Client Alerts & Newsletters

The Month in International Trade – October 2021

November 8, 2021

In this issue:

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.


Top Trade Developments

Latest U.S. Trade Actions/Tariffs and Other Countries Retaliatory Measures

Please click here anytime for the latest actions, covered products rate increases, and effective dates.

For more information, contact: Dan Cannistra, Robert Holleyman, Bob LaFrankie, Ru Xiao-Graham, Sam Boone, Clayton Kaier


Latest on Section 301 Product Exclusions

Please click here anytime for the latest actions regarding Section 301 Product Exclusions.

For more information, contact: Dan Cannistra, Robert Holleyman, Bob LaFrankie, Ru Xiao-Graham, Sam Boone, Clayton Kaier


Crowell & Moring Partner Nicole Janigian Simonian Named One of Latin America’s Top 100 Female Lawyers

Latinvex has for the second consecutive year named Nicole Janigian Simonian, co-chair of Crowell & Moring’s International Trade practice and International Employment and Global Mobility Lead, as one of Latin America’s Top 100 Female Lawyers.

According to Latinvex, the criteria for selection was a combination of factors, including recent track record on major deals and business, prominence of firm in Latin America, and rankings by third parties such as Chambers and PartnersLegal 500 and M&A data from Refinitiv. The list is developed by Latinvex’s editorial and research staff using data from their annual survey of international law firms, as well as publicly available data.

Simonian has over 20 years of experience working as a strategic advisor for a wide range of clients, from emerging growth to Fortune 100 companies, on their market entry and global business expansion throughout Asia, Europe, Latin America, and the Middle East. Her practice covers a wide range of international compliance and regulatory issues throughout the supply chain, including cross border transactions, investigations, international trade, and global mobility.

In addition to her day to day legal practice, she co-hosts the Global Trade Talks—a podcast that shares brief perspectives on key global issues on international trade, current events, business, law, and public policy.

Latinvex publishes daily news and weekly analysis on Latin America business and provides extensive coverage of Latin America’s legal, technology, and energy sectors.


DOJ’s “Déjà VU All Over Again” for Corporate Crime

On October 28, Deputy Attorney General (“DAG”) Lisa O. Monaco delivered remarks at the ABA’s 36th National Institute on White Collar Crime. Department of Justice (“DOJ” or “Department”) officials have recently referenced the coming enforcement “surge,” and the DAG’s remarks last week provide a roadmap to corporate criminal enforcement under the current administration.

The upshot(i) the Yates Memo is back—full cooperation again means disclosing facts about all individuals involved in misconduct; (ii) corporate recidivism includes unrelated prior misconduct if it demonstrates an ineffective compliance program; and (iii) corporate monitors are back in the federal prosecutor’s toolbox.

The remarks covered extensive ground, outlining several corporate crime trends and related enforcement priorities, previewing three new actions DOJ will undertake to strengthen its overall response to corporate crime, and highlighting areas of DOJ focus in the coming weeks and months.

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

For more information: Thomas Hanusik, Daniel Zelenko, Rebecca Monck Ricigliano, Sarah Bartle, Tiffany Wynn


CBP Issues Forced Labor Withhold Release Order on Malaysian Gloves and Mexican Tomatoes

On October 20 and October 21, 2021, U.S. Customs and Border Protection (CBP) issued a Withhold Release Order (WRO) against disposable gloves from Malaysian company Supermax Corporation BHD and its three wholly owned subsidiaries as well as a separate WRO against tomatoes produced by Mexican farms Agropecuarios Tom S.A. de C.V., Horticola S.A de C.V., and their subsidiaries, respectively.

CBP issued the disposable glove WRO against Supermax Corporation and its three subsidiaries – Maxter Glove Manufacturing Sdn. Bhd., Maxwell Glove Manufacturing Mhd., and Supermax Glove Manufacturing – based on information that indicated that the company used forced labor in its manufacturing operations. CBP specifically identified 10 of 11 possible indicators of forced labor from the International Labour Organization’s (ILO’s) list in its investigation.

For the Mexican tomato WRO, CBP identified at least 5 of 11 possible indicators of forced labor from the ILO’s list in its investigation into Agropecuarios, Horticola, and their subsidiaries, which included:

  • Abuse of vulnerability
  • Deception
  • Withholding of wages
  • Debt bondage
  • Abusive working and living conditions

With these two new orders, CBP has now issued 7 WROs as well as two forced labor findings in Fiscal Year 2021.

WROs are issued by the U.S. government when information reasonably but not conclusively indicates goods were made in whole or in part using forced labor. Merchandise detained under a WRO order must be exported immediately or a substantial submission made that provides specific information showing that the goods were not made with forced labor. To obtain a release of any shipment that has been subjected to a WRO, a certificate of origin along with this detailed statement regarding the merchandise’s production and supply chain origin must be submitted to CBP. CBP makes a determination on a case-by-case basis.

The Press Release for the disposable glove WRO is available here, and the Press Release for the tomato WRO is available here.

