The Month in International Trade — May 2017

In this issue:

• Crowell & Moring Welcomes
• Top Trade Developments
  • Recap and Analysis of May 24 Steel Import Investigation Hearing
    • Commerce Recommendation Expected By End Of June
  • MTB: ITC Accepting Additional Comments on Certain Petitions Starting June 12
  • ITC and USTR to Hold NAFTA Public Hearings in June
  • D.C. Circuit Finds Part of OFAC Penalty “Arbitrary & Capricious”
    • Practical Considerations
  • New Trade Cases Filed
    • Fine Denier Polyester Staple Fiber from China, India, Korea, Taiwan, and Vietnam
    • Citric Acid and Certain Citrate Salts from Belgium, Colombia, and Thailand
  • A $250,000 Settlement with FinCEN puts AML Compliance Officers in the Cross-Hairs
  • District Court Upholds FinCEN Rule Imposing Special Measures on Tanzanian Bank FBME
  • Update: Legal Considerations for U.K. and EU Investment and Trade Treaties after Brexit
  • Software Application Insufficient to Substantially Transform Existing Hardware Components into a Visitor Management System
    
    
• Other Agency Actions
  • Directorate of Defense Trade Controls
    
    
• Crowell & Moring Announces Regulatory Forecast 2017 and Trump First Year Series
  
  
• Crowell & Moring Invites You to a Reception at ICPA Dublin
  
  
• Crowell & Moring in the News
  
  
• Crowell & Moring Speaks

This news bulletin is provided by the International Trade Group of Crowell & Moring. If you have questions or need assistance on trade law matters, please contact Jeff Snyder or any member of the International Trade Group.

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CROWELL & MORING WELCOMES

Crowell & Moring is pleased to announce the addition of Michelle Jacqueline Linderman as a partner in the firm's International Trade Practice in London. An English qualified solicitor, Linderman brings nearly 20 years of experience in cross-border sanctions and commercial disputes.

She offers significant insight on United Kingdom and European Union sanctions, and her presence expands the group’s capabilities to advise clients on sanctions across the United States and Europe.

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TOP TRADE DEVELOPMENTS

RECAP AND ANALYSIS OF MAY 24 STEEL IMPORT INVESTIGATION HEARING

Commerce Recommendation Expected By End Of June

The Department of Commerce held a public hearing on its Section 232 National Security Investigation of Imports of Steel on May 24. The hearing was chaired by Commerce Secretary Wilbur Ross, who stayed for the majority of the 37 witnesses' remarks. The balance of the panel included representatives from Commerce's Bureau of Industry and Security, Commerce's International Trade Administration, the Department of Defense, and the Office of the U.S. Trade Representative. 

Congresswoman Marcy Kaptur from Ohio's 9th District was the first witness. In her testimony, she urged the panel to stop the "flood" of dumped and subsidized steel imports entering the U.S. market and recommended relief in the form of (1) bridge financing to allow the industry to modernize; (2) "addressing" overcapacity in general and Chinese overcapacity in particular; and (3) exploring ways to "neutralize" the Value Added Tax (VAT) prevalent in steel-producing countries.

In closing, she reminded Secretary Ross of President Trump's request that the investigation be handled expeditiously. In response, the Secretary indicated he had "no intention" of taking the full 270 days permitted by statute for the conduct of the investigation, but rather expects to issue a recommendation by the end of June. 

The Congresswoman's remarks set the tone for much of the remainder of the proceeding. Of the 36 speakers who followed, only about a half dozen expressed any opposition to relief. Notably, most of this group were not expressing opposition to relief in principle, but rather were arguing for the exclusion of specific products not domestically available. For instance, the U.S. Tire Manufacturers’ Association witness testified that no U.S. producer has the technology to produce the high-quality tire cord currently sourced from Japan, and that as such it should be excluded from any relief the government ultimately grants.

That testimony prompted one of the few remarks from the panel, as one of the Commerce representatives requested that the domestic producers comment on whether they do or can produce the products for which exclusion is sought.

