International Trade & Supply Chain

The Miscellaneous Tariff Bill (MTB) offers importers the opportunity to eliminate or reduce duties assessed on imported raw materials and intermediate products that are not produced in the United States or are unavailable domestically. The MTB’s goal is to aid U.S. manufacturers by reducing duties on inputs (raw materials, parts, etc.), thereby cutting domestic production costs and increasing the competitiveness of U.S. manufacturers. However, MTB duty benefits have also been granted to imported finished goods. For example, the last MTB granted duty benefits to certain shopping bags, basketballs and sports footwear. Duty savings for U.S. manufacturers under the MTB are anticipated to exceed $700 million annually. Interested importers should not miss the December 12, 2016, deadline to take advantage of these cost savings opportunities.

On September 14, 2016 the President issued a proclamation ending a U.S. government suspension issued in 1989 and restoring trade benefits to Burma, plus new trade benefits not previously granted, under the Generalized System of Preferences (“GSP”). The GSP is a duty reduction measure, which provides cost savings and applies to goods covered under thousands of individual tariff provisions. In short, the GSP permits duty-free entry for qualifying goods.

The restored benefits and new benefits for qualifying goods become effective November 13, 2016.

The U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) and the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) recently announced additional rule amendments intended to continue improving relations between the United States and Cuba by allowing even greater commerce and humanitarian efforts between the two countries. These new OFAC  and BIS  rules take effect today.  The new amendments build on previous amendments which Husch Blackwell LLP’s Technology Manufacturing & Transportation Industry Insider blog summarized here, here, and here.

On October 7, 2016, President Obama signed Executive Order 13742, terminating sanctions on more than 200 Burmese businesses and individuals. The Order eliminates prior restrictions on business with Burmese banks, permits the import of Burmese jadeite and rubies, and allows investment reporting through the State Department’s Responsible Investment Reporting Requirements to be made on a voluntary basis. Burma will now receive duty-free treatment on more than 5,000 products exported to the United States.

On Tuesday, September 27, 2016, the House Ways and Means Subcommittee on Trade held a hearing on “Effective Enforcement of U.S. Trade Laws.” Trade Subcommittee members evaluated U.S. Customs and Border Protection’s (CBP) efforts to comply with the provisions and deadlines outlined in the Trade Facilitation and Trade Enforcement Act of 2015 (PL 114-125). CBP Commissioner Gil Kerlikowske briefed the Committee on the agency’s progress in meeting its legislative obligations.

Commissioner Kerlikowske acknowledged CBP’s delinquency on a number of statutory deadlines, but assured Committee members that the agency has been working diligently to fulfill its obligations. In addition to shifting staff priorities, the CBP Office of Trade collected all legal deadlines and triaged assignments to provide priority attention to the most urgent matters. Commissioner Kerlikowske concluded that the CBP was “well on the way” to implementing the majority of its requirements by the end of the calendar year.

On September 14, 2016, the U.S. International Trade Commission (USITC) launched a new web page to engage American manufacturers who may benefit from the Miscellaneous Tariff Bill (MTB). The MTB supports manufacturers by eliminating or reducing import duties on hundreds of materials and products that are not produced domestically, cutting production costs and enhancing global competitiveness.

The American Manufacturing Competitiveness Act of 2016 (PL 114–159) established a new process for submitting MTB petitions, which traditionally required Members of Congress to introduce bills. Under the new system, likely beneficiaries will submit petitions directly to the USITC within a 60-day period, beginning October 14, 2016. Anticipated revenue loss for each product must be less than $500,000 per year.

On August 31, 2016, Hanjin Shipping Co. filed for bankruptcy protection in South Korea. Two days later, Hanjin filed in U.S. Bankruptcy Court for the District of New Jersey for Chapter 15, which provides a mechanism in the U.S. for resolving problems that arise in cross-border bankruptcies. Three out of four U.S. shippers reportedly have…

On September 1, 2016, the Office of Foreign Assets Control (OFAC) placed sanctions on 37 new individuals and entities to prevent attempts to circumvent U.S. sanctions against Russia, help the private sector with compliance and to foster a diplomatic resolution to the conflict in Ukraine. The new list (found here) includes 17 separatists in eastern Ukraine or Russian-occupied Crimea, including 11 officials operating in Crimea.  18 companies operating in Crimea, including a number of construction, defense and maritime firms, and a Ukrainian charity were added to the Specially Designated Nationals (SDN) list.  The list includes construction companies, PJSC Mostotrest and SGM –Most OOO, which were awarded contracts to complete the Kerch Strait Bridge to connect Russia to Crimea.

U.S. Secretary of Transportation Anthony Foxx was among the passengers aboard the historic flight from Fort Lauderdale, Florida to Santa Clara, Cuba today as JetBlue provided the first regularly scheduled commercial flight from the U.S. to Cuba in 55 years. Scheduled air service from the United States to Cuba is the most recent step in a string of important changes in the normalization of relations between the two nations.  As a result of these changes, which have been previously reported on here, a U.S. embassy was opened, direct mail service has been restored, Carnival cruise line has begun trips to Cuba and various regulatory changes have been made to ease travel, trade and financial transactions with Cuba.

For companies engaged in the international trade of goods or services, the decision of the United Kingdom to exit from the European Union, creates uncertainty on many levels. Laying aside political effects, such as potential reconsideration of Scotland’s 2014 decision to remain in the U.K. (Scotland having overwhelmingly voted to stay in the U.K. during the Brexit referendum), the legal issues stemming from the Brexit decision are almost too numerous to mention.  But, for a U.S. company thinking through the implications of Brexit, resultant changes in treaty obligations, British law, and U.S. law are the major categories to monitor carefully.