Customs agent charged with falsifying ship inspection records.

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According to the Virginian-Pilot, a former U.S. Customs and Border Protection (CBP) agricultural specialist agent was charged with falsifying ship inspection forms on three separate occasions since 2015.

A CBP agricultural specialist is tasked with checking containers and trucks for agricultural or packaging materials that might contain invasive pests and also check wood packaging materials for larvae or inspects that could impact the native trees and nursery. In short, an agricultural specialist will make sure wood packaging materials, fruits and vegetables arrive into the US pest-free.

According to an indictment filed in the case, former-agent, Carl James Jr. falsified ship inspection forms on two ships: the CMA CGM Dalila and the OOCL Chongqing and one bulk carrier ship – the Pontovremon.

James’ set to appear in court on July 13th.

If you or anyone you know has had their shipment detained due to pests or invasive species found in wood packaging materials, or you have received an Emergency Action Notice (EAN) from Customs or you have had a seizure due to a failed agricultural inspection – contact experienced trade and customs attorney David Hsu at 832.896.6288 or by email at: dhsu@givensjohnston.com.

Canada announces retaliatory tariffs. Link to full list below.

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As has been widely reported on Reuters, NBC, CNN, Dailymail etc., Canadian Prime Minister Justin Trudeau announced the final list of items that will be subject to tariffs  of 10-20% starting July 1st.

The full list can be found here.

The list includes ballpoint pens, inflatable boats, playing cards, sleeping bags, portable stoves, toilet paper, ketchup, pizza, maple syrup etc. Seems like the only people will be the Canadian Boy Scouts! Just kidding, the list includes steel, aluminum, bovine animals; prepared meals etc.

It will be interesting to see whether these tariffs will impact the US surplus with Canada. Since 1985, the US has had a yearly trade surplus with Canada and the new tariffs will impact about 12.5 billion in goods from the US. In 2017, the US held a trade surplus of 25.9 billion dollars.

If you import or export any of the impacted goods and have questions moving forward, contact experienced trade and customs attorney David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

Trump claims Harley Davidson using tariffs as an excuse to close US plant and move to Thailand.

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Back in April 27th of this year, I wrote on my blog post here that I suspected Harley Davidson was using international trade, tariffs and the US withdraw of the TPP as excuses for two unpopular moves by the company: (1) closing a Missouri factory and (2) moving production to Thailand.

As Harley Davidson is a foreign entity in Thailand, it is not easy for Harley Davidson to just decide to open a factory in Thailand overnight, here’s why you can’t just open a factory overnight –

It takes time and planning, sometimes years of planning – corruption and lack of transparency in government and state agencies, high tariffs on imports (ad valorem tariffs from 50-80% according to export.gov), changes in Thailand’s legal frame work increasing rule of law and consumer protection, higher insurance premiums and a lengthy patent registration process (export.gov claims the patent process may take several years). This doesn’t include the time to find the space, building or retrofiting an existing factory, hiring and training a local work force, working out the logistics to get supplies to the assembly line and then all the permitting, registration and other red tape needed.

Today, July 26, 2018, U.S. President Donald Trump accused Harley-Davidson of using trade tensions as an excuse to move production overseas:

<blockquote class=”twitter-tweet” data-lang=”en”><p lang=”en” dir=”ltr”>Early this year Harley-Davidson said they would move much of their plant operations in Kansas City to Thailand. That was long before Tariffs were announced. Hence, they were just using Tariffs/Trade War as an excuse. Shows how unbalanced &amp; unfair trade is, but we will fix it…..</p>&mdash; Donald J. Trump (@realDonaldTrump) <a href=”https://twitter.com/realDonaldTrump/status/1011568906992017408?ref_src=twsrc%5Etfw”>June 26, 2018</a></blockquote>
<script async src=”https://platform.twitter.com/widgets.js” charset=”utf-8″></script>

Reuters reported that the plan for the Thailand-made motorcycles would be shipped to the EU to avoid any potential tariffs on US goods. It is estimated the tariffs could cost anywhere from $90 to $100 million per year. The Reuters article also mentioned the move would not result in retail or wholesale price increases in the EU.

Check back for more updates as they become available.

ZTE pays $1 billion fine, $400k into escrow soon.

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According to CNN Money, ZTE has paid the $1 billion dollar fine and will place an additional $400,000 into escrow soon.

This current payment of $1 billion is on top of the $1 billion ZTE paid last year.

Check back for more ZTE developments.

Check out my other ZTE-related blog posts:

In-depth details of the ZTE deal.

Senate passes amendment to undo Trump’s ZTE deal.

Deal reached between the US and ZTE.

ZTE facing $1.7 billion penalty?

The real reason Trump is working to reverse the 7 year ZTE ban? To help U.S. companies!

CNBC reports the US and ZTE are working on alternatives to the denial order issued against ZTE back in April of this year.