Aside from the handful of witnesses seeking carve-outs, and the few opposing relief entirely, the balance of speakers were steel company executives requesting relief from imported steel.  Although they represented discrete industry segments, as a group they sought to address two potential analytic vulnerabilities.

• In anticipation of the argument that the industry has already been granted significant relief in the form of dozens of Antidumping and Countervailing Duty (AD/CVD) orders over the last several years, the executives made a point of saying that “the trade remedies laws aren’t enough” because the rates are too low to lock out imports effectively and because foreign producers "cheat" by circumventing existing orders and/or moving production to non-subject countries.
• In anticipation of the argument that everything sold to the Department of Defense already must be of U.S. origin as a matter of law, the executives argued that actual defense sales are only a small portion of their overall customer base, and that it is not sufficient to offset the impact of imports on their base businesses. They also made a concerted effort to include non-defense sectors within the rubric of “national security” – they variously argued critical infrastructure, food packaging (which consumes tin mill products), energy (which consumes oil country tubular goods and line pipe), power generation and transmission (which consumes grain-oriented and non-oriented electrical steels), and the automotive sectors all contribute to U.S. “national security.”

The executives repeatedly pointed out that there is significant global overcapacity, and that over half of that overcapacity is in China alone. For the most part they did not provide specifics on the type of relief, although a few suggested that if quotas are to be established then they should be indexed to 2010-2011 import volume levels. 

Comments, which were due on May 31, may be found here.

The next step is waiting to see what action, if any, the department will recommend to the president.

For more information, contact: Dan Cannistra, Alex Schaefer, Jeff Snyder, John Brew, Bob LaFrankie, Charles De Jager, Benjamin Blase Caryl

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MTB: ITC Accepting Additional Comments on Certain Petitions Starting June 12

The U.S. International Trade Commission announced it will be accepting additional comments on certain Miscellaneous Tariff Bill (MTB) petitions from June 12 to June 21, 2017.

Comments will only be accepted on Category VI petitions, those which the Commission will not be recommending for inclusion in a miscellaneous tariff bill to Congress.

Per information posted on the Commission’s website, the public will be able to comment on:

“The administrability of the article descriptions in the petitions, the existence of domestic producer objections to the petitions, and other issues affecting their placement in Category VI.

In particular, the Commission seeks input that would clarify or narrow the scope of proposed article descriptions in Category VI petitions, including the constituent materials in the intended merchandise or similar information that would help verify the classification of the goods in chapters 1-97 of the Harmonized Tariff Schedule.

Similarly, the Commission seeks information that could clarify technical criteria, distinguish the intended merchandise in a petition from other goods in the same rate line, or narrow the scope of an article description to avoid covering domestically produced goods.”

For more information, contact: John Brew, Ade Johnson, Aaron Marx, Ben Caryl

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ITC AND USTR TO HOLD NAFTA PUBLIC HEARINGS IN JUNE

On May 18, the United States Trade Representative requested the U.S. International Trade Commission provide certain advice and an assessment with respect to the effects of providing duty-free treatment for imports of products from Canada and Mexico.

• The schedule for this action is:
  • June 13, 2017: Deadline for filing prehearing briefs and statements.
  • June 20, 2017: Public hearing at the Commission in Washington, D.C. beginning at 9:30 am.
  • June 26, 2017: Deadline for filing post-hearing briefs and submissions, as well as all other written statements.
  • August 16, 2017: Transmittal of the Commission’s report to the USTR.

On May 23, the USTR announced it was seeking public comments on matters relevant to the modernization of NAFTA in order to inform the development of U.S. negotiating positions.

• The schedule for this action is:
  • June 12, 2017:
    • Deadline for companies wishing to testify at the hearing to provide written notification and a summary of their testimony; and
    • Deadline for written comments.
  • June 27, 2017:
    • Public hearing at the International Trade Commission in Washington, D.C. beginning at 9 am.

For more information, contact: John Brew, Dan Cannistra, Eduardo Mathison

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D.C. CIRCUIT FINDS PART OF OFAC PENALTY "ARBITRARY & CAPRICIOUS"

On May 26, 2017, the D.C. Circuit issued its final decision regarding Epsilon Electronics’ challenge to a July 2014 penalty imposed by the U.S. Department of the Treasury’s Office of Foreign Assets Control. The court upheld much of the penalty, but found OFAC failed to provide sufficient explanation for five of the 39 alleged violations, and remanded the entire penalty to the agency for further consideration.

