2022 HTSUS), which provides for “Food preparations not elsewhere specified or included: Other: Other: Other: Other.”
  • CBP has reviewed both NY 830068 and DD H890859 and has determined the ruling letters to be in error. It is now CBP’s position that pan masala betel nut food product is properly classified, in heading 2008, HTSUS, specifically in subheading 2008.19.9090, HTSUSA, which provides for “Fruit, nuts and other edible parts of plants, otherwise prepared or preserved, whether or not containing added sugar or other sweetening matter or spirit, not elsewhere specified or included: Other, including mixtures: Other, including mixtures: Other: Other.”
• New American Keg v. United States
  • Because the Department of Commerce failed to explain why it was appropriate to inflate a Mexican labor wage rate using Brazilian data and why doing so was superior to using a Brazilian labor wage rate and to identify the evidence in the administrative record that supported granting a company a separate rate, the case had to be remanded.
• Hyundai Steel Company v. United States
  • Because the Commerce Department reopened the record and necessary information was available, the court concluded that the Department’s decision to recalculate plaintiff’s dumping margin at 0.46% without applying facts available was supported by substantial evidence. Because the court sustained the Department’s decision to not use facts available in recalculating plaintiff’s dumping margin, consideration of the Department’s reiterated benefit determination in the remand results would have no practical significance and was mooted.
• United States v. Zhe “John” Liu
  • Zhe “John” Liu and GL Paper Distribution, LLC (collectively, “Liu”), has moved pursuant to USCIT Rule 12(f) to strike portions of the complaint presented by the United States (“Government”), arguing that paragraphs 5–10, 14, 16, 17, 21, 22, and the majority of paragraph 3 of the complaint are “wholly unrelated to the underlying action and contain allegations that are potentially prejudicial.”
  • Motion to strike denied
• Eteros Technologies v. United States
  • Washington State’s repeal of certain prohibitions attending marijuana-related drug paraphernalia “authorized” plaintiff such that plaintiff’s importation of component parts of an agricultural machine, which was designed to separate the leaf from the flower of cannabis or other plant material, through the Port of Blaine, Washington was exempted by the federal Controlled Substances Act, 21 U.S.C.S. § 863(f)(1), from the federal prohibition on importing drug paraphernalia.

Customs and Border Protection (CBP) Bulletin Weekly, Vol. 56, October 12, 2022, No. 40

• Extension of import restrictions on archaeological and ecclesiastical ethnological materials from Guatemala
  • This document amends the U.S. Customs and Border Protection (CBP) regulations to reflect an extension of import restrictions on certain categories of archaeological and ecclesiastical ethnological materials from Guatemala to fulfill the terms of the new agreement, titled ‘‘Memorandum of Understanding between the Government of the United States of America and the Government of the Republic of Guatemala Concerning the Imposition of Import Restrictions on Categories Of Archaeological and Ethnological Material of Guatemala.’’
  • CBP Dec. 12–17, which contains the Designated List of archaeological and ecclesiastical ethnological material from Guatemala to which the restrictions apply, is being extended for an additional five years by this final rule.
• Proposed modification of one ruling letter and proposed revocation of treatment relating to the tariff classification of finished wood slats and wood bottom rails with UV coatings used for window blinds
  • In NY N041645, CBP classified various wood components used for the manufacture of window blinds, including two styles of finished wood valances and wood slats that were primed and painted and three styles of finished wood slats and wood bottom rails that were either stained or painted and coated with UV coatings, in heading 4409, HTSUS, specifically in subheading 4409.29.9000, HTSUSA (“Annotated”) , which provides for “[w]ood (including strips and friezes for parquet flooring, not assembled) continuously shaped (tongued, grooved, rebated, chamfered, V-jointed, beaded, molded, rounded or the like) along any of its edges, ends or faces, whether or not planed, sanded or end-jointed: Nonconiferous: Other: Other: Other.” CBP has reviewed NY N041645 and has determined the ruling letter to be partially in error.
