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Regulatory Compliance News

Regulatory Compliance News | Shapiro

Free Trade Agreements (FTAs)

Free Trade Agreements (FTAs) have emerged as a key driving force behind global economic integration, facilitating the flow of goods and services across borders. FTAs remove barriers to trade, such as tariffs and quotas, enabling countries to access new markets and expand their export opportunities. One of the most notable examples is the North American Free Trade Agreement (NAFTA), which transformed trade relations between the United States, Canada, and Mexico.

It facilitated the seamless movement of goods, encouraged investment, and boosted economic integration between the 3 countries.  Interested in learning more about the litany of trade agreements across the globe? Check them out below.  

Global Free Trade Agreements

Benefits of Free Trade Agreements (FTAs)

  1. Boosting International Trade: FTAs promote a surge in international trade by reducing trade barriers, leading to an increase in imports and exports between participating nations. This opens new markets for businesses and stimulates economic growth.
  2. Attracting Foreign Investment: Countries with FTAs become more attractive to foreign investors due to improved market access, reduced risks, and enhanced business predictability. This influx of foreign direct investment contributes to economic development and job creation.
  3. Competitive Advantage: Businesses within countries engaged in FTAs gain a competitive advantage by accessing cheaper inputs and raw materials, which ultimately reduces production costs and increases competitiveness in the global market.
  4. Innovation and Technology Transfer: FTAs facilitate the transfer of technology and innovation between nations, enabling less-developed countries to acquire new knowledge and improve their productivity.
  5. Consumer Benefits: With reduced tariffs, consumers can access a wider range of goods and services at more competitive prices, enhancing their purchasing power and quality of life.

How FTAs Impact Different Sectors

Free trade agreements (FTAs) have a significant impact on various sectors of economies by influencing trade dynamics, market access, and economic cooperation. It’s important to take note of the export opportunities or challenges that could affect your industry or business.

  • Agriculture: FTAs can lead to increased agricultural exports, benefiting farmers and agribusinesses. However, domestic industries may face competition from cheaper imports.
  • Manufacturing: Manufacturing industries often witness growth due to access to new markets and competitive input prices, but some sectors may experience competition from foreign manufacturers.
  • Services: FTAs promote the liberalization of services, allowing service providers to tap into new markets and create a more conducive environment for cross-border service trade.

Notable Free Trade Agreements

Here’s a list of official FTAs between countries aimed at promoting trade by reducing or eliminating barriers such as tariffs and quotas. These agreements facilitate the exchange of goods and services, encourage investment, and foster economic cooperation. Notable FTAs include:

  • North American Free Trade Agreement (NAFTA): A landmark agreement between Canada, Mexico, and the United States, which has recently been replaced by the United States-Mexico-Canada Agreement (USMCA).
  • European Union-United Kingdom Trade and Cooperation Agreement (TCA): Formed after Brexit, this agreement governs trade relations between the EU and the UK.
  • Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP): Involving 11 Pacific Rim countries, this agreement aims to enhance economic integration among member states.

Free Trade Agreements play a vital role in promoting economic growth, enhancing international trade, and providing numerous benefits to participating countries and businesses alike. By reducing trade barriers and fostering cooperation, FTAs pave the way for a more interconnected and prosperous global economy, fostering a win-win situation for all stakeholders involved.

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Know Your AD/CVDs

AD/CVD rulings involve the imposition of anti-dumping (AD) and countervailing duties (CVD) on imported goods deemed to be sold below fair market value or benefiting from foreign government subsidies. These measures aim to protect domestic industries from unfair trade practices and level the playing field in international commerce.  

FY2023 Q3

On July 12, 2023,  a petition was filed to initiate Anti-dumping and Countervailing Duty Investigations on Certain Pea Protein from China.

  • Please see the announcement in the Federal Register: Certain Pea Protein from China; Institution of Antidumping and Countervailing Duty Investigations and Scheduling of Preliminary Phase.
  • The product within the scope of these investigations is high protein content (“HPC”) pea protein, which is a protein derived from peas (including, but not limited to, yellow field peas and green field peas) and which contains more than 65 percent protein on a dry weight basis.
  • Subject HPC pea protein may also be identified as pea protein concentrate, pea protein isolate, hydrolyzed pea protein, pea peptides, and fermented pea protein.
  • HPC pea protein, has the Chemical Abstracts Service (“CAS”) registry number 222400-29-5.
  • The investigation covers HPC pea protein in all physical forms including liquid and powder regardless of packaging.
  • The scope includes HPC pea protein described above that is blended, combined, or mixed with non-subject pea protein or with other products, including, but not limited to, protein powders, dry beverage blends, and protein fortified beverages. For any such blended, combined, or mixed products, only the HPC pea protein component is covered by the scope of these investigations.
  • HPC pea protein that has been blended, combined, or mixed with other products is included within the scope, regardless of whether the blending, combining, or mixing occurs in third countries.
  • HPC pea protein that is otherwise within the scope is covered when commingled (i.e., blended, combined, or mixed) with HPC pea protein from sources not subject to this investigation. Only the subject component of the commingled product is covered by the scope.
  • Excluded from the scope are any blend, combination, or mixture if the total HPC pea protein content of the blend, combination, or mixture (regardless of the source or sources) comprises less than 5 percent of the blend, combination, or mixture on a dry weight basis.
  • This merchandise is currently classifiable under HTS 3504.00.1000, 3504.00.5000, 2106.10.0000, and 2308.00.9890.
  • Preliminary determinations are due by August 28, 2023.

