The Month in International Trade – September 2022

In this issue:

Ukraine Crisis Resource Center

• Top Trade Developments
  • Latest Russia Sanctions/Export Highlights
  • Lawmakers in Washington Propose Bill for Allowing Retroactive GSP Benefits
  • Biden Administration Announces Presidential Directive on Sharpening Foreign Investment Screening by CFIUS
  • USTR Says China Section 301 Tariffs to Remain in Place
  • Customs Rulings of the Week

Crowell & Moring Welcomes

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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Ukraine Crisis Resource Center

Crowell & Moring has a multidisciplinary working group helping clients navigate the rapidly evolving business, legal and operational issues associated with the crisis. Our group brings together lawyers and professionals with relevant senior government, industry, and private sector experience across a wide array of practices that intersect with the most critical issues in this unprecedented crisis. We are helping clients to mitigate risk, to implement practical approaches and sound business solutions, and anticipate and prepare for the opportunities and challenges that are on the horizon.

Insights

Webinars

Press Coverage

External Resources

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Top Trade Developments

Latest Russia Sanctions/Export Highlights

• September 29, 2022
• September 22, 2022
• September 15, 2022
• September 8, 2022

For more information, contact: Jeff Snyder, Carlton Greene, Dj Wolff, Michelle Linderman, Caroline Brown, Nicole Succar, Anand Sithian, Laurel Saito, Rachel Schumacher

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Lawmakers in Washington Propose Bill for Allowing Retroactive GSP Benefits

On Monday, lawmakers in the U.S. House of Representatives proposed a bipartisan bill aimed at providing relief to U.S. importers who paid tariffs on goods that would have been eligible for preferential treatment under the Generalized System of Preferences (GSP), which expired on December 31, 2020. This bill would retroactively apply preferential treatment to products that entered the U.S. between Dec. 31, 2020, and Sept. 1, 2022, if they would have been eligible for benefits under GSP, while not reauthorizing the program. The legislation would apply to approximately 3,400 products from 120 developing countries, refunding an estimated $1.8 billion worth of GSP-related tariffs.

The Generalized System of Preferences (GSP) is a preference program that allows duty-free imports for certain products from beneficiaries, which are predominantly lower-income and developing countries. U.S. imports from China on GSP-eligible goods have increased by hundreds of millions of dollars since the program’s expiration – imports of sports and duffle bags have increased by $50 million, trucks and suitcase materials have increased by $200 million, and air conditioner parts have increased by $600 million. Supporters of the new legislation argue that both the GSP program and the Miscellaneous Tariff Bill (MTB’s) incentivize U.S. trade investment outside of China and aid American companies in attaining component parts and other items free of duty if they are not readily available in the US. These signature trade items currently contribute to the inflation problem and their renewal would have a profound positive impact on the US economy.

On Tuesday, representatives from more than 60 major companies, including Target, Home Depot, and Samsonite were in Washington to urge Congress to consider the proposed legislation. Supporters of the bill claim that it will discourage imports from China while benefitting other developing economies throughout the world, being most helpful to companies that rely on specialized commodities from countries such as Indonesia, Thailand, and Brazil. House Oversight Committee member Rep. Debbie Wasserman Schultz (D-FL), who proposed the bill alongside fellow Florida Reps. Mario Diaz-Balart (R) and Darren Soto (D), highlighted in an email statement that GSP’s expiration has “caused our businesses to pay roughly $2 billion in excess tariffs, harming companies and workers in all 50 states,” adding that “it’s cost over $178 million in my home state of Florida alone, and small businesses were hit the hardest. I look forward to continuing to work together toward our shared goal of GSP reauthorization and to truly helping American businesses not just survive, but thrive.”

Efforts to renew GSP and MTB’s have failed to date – both the House and the Senate passed bills earlier this year that included the renewal of GSP and MTB’s, along with new eligibility requirements, but conferees tasked earlier this year to finalize a compromise China-focused competition bill failed to do so and the trade titles from both were not reconciled. Supporters of the bill have said that they hope Congress will act before the end of the year to renew GSP – possibly after the upcoming midterm elections in November. Dan Anthony, vice president of the Coalition for GSP, stated that “while we continue to seek a long-term GSP reauthorization after the November elections, a limited bill to refund GSP tariffs paid to date is the absolute floor for what Congress should pass this year.”

For more information, contact: John Brew, Dmitry Bergoltsev

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Biden Administration Announces Presidential Directive on Sharpening Foreign Investment Screening by CFIUS

On September 15, 2022, the Biden Administration issued a new executive order (“EO”) and accompanying fact sheet, designed to sharpen the current U.S. foreign investment screening process as administered by the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”).  This EO is the first to specifically identify certain additional national security factors for CFIUS to consider when evaluating transactions involving foreign investors. 

Click here to continue reading the full version of this alert.