In 2014, OFAC imposed a $4 million penalty against Epsilon for 39 transactions it allegedly intended specifically for the supply, transshipment, or re-exportation, directly or indirectly, to Iran. OFAC noted Epsilon exported its products to a company it knew or had reason to know distributed most, if not all, its sales to Iran. Epsilon also had a photo gallery of its products labeled “Iran” on its website.

In its challenge, the company raised issues with the substance of the violations and the calculation used to determine the penalty amount. With respect to the substance, Epsilon argued OFAC introduced no evidence the goods it shipped to its distributor actually arrived in Iran and therefore it could not be held liable for violating a provision of the Iranian Transactions and Sanctions Regulations (ITSR) that prohibited the export of goods to a person in a third country “undertaken with knowledge or reason to know that [s]uch goods … are intended specifically for … re-exportation, directly or indirectly, to Iran.” The D.C. Circuit disagreed, holding that the prohibition does not require that the goods actually arrive in Iran. The court also rejected Epsilon’s due process argument that it lacked adequate notice of the basis for the agency’s action because the agency did not disclose certain documents it relied on, finding that the basis for the agency’s decision was adequately described in its pre-penalty notice.

Epsilon had more success, however, arguing that OFAC failed to adequately explain some of its findings. In a review to determine if the agency’s decision was “arbitrary and capricious,” under the Administrative Procedure Act, the D.C. Circuit found that there was “substantial evidence” to support OFAC’s findings with respect to the first 34 transactions. However, for the last five transactions, the court found that the agency “failed to explain adequately why it discounted” evidence Epsilon submitted to show why it believed the products were to be used in Dubai. OFAC’s determination for those transactions was therefore arbitrary and capricious, and the D.C. Circuit remanded the determination to the agency for “further consideration.” Additionally, because the penalty determination for the 34 transactions the D.C. Circuit upheld was inherently intertwined with alleged aggravating factors for the five transactions it remanded, the D.C. Circuit remanded the entire penalty for further consideration.  

Judge Silberman issued a dissent which would have found OFAC’s determination with respect to all 39 transactions to be arbitrary and capricious, arguing that “OFAC has exacted a penalty based on a confusing, indeed mystifying, decision.” The dissent argued OFAC’s interpretation of whether it must prove the goods had arrived in Iran was ambiguous and the court must remand to the agency.   

Practical Considerations

The D.C. Circuit’s decision stands as one of the few circuit-level reviews of an OFAC penalty determination and it contains a number of useful elements for practitioners, from a clarification that the ITSR does not require evidence of the goods arriving in Iran, to a summary of the penalty matrix, a suggestion of how exclusionary clauses can be overcome by a seller’s knowledge of potential violations, and even a brief overview of the “inventory rule.”

Going forward, the decision may hold even more value for the regulated community if it leads OFAC to provide more detail in its public penalty determinations to ensure they can withstand judicial scrutiny against a “substantial evidence” standard.

For more information, contact: Carlton Greene, Cari Stinebower, Dj Wolff

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New Trade Cases Filed

Fine Denier Polyester Staple Fiber (Fine Denier PSF)

On May 31, DAK Americas LLC, Nan Ya Plastics Corporation, America, and Auriga Polymers Inc. filed antidumping (AD) and countervailing duty (CVD) petitions on imports of fine denier polyester staple fiber (fine denier PS) from China, India, Korea, Taiwan, and Vietnam.  

Petitioners have requested the AD duties as shown below, as well CVD duties to offset subsidies on imports from China and India.  

Country	Alleged AD Rate
China	88.07 percent to 103.06 percent
India	21.31 percent to 29.70 percent
Korea	27.16 percent to 45.23 percent
Taiwan	29.32 percent to 53.81 percent
Vietnam	64.73 percent

Fine denier PSF is used in both woven and non-woven applications. Woven applications include, among other things, the production of textiles such as clothing and bedding linen. Non-woven applications include the production of household and hygiene products such as baby wipes, diapers, and coffee filters.

