A weekly live web event dedicated to issues related to international trade. Materials used throughout the stream include: OWIT Mexico Event | WOMAN EXPORTING MX – October 26-30, 2020 https://mbmapp.com/event/mujerexportamx Assoc. of Cert. Sanction Specialists | Listings, Delistings and Other Developments in the Russian Sphere – Oct. 1, 2020 https://sanctionsassociation.org/20201001upcoming/ Event – Rising Tensions – Increased Trade Controls on Wednesday, October 7 HKT https://email.steptoecommunications.com/120/8358/landing-pages/rsvp-blank.asp?sid=ea292c35-fe3a-42c2-ac19-ea8649c27ee1 Cuba: OFAC’s amendment of Cuban Asset Control Regulations: Qs 837 https://home.treasury.gov/policy-issues/financial-sanctions/faqs/topic/1541 12 Categories of General License: https://cu.usembassy.gov/u-s-citizen-services/local-resources-of-u-s-citizens/traveling-to-cuba/ New Rule for Professional Meetings: https://www.ecfr.gov/cgi-bin/text-idx?SID=cff7b100f3d7279989d2c087a32f83f6&mc=true&node=se31.3.515_1564&rgn=div8 Old Rule for Professional Meetings: https://www.govinfo.gov/content/pkg/CFR-2019-title31-vol3/pdf/CFR-2019-title31-vol3-sec515-564.pdf New Rule for Public Performances: https://www.ecfr.gov/cgi-bin/text-idx?SID=cff7b100f3d7279989d2c087a32f83f6&mc=true&node=se31.3.515_1567&rgn=div8 Old Rule for Public Performances: https://www.govinfo.gov/content/pkg/CFR-2019-title31-vol3/pdf/CFR-2019-title31-vol3-sec515-567.pdf HK Special Administrative Region on SDN – 09/25/2020 OFAC FAQ https://home.treasury.gov/policy-issues/financial-sanctions/faqs/840 Reminder of 08/31/2020 HKSAR Designations: https://home.treasury.gov/news/press-releases/sm1088 Follows Exxon Mobile Case: https://www.govinfo.gov/content/pkg/USCOURTS-txnd-3_17-cv-01930/pdf/USCOURTS-txnd-3_17-cv-01930-2.pdf Xinjiang Production and Construction Corps (XPCC) makes it to Magnitsky List on 09/25/2020 https://home.treasury.gov/policy-issues/financial-sanctions/faqs/835 Note on Magnitsky (https://en.wikipedia.org/wiki/Sergei_Magnitsky): Sergei Magnitsky Rule of Law Accountability Act of 2012 … see pg. 8: https://www.govinfo.gov/content/pkg/BILLS-112hr6156enr/pdf/BILLS-112hr6156enr.pdf New Website for Steel Mill Licenses https://www.federalregister.gov/documents/2020/09/11/2020-19753/steel-import-monitoring-and-analysis-system https://www.trade.gov/us-industry-licensing https://enforcement.trade.gov/steel/license/SMP_byHTS.pdf DOJ News Release on False Claims Act https://www.justice.gov/opa/pr/multinational-industrial-engineering-company-pay-22-million-settle-false-claims-act 09/16/2020 Customs Bulletin at 15: Cyper Power v. US https://www.cbp.gov/sites/default/files/assets/documents/2020-Sep/Vol_54_No_36_Complete_0.pdf Please remember to attend our weekly live stream! Tuesdays at 5:30 p.m. EST…
A weekly live web event dedicated to issues related to international trade. This week the conversation focused on so-called “Trump” tariffs: a.k.a. Sec. 201, 232, 301. In light of lively debate about Sec. 301 challenge in the Court of International Trade, we also focused on the details and legal rationale underlying the Sec. 301 litigation. Materials used throughout the stream include: Martin Behr’s Presentation: “Trump’s Tariffs: Sections 201, 232, and 301,” available at https://drive.google.com/file/d/17kgaG2an_EiUL4kZOduqinbUWWu1-2MD/view?usp=sharing U.S. Court of International Trade Plaintiff’s Complaint: HMTX Industries v. U.S., available at https://filehost.thompsonhine.com/uploads/USCIT_-_HMTX_Industries_LLC_et_al_v_United_States_-_Sept_2020_2ea7.pdf Jurisdictional Statute, 28 USC 1581(i)(1)(B): https://uscode.house.gov/view.xhtml?req=(title:28 section:1581 edition:prelim) OR (granuleid:USC-prelim-title28-section1581)&f=treesort&edition=prelim&num=0&jumpTo=true Statute of Limitations, 28 USC 2636(i) – 2 years from the date the cause of action first accrues: https://uscode.house.gov/view.xhtml?req=(title:28 section:2636 edition:prelim) “First Accrues” Date: 83 FR 47974 (09/21/2018) https://www.federalregister.gov/documents/2018/09/21/2018-20610/notice-of-modification-of-section-301-action-chinas-acts-policies-and-practices-related-to 19 USC 2411 (Sec. 301) https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title19-section2411&num=0&edition=prelim 19 USC 2414 (Sec. 303) https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title19-section2414&num=0&edition=prelim 19 USC 2417 (Sec. 307) https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title19-section2417&num=0&edition=prelim 4 Sec. 301 lists available at USTR website https://ustr.gov/issue-areas/enforcement/section-301-investigations/section-301-china/200-billion-trade-action 8/18/17 FR Notice of Investigation https://www.federalregister.gov/documents/2017/08/24/2017-17931/initiation-of-section-301-investigation-hearing-and-request-for-public-comments-chinas-acts-policies USTR Report (Final?) https://ustr.gov/sites/default/files/Section%20301%20FINAL.PDF USTR Response for List 3 https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/june/ustr-robert-lighthizer-statement-0 Reliance on Sec. 307 (at page 2) https://ustr.gov/sites/default/files/enforcement/301Investigations/2018-0026%20China%20FRN%207-10-2018_0.pdf USTR Statement Mentioned in the Complaint https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/june/ustr-robert-lighthizer-statement-0 Please remember to attend our weekly live stream! Tuesdays at 5:30 p.m. EST At…