For more information, contact: Caroline Brown, Addie Cliffe, Jana del-Cerro, Alan W.H. Gourley, Jeremy Iloulian, Nimrah Najeeb

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USTR Says China Section 301 Tariffs to Remain in Place

On September 2, 2022, the Office of the U.S. Trade Representative (USTR) announced that its statutory four-year review of Section 301 tariffs imposed on Chinese goods on July 6 and August 23, 2018 will be extended, with the tariffs remaining in effect while the agency conducts a more comprehensive review of their necessity. USTR stated that it will separately announce the process for its larger review, but confirmed that it will accept written submissions from interested parties regarding issues including the effectiveness of the tariffs, their impact on the U.S. economy, and additional actions beyond tariffs that the U.S. could consider moving forward.

Click here to continue reading the full version of this alert.

For more information, contact: John Brew, Martin Yerovi, Dmitry Bergoltsev

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Customs Rulings of the Week

• Country of Origin of an Electronic Vaping Device
• Classification of Semiprecious Stones

For more information, contact: Maria Vanikiotis, Martín Yerovi, Emily Devereaux

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Crowell & Moring Welcomes

Maria Alejandra (Jana) del-Cerro rejoins Crowell & Moring as a partner in the International Trade and Government Contracts groups.

Del-Cerro returns to the firm from the U.S. Department of State, where she served as a Regulatory and Multilateral Affairs analyst in the Directorate of Defense Trade Controls (DDTC)’s Policy office.   In that role, del-Cerro collaborated in the amendment and interpretation of the International Traffic in Arms Regulations (ITAR) and in advancing bilateral defense trade working groups’ priorities. 

At Crowell, del-Cerro will work closely with clients around the globe on all aspects of export compliance, including day-to-day counseling, developing internal controls, completing commodity jurisdiction and classification analysis, conducting export trainings, performing M&A due diligence and coordinating related regulatory submissions. She will advise clients on compliance with the unprecedented export controls and economic sanctions arising from the Russian government’s invasion of Ukraine. Del-Cerro will also provide crucial export analysis to support clients through the CFIUS process, serving as an integral part of the Crowell CFIUS team.

Crowell also welcomes two talented first year associates: Kelsey Clinton and Darianne Young.

Kelsey, who is based in our Washington D.C. office, is a 2021 Stanford law graduate and comes to us after finishing a clerkship at the U.S. District Court for the Middle District of Tennessee. Prior to that, Kelsey worked as a Legal Intern for the Felony Major Crimes Division at the U.S. Attorney’s Office for the District of Columbia. For the trade group, she is working on export controls and sanctions regulatory matters, as well as investigations that overlap with white collar and have a national security nexus.

Darianne, who is based in our Los Angeles office, graduated Summa Cum Laude from the Thurgood Marshall School of Law at Texas Southern University. Prior to joining Crowell she was an intern  at a large tech company, and for a judge with the Texas state court in Houston (District 134^th).  Darianne also was an intern at the U.S. Department of Commerce, Office of Legislative & Intergovernmental Affairs. Her work in the international trade group will include international corporate transactions, global mobility, export controls and import regulations. 

Finally, Crowell also wishes to welcome the new editors of “The Month in International Trade” and the International Trade Blog: Jana del-Cerro, Anand Sithian, and Simeon Yerokun. A big thank you to our past editor of several years, Jeff Snyder, for all his dedication and hard work.

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Crowell & Moring Speaks

John Brew will be a panelist on Section 301 Tariffs Policy at the 11^thAdvanced Forum on Import Compliance and Enforcement, November 8-9, 2022 at the Kimpton Hotel Monaco DC, Washington, DC.

• This 2-day, in-depth strategic conference is the only comprehensive, practical event of its kind that covers U.S. and international regulatory changes impacting imports and customs compliance strategy. Connect with an established community of global import compliance, customs, and supply chain experts and absorb key takeaways from sessions covering highly complicated, evolving US import controls.
• If Crowell colleagues and contacts quote Registration Code S10-823-823I23.S, they can benefit from a 10% discount off of the early main conference fee.

• Please click here to Register Now.

John Brew will be leading a session on “Understanding Court of International Trade (CIT) Cases: Has CBP ever issued a decision that makes no sense and will cause your company significant harm?” at the 2022 Fall International Compliance Professionals Association (ICPA) conference in Grapevine, TX, October 16-18.  This session explains when and how you should appeal adverse CBP decisions to the US Court of International Trade (CIT). John will also explore what the CIT considers when determining to uphold or overturn government actions, and what impact CIT opinions might have on other government actions.

On October 12-13, 2022, Carlton Greene will be moderating an in-house executive roundtable discussing Perspectives on Managing the Latest Emerging Opportunities and Risks Confronting the Crypto Industry. The event will take place at the New York Hilton Midtown in New York City. You can register here.  

Caroline Brown was a panelist on the National Association of Women Lawyers webinar on October 4, 2022, entitled, “Blockchain, Crypto, Bored Apes, Oh My!”

September 16, 2022 – The Deal* speaks with partner Caroline Brown regarding Biden’s executive order about the Committee on Foreign Investment in the U.S., which dovetails with the administration’s focus on the competitive consequences of startup purchases by industry powerhouses and private equity rollups. Brown says the directive telegraphs the considerations that CFIUS will have top of mind, and that the review panel could take serial acquisitions under greater consideration (“Biden Warns CFIUS on Serial Acquisitions”). *subscription required