International Trade & Supply Chain

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.

Cuba’s Minister of Agriculture, Gustavo Rodriguez Rollero, made an official visit to the U.S. last week together with a delegation of officials from other Cuban ministries.  Minister Rollero’s visit was preceded by a February 2016 visit from Rodrigo Malmierca, Cuba’s Foreign Trade Minister.  These visits marked the first U.S. visits from senior Cuban government officials in over 50 years.  President Obama, U.S. Agriculture Secretary Tom Vilsack and Missouri Governor Jay Nixon have also made their own historic visits to Cuba within recent months.  Secretary Vilsack’s visit included a meeting in Havana to sign a Memorandum of Understanding  (the “MOU”) between the U.S. Department of Agriculture and the Cuban Ministry of Agriculture enabling the two agencies to cooperate in fields such as phytosanitary standards, plant and animal sanitation, organic production methods, climatology and irrigation through collaborative efforts such as information exchange and scientific research.

Effective May 23, 2016, the U.S. State Department revised its policy and terminated the embargo that had previously prohibited any exports to and imports of lethal arms and related material from Vietnam. President Obama announced this change in policy during a visit to Hanoi, Vietnam. Under the new policy, U.S. persons and other individuals or business entities subject to the Arms Export Control Act (AECA) may now apply for a license to export lethal defense articles and defense services to Vietnam or temporarily import the same from Vietnam. The Directorate of Defense Trade Controls will then review any license applications on a case-by-case basis.

Shortly before President Obama’s upcoming visit to Cuba, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) and U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”) have released new rule amendments in order to permit increased travel, financial transactions and trade between the two countries.

These amended rules remove the sponsoring organization requirement from OFAC’s general license allowing “people to people” travel to Cuba. As a result, U.S. persons may now to travel to Cuba much more easily on their own accord under the “people to people” program. However, persons doing so must still must maintain a full-time schedule of meaningful interactive activities, keep appropriate documentation and satisfy other requirements. Travel to or within Cuba for tourism purposes remains prohibited.

On Tuesday, the U.S. International Trade Commission (USITC) made an affirmative determination in a five-year (sunset) review concerning pressure sensitive plastic tape from Italy. The was welcome news to the U.S. tape manufacturers, which made a priority of  the renewal of this order, which is decades old but still effective. Husch Blackwell’s international trade team…