Category Archives: Customs & Trade Updates

Due to the lapse in Appropriations for Fiscal Year 2019, many federal offices are closed or not updating their websites. Nonetheless, private sources assist us in accessing the following information / notices, which may be of interest to our members and the trade:

Legislation: Rep. Sean Duffy Introduces the U.S. Reciprocal Trade Act, a bill that would give president ability to raise tariffs;

Customs and Border Protection: CBP official says that the government shutdown won’t stop CBP from meeting its deadline for phasing out old “core” drawback processes on February 24^th; however, the shutdown seems to be impacting other aspects of CBP’s work: CBP’s Disclosure Branch isn’t sending out emails confirming receipt of importers’ requests for an extension of “confidential treatment.” (per § 103.31(d)(1) and (d)(2) of the Customs Regulations, importers may request an exemption from public disclosure of information appearing on inward and outward vessel manifests in connection with its shipments at all ports of entry); included in CBP’s recently posted messages is CSMS 19-000016 Delays In The Processing Of Commercial User Fee Payments;

FDA Recalls Market Withdrawals, & Safety Alerts;

Courts: A recent Court of International Trade (CIT) case suggests that importers should verify their UL Marks – minor differences from products already registered with UL require new products to be registered even if there are only superficial differences, according to the CIT;

The CIT recently ordered an importer to pay more than $500,000 in penalties and unpaid duties for misclassifying goods that should have been subject to antidumping and countervailing duties. The importer allegedly imported wire hangers and polyethylene retail carrier bags from China under the wrong tariff classifications, then failed to defend itself in court against the penalty action;

Three steel importers recently filed a new lawsuit at the Court of International Trade alleging that an increase in Section 232 tariffs on steel products from Turkey to 50 percent is unconstitutional and violates statutory requirements. In a complaint filed January 17th, MedTrade, Transpacific Steel and A.G. Royce Metal Marketing (dba Concrete Reinforcing Products) seek a court order stopping implementation of the tariff increase and refunding any duties collected above the 25 percent applicable to other countries;

E U:  The EU has recently amended its ‘Food Contact Plastics’ Regulation;

California: latest 60 Day Notices on items such as, but not limited to, certain Plastic Soap Holder with Suction Cup, mugs with exterior decorations, Plastic Exercise Balls and a Cosmetic Tools Set; and,

Canada: latest Antidumping and Consumer Alert & Recall notices.

Members wishing to learn more about any of these items are encouraged to review details on the Gemini Member Site, or to contact the Gemini team.

Due to the lapse in Appropriations for Fiscal Year 2019, many federal offices are closed or not updating their websites. Nonetheless, private sources assist us in accessing the following information / notices, which may be of interest to our members and the trade:

Customs and Border Protection:

New Statistical Breakouts for Infant Footwear, Organic Flour are being implemented, despite the ongoing partial federal government shutdown and the resulting lack of any official version published by the International Trade Commission, such as the:

New statistical breakout 1101.00.0050 added for Organic flour;

New statistical breakout 2912.29.6010 added for “other” aldehydes that are odoriferous or flavoring compounds;

Subheading 4802.56.7040 for certain uncoated paper is split into statistical suffixes 4802.56.7050

for writing and cover paper, and 4802.56.7090 for “other” such paper; and

New subheading 6402.91.4063 is added for infant footwear covering the ankle with outer soles and uppers of rubber or plastics. The “other” category, 6402.91.4061, is renumbered 6402.91.4067.

CBP’s Importer Identity Form / Form 5106 Deployment to Be Delayed.

CBP will also further delay enforcement of in-bond requirements.

CBP to issue a CSMS message about the Jan. 23 sugar quota opening with “specific information that is particular to the shutdown.”

Consumer Product Safety Commission And Related:

EU Proposes to Restrict Formaldehyde in Certain Toys
The EU is proposing to restrict formaldehyde in specific toy materials under Appendix C to the Toy Safety Directive. The restrictions could become effective at the end of 2020.
Canada Publishes Guideline for Trace Amounts of Asbestos in Consumer Products

Canada has published guidance to assist the consumer products industry to comply with asbestos in consumer products regulations. The guideline provides information on ‘trace amounts of asbestos’ and suitable analytical methods. …

China Implements Revised Product Standard – FZ/T 81010-2018 <Trench Coats>

China has issued a revised version of its national standard for trench coats–FZ/T 81010-2018. The revised standard has become effective on September 1, 2018.

