Renegotiated KORUS FTA results in changes more favorable to US companies.

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According to the Office of the United States Trade Representative website, the Trump administration has negotiated additional favorable terms of the United States – Korea Free Trade Agreement (KORUS) that went into effect in 2012.

Fulfilling part of his campaign promises, President Trump has re-negotiated the KORUS with these (and many more) favorable changes to US companies:

1. Korea will double the number of US automobile exports to 50,000 cars per manufacturer per year.

2. US automobile exports to Korea that meet US safety standards can enter the Korean market without further modification. This lowers the cost of US cars being sold in Korea as additional testing and modifications are not needed before the US cars are sold in the marketplace.

3. Korea will recognize US standards for auto parts to service US vehicles in Korea, this reduces the labeling burden for US parts manufacturers.

4. Korea will amend their Premium Pricing Policy for Global Innovative Drugs to ensure non-discriminatory and fair treatment for US pharamceutical exports.

5. Korea imports of steel products into the US will be subject to a product-specific quota equal to 70% for the average annual import volume of such products during the years 2015-2017, resulting in reduction of Korean steel shipments to the US.

If you have any questions regarding the KORUS or other trade and customs law issues, feel free to contact David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

South Korea allows for increases on US auto imports in exchange for U.S. Steel tariff exemption.

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According to Reuters, the US and South Korea agreed on Monday (March 27th, 2018) to revise the KORUS bilateral free trade deal. As part of the deal, South Korea would improve access to U.S. automakers and in exchange the US would exempt Korean steel from the new Section 232 duty rates.

President Trump has always claimed the current KORUS agreement was “horrible” and lead to a doubling of the U.S. goods trade deficit with South Korea since 2012. While the terms have not yet been announced, the agreement likely makes South Korea is the first US ally to receive an indefinite exemption but still subject to quotas.

In addition to South Korea, Trump has temporarily excluded other major US trading partners Canada, Mexico, Australia and the European Union from higher U.S. import duties on steel and aluminium.

Check back for the latest news and as always, please contact David Hsu at 832.896.6288 or dhsu@givensjohnston.com for all your trade and international law questions.

Section 232 – Duties do not apply to goods coming from these countries until May 1, 2018.

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Until May 1, 2018, the Section 232 duties do not apply to goods coming from:

• Argentina;

• Australia;

• Brazil;

• Canada;

• Mexico;

• the member countries of the European Union; and

• South Korea.

After that time, the President will review whether to continue exempting these countries from the order.

Furthermore, the most recent customs message also says that admissions into FTZs can only be made with a privileged foreign status, which closes the previous FTZ loophole.

Any Section 232 questions? Call experienced trade and customs attorney David Hsu at 832.896.6288, or by email at dhsu@givensjohnston.com.

Cargo Systems Messaging Service – Additional Duties on Imports of Steel and Aluminum under Section 232 – March 22, 2018.

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U.S. Customs and Border Protection (CBP) released Cargo Systems Messaging Service Number 18-000240 with additional information regarding the imports of steel and aluminum under Section 232.

If you have any questions regarding this, please contact David Hsu at 832.896.6288 or by email at dhsu@givensjohnston.com.

CSMS #18-000240

Title:
Additional Duty on Imports of Steel and Aluminum Articles under Section 232 Date: 3/22/2018 11:39:25 PM To: Automated Broker Interface, ACE Portal Accounts, ACE Reports, Air Manifest, New ACE Programming, Ocean Manifest, Partner Government Agencies, Rail Manifest, Trade Policy Updates, Truck Manifest  Additional Duty on Imports of Steel and Aluminum Articles under Section 232 of the Trade Expansion Act of 1962

BACKGROUND:
On March 8, 2018, the President issued Proclamations 9704 and 9705 on Adjusting Imports of Steel and Aluminum into the United States, under Section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862), providing for additional import duties for steel mill and aluminum articles, effective March 23, 2018.  See the Federal Register, 83 FR 11619 and 83 FR 11625, March 15, 2018.  On March 22, 2018, the President issued Proclamations on Adjusting Imports of Steel and Aluminum into the United States.

These duty requirements are effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on March 23, 2018.

COMMODITY:
Steel mill and aluminum articles, as specified in the Presidential Proclamations.

