“Trade & Tariff Survival Guide”Webinar

Tuesday, September 10, 2019

Moderator

Michal T. ConeCustoms, International Trade, and Regulatory

Compliance Attorney, Partner

FisherBroyles, LLP

Presenter

Florence CheironMember Relations Associate

French-American Chamber of Commerce

Trade and Tariff Survival Guide

I. IntroA. Customs law enforcement

I. ClassificationII. ValuationIII. Country of Origin

B. Under U.S. law, it is the importer's responsibility to ensure compliance with all customs obligations

II. Types of customs dutiesA. “Normal” customs dutiesB. Antidumping and countervailing dutiesC. “Special” customs duties

III. Special duties under Section 201 and Section 301 of the Trade Act of 1974 – National Security, Retaliation for Unfair Practices

U.S. Customs and Border Protection (CBP) enforces customs laws1) Big 3: Classification,

Valuation, Country of Origin

CBP enforces laws of over 40 different agencies

• Non-compliance with regulations of any other agency can result in detentions, seizures, recalls, and liquidated damages.

Importer’s Responsibilities

• 19 U.S.C. §1484 requires the importer of record to use reasonable care to enter, classify and determine the value of imported merchandise and to provide any other information necessary to enable CBP to properly assess duties

• 19 U.S.C. § 1592 provides severe penalties for underpayment of customs duties. Law360 Expert Analysis, “Trek Leather Opens Pandora’s Box On US Customs Penalties”, October 2014

Classification

• An importer must properly classify its goods under the Harmonized Tariff Schedule of the United States (HTSUS)

Valuation

• Custom duties are normally calculated based on an ad valorem percentage of the appraised value of the imported good.

• Accordingly, it is crucial from a compliance perspective to make sure that the value of the imported shipment is correct under customs laws

Country of Origin

• Absent a free trade agreement, country of origin is based on a "substantial transformation" of a good in a country resulting in a new "name, character, or use" of the good.

• Examples that do not cause a substantial transformation: simple assembly, mixing, shipping the finished good from or through a different country

This Photo by Unknown Author is licensed under CC BY-SA-NC

Antidumping and Countervailing Duties

• Antidumping duties seek to offset the sale of goods into the United States at "Less Than Fair Value"

• Countervailing Duties seek to offset the sale of goods into the United States that have benefited from foreign governmental subsidies

“Special” Customs Duties

• Special Duties under Section 201 and Section 301 of the Trade Act of 1974

Goods Containing Aluminum and Steel

Goods From China

This Photo by Unknown Author is licensed under CC BY-SA

Aerospace and other goods imported from the EU (Airbus subsidy dispute)

EU Goods Currently Targeted By the USTR• Aircraft components from France, Britain,

Germany, and Spain

• USTR Section 301 Action - Airbus List 1 (April 12 2019)

• Other goods from all EU Countries

• USTR Section 301 Action - Airbus List 2 (July 5 2019) (002)

Avoiding Special Duties Through USTR Written Comments and Appearances

• Roquefort - Answers for USTR (March 8 2017)

• Roquefort comments for USTR - (January 30 2017)

Strategies to Address and Mitigate Trump Tariffs• Tariff classification review: Are your products

correctly classified?

• Tariff engineering: Can you make changes to your products so they properly classified in a tariff provision not subject to special duties?

• Sourcing in a different country: Can you move production from China to Vietnam?

• Drawback: Can you take advantage of the little known customs duty refund planning strategy called “Drawback”?

This Photo by Unknown Author is licensed under CC BY-SA

Michael T. Cone

• Large Firm Experience:

• Baker & McKenzie

• Coudert Brothers

• Moquet, Borde, Dieux, Geens & Associés

• Corporate Experience:

• Kellogg Company

• Judicial Experience:

• U.S. Court of International Trade; Law Clerk to the Hon. R. Kenton Musgrave

• U.S. District Court for the Eastern District of Michigan; Intern to the Hon. Anna Diggs Taylor

• Languages: French

• FisherBroyles Law Firm 2.0® model and Michael Cone featured in l’ENAhors les murs, the alumni magazine of France’s leading graduate school, l’École National d’Administration: “Does the cloud have a silver lining? Le «cloud» est-il cousu d’or?”, May 2016

Contact:T: (212) 655-5471E: michael.cone@fisherbroyles.com

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Michael T. Cone Customs, International Trade, and Regulatory Compliance Attorney, Partner at FisherBroyles, LLP

michael.cone@fisherbroyles.com

Florence CheironMember Relations Associate at French-American Chamber of Commerce

fcheiron@faccnyc.org