China New Product Standard – FZ/T 44004-2018 <Silk Bedding>
China has implemented its first product standard for silk bedding on September 1, 2018.

California’s latest 60 Day Notices on items such as, but not limited to, certain hooded towels, folio cases, gel ink pens and foam roller sets, deck scrubs; and,

Canada’s latest Antidumping and Consumer Alert & Recall notices.

Members wishing to learn more about any of these items are encouraged to

review details on the Gemini Member Site, or to contact the Gemini team.

Due to the lapse in Appropriations for Fiscal Year 2019, many federal offices are closed or not updating their websites – see Here’s who the partial government shutdown affects 

See also:

CBP’s latest ABI messages, including CSMS 19-000005 Attention for Trade Community utilizing MQ Server connections

CONSUMER PRODUCTS
EU Publishes Guideline for CMRs Under Annex XVII of REACH

The European Commission has published a guideline with methods to assist the industry to comply with CMRs under entry 72 to Annex XVII of REACH. The stricter limits apply for different concentration limits in other entries to Annex XVII of REACH or EU legislation.

COSMETICS, PERSONAL CARE AND HOUSEHOLD
Europe Restricts the Use of o-phenylphenol and its Salts in Cosmetic Products

TOYS AND JUVENILE PRODUCTS
EU Proposes to Strengthen Aluminum Migration in Toys

SOFTLINES
South Korea Publishes Notification for Updated Safety Standards for Products

Presidential Proclamation concerning Trade and the African Growth and Opportunity Act; Beneficiary Country Designations;

California’s latest 60 Day Notices on items such as, but not limited to, certain Charcoal grills, cellphone wallets, lens cleaner kits and handbags, travel bags; and,

Canada’s latest Antidumping and Consumer Alert & Recall notices.

Members wishing to learn more about any of these items are encouraged to review details on the Gemini Member Site, or to contact the Gemini team.

The following governmental notices may be of interest to our members and the trade:

CBP’s latest ABI messages, including CSMS 18-000758 Advance Electronic Data Required for Postal Shipments, requiring Advance Electronic Data on all postal shipments from China to the U.S. as of January 1, 2019 and CSMS 18-000757 Section 301 Product Exclusions – Announced on 12/28, advising: At the conclusion of the government funding hiatus, CBP will issue instructions on entry guidance and implementation.  Any updates to the Automated Customs Environment (ACE) will be implemented 10 business days after the shutdown has concluded. Until these updates are completed, entry and entry summaries must be submitted without the Chapter 99 product exclusion number referenced in 83 FR 67463.  Entry and entry summaries will be rejected by ACE if the Chapter 99 product exclusion number referenced in 83 FR 67463 is transmitted. 

Once CBP issues guidance and implements ACE enhancements, a Post Summary Correction (PSC) or a Protest may be submitted for a refund.

European Union’s Restriction of Phthalates Under REACH and Restriction of the Use of o-phenylphenol and its Salts in Cosmetic Products

CPSC and FDA Recalls and Consumer Updates;

ITA & ITC Notice of an Investigation into Certain Programmable Logic Controller (PLCs), Components Thereof, and Products Containing Same;

California’s latest 60 Day Notices on items such as, but not limited to, certain standard pillowcases, Anti-Stress Comfort Wrap reusable cover and Extendable fly swatter; and,

Canada’s latest Antidumping and Consumer Alert & Recall notices, as well as information concerning Ontario Canada’s Elimination of Regulatory and Licensing Requirements for Upholstered and Stuffed Articles.

Members wishing to learn more about any of these items are encouraged to

review details on the Gemini Member Site, or to contact the Gemini team.

The following governmental notices may be of interest to our members and the trade:

APHIS’ Comment Request concerning the Importation of Tomatoes From Certain Central American Countries

CBP’s Rule concerning Civil Monetary Penalty Adjustments for Inflation, Notice of a Comment Request regarding Entry and Manifest of Merchandise Free of Duty, Carrier’s Certificate and Release, as well as the latest ABI messages, including CSMS 18-000755, Draft Revised CBP Form 5106 Available on cbp.gov;

CPSC and FDA Recalls and Consumer Updates;

OFAC’s Notice of the Blocking of Persons and Property;

FTZ Board current notices;

ITA & ITC Notices of Administrative Reviews, Antidumping or Countervailing Duty Investigations, Orders or Reviews, as well as updates on Determinations, Investigations and Complaints on merchandise such as Drawn Stainless Steel Sinks from the People’s Republic of China and Multilayered Wood Flooring from the People’s Republic of China;

