On Monday, April 20, 2020, U.S. Customs and Border Protection (CBP) issued interim instructions for implementation of the U.S.-Mexico-Canada Agreement (USMCA).*  The instructions provide guidance regarding preferential tariff claims under the USMCA.  The Agreement, once it enters into force, provides for the immediate or staged elimination of trade barriers for goods originating in one of the three countries.  The instructions provide guidance regarding rules of origin (including for automotive goods), regional value content (RCV) calculation methods, de minimis rules, transshipment, eligibility for textiles and apparel, making preference claims, and certification and recordkeeping rules and requirements.

The instructions provide a rules of origin definition to determine whether a good qualifies as an “originating good” under the USMCA, such that it is eligible for preferential tariff treatment.  Under USMCA a good is “originating” in the United States, Mexico, or Canada when:

a) The good is wholly obtained or produced entirely in the territory of one or more of the Parties, as defined in Article 4.3 of the Agreement;

b) The good is produced entirely in the territory of one or more of the Parties using non-originating materials provided the good satisfies all applicable requirements of product- specific rules of origin;

c) The good is produced entirely in the territory of one or more of the Parties exclusively from originating materials; or
Continue Reading CBP Posts Interim Instructions for USMCA Implementation

Since the advent of the Centers of Excellence and Expertise (CEE’s), US Customs and Border Protection (CBP) has moved its audit function to the Centers and is focusing on single issue audits rather than the focused assessments previously conducted by regulatory audit.

Targeted single issue audits can be misleading.  CBP typically sends an audit questionnaire

On September 6th Customs and Border Protection (“CBP”) released a statement regarding cargo processing during the upcoming hurricane.   In the wake of Hurricane Harvey, diversion of cargo to open ports was a key factor in allowing trade to continue to operate in the face of the closures of Texas and Louisiana seaports.

CBP will permit ocean vessels to divert from their intended port to another port for discharge. CBP requests that ocean manifests be amended and new destination ports be alerted.  CBP will not issue penalties for violations arising from port diversions during the hurricane.
Continue Reading Customs and Border Protection Readies for Hurricane Irma

Last year, President Obama signed into law the Trade Facilitation and Trade Enforcement Act of 2015 (“TFTEA”).  Section 421 of the TFTEA (commonly called the Enforce and Protect Act, or EAPA), establishes procedures for submitting and investigating allegations of evasion of antidumping and countervailing duties.

The statute encouraged a wide variety of stakeholders to participate in this new administrative process.  For example, the statute defined “interested parties” who may file an allegation of evasion to include foreign exporters and producers, importers, and domestic manufacturers and wholesalers, of products covered by antidumping and countervailing duty orders.  Indeed, interested parties on all sides of the trade equation who play by the rules have an incentive to participate in the CBP’s evasion investigations. 
Continue Reading Combating Evasion of Duties Front and Center

The American Manufacturing Competitiveness Act of 2016 (“AMCA”) established a new process for the submission and evaluation of requests for temporary duty suspensions and reductions.  Under the AMCA, petitions for duty suspensions and reductions are filed with the U.S. International Trade Commission (“Commission” or “USITC”), and the Commission, with input from other federal agencies, reviews each petition.  The Commission must submit preliminary and final reports to two Congressional committees (the House Committee on Ways and Means and the Senate Committee on Finance).  Following the final report’s submission, the Committees will draft a miscellaneous tariff bill (“MTB”).  Once the MTB passes, the temporary duty suspensions or reductions will be take effect for a period not to exceed three years. The process will repeat again in a second series, no later than October 15, 2019.

In the first series, over 3,100 petitions were submitted to the ITC through its online Miscellaneous Tariff Bill Petition System (“MTBPS”).  Due to petition withdrawals, 2,500 petitions still are under consideration.  On June 6, 2017, the Commission issued its preliminary report to the Committees, entitled:  American Manufacturing Competitiveness Act of 2016: Preliminary Report, USITC Pub. 4699 (USITC June 2017).  
Continue Reading It’s Time To Comment on Miscellaneous Tariff Petitions