Customs Brokerage News

The CBP has released an official notice regarding goods produced in Hong Kong. The notice states that a product produced in Hong Kong must indicate “China”as their origin.

The new ruling is based on the President’s Executive Order on Hong Kong Normalization (EO 13936, dated July 14, 2020). The EO suspends the United States-Hong Kong Policy Act of 1992.

CBP is granting a 45-day transition period. Enforcement of the new markings will begin September 25, 2020.

• The transition period is intended to offer time to adjust to the newmarking rules.
• During the transition period CBP isdirected to not issue marking notices or take enforcement actions on goods produced in Hong Kong.
• Goods entered or withdrawn from warehouse for consumption into the United Statesafter September 25, 2020,must be marked to indicate that their origin is “China” for purposes of 19 U.S.C. 1304.For more information on this topic, please reach out to your DB Schenker representative.

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Goods Produced in Hong Kong - Aug 2020

The USTR continues to update Section 301 actions effecting duties. The USTR will continue to issue decisions on pending requests on a periodic basis.

• Exclusions - China
  Office of the United States Trade Representative (Link)
  Related to Section 301 Exclusions List 4
  Exclusions under HTSUS 9903.88.53
  Applicable on goods entered September 1, 2019
   
• Additional Duties – France
  Federal Register / Vol. 85, No. 137 / Friday July 16, 2020 / Notices (Link)
  Related to Section 301, France’s Digital Services Tax
  Announcing additional duties of 25% on certain products from France
  Products such as make-up, soaps and handbags
  Delayed 180 days seeking substantial progress in negotiations (Jan 6^th, 2021)

Note the exclusions are not limited to the party or importer of record that applied for the exclusion.  Any importer of record with eligible commodities may claim exclusions provided the imported commodity is an exact match to the commodity description.

You must compare your products against the published exclusions and determine if there is a match. If you choose to claim an exclusion you must be prepared to defend the claim to CBP if they request information to validate claims.

Claims for exclusions may be filed retroactively to the date the additional duty was implemented. For entries not liquidated a post-summary correction may be transmitted to make the claim and request a refund. A formal protest is required to submit a claim for liquidated entries.

For more information on Section 301 tariff actions and the exclusion process, please reference USTR website or contact your local customs service office or account manager if you would like to discuss this topic and your imported commodities.

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Section 301 Exclusions and Additional Duties

Unless an importer or exporter takes steps to request confidentiality of its vessel manifest data, U.S. Customs and Border Protection (CBP) is legally obligated to make certain data available under the Freedom of Information Act. This means that “data collection” companies are legally able to obtain some of your shipping information that is presented on vessel manifests and sell it to other companies (e.g. your competitors) in various reporting formats. Air manifests are confidential.

You do have options to protect your manifest information by requesting confidential treatment of data. While the confidentiality request option has long been available, it required mailing the request, or more recently emailing the request and often took 60-90 days to go into effect. On May 22, 2020, CBP deployed an on-line application, for which CBP anticipates reducing the processing time to as little as 24 hours.

Since this is an electronic data match to suppress information, only exact matches will be suppressed. Therefore, CBP does not guarantee your data will never be made available, and the key is to submit as many naming variations as you can think of. A good place to start is by reviewing copies of ocean shipment bills of lading. How many ways do you see your name listed? Include them all.

What about the shipper’s name? An importer or consignee can suppress the name and address of the shipper. The on-line application automatically defaults to this option but can be overridden.

The request is only valid for two years, so remember to put the renewal date on your calendar to refresh your requests and allow enough time for CBP processing to avoid gaps.

Resources:
May 2020 Trade Information Notice
Vessel Confidentiality Web Page
Confidentiality Application Web Page

Should you have any questions regarding the process, please feel free to contact your local DB Schenker representative.

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Electronic Vessel Manifest Confidentiality

Over the last two years there have been many challenges and complaints about the Section 232 trade remedy exclusion process applied to aluminum and steel articles. At this time the Department of Commerce Bureau of Industry and Security (BIS) is soliciting comments regarding the appropriateness of the information requested and considered in applying the exclusion criteria, and the efficiency and transparency of the process employed.