For more information on actions addressing human rights and forced labor abuses, contact our team and see previous posts below.

Customs and Border Protection (CBP) Modifies Withhold Release Order on Carpet and Hand-Knotted Wool Products from Nepal – International Trade Law (cmtradelaw.com)

CBP Issues Withhold Release Order (WRO) on Certain Silica-Based Products from Xinjiang, PRC – International Trade Law (cmtradelaw.com)

For more information: John Brew, David Stepp, Jeff Snyder, Frances Hadfield, Martin Yerovi


Update: U.S. - China Trade: USTR Restarts Tariff Exclusion Process for Section 301 Duties

On October 4, 2021, United States Trade Representative (USTR) Katherine Tai delivered a speech at the Center for Strategic and International Studies (CSIS) detailing the Biden Administration’s new strategy for managing U.S.-China trade relations. Tai announced that the USTR will restart a targeted tariff exclusion process for Section 301 duties. Today (October 6) the USTR published a request for comments regarding possible reinstatement of certain exclusions to the Section 301 tariffs visible here. The exclusion process covers 549 products for which the prior Administration granted exclusion extensions, most of which expired on December 31, 2020. See here for the list of covered products  The USTR is seeking public comments on whether or not to further extend the exclusion from 301 tariffs on these products. The comment period opens October 12 and closes December 1 and 11:59 PM EST and can be accessed here.

The factors the USTR will consider in deciding whether or not to extend exclusions are similar to those considered in the prior Administration, including:

  1. whether the particular product is available in the United States or other countries;
  2. how changes in the global supply chain since September 2018 or any other relevant industry developments have impacted product availability;
  3. the efforts the importers or U.S. purchases have undertaken since September 2018 to source the product from the U.S. or other countries; and
  4. domestic capacity for production in the United States.

The USTR is also considering additional criteria for granting exclusions, such as whether or not reinstating the exclusion will impact or result in severe economic harm to the commenter or to other U.S. interests, such as small businesses, employment, manufacturing, or critical supply chains. It remains to be seen if other criteria, possibly relevant to broader administration goals such as promoting efforts to advance climate change, might also be considered.

If the USTR reinstates exclusions, then such exclusions would be reinstated retroactively. Importers may seek 301 duty refunds on all subject entries that are not “liquidated” by U.S. Customs and Border Protection (CBP) at the time the importer makes a claim for a refund with CBP. CBP typically liquidates an entry 314 days after entry, so the sooner importers file for and receive an exclusion extension the greater the potential duty refunds.

It is not clear if the USTR will open up a broader exclusion processes, but in her speech at the CSIS, Ambassador Tai stated that “we will keep open the potential for additional exclusion processes, as warranted.” While Ambassador Tai focused her remarks on President Biden’s vision for a worker-centered trade policy for the U.S.-China trade relationship, the policy details from her speech indicated that the Biden Administration will continue utilizing key elements from the Trump Administration’s toolkit. Ambassador Tai stated that the U.S. will continue to seek enforcement of the existing Phase One trade deal from January 2020. She made little indication that the Section 301 tariffs targeting the vast majority of Chinese imports will be removed imminently. Crowell calculates that for List 1 USTR granted 33.8% of all exclusion requests while for the larger List 3 the number dipped to 4.9% granted. Ambassador Tai also stressed that the United States is not seeking to further inflame ties with China.

Now is a critical time for constructive dialogue between industry and government. Implementing a broader, more transparent, reasoned and fair exclusion process will help meet these goals, and reduce the harm caused by the 301 tariffs. If the USTR implements a new exclusion processes, they should heed the critique of the prior USTR-administered process by the U.S. Government Accountability Office (GAO) readable here. It will be vital that the USTR consider the lessons learned from previous exclusion processes, and enact a framework that is objective, predictable and considers the reality of domestic manufacturing’s reliance on global supply chains.

Ambassador Tai’s full speech on US-China trade can be read here.

For video of her speech as well as the Q&A that followed, the Center for Strategic and International Studies has made available this link.

For more information: John Brew, Robert Holleyman, Sam Boone


Bureau of Industry and Security Issues Proposed Rule to Amend Export Administration Regulations to Clarify and Expand Restriction on the Availability of License Exception Strategic Trade Authorization

On October 22, 2021, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) announced its proposal to amend the Export Administration Regulations (EAR) in order to clarify and expand restrictions on the availability of License Exception Strategic Trade Authorization (License Exception STA or STA) for items controlled by the EAR. BIS proposed clarifying the “Special Conditions for STA” paragraphs included under the Category 9 Export Control Classification Numbers (ECCNs) 9D001, 9D002, 9D004, 9E001, 9E002, and 9E003 to reduce confusion for exporters.

