China General Nuclear Power Group added to BIS entity list.

white nuclear plant silo under orange sky at sunset

Photo by Johannes Plenio on Pexels.com

This past Wednesday, the U.S. Department of Commerce added China General Nuclear Power Group (CGN) to the BIS entity list. As a result, American companies are now prevented from selling any products to China’s largest state-owned nuclear company. If any American company or person does business with CGN (or any other listed entity), they would be violating the law and subject to persecution.

The U.S. Department of Commerce claims CGN its subsidiaries engaged in activity to acquire advanced U.S. nuclear technology and material for use in the Chinese military.

China claims the real goal of placing CGN on the entity list is to limit China’s growth under China’s “Made in China 2025” initiative. Made in China 2025 is an effort by the Chinese government to increase the high tech capability and manufacturing of China. If successful, the “Made in China 2025” efforts will make China the a superpower in high technology in Asia.

If you have any questions about your company’s operations and want to ensure compliance with the new entity list addition, contact experienced export compliance attorney David Hsu at 832-896-6288 or by email at dh@gjatradelaw.com, attorney.dave@yahoo.com.

US Mexico tomato dispute – US demands 100% review of all tomatoes within 72 hours of shipment.

photography of tomatoes near basil leaves

Photo by monicore on Pexels.com

According to publimetro.com.mx, the Secretary of Economy of Mexico, Graciela Marquez claims the US is inflexible in their demand to review 100% of tomato shipments at the border within 72 hours. The Mexican Government claims the US does not have enough man power to process the tomatoes.

The current tomato dispute stems began in 1996, when tomato growers in Florida initiated antidumping investigations against Mexican tomato exports. A deal was reached in November 1996 between Mexican growers and the Department of Commerce that led to the suspending of the investigation. The suspension was renewed in 2002, 2008 and 2013. However, earlier this year, Florida tomato growers complained the Mexican growers were violating their end of the deal. Since May of 2019, Mexican tomato exporters have had to pay a countervailing duty rate of 17.5% before the tomatoes can be exported into the United States.

The final determination will be issued on September 19, 2019 followed by a final determination regarding the damages to the industry due on November 1, 2019.

Mexico is the world’s largest tomato exporter in 2018, with external sales of $2.3 billion dollars of which 99.7% of its exports are to the US.

Canadian sofa bed manufacturer no longer shipping to US due to 1,732% duties on Chinese mattresses.

photo of living room

Photo by Milly Eaton on Pexels.com

According to a news article from the vancouverisawesome.com webasite, a Vancouver-based company has cancelled shipping their sofa beds into the US due to the 1,732% antidumping duty on Chinese mattresses that are used in their sofa beds. The U.S. Department of Commerce in May dumping rates of 34% to 75% for some Chinese manufacturers with an “all others” rate of 1,732%.

The company claims their sofa beds costing $600 will cost $113,000 due to the tariffs because the sofa beds include the mattress.

Fortunately the company does not only sell beds, and can rely on their Canadian made products. In fact, being made in Canada will probably make this company more competitive than their competitors who rely on Chinese imports for other goods that are likely covered under Lists 1-3 and a potential List 4.

The Commerce Department has set October 11, 2019 as the announcement date for their final decision on antidumping duties for mattresses imported from China.

If you have questions on how this or any other antidumping duty or countervailing duty will impact you and your business, contact experienced trade attorney David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com, dh@gjatradelaw.com.

FedEx sues Commerce Department.

brown wooden gavel close up photography

Photo by rawpixel.com on Pexels.com

On Monday June 24th, FedEx filed a lawsuit against the the U.S. Department of Commerce to avoid having to follow the BIS entity list restrictions the government imposed back in May against doing business with Huawei.

A FedEx statement said “FedEx is a transportation company, not a law enforcement agency,” and that the EAR violates a shipping company’s rights to due process under the Fifth Amendment because all shipping companies are strictly liable for shipments that violate the Export Administration Regulations; without requiring evidence the shippers had knowledge of any violations.

In short, FedEx claims compliance with the new EAR regulations is impossible because FedEx cannot know the origin and technological make-up of all the contents of the shipments it handles.

Will post updates as soon as they are available.

Huawei files lawsuit against Commerce Department for seizing equipment.

blur computer connection electronics

Photo by Field Engineer on Pexels.com

According to Reuters, Huawei Technologies Company, Inc. filed suit against the U.S. Department of Commerce on Friday the 21st claiming the seizure of telecommunications equipment sent from China to the US and back to China was not covered under the Export Administration Regulations (EAR).

Specifically, Huawei claims the equipment was not subject to a license requirement because it did not fit into a controlled category (ECCN) as the hardware was being returned to China from which it came.

The equipment seized is a computer server and ethernet switch sent to California for testing and then seized on the shipment back to China.

Will post more updates as they become available.

The US Department of Commerce bans Huawei and affiliates from sourcing US components.

black huawei android smartphone

Photo by Alex Fu on Pexels.com

On May 15th, the U.S. Department of Commerce officially placed Huawei and 70 of its affiliates on the Bureau of Industry and Security’s (BIS) “entity list.” The ban prohibits US companies from selling and exporting components to Huawei without government approval through an export license.