One of the primary and completely legitimate purposes of incorporating is to limit or eliminate the personal liability of corporate principals and employees. Under New York state law, corporate veil piercing principles or legal entity disregarding principles involve several factor analysis. Piercing the corporate veil requires a showing that: (1) the owners exercised complete domination of the corporation in respect to the transaction attacked; and (2) that such domination was used to commit a fraud or wrong against the plaintiff which resulted in plaintiff’s injury. Morris v. New York State Dep’t of Taxation & Fin., 82 N.Y.2d 135, 141, 623 N.E.2d 1157, 1160–61 (1993). So fraud automatically pierces corporate veil, it is given. What about negligence? Well, the negligence must equate to abuse of the privilege of doing business in the corporate form to perpetrate a wrong or injustice against that party. Id. In one case, New York’s Appellate court declined to pierce corporate veil in a negligence claim finding no “fraud or wrong.” Mistrulli v. McFinnigan, Inc., 39 A.D.3d 606, 607, 834 N.Y.S.2d 271, 272 (2d Dept. 2007). This means that negligence, would not automatically serve as an entitlement to corporate veil piercing in New York state courts. Same…
Court of International Trade (CIT) decision in Zojirushi v. U.S. (CIT 2016) is a great jurisdictional monologue explaining how and when 28 U.S.C. § 1581 can be invoked when challenging Customs and Border Protection (CBP) protest. In Zojirushi, CBP did not approve nor deny protestant’s GSP claim, but instead checked the box on CBP Form 19 “rejected as non-protestable.” Protestant brought action against CBP in CIT under 28 U.S.C. § 1581(i), which is a residual jurisdictional subdivision. CIT declined jurisdiction under 28 U.S.C. § 1581(i), saying that for this type of action, jurisdiction pursuant to 28 U.S.C. § 1581(a) should be invoked, which explicitly provides for protests. (The Court of International Trade shall have exclusive jurisdiction of any civil action commenced to contest the denial of a protest, in whole or in part, under section 515 of the Tariff Act of 1930) However, the problem here was that CBP had neither denied nor approved the protest, but rather “rejected” the document. According to CIT, this problem is easily corrected through “accelerated disposition” clause under 19 U.S.C. § 1515(b). In other words, before showing up to court, protestant should request accelerated disposition. Then wait thirty (30) for “deemed” denial. And only then,…
On August 24, 2016, in Otter Products v. US, Court of Appeals for the Federal Circuit (CAFC) agreed with the Court of International Trade (CIT) decision that protective cases for smartphones that are specifically designed to fit these smartphones are not classifiable under HTSUS heading 4202. For Otter Products, LLC this decision lowered duty from 20% to 5.3%, allowing them to use HTSUS 3926.90.99 (other articles of plastic provision). Perhaps more interesting, if not important, outcome of the opinion is the analysis and well-reasoned attack on the part of both plaintiff and defendant. HTSUS 4202 heading provides for: Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper: Since smartphone cases are not specifically provided under heading notes,…
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In October 2015, Department of Justice published conviction and penalty information of Lumber Liquidators Inc.’ criminal activities (also available here). The fine is $13,150,000. According to February 2, 2016 Google Finance report, (holding) company’s market cap is about $354,470,000. This means that Lumber Liquidators Inc.’s criminal activities cost company 3.7 percent of its market cap (attorneys’ fees not included). According to DOJ, it is “the largest financial penalty ever under the Lacey Act.” Now that the Lacey Act criminal precedent is set to cost 3.7% of the corporate market cap, it is a good reason to revisit Lacey Act itself, especially since its has been over four years since LawCustoms published on the topic. In a nutshell, Lacey Act makes it unlawful to import, export, sell, acquire, or purchase fish, wildlife or plants that are taken, possessed, transported, or sold: 1) in violation of U.S. or Indian law, or 2) in interstate or foreign commerce involving any fish, wildlife, or plants taken possessed or sold in violation of State or foreign law. Lumber Liquidators Inc. pleaded guilty to violation of 18 U.S.C. § 542 (entry of goods by means of false statements). Lacey Act requires importer of to submit a…