BIS established the License Exception STA in Part 740 of the EAR on June 16, 2011 to authorize exports, reexports, and in-country transfers of certain items to STA-eligible destinations. These items include certain software source code and technology, as well as certain “600 series” items. Section 740.20(b) of the EAR sets forth restrictions on the use of License Exception STA – including Section 740.20(b)(2)(viii), which prohibits the use of STA for certain Category 9 ECCNs. These restriction under Section 740.20(b)(2)(viii) apply to ECCNs 9D001, 9D002, 9D004, 9E001, 9E002, and 9E003. Under Section 740.20(b)(2)(viii), STA eligibility for items under these six ECCNs is prohibited regardless of destination.

However, the “Special Conditions for STA” paragraphs of these Category 9 ECCNs are not as comprehensive as Section 740.20(b)(2)(viii), which BIS notes “potentially confuses exporters.” Specifically, these paragraphs state that STA eligibility for certain software and technology controlled under the ECCNs is excluded to destinations in Country Group A:6, while the controlling text of Section 740.20(b)(2)(viii) excludes STA eligibility for these items regardless of destination. The clarified text, which does not change license requirements or restrictions, would direct exporters, reexporters, and in-country transferors to the Category 9 limitation on the use of STA set forth in Section 740.20(b)(2)(viii).

BIS also proposed two new restrictions. The first proposal would expand restrictions on the use of License Exception STA for coating technologies under ECCN 2E003.f when the technology is used for the application of inorganic overlay coatings on gas turbine engine combustors. As it stands, coating technologies under ECCN 2E003.f are not controlled for Significant Items (SI) reasons and are eligible for export to certain countries under License Exception STA. The second rule proposes to exclude License Exception STA eligibility for all destinations for technology described by ECCN 1E001 for the “development” or “production” of “equipment and materials specified by ECCNs 1A002, 1C001, 1C007.c, 1C008.a.1, 1C009.bm and 1C010.b,.c or .d.” BIS will be seeking public comments on these amendments to the EAR, which must be received by December 6, 2021.

The Federal Register notice is available here.

For more information on the EAR and BIS, contact our team and see previous posts below.

Bureau of Industry and Security (BIS) Fines Company $200,000 for Violating the Export Administration Regulations (EAR) – International Trade Law (cmtradelaw.com)

Commerce Adds 23 Companies to Entity List Citing Forced-Labor, Military Technology, and Sanctions Concerns – International Trade Law (cmtradelaw.com)

For more information: Jeff Snyder, Chandler Leonard, Martin Yerovi


Customs Rulings of the Week

For more information, contact: Frances Hadfield, Martín Yerovi


Crowell & Moring Webinar

Supply chain issues are a top concern for many companies across industries and markets. Please join us for a webinar series that explores these issues and provides insights on the various legal and tactical considerations as companies think about supply chain disruption, impacts, and solutions.

Wednesday, November 17 at 1:00 pm EST

Overview of Supply Chain 

This session provides an overview of the myriad issues affecting and arising from the global and national supply chain delays and port congestion. Crowell & Moring’s experienced practitioners will cover issues pertaining to international trade/global mobility, government contracts, criminal and civil regulatory compliance and enforcement, cybersecurity, torts, commercial contracts and negotiations, antitrust, and around the corner litigation.

Wednesday, December 8 at 1:00 pm EST

Government Contract Issues

In the second installment of Crowell & Moring’s webinar series, our Government Contracts attorneys will discuss the impacts of the current and expected supply chain issues on federal government contractors and their compliance responsibilities. Our panelists will discuss contract clauses that may be at risk as the supply chain delays continue, including requirements for domestic preferences, prohibitions on counterfeit parts, and protecting national security interests. This panel will also cover the expected Government enforcement of supply chain-related compliance violations, including False Claims Act liability.

Contact: Marketing Events (MarketingEvents@crowell.com)

Register for Event


Crowell & Moring Speaks

October 25, 2021 – Law360 quotes former FinCEN chief counsel Carlton Greene, a partner in the White Collar & Regulatory Enforcement Group, regarding the agency still being chronically under resourced compared to other financial regulators. Greene says having more staff would enable FinCEN to ensure more consistent enforcement of the requirements of the AML laws and a greater impact on enforcement writ large, important for developing spaces like virtual currency and allowing for quicker responses (“20 Years After the Patriot Act FinCEN Still Has Room to Grow”).

For more information, please contact the professional(s) listed below, or your regular Crowell & Moring contact.

Jeffrey L. Snyder
Partner – Washington, D.C.
Phone: +1.202.624.2790
Email: jsnyder@crowell.com

Frances P. Hadfield
Counsel – New York
Phone: +1.212.803.4040
Email: fhadfield@crowell.com

Edward Goetz
Manager, International Trade Services – Washington, D.C.
Phone: +1.202.508.8968
Email: egoetz@crowell.com

Crowell & Moring LLP is an international law firm with offices in the United States, Europe, MENA, and Asia that represents clients in litigation and arbitration, regulatory and policy, and transactional and corporate matters. The firm is internationally recognized for its representation of Fortune 500 companies in high-stakes litigation and government-facing matters, as well as its ongoing commitment to pro bono service and diversity, equity, and inclusion.

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