COUNTRIES COVERED:
March 23, 2018 through April 30, 2018:  All countries of origin except Canada, Mexico, Australia, Argentina, South Korea, Brazil and  member countries of the European Union (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom).

As of May 1, 2018:  All countries of origin.

Please note this is based on the country of origin, not the country of export.

ENTRY SUMMARY FILING INSTRUCTIONS:
Steel Products In addition to reporting the regular Chapters 72 & 73 of the Harmonized Tariff Schedule (HTS) classification for the imported merchandise, importers shall report the following HTS classification for imported merchandise subject to the additional duty:9903.80.01 (25 percent ad valorem additional duty for steel mill products) Aluminum Products In addition to reporting the regular Chapter 76 of the HTS classification for the imported merchandise, importers shall report the following HTS classification for imported merchandise subject to the additional duty: 9903.85.01 (10 percent ad valorem additional duty for aluminum products)

Importers and filers failing to submit the required Chapter 99 HTS classifications with the entry summary information for imports under the specified Chapter 72, 73, and 76

HTS classifications for the covered countries of origin will receive the following reject messages:

E1 IQ10    LINE SUBJECT TO QUOTA

E1 FQ09   QUOTA NOT ALLOWED FOR ENTRY TYPE

E1 FQ05   BANNED IMPORT

E1 RF998 TRANSACTION DATA REJECTED

Note:  Quota is not in effect, but this ACE functionality is being used to validate entry summary transmissions and reject when validations determine the data is missing the required chapter 99 number.

Importers or filers receiving one of the reject messages above, who have researched their classification and dates to confirm the entry summaries were incorrectly rejected, should contact their assigned Client Representative with the results of their review.

Additional Information
Any steel or aluminum article subject to the Section 232 duties that is admitted into U.S. foreign trade zones on or after 12:01 a.m. eastern daylight time on March 23, 2018, must be admitted as “privileged foreign status” as defined in 19 CFR 146.41, and will be subject upon entry for consumption to any ad valorem rates of duty related to the classification under the applicable HTSUS subheading.

Any steel or aluminum article that was admitted into U.S. foreign trade zones under “privileged foreign status” as defined in 19 CFR 146.41, prior to 12:01 a.m. eastern daylight time on March 23, 2018, will likewise be subject upon entry for consumption to any ad valorem rates of duty related to the classification under applicable HTSUS subheadings imposed by the Proclamations.

The merchandise covered by the additional duties may also be subject to antidumping and countervailing duties.

CBP will issue additional guidance on entry requirements for any products excluded from these measures, as soon as information is available.  CBP will also issue updated guidance if there are any changes to these measures, including any changes to exempted countries and any new requirements, such as quota requirements.

FOR FURTHER INFORMATION:For more information, please refer to the Presidential Proclamations on Adjusting Imports of Steel and Aluminum into the United States, Federal Register, 83 FR 11619 and 83 FR 11625, March 15, 2018; and the March 22, 2018 Presidential Proclamations on Adjusting Imports of Steel and Aluminum into the United States.

Questions related to Section 232 entry filing requirements should be emailed to adcvdissues-hq@cbp.dhs.gov.

Questions from the importing community concerning ACE rejections should be referred to their Client Representative.

Trump Announces Tariffs on at Least $50 billion in Chinese Goods.

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On March 22nd, President Donald Trump signed a memorandum instructing the U.S. Trade Representative to prepare a list of goods imported from China that will be subject to tariffs.

The tariffs are in response to China’s policies of forced technology transfers, forced joint ventures, intellectual property theft and technology licensing restrictions for U.S. companies doing business in China.

Check back here for the list when it is published. It is is estimated the list will include approximately 1,300 tariff lines and the public will have 30 days to submit comments.

If you have any questions how this may affect your imports, call experienced trade and customs attorney David Hsu at 832-896-6288 or email dhsu@givensjohnston.com.

Section 232 Exclusion Requests.

 

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The Bureau of Industry and Security (BIS) has released the rules and procedures to apply for a Section 232 exclusion request for imports of steel or aluminum. Additionally, the BIS also released guidelines to object to any exclusion requests.

Contact David Hsu at 832.896.6288 or dhsu@givensjohnston.com to get started today on the exclusion request process.

Customs and Border Protection’s 2018 E-Commerce Strategy.