The merchandise subject to this proceeding is synthetic staple fibers (not carded, combed or otherwise processed for spinning, nonwoven and other uses) of polyesters measuring less than 3.3 decitex (3 denier) in diameter. The subject merchandise may be coated, usually with a finish, or not coated.

For more information, contact: Benjamin Blase Caryl

Citric Acid and Certain Citrate Salts

On June 3, Archer Daniels Midland, Cargill, Incorporated, and Tate & Lyle Ingredients Americas LLC, filed antidumping (AD) and countervailing duty (CVD) petitions on imports of citric acid and certain citrate salts from Belgium, Colombia, and Thailand. 

Petitioners have requested the AD duties as shown below, as well CVD duties to offset subsidies on imports from Thailand.  

Country	Alleged AD Rate
Belgium	56.02 percent to 118.44 percent
Thailand	19.3 percent to 67.1 percent
Colombia	41.18 percent to 49.46 percent

The subject merchandise is used in the production and formulation of a wide variety of foods, beverages, pharmaceuticals, and cosmetics, as well as commercial and household products including detergents and metal cleaners, and in textile finishing treatments and other industrial applications.

Covered by this petition are all grades and granulation sizes of citric acid, sodium citrate, and potassium citrate in their unblended forms, whether dry or in solution, and regardless of packaging type. The scope also includes blends of citric acid, sodium citrate, and potassium citrate; as well as blends with other ingredients, such as sugar, where the unblended form(s) of citric acid, sodium citrate, and potassium citrate constitute 40 percent or more, by weight, of the blend.

The scope also includes all forms of crude calcium citrate, including dicalcium citrate monohydrate, and tricalcium citrate tetrahydrate, which are intermediate products in the production of citric acid, sodium citrate, and potassium citrate.

For more information, contact: Benjamin Blase Caryl

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A $250,000 SETTLEMENT WITH FINCEN PUTS AML COMPLIANCE OFFICERS IN THE CROSS-HAIRS

MoneyGram’s ex-Chief Compliance Officer, Thomas Haider, on May 3 settled alleged anti-money laundering (AML) compliance violations with the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) for $250,000, according to announcements by FinCEN and the U.S. Attorney’s Office for the Southern District of New York.

It appears to be the largest penalty FinCEN ever has imposed on an individual. The settlement resolves an action that FinCEN brought in federal district court to enforce its penalty against Haider, and also Haider’s counter-claim that the Government violated the Privacy Act by leaking details of its investigation to the media.

This appears to be the first time that FinCEN has sought penalties against an individual for mismanagement of an AML compliance program, and only the second time FinCEN has sued to enforce a civil penalty. Haider also agreed to be enjoined from performing compliance functions for a money transmitter for a period of three years.

For more details, please see Crowell & Moring's Client Alert.

For more information, contact: Carlton Greene, Cari Stinebower, Thomas Hanusik, Sarah Bartle

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DISTRICT COURT UPHOLDS FINCEN RULE IMPOSING SPECIAL MEASURES ON TANZANIAN BANK FBME

On April 14, 2017, the U.S. District Court for the District of Columbia upheld the Treasury Department’s use of Section 311 of the USA PATRIOT Act to impose “special measures” with respect to Tanzanian Bank FBME, Ltd. 

The court’s ruling allows the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) to proceed with implementing a final rule that prohibits U.S. banks from maintaining correspondent accounts for FBME, and thereby effectively bars it from the U.S. financial system. The court’s decision follows two successful challenges by FBME in August 2015 and September 2016 that had blocked implementation of a final rule.

For more information on this important case, please see Crowell & Moring's Client Alert.

