U.S. Trade Representative Katherine Tai generally avoided being pinned down on timing as she was asked about rekindling trade negotiations with the United Kingdom and Kenya, the pause on tariffs on European imports, and a solution for steel overcapacity that could make way for the lifting of Section 232 tariffs.
Country of origin cases
The U.S. Department of Agriculture Foreign Agricultural Service has noticed higher security on a range of items traded between the U.S. and Panama, USDA reported May 7. The agency said traders should be aware of “increased rules of origin scrutiny” on coffee products, certain rice products, milk, butter, cheese, eggs, beef, pork, potatoes and other food products. USDA warned U.S. exporters to comply with Panamanian customs authorities, which enforce the rules of origin requirements in the U.S.-Panama Trade Promotion Agreement and issue fines and back duty assessments for noncompliance.
Bolivia, Colombia, Ecuador and Peru recently extended measures to promote and facilitate trade in cosmetics, cleaning products and certain hygiene products, the Hong Kong Trade Development Council reported May 10. Through Dec. 31, the Andean Community countries may accept a “commitment letter in lieu of a certificate of free sale or a similar authorisation” of the country of origin when traders are looking to renew sanitary certifications, HKTDC said. In the letter, the trading party must “commit” to provide the certificate within six months after the sanitary notification is issued, renewed or modified. The countries may also extend a deadline by up to 12 months that will allow importers to “exhaust existing stocks” of their cosmetics, cleaning and hygiene products when their sanitary certificate has expired.
Following the Department of Justice's first resolution of action under a new export control tool, greater efforts should be made to conduct export-related due diligence and act on those recommendations, according to a May 6 analysis from Sidley Austin. Merely conducting audits of exports and sanctions is not good enough anymore, Sidley said. Implementing audit recommendations and putting in place a robust process to receive, investigate and elevate whistleblower complaints should be a priority following the DOJ's settlement with German software company SAP SE.
Peru recently revised its labeling requirements for certain manufactured imports to include the country of origin, the Hong Kong Trade Development Council said May 6. The country previously required only the “country of manufacture” and certain other information, but traders now must disclose the country of origin for any “packaged or primary processed agricultural food product,” HKTDC said. The country of origin information must be in Spanish, HKTDC said, and the country of manufacture and, for perishable products, expiration date, must be “indelibly marked” on the product or packaging.
Four months after the United Kingdom left the European Union, customs activity is stabilizing following a hectic period of trade between Britain and the bloc, said Joop Mastenbroek, director of Customs Brokerage North and Continental Europe, West Europe and Middle East Africa at logistics company GEODIS, speaking at a May 4 event hosted by the U.S. Fashion Industry Association about the leading customs challenges post-Brexit. While more exporters and importers are up to date on how to issue the right documentation to ensure smooth customs clearance, large challenges still exist. In the current market scenario, the robustness of government systems under the increased weight of declarations, challenges around products of animal origin, shortage of resources and differing customs procedures by the various EU member states stand as the most challenging customs issues, Mastenbroek said.
The State Department fined a U.S. aerospace and technology company $13 million for illegally exporting technical data to several countries, including China, according to a May 3 order. Honeywell International sent drawings of parts for military-related items, including for engines of military jets and bombers, the agency said, all of which were controlled under the International Traffic in Arms Regulations. After discovering the violations, issuing a self-disclosure to the State Department and bolstering its compliance program, the company again illegally exported technical drawings, failing to abide by its improved compliance requirements, the order said.
The Bureau of Industry and Security fined a California metalworking machinery company $60,000 for illegally exporting an item to the United Arab Emirates, BIS said in an April 30 order. The company, MDA Precision LLC, knowingly violated the Export Administration Regulations when it sold a $34,000 “five-axis benchtop milling machine” to the UAE without a license. BIS said the UAE customer likely intended to transfer the machine to Iran.
The United Kingdom, fresh out of the European Union, conducted its fourth round of free trade agreement negotiations virtually with New Zealand April 12-27, the U.K.'s Department for International Trade announced in an April 30 news release. An outline of the whole agreement was provisionally agreed to, including chapters on Anti-Corruption and Women in Trade, the agency said. Significant progress was also made on the Disputes, Rules of Origin, Goods, Labor and Telecommunications, Digital, Consumer Protection and Environment provisions of the agreement.
San Diego-based tungsten products manufacturer Tungsten Heavy Powder settled a False Claims Act allegation for $5.6 million for false origin claim, the U.S. Attorney's Office for the Southern District of California said in an April 29 news release. The producer was accused of falsely certifying that it sourced materials from the U.S. for items made under contract with the government of Israel, funded by the U.S. Defense Security Cooperation Agreement Agency. The U.S. accused THP of falsely declaring that its Chinese-origin tungsten from China was from the U.S. The U.S. also alleged THP falsely certified that manufacturing occurred in the U.S., when it instead produced its products via a contract with a Mexican maquiladora factory.