Author commented on CBP’s position for digital equipment border searches back in 2008. Since then, CBP came out with amended version for digital equipment search conduct in the CBP Directive 3340-049. The directive states that searches, including those of electronic derives, can be made “without individualized suspicion.” Id. at ¶¶ 5.1.3, 5.1.4. DHS Special Agent Kevin Hamako, who may or may not have read the CBP directive, also had “an understanding that no suspicion was required to conduct a border search of any items * * * including electronic devices.” U.S. v. Kim, 7 (D.C. 2015). But, the D.C. district court decided that Agent Hamako misunderstood the “no suspicion” doctrine in the context of digital equipment border searches. DHS agent was following up a lead that allegedly implicated one businessman’s involvement with exports of controlled items without securing valid licenses around 2008-2009. In 2012, DHS agent intercepted the businessman at the airport and seized his computer, allowing the businessman to exit the United States. The seized computer was sent to the another DHS facility, where the contents of the hard drive were copied and examined. The computer was eventually returned to the businessman, but based on the examined content, DHS…
Certain individuals who work for corporations engaging in international trade, particularly imports, now have an excuse to ask for a raise. On September 16, 2014 Court of Appeals for Federal Circuit in U.S. v. Treck Leather held defendant-officer Mr. Shadadpuri personally liable for gross negligence while introducing merchandise into the commerce of United States under 19 U.S.C. § 1592(a). While requesting the raise, following arguments may be helpful: Any ‘person’ who engages in the behavior prohibited by 19 U.S.C. § 1592(a) is liable thereunder regardless of whether that ‘person’ is the importer of record or not. U.S. v. Treck Leather, pg. 11. Person includes human beings, partnerships, associations, corporations, consignees, consignors, sellers, owners, importers, agents, and other persons. U.S. v. Treck Leather, pp. 13-14. Corporate liability could not have been incurred but for direct involvement of a person. U.S. v. Treck Leather, pg. 11 (“Trek’s gross negligence . . . could not have been conceded but for the direct involvement of Mr. Shadadpuri.”). Person imports merchandise through one or more companies owned by that person. U.S. v. Treck Leather, pg. 19 (He “imported men’s suits through one or more of his companies.”). Person’s own acts are enough, no piercing of…
In the Corning Gilbert Inc. v. U.S., importer asked the Court of International Trade for an opinion about Customs and Border Protection (CBP) role in enforcing decisions of other agencies. The specific issue concerned general exclusion order issued by International Trade Commission (ITC) in the patent infringement investigation for coaxial cable connectors. Exercising ITC’s authority under 19 U.S.C. § 337(d)(2)(a), the Commission directed CBP to exclude all unlicensed “coaxial cable connectors that infringe claim 1 and/or claim 2 of U.S. Patent 6,558,194.” Id. Since the patent in question has only two claims, the ITC’s decision essentially concerned the whole patent. Now here is the interesting part: when deciding whether or not to exclude the merchandise, can CBP rely on interpretations of the ITC, or should CBP make its own inquiry? In Corning Gilbert, CBP thought that reliance on ITC’s interpretation would suffice. The Court, however, disagreed and requested CBP to exercise its own discretion: “Customs may have to go beyond the mechanical application of the ITC’s Section 337. It may have to look at evidence and analyze whether the importer, particularly a non-party such as Corning Gilbert, has established non-infringement.” Id. This holding is significant in light of CBP’s peculiar role as…
Read More CBP Can’t Hide Behind Ministerial Shield… sometimes
Imposition of antidumping duties is a popular trade tool in the modern WTO regime. When it comes to People’s Republic of China, asking the U.S. government to impose antidumping duty is even easier (due to its non-market economy status), and probably politically popular. When these duties are imposed, the tariff rate can easily overshoot 100 percent range. In case of Chinese origin pencils, for example, it would be over 114 percent. High antidupimping duties are designed to prevent “dumping” of a product on the U.S. market. Collaterally, these duties serve as the great incentive to circumvent the law, such as the antidumping duties law. This is exactly what the plaintiff has alleged in US v. Staples case. The plaintiff complained to the court about various importers, such as Staples, Target, OfficeMax, and Industries for the Blind. According to the plaintiff, these companies circumvented the law by incorrectly declaring the origin of Chinese pencils. Since the antidumping duty is tied to the origin, changing the origin of the product can change the duty. This is what the plaintiff said: Staples declared falsely on Customs entry documents that its pencils originated in Hong Kong, Malaysia, and Taiwan; Target falsely declared that its…