ZTE estimated to lose $3.1 billion due to US sanctions (Bloomberg).

Deal reached to allow ZTE to purchase U.S. hardware and software?

ZTE may need to change management and board in order to access US suppliers.

ZTE report to the HKEX on the impact of the US denial order: “major operating activities of the Company have ceased”.

ZTE and Huawei banned for sale to US military personnel.

ZTE banned from purchasing US technology for 7 years.

In-depth details of the ZTE deal.

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By ZTE Corporation (Own work (vectorized)) [Public domain or Public domain], via Wikimedia Commons

Most media reports of the ZTE deal stop only mention the $1 billion dollar fine and $400,000 to be placed in escrow.

I thought this reporting was a little lacking in details, so I went ahead and read the details of the ZTE deal and summarized them below:

1. Pay $1,000,000,000.00 within 60 days of June 8, 2018.

2. Pay $400,000,000 to escrow within 90 days of June 8, 2018 to a US headquartered bank selected by ZTE and approved by BIS.
-10-years probationary period.
-$400,000,000 will be returned to ZTE after 10 years.
-Records maintained and retained in the US or fully accessible from the US.
-Comply with all other terms and committed no other violation.
-Comply with OFAC settlement agreement.
-If ZTE is found to be non-compliant, then the $400,000 goes to BIS.
3. ZTE has 30 days to retain and their expense an “special compliance coordinator” (SCC)
-The SCC will be in place for 10 years
-If there is a change to any SCC, the replacement must be made within 30 days
-ZTE can’t hire an SCC to join ZTE until 5 years after the agreement ends.
4. ZTE must complete 9 audit reports to show compliance with US export control.
-Independent compliance monitor performs the first 4 audits.
-SCC completes remaining 6 audits
5. All records must be stored-in or fully accessible from the US.
6. ZTE must allow the US Gov’t to verify adherence to their export control compliance program.
-ZTE needs to provide export compliance training to leadership, mgmt, employees.
-ZTE needs to provide BIS copies of training materials until January 1, 2021.
-Implement export compliance program within 6 months.
-Replace entire Board of Directors
-Terminate all current senior leadership of ZTE and ZTE Kangxun.
-30 days after replaceing BOD, ZTE needs to create audit/compliance committee.
-Within 90 days of order, ZTE needs to detail all Chinese government ownership and control of ZTE, including stock ownership.
-Within 180 days, ZTE needs to publish online the classification under the regulations, publish in English and Chinese.
-Within 4 years, ZTE needs to hold 2 public symposia in China regarding export control compliance.

7. Full and timely payment of civil penalties.

8. For 10 years, ZTE cannot participate in any transaction involving any item exported or to be exported from the US that is subject to the Regulations.

9. ZTE cannot export or re-export to or on behalf of a denied person.

10. Any one related to a denied person also subject to the order.

11. 10 year denial period suspended as long as ZTE pays the penalties. If ZTE violates terms, then a 10-year denial period from the date it is determined that ZTE has failed to comply.

12. ZTE cannot make a statement directly or indirectly denying allegations in the: proposed charging letter, the March 17th settlement agreement, the June 2018 agreement or the superseding order.
-ZTE needs to consult with BIS regarding any press releases

13. ZTE should fully cooperate with BIS, DOJ, OFAC regarding production of documents and witnesses.
-ZTE must be truthful in disclosures to BIS.
-ZTE must make available for interview deposition or testimony of employees current and former as needed.
-ZTE to notify BIS of any violations during the 10-year probationary period.
14. The ZTE order is to be made public.

PLEASE NOTE: The Senate added an amendment in the National Defense Authorization Act for Fiscal Year 2019 that would reverse the ZTE deal if passed. The amendment passed the Senate on Friday the 15th and is now in the House.

My thoughts: I don’t believe the Senators supporting the amendment to the NDAA have read the entire settlement with ZTE. My guess is the Senators only read the “$1 billion” dollar fine.

The US/ZTE deal is good for several reasons:
1. This deal keeps ZTE in business.
2. If ZTE is in business, US companies that supply to ZTE will benefit (Qualcomm, Google, etc).
3. This agreement is the FIRST (and likely the LAST time that the US Government will have any oversight of a Chinese company. I don’t think the Senators understand how unusual this is. Oversight by the US government of a large Chinese company will never happen again.
4. This deal allows the US to ensure no export controlled technology is sent by ZTE to a denied country for the next 10 years.

 

Trump threatens tariffs on imports of European cars.

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According to Bloomberg, the Trump administration threatened a tariff of 20% on cars imported from the European Union if the EU does not remove import duties on U.S. goods.

President Trump tweeted:

“Based on the Tariffs and Trade Barriers long placed on the U.S. and it great companies and workers by the European Union, if these Tariffs and Barriers are not soon broken down and removed, we will be placing a 20% Tariff on all of their cars coming into the U.S. Build them here!” Trump said in a tweet on Friday.