For more information, contact: Carlton Greene, Cari Stinebower, Kelly Currie, Dalal Hasan

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UPDATE: LEGAL CONSIDERATIONS FOR U.K. AND EU INVESTMENT AND TRADE TREATIES AFTER BREXIT

In Crowell & Moring’s May 24 Client Alert, we provided updates on recent European investment and trade headlines:

• European Court of Justice (ECJ) opines on scope of EU’s supremacy over the EU-Singapore Free Trade Agreement (FTA). The highlights include:
  • Investor-State Dispute Settlement (ISDS) requires unanimous Member States approval, and
  • The possibilities for a U.K. trade treaty with the EU separate from any withdrawal agreement.
• U.K. Conservative Party champions ratification of EU-Canada Comprehensive Economic and Trade Agreement (CETA), the EU-Singapore FTA, and other trade treaties in the U.K. parliamentary election due on 8 June 2017.

The article follows our previous alert, Legal Considerations for the U.K.’s Investment and Trade Treaties After Brexit, following the notification under Article 50 of the Treaty on the European Union (TEU) regarding the United Kingdom’s intent to leave the European Union.

For the complete Client Alert, please click here.

For more information, contact: Ian Laird, Charles De Jager, John Laird

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SOFTWARE APPLICATION INSUFFICIENT TO SUBSTANTIALLY TRANSFORM EXISTING HARDWARE COMPONENTS INTO A VISITOR MANAGEMENT SYSTEM

In a Final Determination published in the Federal Register in May, U.S. Customs and Border Protection held that application software installed on existing computers and on an ID scanner manufactured in China did not substantially transform the individual elements (ID scanner, labels, printer and barcode scanner) into a Visitor Management System (VMS).

The scanners and printers functioned as such when imported, and the software, while defining a specific use, did not change the basic function of the hardware. Although the Federal Acquisition Regulation contemplates that an “end product” offered under a Trade Agreements Act (TAA)-covered contract should have a single country of origin, CBP found each element of the VMS retained its individual country of origin, two of which were from China, a non-designated country.

CBP declined, however, to provide a country of origin determination for the application software itself suggesting that “to the extent that the Raptor software is an intangible product developed in the United States and transmitted electronically via intangible signals, the Raptor software, by itself is not subject to the country of origin determinations issued by CBP for purposes of U.S. Government procurement.” 

While there is significant merit to this position and perhaps welcome news to contractors selling software to the government, it is hard to reconcile with the growing number of CBP determinations that have in fact found substantial transformation for software products. The CBP distinguished the most recent of those determinations, H268858, on grounds that it involved software that became a tangible product when loaded on U.S.-origin discs for sale to the government.

For more information, contact: Alan W. H. Gourley, Adelicia R. Cliffe, M. Yuan Zhou

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OTHER AGENCY ACTIONS

Directorate of Defense Trade Controls

• On May 26, the State Department published a notice in the Federal Register seeking comments on its new “Request for Advisory Opinion” form. This new form, once approved, will be used with DDTC’s new Defense Export Control and Compliance System (DECCS).
  • To review the proposed form, click here. To review the proposed instructions, click here. To review the supporting statement click here.
  • You may submit comments directly to the Office of Management and Budget  up to June 26, 2017 using one of the following methods:
    • Email: oira_submission@omb.eop.gov. You must include the DS form number (DS–7786), information collection title (Request for Advisory Opinion), and the OMB control number (1405–0174) in the subject line of your message.
    • Fax: 202–395–5806. Attention: Desk Officer for Department of State.

For more information, contact: Edward Goetz

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CROWELL & MORING ANNOUNCES REGULATORY FORECAST 2017 AND TRUMP FIRST YEAR SERIES

On May 9, Crowell & Moring launched its third annual Regulatory Forecast, subtitled “What Trump Means for Business.”  It provides in-depth analysis on how the new administration, Congress, and the federal courts are changing the regulatory landscape and what it means for business in the months ahead.

The forecast coincides with the launch of our new Trump: The First Year series about the regulatory changes emerging from the White House under the new administration. In the first episode of the series, Regulatory Forecast co-editors Dan Wolff and Richard Lehfeldt sit down to discuss the Forecast and what to expect from the First Year series.

Click below to listen via the embedded player or access from one of these links:
PodBean | SoundCloud | iTunes

Visit our Trump: The First Year Series page here for more updates and analysis, as well as webinars and other podcasts.

