To Our Valued Customers:
Section 301 (China Tariffs) and Hong Kong: In July, Hong Kong lost special trade status which creates new supply chain considerations. One such issue is product labeling requirements. US Customs and Border Protection (CBP) has issued guidance stating that importers must adjust their labeling for products from Hong Kong beginning September 25,2020. Acknowledging realistic timelines for this kind of shift, they have also stated there will be a 45 day transition period in place.
Additional guidance from CBP also put US Importers minds at ease by stating that goods from Hong Kong will not be subject to additional Section 301 duties, which are meant for products with Country of Origin China.
Section 301 Exclusion Expirations and Extensions: Exclusions, which have been providing tariff relief to thousands of importers, are now beginning to expire in rounds. Prior to reaching the expiration date on each exclusion, the USTR opens a ‘comment period’ for importers to request exclusion extensions. Just like initial exclusion requests, the USTR requires certain information to be included in the request – including company revenue, import activity, and a business case.
A large chunk of exclusions which were being utilized for products on Section 301, List 3, expired earlier this month – with less than one third of them being granted extensions through the end of 2020. Another large list of exclusions pertaining to consumer products on Section 301, List 4A will expire on September 1st and any potential granted extensions are not expected to be announced until August 30th or 31st. Many medical and consumer PPE goods related to COVID-19 relief are utilizing these exclusions, and may be subject to additional import duties after September 1st.
The comment period to request extensions for exclusions on List 1, which were initially granted in October of 2019 and expire on October 1st, 2020, is open now through August 30th.
Importers who wish to draft comments requesting exclusion extensions should act now before the window on these particular exclusions closes. We are currently assisting importers in drafting their comment submissions. Contact your Laufer representative for more details on the process and requirements.
CBP Issued Violations and Penalties: CBP has recently increased their attention to global human rights issues - specifically focusing on forced labor enforcement for goods entering the United States. Although there have been compliance guidelines in place for some time, we are seeing an increase of automatic shipment detentions by CBP for shipments with red flags. If importers are issued a notice (mostly based upon a flagged manufacturer), they must prove their supply chain does not contain any human rights violations, or the goods must be immediately exported from the US.
CBP has issued their first monetary penalty for violation of forced labor laws, so it is imperative that US importers have full control over their supply chain, as it is their responsibility to ensure their vendors and manufacturers are not engaged in any illegal practices.