Placing Huawei on the BIS entity list comes one day after Trump signed an executive order declaring a national emergency regarding telecommunication equipment from “foreign adversaries” who “are increasingly creating and exploiting vulnerabilities in information and communications technology and services.” The impact of Trump’s executive order prohibits U.S. companies from buying telecommunication equipmetn from companies that pose a national security risk. While the executive order does not specifically name Huawei, the order’s exclusion of “foreign adversaries” implies Huawei and other government controlled entities. The Department of Commerce has 4 months and 20 days to determine who is included as a “foreign adversary”.

If you have any questions how Huawei’s placement on the BIS enttiy list may impact you, contact David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.

American Farm Bureau Federation supports Commerce Department anti-dumping investigation of Mexican tomatoes.

close up of tomatoes on wooden table

Photo by Pixabay on Pexels.com

The U.S. Department of Commerce will resume anti-dumping investigations into imports of Mexican tomatoes despite a previous agreement not to.

Zippy Duvall, President of the American Farm Bureau Federation indicated an anti-dumping investigation was needed because Mexican producers have increased their market share despite an agreement to ban artificially low prices.

On February 6, 2019, the Department of Commerce notified Mexico they would withdraw from the 2013 Suspension Agreement on Fresh Tomatoes from Mexico under a clause that the signatories may withdraw from the Agreement with “ninety days written notice to the other party”. The expiration of the 90-days is May 7, 2019.

After the withdraw on May 8th, an investigation by the Department of Commerce will continue and will send notification to the International Trade Commission of its final determination.

If you are an importer of Mexican tomatoes or want to know how this may impact you, contact antidumping duty attorney David Hsu at attorney.dave@yahoo.com or by phone/text at 832.896.6288 for a no cost or obligation consultation.

ZTE and Commerce sign escrow agreement – denial ban is one step closer to being lifted.

architectural design architecture buildings business

Photo by Luke Hui on Pexels.com

Earlier today, the U.S. Department of Commerce announced they had reached an escrow agreement with ZTE. As you are aware, in order to lift the denial ban put in place in April 2018 (and be authorized to purchase goods and services from US companies), ZTE must pay $1 billion dollar fine and place $400 million into an escrow account.

Commerce announced today an agreement was reached with ZTE. The next step is for ZTE to deposit the $400 million into the escrow account. Upon deposit, the Department of Commerce, Bureau of Industry and Security will lift the denial ban. According to the June 8, 2018 superseding order, ZTE has until September 8, 2018 to deposit the funds – based on today’s news it appears ZTE is on its way to lifting the denial ban.

If you are a supplier or ZTE vendor and have any questions about the denial ban, feel free to contact export compliance attorney, David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.

Check out my other ZTE posts:

ZTE Open for US Business – sort of and only until August 1, 2018.

ZTE deal is good to go – House bill does not include Senate language “undoing” ZTE deal.

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

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 Open for US Business – sort of and only until August 1, 2018.

According to the US Department of Commerce, Bureau of Industry and Security (BIS) website, ZTE has authorization by BIS for “Limited Service” from July 3rd – August 1st, 2018.

On July 3rd, BIS granted a limited authorization for all persons to engage in business with ZTE under the 4 following circumstances:

  1. Engagement with ZTE for all contracts entered into with ZTE before April 15, 2018.
  2. Engaging in the support, service, software updates and patches to ZTE phones.
  3. Disclosure to ZTE of information regarding security vulnerabilities in items owned, possessed or controlled by ZTE.
  4. Limited transfer of funds – can make or receive payments to and from ZTE if transactions are pursuant to this authorization.

The full text can be found here.

Any other transactions with ZTE are still subject to the denial order of April 15, 2018. The denial order is only lifted once ZTE pays the $400,000 into an escrow account. According to the superseding order that outlines the ZTE deal, ZTE has 90 days to pay the escrow funds (until September 6, 2018).

Check out my other ZTE-related blog posts:

ZTE deal is good to go – House bill does not include Senate language “undoing” ZTE deal.

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.

If you have any questions whether your company can start engaging with ZTE, call trade specialist David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.

ZTE deal is good to go – House bill does not include Senate language “undoing” ZTE deal.

alphabet arts and crafts conceptual creativity

Photo by Pixabay on Pexels.com

Last Thursday, the US House of Representatives (“House”) passed its version of the defense appropriations bill, formally known as the the “John McCain National Defense Authorization Act for Fiscal Year 2019”, or “NDAA” for short.

The House bill passed on a 359-49 vote and authorized $675 billion in defense spending for next year. The final bill does include the Senate language prohibiting ZTE and Huawei from selling goods or services to the Pentagon.

More importantly, the final bill does not include Senate language that would have “undone” ZTE’s deal ($1 billion in fines, US government oversight, $400k in escrow, etc.) Despite bipartisan support in the Senate for amended language that would have prevented a deal with ZTE, the House did the right thing and removed this amendment from the final bill.

News of this final bill probably won’t make it to the news outlets, but this final bill is a win for President Trump and the administration – and will be the first time the US Government has had oversight of a large Chinese company.

With the ZTE deal saved and ZTE now eligible to buy hardware and software from US companies – companies such as Qualcomm, Lumentum, Oclaro, Broadcom, Intel, MACOM, Semtech, and other U.S.-based vendors in the ZTE supply chair are probably breathing a sigh of relief.

Check back for more ZTE news, if you have any questions about ZTE, trade or customs law, contact David Hsu at 832-896-6288 or by email at attorney.dave@yahoo.com.