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CROWELL & MORING INVITES YOU TO A RECEPTION AT ICPA DUBLIN

Monday, June 12, 2017
8:00 - 10:00 pm Local Time

Le Panto Room at the Radisson Blu St. Helen's Hotel
Stillorgan Road
Blackrock
County Dublin, Ireland

The International Compliance Professionals Association (ICPA) is hosting its annual EU conference June 11-13, 2017 at the Radisson Blu St. Helen’s Hotel in County Dublin, Ireland.

In conjunction, Crowell & Moring’s International Trade Group will host a cocktail reception on Monday, June 12, starting at 8:00 pm in the Le Panto room of the conference hotel. 

We hope you will be our guest for an evening of food, fun, and spirits. Please RSVP to Elizabeth Aghili.

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CROWELL & MORING IN THE NEWS

International Trade Group Counsel Jini Koh

Liberalized tariff-shift rules and higher de minimis levels for Canada and Mexico could be includ­ed in the expected NAFTA renegotiation, industry sources said in recent interviews. As the administration works toward the statutorily required notice to Congress of plans to reopen NAFTA discussions, law firms and industry stakeholders are discussing what provisions they will lobby for the administration to change or add to any completed agreement. The new administration provides an opportunity for companies to “push outside the traditional boundary” of trade negotiations, and companies’ personnel who were traditionally compliance-focused are now in a “new frontier” of engagement in government-business dialogues, Crowell & Moring attorney Jini Koh said in an interview. “I think that’s new to companies.”

Businesses could potentially find success within those dialogues through “precision lobbying” to lib­eralize NAFTA’s rules of origin to allow more products at the subheading and heading levels to tariff-shift into more subheadings, Koh said. “I can see that being a way to lobby to get some changes to help your specific company or your specific industry in a way that may not create a lot of noise,” she said.

Under current NAFTA rules, companies often get “burned” by the specific limitations allowing sub­heading-to-heading shifts but barring certain heading-to-subheading shifts, Koh said. More liberal tariff-shift rules would facilitate U.S. production and assembly, and could wall off supply chains from the potential im­pacts of any effort to increase regional value content requirements, she said. Koh said she could see industry pushing to raise the $1,000 threshold under which certificates of origin aren’t required to qualify for NAFTA tariff benefits. Changes to drawback provision are another area of potential interest (see 1705120016).

The Express Association of America (EAA) is “ready to go forward” in advancing its NAFTA pri­orities with the Trump administration and Congress after the Senate confirmed Lighthizer on May 11, EAA Executive Director Mike Mullen said in an interview. The group would like to see Canada and Mexico agree to raise their $20 and $50 de minimis levels, respectively, during renegotiations, he said. “That would be the optimum situation,” Mullen said. “If that’s too big of a stretch for Canada and Mexico, we’d like to see them come up to a somewhat commercially more meaningful level, particularly in the case of Canada.” He added that if value-added tax (VAT) collection deters Canada and Mexico from boosting their de mi­nimis levels, perhaps the parties could discuss developing an innovative mechanism to collect VAT away from the border. EAA would also like to see Mexico increase its $300 informal entry threshold to the U.S.’s and Canada’s $2,500 level, Mullen said.

NAFTA would also benefit from provisions protecting the free flow of data across borders, which aren’t issues between the U.S. and its NAFTA partners, “but we see no reason not to crank them in there,” he said. Mullen added that his group would like to see the final version of NAFTA protect delivery services, and to include provisions that encourage the three countries to develop a common single-window system and that instruct the three parties to use an identical form for an export declaration and an import declara­tion as part of the same transaction. An identical import/export declaration should be “easily achievable,” he said. As EAA is “focusing down” on bringing specific express industry priorities to the administration’s table for NAFTA talks, the group will likely channel its advocacy work for single-window provisions through the U.S. Chamber of Commerce and the National Retail Federation (NRF), Mullen said.