Not mentioned in the Bloomberg article – but some European manufacturers already make vehicles in the US. For example, Mercedes-Benz builds their GLE SUV, GLS SUV, the C-Class and the GLE Coupe in Alabama. BMW builds their X3, X4, X5, X6, and X7 models in South Carolina. Mexico is also host to manufacturing for Audi’s Q5 and VW’s Tiguan and Jetta models.

The EU has already imposed tariffs on $3.3 billion in U.S. goods and would impose further tariffs in the event the U.S. goes through with the import car tariffs.

Further updates will be posted as they become available.

German metal producer claims CBP violated due process.

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This past Sunday, German metal manufacturer (Andritz Sundwig GMHB) claims the U.S. Department of Homeland Security (DHS) of violating its due process rights when U.S. Customs and Border Protection (CBP) ordered the export of the company’s bug-infested cargo instead of allowing the shipment to be fumigated.

In an emergency complaint filed with the U.S. Court of International Trade, Andritz’s legal counsel (Scott Johnston and James Hurst of Givens & Johnston PLLC and Stacey L.Barnes of Kearney, McWilliams & Davis PLLC) claims CBP’s decision to require the cargo to be exported does not allow Andritz any administrative remedies or opportunities to appeal.

The filing with the CIT claims CBP denied Andritz’s request to fumigate its cargo after horntailed wasps were found in the wood packaging materials (WPM).

Upon notice of a pest infestation, Andrtiz hired fumigators and requested last Friday for CBP authorization to fumigate and separate the infested WPM. Unfortunately, CBP denied those requests and requested exportation of the cargo on Sunday.  In response, Andritz filed a temporary restraining order in addition to a request for declaratory relief along with a temporary protective order on Monday.

More updates will be posted as available.

If you have received an “Emergency Action Notification” from Customs regarding wood packaging materials and or pest infestation, contact attorney David Hsu for immediate assistance at 832-896-6288. Time is of the essence when an EAN is received, call or email dhsu@givensjohnston.com as soon as possible.

Trump proposes further tariffs on $200 billion worth of Chinese goods.

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Official Portrait of Ambassador Robert E. Lighthizer

US Trade Representative (USTR), Robert Lighthizer released a statement supporting Trump’s request for the USTR to identify $200 billion worth of Chinese goods for an additional 10% in tariffs.

This follows Trump’s announcement last Friday of a 25% tariff on $50 billion in Chinese goods to counter what Trump claims to be “China’s theft of intellectual property and technology and its other unfair trade practices”.

Lighthizer’s full statement reads:

“I support the President’s action. The initial tariffs that the President asked us to put in place were proportionate and responsive to forced technology transfer and intellectual property theft by the Chinese. It is very unfortunate that instead of eliminating these unfair trading practices China said that it intends to impose unjustified tariffs targeting U.S. workers, farmers, ranchers, and businesses. At the President’s direction, USTR is preparing the proposed tariffs to offset China’s action.”

Call David Hsu if you have any questions on how US and Chinese tariffs may impact your business, 832-896-6288 or mail at dhsu@givensjohnston.com.

Philadelpha CBP seize 100 counterfeit Yeti mugs.

Yeti Screengrab

Screengrab of the Yeti.com website.

According to a U.S. Customs and Border Protection (CBP) media release on June 19th, CBP officers in Philadelphia seized 100 counterfeit mugs branded with the name of the poular cooler company Yeti.

The items were shipped from Hong Kong, China in April and labeled “fishing reel iron products”. CBP noted the “poor packaging” and “substandard quality” and detained the shipment.

After a shipment is detained, Customs will usually send a sample or photos to the trademark/word mark holder to verify authenticity of the mark. In this case, Yeti likely replied and told CBP the items were counterfeit.

In the event the trademark holder notifies CBP of the unauthorized use of a registered mark, CBP will seize the items and send a “Notice of Seizure” to the importer of record.

Philadelphia CBP has been busy with five counterfeit seizures in the past 3 months. Prior seizures included counterfeit jewelry and luxury watches.

If you have had your shipments seized by Customs, and you receive a “Notice of Seizure”, you should take action – call experienced seizure attorney, David Hsu at 832-896-6288 or by  email at dhsu@givensjohnston.com. CBP seizures do not just go away and you may expose yourself and your company to personal, criminal and civil liability – call today!

 

 

 

 

EU will vote to adopt”counter-balancing measures”on June 20th.

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At the next scheduled European Commission meeting scheduled for today (June 20th), the commission will vote on whether to adopt “counter-balancing measures” against the US.

Last Thursday (June 14th), the European Union countries unanimously endorsed a plan to impose counter trade tariffs against the US covering $3.3 billion worth of US products.

Once the vote is approved, the duties on US goods to the EU should be in place late June or early July.