Presidential Administrative Orders concerning Suspension of Limitations Under the Jerusalem Embassy Act;

USTR issues its first List Of Product Exclusions from Section 301 tariffs on products from China;

California’s latest 60 Day Notices on items such as, but not limited to, certain rain suits, clutches and purses, bags including manbags, clutches, and wallets;

Canada’s latest Consumer Alert & Recall notices;

Vietnam Updates of the New Regulation on the Restriction of Formaldehyde and Azo Dyes in Textile Products; and,

Members wishing to learn more about any of these items are encouraged to

review details on the Gemini Member Site, or to contact the Gemini team.

December 19, 2018

U.S. Customs and Border Protection (CBP) has posted its CSMS addressing Immediate Delivery Procedures at Year-End for those wanting to take advantage of any beneficial tariff changes:
CBP’s Office of Trade is issuing a blanket authorization for Immediate Delivery (ID) procedures for merchandise to be released on or after December 17, 2018 through December 31, 2018, in accordance with 19 CFR § 142.21(i). The authorization is offered to filers who may elect to take advantage of the interim Harmonized Tariff Schedule changes, which take effect on or after January 1, 2019.
This blanket authorization does not apply to absolute quota merchandise and merchandise moved under an immediate transportation entry (type 61). Tariff rate quota merchandise previously authorized for ID release under 19 CFR § 142.21 (e) may still be released; however, the entry summary shall be presented within the time specified in 19 CFR § 142.23 or within the quota period, whichever expires first.
ABI entry transmissions, including the “paperless” provisional messages, will establish the desired entry date by using the estimated entry date in the summary transmission (“AE” transmissions). This will identify the change from “Entry” to “Immediate Delivery” and will allow filers to elect a date of entry in order to take advantage of tariff changes or special programs. Under ID procedures, the entry/entry summary must be filed within 10 working days after release. This blanket authority only extends to shipments released December 17, 2018 through December 31, 2018. No grace period will be granted for the purpose of timely filing ID entry summaries under this one-time allowance.
Questions regarding this policy should be addressed to the Commercial Operations, Revenue and Entry Division at otentrysummary@cbp.dhs.gov.

MEMORANDUM

December 18, 2018
As advised in our Memo of December 15th, although the President stated that there would be a 90-day delay in the increase in duty on List 3 products (https://www.gpo.gov/fdsys/pkg/FR-2018-06-20/pdf/2018-13248.pdf) from China, sources had advised that U.S. Customs and Border Protection (CBP) stated that unless CBP receives official notice of the delay from the United States Trade Representative (USTR), it expects to impose the additional 25 percent duty on the List 3 products effective January 1, 2019.
According to today’s Federal Register advance publications website, the USTR does have the notice scheduled for publication in tomorrow’s issue.1 As posted in its press release over the weekend, the USTR notice confirms the 90 day delay:
SUMMARY: In accordance with the direction of the President, the U.S. Trade Representative (Trade Representative) has determined to modify the action being taken in this Section 301 investigation by postponing the date on which the rate of the additional duties will increase to 25 percent for the products of China covered by the September 2018 action in this investigation. As set out in this notice, the rate of additional duty for the products covered by the September 2018 action will increase to 25 percent on March 2, 2019.
DATES: On March 2, 2019 at 12:01 am Eastern Standard Time, the rate of additional duty will increase to 25 percent with respect to products covered by the September 2018 action.

MEMORANDUM

December 17, 2018

On December 1st, the President stated that there would be a 90-day delay in the increase in duty on List 3 products from China. However, sources advise that U.S. Customs and Border Protection (CBP) has stated that until CBP receives official notice of the delay from the United States Trade Representative (USTR), it expects to impose the additional 25 percent duty on List 3 (https://www.gpo.gov/fdsys/pkg/FR-2018-06-20/pdf/2018-13248.pdf) products effective January 1, 2019.

Apparently, the USTR does have a notice prepared confirming the 90 day delay, which provides in part:

SUMMARY: In accordance with the direction of the President, the U.S. Trade Representative (Trade Representative) has determined to modify the action being taken in this Section 301 investigation by postponing the date on which the rate of the additional duties will increase to 25 percent for the products of China covered by the September 2018 action in this investigation. As set out in this notice, the rate of additional duty for the products covered by the September 2018 action will increase to 25 percent on
March 2, 2019.