Retail Industry Leaders Association (RILA) Vice President for International Trade Hun Quach agreed that it would be great if a renegotiated NAFTA reflects single-window progress, adding that the deal would benefit from identifying customs enforcement provisions that might be made more transparent and streamlined, perhaps record keeping and customs verification language. Streamlining requirements and verification processes among CBP, the Canadian Border Services Agency, and Mexican Customs would also be useful, she said. Further useful items to cover during the course of the renegotiation could be exploring whether goods on the current NAFTA apparel “short supply list” are, actually, in short supply in North America, as well as updating rules of origin to reflect new fabrics and new local supply chains, Quach said.

The American Apparel and Footwear Association (AAFA), NRF, RILA, and the U.S. Fashion Indus­try Association (USFIA) on May 16 sent a letter to Lighthizer urging the administration to renegotiate pro­visions to make customs enforcement “smarter and more streamlined,” to facilitate regional value chains, to help digital trade, and to “recognize advancements in trusted trader programs,” among other things. The letter asked the administration to “do no harm” to current supply chains and to enhance economic cooperation with NAFTA partners through renegotiation. “Any changes should afford ample transition so that companies can stay compliant as they work with government partners to incorporate modifications to their prac­tices and procedures,” the letter says. A lobbyist added that a U.S. textile association is traveling to Mexico “sometime in the next few days” to coordinate with Mexican counterparts on elements of the renegotiation.

Paperwork efficiency should be another consideration for renegotiations, Allen Gina, co-founder of CT Strategies and former CBP assistant commissioner for international trade, said in an interview. In some developing countries, “the norm is a gentlemen’s agreement or a handshake” essentially through some type of self-certification process, he said. During negotiations, USTR will consider the extent to which any proposed language can be enforced by customs, Gina said. Negotiations could also touch on validation and documentation processes, he said. “One [consideration] is, what’s going to be provided to validate?” Gina said. “Does the community at large believe that’s going to be acceptable? How are you going to determine the credibility of whatever it is being provided?”

For its part, RILA is still waiting to see how the administration and Congress will specifically ap­proach the NAFTA renegotiation before the group pitches new customs provisions as part of its push to modernize the deal, Quach said, adding that it’s unknown the degree to which talks will target customs, if at all. She also expressed a more fundamental concern, citing the administration’s lack of clarity on whether NAFTA will remain a trilateral deal or split into two bilateral agreements.

Gina suggested that negotiations take into account whether any efforts to tighten enforcement could drive U.S. commerce out of the country. That concern arose when Gina was at CBP and overseeing the 100 percent screening requirement years ago, he said. Gina said that from a trade enforcement perspective, terms of reference are equally important as are overall negotiating objectives. He added: “When words say ‘shall’ versus ‘must,’ or ‘recommend’ versus ‘required,’ that’s a big, significant difference when you’re try­ing to subsequently enforce or police any type of agreement, and it applies here to free trade agreements.”

Article reproduced with permission from International Trade Today –Internationaltradetoday.com or 800-771-9202.

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CROWELL & MORING SPEAKS

On May 9, Jana del-Cerro spoke at AAEI’s Export Controls and Compliance Seminar in Washington, DC on a panel focused on technology controls in an increasingly digital world.  Topics included cloud computing, encryption, deemed access, and processes to automate export control compliance.

On June 12, Alan W.H. Gourley will be a speaker at the Inter-Pacific Bar Association’s regional seminar on “Investment Controls in Europe, the U.S., and Asia – A Comparative View.” The event is being held in the Düsseldorf office of the Gleiss Lutz law firm.

Charles De Jager, Jana del-Cerro, and Grégoire Ryelandt will be speaking at the International Compliance Professionals Association’s (ICPA) Annual European Conference, to be held June 11-13 in Dublin, Ireland. Charles will be providing an update on the Transatlantic Trade and Investment Partnership (T-TIP), Jana will be speaking on Encryption, and Grégoire will be discussing Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH), an EU regulation which addresses the production and use of chemical substances, and their potential impacts on both human health and the environment.

Chris Monahan will be speaking at the ICPA’s Annual Fall Conference and One Day Valuation Seminar in Grapevine, Texas, scheduled for October 23-25. His topic is “Understanding Commodity Jurisdictions (State vs. BIS).”