On Sunday, March 1, 2015, CBS newsmagazine “60 Minutes” ran a lengthy piece reported by Anderson Cooper regarding accusations that Lumber Liquidators imported laminated flooring products that did not meet the standards set by the California Air Resources Board (CARB) for levels of formaldehyde. The focus of the story was on Lumber Liquidators, but the issue is likely to affect almost every importer of flooring and other wood products from China.

During the segment, Cooper referenced various lawsuits that are pending against Lumber Liquidators alleging that the company failed to meet CARB standards in California for formaldehyde. Cooper interviewed the CEO of Lumber Liquidators, Robert Lynch. Lynch said the company has a good system in place and checks carefully to make sure that CARB standards are met.

After making this statement, Lynch was shown a video interview of the plant manager of a Chinese plant that manufactures products for Lumber Liquidators. In the video, the plant manager plainly states that the flooring did not meet CARB standards. The journalist narrating the video adds that visits made to two other plants that manufacture flooring for the company revealed that the company’s flooring failed to meet the standards.

After more than a half-century, the U.S. has finally taken steps toward normalizing its relations with Cuba. In a series of executive actions on December 17, 2014, President Obama announced changes to existing regulations that will ease sanctions against Cuba.

U.S. and Cuban officials will meet on February 27, 2015 at the State Department to continue talks of restoring ties and ending the embargo. Likely sticking points will be the opening of a U.S. Embassy in Havana, Cuba’s continuing appearance on the U.S. list of countries that support and sponsor terrorism, the potential return of Guantanamo Bay to Cuba, and U.S. support for Cuban political dissidents.

The executive actions alone however offer various opportunities for U.S. and Cuban businesses. This is particularly true in industries such as telecommunications and agriculture where technological and scientific advances could lead to improved infrastructure and increased production.

The current marine container logjams at terminals and containership backups on the West Coast have caused grave concern for all stakeholders in the supply chain.  In recent weeks there have been anywhere from 16 to 35 vessels laying-to awaiting berth availability at LA/Long Beach and other West Coast Ports.  The matter has escalated to the President’s desk with Labor Secretary Tom Perez and Commerce Secretary Penny Prizker weighing in on the labor union/maritime employers side of the problem. The causal factors for this situation that began last July appear to stem from stalled negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA) resulting in allegations of slowdowns and lockouts.

At the request of the U.S. Senate Committee on Finance, the U.S. International Trade Commission (USITC) has launched an investigation to study the economic effects of the statutory and administrative restrictions related to trade with and travel to Cuba on exports of U.S. goods and services.  This investigation follows President Obama’s December 17, 2014 announcement to ease economic and travel restrictions against Cuba.

The USITC report will contain:

  1. A ten-year overview of Cuba’s imports of goods and services, identifying major countries, products, and market segments;
  2. A description of how U.S. restrictions on trade affect Cuban imports of U.S. goods and services; and
  3. An estimate of U.S. exports of goods and services to Cuba should the U.S. lift statutory, administrative, and other trade restrictions on U.S. exports of goods and services and travel to Cuba.

The U.S. Departments of Treasury and Commerce today announced new regulations intended to significantly loosen the embargo imposed against Cuba in 1963.  The changes to the Cuban Assets Control Regulations (CACR), administered by the Office of Foreign Assets Control (OFAC), and the Export Administration Regulations (EAR), administered by the Bureau of Industry and Security (BIS), will go into effect on January 16, 2015, when the rules are published in the Federal Register.  The new rules are part of the implementation of the Obama Administration’s policy shift concerning Cuba, which was announced by President Obama on December 17, 2014.

On December 18, 2014, President Obama signed the Ukraine Freedom Support Act of 2014 (UFSA) into law,broadening the Administration’s authority to impose sanctions in response to continued Russian activity in Ukraine. Although the legislation authorizes the President to increase sanctions, he has stated that “this does not signal a change in the Administration’s sanctions policy” and the Administration does not intend to impose further sanctions at this time.

On December 17, 2014, President Obama announced a major easing of travel and economic restrictions against Cuba as a result of landmark deal between the United States and Cuba. In his remarks, President Obama announced a number of measures which seek to “end an outdated approach . . .” and  “chart a new course in our relations with Cuba and . . . further engage and empower the Cuban people.”

While only Congress can formally overturn the U.S. embargo which has been in place since 1961, the White House has taken some action within its executive powers to liberalize trade and travel to Cuba.  Key components of the Administration’s updated policy approach include the following:

Click here for “West Coast Ocean Cargo Congestion: Facts And Remedies,” Carlos Rodriguez’s original article.

The below surcharges were to have been implemented effective November 17, 2014 by ocean carriers for import/export traffic through the West Coast ports:

There was a loud outburst by shippers and shipper groups, and the Federal Maritime Commission, as did we, questioned the legality of applying the surcharges to cargo already in ocean carriers’ systems either at origin, in route, or at West coast destinations.

All importers and exporters which ship through West Coast ocean ports are by now truly concerned about their cargo being on the shelves in time for sale during the holiday season, and on the export side that their cargo might not reach their buyers any time soon. To add insult to injury, most, if not all ocean carriers have announced congestion surcharges to go into effect on the West Coast November 17, 2014.

Yesterday, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced increased economic sanctions against Russia, including measures against Russia’s largest bank – Sberbank Russia – as well as several state-owned defense technology companies and five energy companies (Gazprom, Gazprom Neft, Lukoil, Surgutneftegas and Rosneft).  The United States has also tightened previous restrictions by lowering from 90 days to 30 days the allowable length of debt U.S. citizens and entities may buy from sanctioned Russian banks – Bank of Moscow, Gazprombank OAO, Vnesheconombank (VEB), Russian Agricultural Bank (Rosselkhozbank),  VTB Bank OAO and Sberbank Russia.