Showing posts from February, 2012

Enforcement Center Comes to Life

Yesterday, the President signed an Executive Order creating the Interagency Trade Enforcement Center that he promised to us in the State of the Union address. The Center is to be headed up by a full time senior USTR employee and will be housed at USTR. The second in command will be a full time senior person from Commerce. In section 3 of the EO, the President defines the Center's mission as follows: (a) serve as the primary forum within the Federal Government for USTR and other agencies to coordinate enforcement of U.S. trade rights under international trade agreements and enforcement of domestic trade laws; (b) coordinate among USTR, other agencies with trade related responsibilities, and the U.S. Intelligence Community the exchange of information related to potential violations of international trade agreements by our foreign trade partners; and (c) conduct outreach to U.S. workers, businesses, and other interested persons to foster greater participation in the i

More on Debarment

The State Department's Directorate of Defense Trade Controls has taken a solid swing at the freight forwarders discussed in the previous post . Here is a link to the notice . The upshot of this is that these forwarders will be able to work through existing authorizations. Pending requests for new authorizations will be returned without action unless they contain a transaction exception request. They can be resubmitted. New requests involving these forwarders must contain a transaction exception request or they will be returned. It's hard to see how these requests for exceptions will be treated except to deny them, but that is not a forgone conclusion. Maybe this is a shot over the bow of the forwarding community and requests will be granted until the debarments end. Or, DDTC could play hardball, which will make life very difficult for the forwarders involved and defense companies that use them.

ITAR Brokering and Freight Forwarders

UPDATE: Take a careful look at Jim Dickeson's thoughtful comment on this item. He correctly points out that there is an exception to the requirement that freight forwarders register and seek licenses. And, that exception makes perfect sense in an environment in which the shipper is the exporter and subject to the licensing requirement. Nevertheless, the brokering regulation does list freight forwarders as parties subject to regulation. The distinction appears to be whether their role is limited to forwarding or whether they take the next step and act as an importer. Read what follows with that in mind. And, thanks to Jim for the input. _________________________________________ I don't typically cover exports here, although it is part of my practice. I am making an exception because this issue has now come up from a number of sources. So, I want to do what I can to clear the air. But, I do not have a conclusion for all involved. The fact is that six prominent freight forwar

Proposed Changes to In-Bond Process

I'm just going to throw this out there for my broker and importer friends. Yesterday, Customs and Border Protection published a proposed rule to modify the in-bond process.  Here is a link to the notice . Here is the summary in full: Under the U.S. Customs and Border Protection (CBP) regulations, imported merchandise may be transported in-bond. This process allows imported merchandise to be entered at one U.S. port of entry without appraisement or payment of duties and transported by a bonded carrier to another U.S. port of entry provided all statutory and regulatory conditions are met. At the destination port, the merchandise is officially entered into the commerce of the United States and duties paid, or, the merchandise is exported. CBP is proposing various changes to the in-bond regulations to enhance CBP's ability to regulate and track in-bond merchandise and to ensure that the in-bond merchandise is properly entered and duties are paid or that the in-bond merchandis

Harmonization or New World Order?

I am a big proponent of the harmonization of international standards. This is mainly because I am cheap and believe in efficient, practical solutions to problems. I have always thought that the U.S., Canada, and the EU, for example, could merge their drug approval processes making for a one-stop shop. Once approved by this international body, the drug would be approved for sale in all three jurisdictions. I realize that is far easier said than done. The problem is that every country wants to be able to protect the health and safety of its citizens. And, at a very detailed level, the different organizations may have different approaches. Those details can become stumbling blocks and eventually stymie the whole thing. But, it can be done. Another objection to this is that the U.S. will be giving up sovereignty and allowing "foreign bureaucrats" to make decisions about the medicines (or foods, or whatever) Americans can use. This, to me, is a red herring. As long as the United

Is It Soup Yet?