DATES: On March 2, 2019 at 12:01 am Eastern Standard Time, the rate of additional duty will increase to 25 percent with respect to products covered by the September 2018 action.

However, although the draft is available on the USTR’s website, it does not appear on the roster of notices scheduled for publication in Monday’s Federal Register. The notice may still be added to Monday’s issue, or it will be included in a later one – hopefully before January 1st.

In any case, we will continue to monitor its status and keep you advised.

The following governmental notices may be of interest to our members and the trade:

APHIS’ Rule concerning the Branding Requirements for Bovines Imported Into the United States From Mexico and Comment Request regarding the Importation of Fresh Peppers From Ecuador Into the United States;

CBP’s Comment Request regarding the Application for Withdrawal of Bonded Stores for Fishing Vessels and Certificate of Use, its December 12th Bulletin with Notices of CBP Decision No. 18-12 addressing Technical Corrections to the Vessel Repair Unit Regulations and Accreditations and Approvals of Commercial Gaugers and Laboratories, as well as the latest ABI messages, including CSMS 18-000724, advising that the Update Completed for the December Preliminary Monthly Statement Print Date Change;

CPSC and FDA Recalls and Consumer Updates;

FTC’s Comment Request concerning the Proposed Identity Theft Rules;

FTZ Board current notices;

ITA & ITC Monthly announcement advising of the Initiation of Administrative Reviews, in addition to Notices of Administrative Reviews, Antidumping or Countervailing Duty Investigations, Orders or Reviews, as well as updates on Determinations, Investigations and Complaints on merchandise such as Wooden Bedroom Furniture from the People’s Republic of China and Certain Microfluidic Devices;

California’s latest 60 Day Notices on items such as, but not limited to, certain flag display kits, bolt cutters and powder/blush brushes; and,

Canada’s latest Antidumping and Consumer Alert & Recall notices.     

Members wishing to learn more about any of these items are encouraged to review details on the Gemini Member Site, or to contact the Gemini team.

 December 12, 2018

A recently issued ruling issued by U.S. Customs and Border Protection (CBP) held that Cable modems that are made up of Chinese parts but assembled in Mexico are subject to the 10 percent Section 301 tariffs on goods from China.

Under consideration were two types of modems, consisting of materials that were all products of China, including the case components, feet, screws and labels. In Mexico, the modems would be completely assembled, including having the printed circuit board assembly (PCBA) board programmed.

Regarding the country of origin marking, CBP analyzed that issue systematically, in accordance with Part 102, Customs and Border Protection Regulations (19 C.F.R. Part 102), the NAFTA Marking Rules.  Because the imported modems were neither wholly obtained nor produced exclusively from “domestic” (i.e., Mexican, in this case) materials, sections 102.11(a)(1) and 102.11(a)(2) did not apply and CBP had to look to section 102.11(a) (3):

“Foreign material” is defined in 19 C.F.R. § 102.1(e) as “a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced.”  The applicable rule for subheading 8517.62.0010, HTSUS, in section 102.20 requires:

[a] change to other units of automatic data processing machines of subheading 8517.62 through 8517.69 from any other good of subheading 8517.62 through 8517.69 or from any other subheading, except from subheading 8504.90 or from heading 8473 or subheading 8517.70 when the change is the result of simple assembly

The foreign components of both modems are classified under subheading 8517.70, HTSUS, and meet the tariff shift requirement.  Therefore, the country of origin, for purposes of marking, of the electric motor is Mexico.

Nonetheless, despite the marking result and all the work that was done in Mexico, CBP determined that this did not constitute a “substantial transformation” of the Chinese components:

In this case, the foreign subassemblies are imported into Mexico where they will be assembled into cable modems.  The foreign components (PCBA, housing/case, rubber feet, labels) all had a pre-determined end-use and did not undergo a change in use due to the assembly process in Mexico.  Based on the information provided, the production process performed in Mexico does not result in a substantially transformation of the Chinese components.

As the assembly of the Chinese components in Mexico does not result in a substantial transformation of the Chinese parts, the modems remain a product of China.  Products of China classified under subheading 8517.62.0010, HTSUS, unless specifically excluded, are subject to the additional 10 percent ad valorem rate of duty.  At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.04, in addition to subheading 851762.0010, HTSUS, listed above.

Accordingly, importers may wish to consider seeking legal assistance / CBP’s opinion regarding the classification of merchandise that may be undergoing new sourcing and / or the benefit of a “substantial transformation.”