  • It is now CBP’s position that the finished wood slats and wood bottom rails with UV coatings used for window blinds are properly classified, in heading 4421, HTSUS, specifically in subheading 4421.99.9880, HTSUSA, which provides for “[o]ther articles of wood: Other: Other: Other: Other…Other.”
• Proposed modification of one ruling letter and proposed revocation of treatment relating to the tariff classification of woven upholstery fabrics
  • In NY N319028, CBP classified the woven upholstery fabrics (Style N1829 (Moriarty), Style D1818 (Glossary), and Style J1819 (Fringe)) in heading 5903, HTSUS, specifically in subheading 5903.90.25, HTSUS, which provides for “Textile fabrics impregnated, coated, covered or laminated with plastics, other than those of heading 5902: Other: Of man-made fibers: Other.” CBP has reviewed NY N319028 and has determined the ruling letter to be in error.
  • It is now CBP’s position that woven upholstery fabrics are properly classified, within either heading 5407, HTSUS, or heading 5515, HTSUS, dependent on the specific subject merchandise at-issue. Specifically it is CBP’s position that the first woven upholstery fabric (Style N1829 (Moriarty)) is properly classified within in subheading 5407.53.20, HTSUS, which provides for “Woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404: Other woven fabrics, including 85 percent or more by weight of textured polyester filaments: Of yarns of different colors: Other,” that the second woven upholstery fabric (Style D1818 (Glossary)) is classified within 5407.73.20, HTSUS, which provides for “Woven fabrics of synthetic filament yarn, including woven fabrics obtained from materials of heading 5404: Other woven fabrics, containing 85 percent or more by weight of synthetic filaments: Of yarns of different colors: Other,” and that the third woven upholstery fabric (Style J1819 (Fringe)) is classified within subheading 5515.12.00, HTSUS, which provides for “Other woven fabrics of synthetic staple fibers: Of polyester stable fibers: Mixed mainly or solely with man-made filaments.”
• Proposed revocation of one ruling letter and proposed revocation of treatment relating to the tariff classification of a woman’s top
  • In NY N324185, CBP classified a woman’s top in heading 6211, HTSUS, specifically in subheading 6211.42.10, HTSUS, which provides for “Track suits, ski-suits and swimwear; other garments: Other garments, women’s or girls’: Of cotton: Other.” CBP has reviewed NY N324185 and has determined the ruling letter to be in error.
  • It is now CBP’s position that the woman’s top is properly classified in heading 6206, HTSUS, specifically in subheading 6206.30.30, HTSUS, which provides for “Women’s or girls’ blouses, shirts and shirt-blouses: Of cotton: Other: Other.”
• Proposed revocation of one ruling letter and proposed revocation of treatment relating to the tariff classification of metal storage lockers and cabinets for garage use
  • In NY N310710, CBP classified the metal storage lockers and cabinets in heading 9403, HTSUS, specifically in subheading 9403.20.0081, HTSUSA (Annotated), which provides for “Other furniture and parts thereof: Other metal furniture: Other: Counters, lockers, racks, display cases, shelves, partitions and similar fixtures: Other”. CBP has reviewed ruling letter to be in error.
  • It is now CBP’s position that the metal locker cabinets are properly classified, in heading 9403, HTSUS, specifically in subheading 9403.20.0050, HTSUSA, which provides for “Other furniture and parts thereof: Other metal furniture: Household: Other: Other
• Proposed revocation of one ruling letter and proposed revocation of treatment relating to the tariff classification of cast-iron cylinder heads and block castings
  • In NY N312073, CBP classified cast-iron cylinder heads and block castings in heading 8409, HTSUS, specifically in subheading 8409.99.91, HTSUS, which provides for “Parts suitable for use solely or principally with the engines of heading 8407 or 8408: Other: Other: Other: For vehicles of subheading 8701.20, or heading 8702, 8703 or 8704.” CBP has reviewed NY N312073 and has determined the ruling letter to be in error.
