trade policy

On December 15, 2016, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) revised their Frequently Asked Questions Relating to the Lifting of Certain U.S. Sanctions Under the Joint Comprehensive Plan of Action (JCPOA), clarifying procedures related to the potential “snapback” of the JCPOA and the subsequent re-imposition of sanctions.

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 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.

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.