Comments are due by July 10, 2020 and may be made via the regulations.gov Federal rulemaking portal using docket number BIS-2020-0012. If submitting comments via email, the reference RIN 0694-XC058 needs to be included in the subject line of the email and within the comments.

The request was published on May 26, 2020 in Federal Register notice 85 CFR 31441. The notice provides many suggestions for topics for which comments are requested. Now is the time to provide your thoughts and suggestions regarding this challenging issue.

As a reminder, if you are importing articles subject to the Section 232 duties, it is vital that you keep your Schenker brokerage branch updated on the availability of exclusions with specific instructions as to which exclusion applies to which material. As exclusions become inactive due to fulfillment of the permitted quantity or expiration of the time limit, the brokerage staff needs to be aware of new exclusions or the recognition that the additional duties are applicable. It is important that you track each exclusion and the quantities claimed on each customs entry to monitor your running total against the permitted quantity.

Please contact your Schenker representative if you have questions.

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BIS Opens Opportunity to Comment on Section 232 Tariff Exclusions

U.S. Customs & FDA Operational Readiness: agencies are maintaining regular operations and monitoring events for potential disruptions.

U.S. Operational Readiness:

• U.S. Customs: Clarification — The Presidential Proclamation issued March 11, 2020 was specific to travelers and not cargo.
  • Cargo is not currently considered as a transmission vehicle for the COVID-19 virus.
  • If U.S. Customs receive different guidance it will be shared immediately.
  • Transportation crew may be subject to additional health screening.
• U.S. Customs: Volumes
  • Decline in express cargo, and overall slow-down in air cargo.
  • Vessels leaving China have declined but still allowed to arrive at U.S. ports.
• U.S. Customs: Staffing
  • No negative impact.
  • Where possible, teleworking takes effect this week.
  • Officers with suspected exposure will quarantine for 14 days.
  • Contingency plans in place to prioritize critical functions.
• U.S. Customs: Other
  • USMCA implementation is still a priority and focus of The Office of Trade. Planned meetings now via webinars and conference calls.
  • Entry Type 86 Data Pilots are not impacted at this time.
  • To facilitate combatting the virus CBP will grant exclusions for items that will help.
• FDA: Operations
  • Remaining functional and operational to include all current processes such as:
    • Prior notice reviews
    • Entry processing
    • Sampling and exams
    • FSVP inspections
    • Filler assessments
    • All compliance activities
• Expecting to process fewer hard-cop FDA Notice of Action and will utilize Import Trade Auxiliary Communication Systems (ITACS). DB Schenker already utilizes electronic notices.
• FDA will continue monitoring events and will provide updates as needed.

As DB Schenker continues to monitor the COVID-19 situation and effect on the global supply chain, stay current via Twitter, LinkedIn, or our Blog. For any immediate questions or assistance, please contact your local account manager or one of our offices closest via www.dbschenker.com.

We appreciate your continued support as a valued customer.

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Client Notice - U.S. Customs and FDA Operations - 03172020

The U.S. Trade Representative (USTR) has created new opportunities for China Section 301 additional duty exclusion extensions for List 1 and exclusion requests for List 4A.

List 1, Round 1 Exclusions Set to Expire 12/28/19

List 1 of the China Section 301 additional duties was effective on July 6, 2018, after which the USTR created the opportunity to apply for exclusions from the assessment of the additional duties. There have been eight rounds of exclusions granted for List 1 products. The first round of exclusions was effective on December 28, 2018 and is scheduled to expire on December 28, 2019.

On October 31, 2019 the USTR published in the Federal Register a notice of its decision to open this round of exclusions for comment and will decide if any exclusions will be extended. The comments may be made online at regulations.gov for docket number USTR-2019-0019. The comment period started November 1, 2019 with a deadline of November 30, 2019.

List 4A Exclusion Request Deadline is 1/30/20

List 4 was effective on September 1, 2019. On October 24, 2019 the USTR published in the Federal Register a notice of its decision to open this list for interested parties to apply for exclusions. The exclusions may be made online via the exclusions portal. The application period started October 31, 2019 with a deadline of January 31, 2020.