  • It is now CBP’s position that cast-iron cylinder heads and block castings are properly classified in heading 8409, HTSUS, specifically in subheading 8409.99.10, HTSUS, which provides for “Parts suitable for use solely or principally with the engines of heading 8407 or 8408: Other: Other: Cast-iron parts, not advanced beyond cleaning, and machined only for the removal of fins, gates, sprues and risers or to permit location in finishing machinery.”
• Proposed revocation of one ruling letter, proposed modification of one ruling letter and proposed revocation of treatment relating to the country of origin of certain air purifiers
  • In NY N322681, CBP determined that the air purifiers, manufactured from parts of Chinese and Vietnamese-origin and further assembled in Vietnam into subassemblies and the finished air purifiers, were products of China. It is now CBP’s position that the country of origin of these air purifiers is Vietnam. In NY N322364, CBP determined that air purifiers, manufactured from parts of Chinese and Vietnamese-origin and further assembled in Vietnam into subassemblies and the finished air purifiers, were products of Vietnam in the first manufacturing scenario and products of China in the second manufacturing scenario.
  • It is now CBP’s position that the country of origin of the air purifiers in the second manufacturing scenario is Vietnam
• Xi’an Metals & Mineral Import & Export Co v. United States
  • There was no error in the U.S. Court of International Trade’s determination that the CONNUM-specific rule was not subject to the notice-and-comment rulemaking provisions of the APA; hence, the U.S. Department of Commerce was entitled to clarify the regulation regarding the data used in performing margin calculations in the third administrative review because it needed data that more accurately reflected the costs associated with the production and sale of the subject merchandise;
  • The Court correctly determined that Commerce’s application of facts otherwise available (FA) was supported by substantial evidence; in deciding to apply FA, Commerce reasonably determined that appellant’s repeated failure to submit its cost information on a CONNUM-specific basis meant that necessary information reasonably reflecting the costs of production was not available.
• Kaptan Demir Celik Endustrisi ve Ticaret v. United States
  • A Turkish producer and exporter of steel concrete reinforcing bar was not entitled to a stay pending resolution of its separate action arising from the previous administrative review of the same countervailing duty order where no common legal issue was being reviewed by the appellate court, the administrative reviews were separate actions based on the specific factual records, and thus, the proposed stay did not meaningfully advance judicial economy;
  • In light of the court‘s overarching duty to timely resolve disputes, the interests of the litigants in resolving disputes quickly, as well as the general interest of the public in expeditiously resolving matters of great economic importance, the extensive stay of proceedings requested by the producer and exporter did not meet the pressing need required for such stays.
• HiSteel v. United States
  • Because the foreign producer of heavy walled rectangular welded carbon steel pipes and tubes did not seek any relief separate from that sought by the producer challenging its individual weighted-average dumping margin, the foreign producer could piggyback on the challenging producer’s standing and did not need to establish independent constitutional standing;
  • Because the underlying litigation consisted of a civil action commenced under § 516A of the Tariff Act of 1930, and because the foreign producer was an interested party who was a party to the proceedings, the foreign producer was to intervene as of right by operation of 28 U.S.C.S. § 2631(j)(1)(B) and Ct. Int’l Trade R. 24(a)(1).
• AG der Dillinger Huttenwerke et. Al. v. United States
  • This consolidated action involves a challenge to the final determination in the antidumping (“AD”) investigation conducted by the U.S. Department of Commerce (“Commerce”) of certain carbon and alloy steel cut-to-length plate (“CTL plate”) from the Federal Republic of Germany
  • Since the issue, Commerce’s analysis, and the arguments of the parties are nearly identical to those presented in Dillinger France, the court concludes that a remand is equally appropriate here. Because Dillinger has failed to place information on the record demonstrating the actual cost of production of its non-prime products, Commerce may reasonably rely on facts otherwise available pursuant to § 1677e(a)(1); however, in making its selection of facts otherwise available, Commerce must explain how its reliance on information indicating the “likely selling price” of non-prime products accords with its obligation to ensure that the reported costs of production reasonably reflect the cost of producing the merchandise under consideration.

If you have questions about these updates, contact our Diaz Trade Law attorneys at info@diaztradelaw.com or call us at 305-456-3830.

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