The Court of Appeals for the Federal Circuit has affirmed the decision in Aromont USA, Inc. v. United States in which the Court of International Trade held that commercial food flavoring was classifiable as food preparations not elsewhere specified or included (2106.90.99) rather than as "soups and broths and preparations therefor" in 2104.10.00. We discussed the Court of International Trade Decision here.  This is an issue of principal use and the Federal Circuit had some interesting things to say. As you probably know, some tariff classifications are based upon the use of the product. Additional U.S. Rule of Interpretation 1(a) provides that: [A] tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to  which the imported goods belong, and the controlling use is the principal use "Principal use" i

Where Administrative Law Meets Pleading

The Court of International Trade has also dismissed a case in which U.S. Customs and Border Protection attempted to impose a penalty on a customs broker. The underlying issue had to do with the failure of the broker to properly deposit antidumping duties and to properly identify the producer of freshwater crawfish from China. This is another in the now long series of decisions from the Court of International Trade that turn on pleading rather than the merits. There is nothing wrong with that. Obviously, plaintiffs need to properly plead their cases to proceed. But, these cases are usually not as interesting as a decision on the merits. This case is somewhat interesting because it seems to plug the holes left by two earlier cases. The first is based on United States v. UPS Customhouse Brokerage . In UPS, the Court of Appeals for the Federal Circuit held that Customs and Border Protection had not properly pursued a penalty against a broker because it failed to consider all 10 factors

CIT Dismisses HTS Gender Case

The long running effort by some importers to show that differing rates of duty for men's, women's, and children's gloves, footwear, and apparel are unconstitutionally discriminatory has hit another bump. Specifically, the Court of International Trade has dismissed Rack Room Shoes v. United States . Just by way of example, consider leather gloves. Men's gloves of 4203.29.30 are subject to a duty rate of 14%. Other gloves, meaning gloves for women and children, are classified in 4202.29.40 and are subject to a duty of 12.6%. That means that every time I buy imported gloves for my manly hands, someone in the supply chain paid an extra 1.4% in costs added on by the United States government as a direct result of my Y-chromosome. We can assume that the rational economic actors in the supply chain have passed that extra cost along to me. When a woman buys gloves for her dainty lady hands, there is no such burden on her supply chain. On its face, this seem wrong and, frankl

Don't Say I Did Not Warn You

According to the preface of the February 3 edition of the Harmonized Tariff Schedule of the United States: [T]his edition of the HTS does not contain updated rules of origin for all U.S. free trade agreements; such updates must be proclaimed by the President. The rules of origin for the North American Free Trade Agreement, the U.S.-Australia Free Trade Agreement, the U.S.-Chile Free Trade Agreement, the U.S.-Singapore Free Trade Agreement, and the U.S.-Bahrain Free Trade Agreement have been updated to reflect amendments made by the WCO to the international Harmonized System in 2007 and proclaimed by the President in Proclamation 8097, effective February 3, 2007; no similar updates have been proclaimed for any other free trade agreements. No rules of origin for any existing free trade agreement have been updated to reflect the amendments made by the WCO to the international Harmonized System, effective January 1, 2012, and proclaimed by the President in Proclamation 8771, effective F

Super Catch Up Edition

Here's the thing about blogging: It takes time that I do not always have. But, I do enjoy doing it and I know that many people read the blog and, to some extent, rely on it for current and useful info. So, I am going to spend some time between entertaining commercials and a potentially boring football game to catch up. That means that this won't be the most detailed post. CIT Orders Appraisal in Penalty Case In United States v. Callanish, the Court of International Trade seems to be trying very hard to dispose of a penalty case, but is frustrated by procedural issues. Specifically, the case involves an effort to secure a default judgment against an importer. However, the Court pointed out previously that it needs to know the domestic value of merchandise to assess the penalty. As a result, it ordered the United States to move to amend its complaint with well-pleaded facts establishing value. In its amended complaint (and I am skipping over an issue about how that amend