We appreciate your continued support as a valued customer and should you require further information or clarification, please contact your Schenker brokerage office.

UPDATE:  11262019

The United States Trade Representative published four additional sets of exclusions to the Section 301 List 3 imports from China.  The product exclusions apply retroactively from September 24, 2018.  Details on the exclusions are available below.

Link to October 2 Federal Register notice for List 1 – 8th round, HTS 9903.88.19, valid from July 6, 2018 until October 2, 2020

Link to October 2 Federal Register notice for List 2 – 3rd round, HTS 9903.88.20, valid from August 23, 2018 until October 2, 2020

Link to October 28 Federal Register notice for List 3 – 3rd round, HTS 9903.88.33, valid from September 24, 2018 until August 7, 2020

Link to November 13 Federal Register notice for List 3 – 4th round, HTS 9903.88.34, valid from September 24, 2018 until August 7, 2020

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China Section 301 List 1 and List 4A Exclusions

On October 2, 2019 the World Trade Organization (WTO) arbitrator ruled the U.S. may impose retaliatory tariffs on $7.5bn of goods it imports from the European Union (EU). 

The U.S. plans to impose tariffs on European Union goods including aircraft and agricultural products in alignment with the World Trade Organization (WTO) ruling.  The USTR released a list Wednesday of products it plans to target.  The duties would take effect Oct. 18. The duties include:

• 10% tariffs on aircraft from France, Germany, Spain or the United Kingdom
• 25% duties on single-malt Irish and Scotch whiskies, various garments and blankets from the U.K.
• 25% tariffs on coffee and certain tools and machinery from Germany
• 25% duties on various cheeses, olive oil and frozen meat from Germany, Spain and the U.K.
• 25% tariffs on certain pork products, butter and yogurt from multiple countries

The U.S. Trade Representative published on its website a final list of products on which additional duties will be assessed after official legal notice in the Federal Register.

There are 15 lists of HTS numbers affected, with each list assigned to certain countries. Also impacted are certain apparel, blankets, and bed linens from the UK; and tools, books, pictures, and self-propelled machinery from the U.K. and Germany.

Please be sure to contact your Schenker brokerage office as soon as possible if you believe your products are impacted by these additional tariffs.

Effective October 1, 2019

U.S. Customs & Border Protection announced a 2.174 percent increase of the merchandise processing fee (MPF) effective October 1, 2019 for fiscal year 2020. While the assessed rate of .3464 percent of the entered value of merchandise does not change, the minimum and maximum limitations for the MPF are adjusted. The fee is now reviewed annually and may be adjusted to account for inflation as authorized under the 2015 Fixing America’s Surface Transportation Act (FAST Act). The rate of increase is calculated from the base year of 2014, so the published rate increase of 7.167 percent is based on fee amounts in that year ($25 formal min, $485 formal max), rather than from current rates.

• Formal entry minimum increases from $26.22 to $26.79
• Formal entry maximum increases from $508.70 to $519.76
• Informal entry electronically transmitted to CBP increases from $2.10 to $2.14
• Informal entry manually submitted to CBP increases from $6.29 to $6.43

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CBP Increases MPF

On August 1st President Trump announced his intention to assess 10 percent additional duty starting September1, 2019 on remaining imports from China.  The Section 301 additional duties will be imposed on products that are on “List 4”, with an annual trade value of approximately $300 billion. The USTR published the preliminary List 4 in the May 17, 2019 Federal Register, and public hearings were held in June.  The Office of the U.S. Trade Representative said,  "this list covers essentially all remaining imports from China. The proposed product list excludes pharmaceuticals, certain pharmaceutical inputs, select medical goods, rare earth materials, and critical minerals."  At this point we must wait until the U.S. Trade Representative (USTR) publishes the final list and posts the legal notice in the Federal Register in order for the tariff to take effect.

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Section 301 List 4 Duties Announced

On Sunday, February 24th President Trump announced that he is postponing the rate increase for the List 3 Section 301 trade remedy duties that was scheduled for implementation on March 2nd. A new deadline was not provided.