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According to a U.S. Customs and Border Protection (CBP) media release on March 8th, 2018 – CBP released their new strategy to deal with the increase in volume of e-commerce packages into the United States.

The media release is wordy and you are already to go back to Facebook – so here’s a quick cliff notes version of the media release:

1. More people are using the internet to buy direct from China, leading to more small packages entering the US.

2. The large increase in volume of small packages (commonly indicated as “e-packet delivery”) means there is a greater likelihood of things entering the country that should not enter.

3. CBP is worried about a greater entry of items that violate intellectual property rights (fake watches, counterfeit purfume, fake iphones, etc) will make it into the US.

Some highlights of the CBP e-commerce strategy:

1. Educate people to be aware of customs regulations. Not sure how easy it will be to make people aware of customs regulations when people can’t even follow traffic regulations!

2. Partnership with foreign governments

3. Improve data collection from CBP targeting systems and field personnel.

4. The media release includes a lot of buzzwords: “more agile, dynamic workforce that utilizes state-of-art techniques and technology to better target high-risk shipments, improving data collection from CBP targeting systems, and leveraging enforcement partnerships.”

My thoughts:

Personally, I do not believe methods 1-4 will be able to adequately address the increased flow of these small packages from China. I believe CBP has other methods that they are not publicizing, and rightly so. Notifying the public how CBP searches for items that violate IPR, are counterfeit or not allowed for entry into the US would be counter-intuitive and could only lead to foreign manufacturers creating work arounds.

If you are a manufacturer overseas and ship many small package items to the US and want to know how this can effect your business, call experienced trade and customs attorney, David Hsu, 832.896.6288 or email at dhsu@givensjohnston.com

CBP in Georgia intercept “first-in-port” insects.

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Mottled tortoise beetle (Image via Wikipedia)

U.S. Customs & Border Protection (CBP) officers at the Port of Savannah intercepted the pigeon tick, straight-snouted weevil and tortoise beetle in containers destined for Georgia.

These insects are known as “first-in-port” because the pests have never been encountered at a specific port of entry.

In January, CBP agriculture specialists at the Port of Savannah inspected tile and stone on shipments arriving from Turkey and Italy and discovered these potentially harmful insects.

This inspection was just one of the over 3.85 million twenty-foot container equivalent units of cargo processed yearly by the Port of Savannah, the second-largest on the East Coast.

If your imports have been seized due to containing pests, call experienced Customs attorney David Hsu for immediate assistance, 832-896-6288, or by email at: dhsu@givensjohnston.com.

CBP seizes ancient artifacts for repatriation.

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According to a U.S. Customs and Border Protection (CBP) news release, CBP officers at Miami International Airport (MIA) seized two shipments containing suspected ancient artifacts.

The first shipment from the United Kingdom was a wooden cargo container with a manifest indicating a value of $252,000. When CBP opened the container they found a helmet appearing to be an ancient artifact. An expert appraiser determined the helmet to be an authentic “Corinthian Helmet” dating back to 100-500 B.C.

The second seizure was from El Salvador containing 13 artifacts of Mayan origin.

While not frequently mentioned in the press, U.S. Immigration and Customs Enforcement (ICE) is responsible for investigating the loss or looting of cultural heritage properties and returning them to their country of origin. CBP works with ICE to ensure the repatriation rules are followed.

If you or someone you know has had artifacts seized, call experienced customs seizure attorney David Hsu at 832-896-6288, or by email at: dhsu@givensjohnston.com for a free consultation.

Customs posts Interim ACE Drawback Guidance online.

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On February 5, 2018, Customs posted the draft version of the new “Drawback: Interim Guidance for Filing TFTEA Drawback Claims”.

Starting February 24, 2018, filing drawback claims can be done electronically within the Automated Commercial Environment (ACE). The interim rules published on the Customs website here will be effective during the “interim period”, starting February 24, 2018 until February 23, 2019.

For the next one year period ending February 23, 2019, drawback claims can still be filed (1) manually, (2) Core-ACE or (3) TFTEA-Drawback.

However, after February 24, 2019, all TFTEA-Drawback claims must be filed electronically in ACE.

If you have any drawback questions or questions about how to file claims during the interim period, contact experienced customs attorney, David Hsu at 832-896-6288 or by email at dhsu@givensjohnston.com.