FY2023 Q2

On May 31, 2023,  a petition was filed to initiate Anti-dumping and Countervailing Duty Investigations on Paper Shopping Bags from Cambodia, China, Columbia, India, Malaysia, Portugal, Taiwan, Turkey, and Vietnam.

  • The announcement of this investigation has not been published in the Federal Register. However, please see the United States International Trade Commission Investigation Notice for Paper Shopping Bags from Cambodia, China, Columbia, India, Malaysia, Portugal, Taiwan, Turkey, and Vietnam.
  • The products within the scope of these investigations are paper shopping bags with handles of any type, regardless of whether there is any printing, regardless of how the top edges are finished (e.g., folded, serrated, or otherwise), and regardless of whether the tops can be sealed.
  • Subject paper shopping bags have a width of at least 4.5 inches and depth of at least 2.5 inches.
  • Excluded from the scope are:
  • Multiwall sacks and bags;
  • Paper sacks or bags that are of a 1/6 or 1/7 barrel size (i.e., 11.5-12.5 inches in width, 6.5-7.5 inches in depth, and 13.5-17.5 inches in height) with flat paper handles;
  • Paper sacks or bags with die-cut handles, a standard basis paper weight of less than 38 pounds, and a height of less than 11.5 inches;
  • Shopping bags (i) with non-paper handles made wholly of woven ribbon or other similar woven fabric and (ii) that are finished with folded tops or for which tied knots or t-bar aglets (made of wood, metal, or plastic) are used to secure the handles to the bags; and
  • Gift bags marked for retail sale that are physically bundled into the saleable unit prior to importation such that each bundled unit is composed of no less than three individual bags and no more than 30 individual bags.
  • This merchandise is currently classifiable under HTS 4819.30.0040 and 4819.40.0040.
  • Preliminary determinations are due by July 17, 2023.

On April 27, 2023, a petition was filed to initiate an Anti-dumping and Countervailing Duty Investigation on Certain Non-Refillable Cylinders from India.

  • Federal Register: Non-Refillable Steel Cylinders from India – Institution of Antidumping and Countervailing Duty Investigations.
  • The merchandise covered by the petition are certain seamed (welded or brazed), non-refillable steel cylinders meeting the requirements of, or produced to meet the requirements of U.S. Department of Transportation Specification 39, TransportCanada Specification 39M, or United Nations pressure receptacle standard ISO 11118 and otherwise meeting the description below.
  • Certain non-refillable steel cylinders are portable and range from 100-cubic inch (1.6 Liter) water capacity to 1,526-cubic inch (25 Liter) water capacity.
  • Subject non-refillable steel cylinders may be imported with or without a valve and/or pressure release device and are unfilled at the time of importation.
  • Non-refillable steel cylinders filled with pressurized air otherwise meeting the physical description above are covered by these orders.
  • Specifically excluded are seamless non-refillable steel cylinders.
  • Preliminary determination is due by June 9, 2023.

On April 27, 2023,  a petition was filed to initiate an Anti-dumping and Countervailing Duty Investigation on Brass Rod from Brazil, India, Israel, Mexico, South Africa, and South Korea.

  • Federal Register: Brass Rod from Brazil, India, Israel, Mexico, South Africa, and South Korea – Institution of Antidumping and Countervailing Duty Investigations.
  • Brass rod, which is defined as leaded, low-lead and no-lead solid brass made from alloys such as, but not limited to: Alloys C36000, C37700, C3700, C36300, C27450, C69300, C35300, C34500, C67600, C35330, C48500, and C67300, and their international equivalents.
  • The brass rod subject to these orders have a cross-section greater than one quarter of one inch (0.25 inches) outside diameter but less than or equal to 12 inches outside diameter.
  • Brass rod cross-sections may be round, hexagonal, square, or octagonal shapes as well as special profiles (e.g., angles, shapes).
  • Standard leaded brass rod covered by the scope contains, by weight, 57.0 – 65.0 percent copper; 1.5 – 3.0 percent lead; no more than 0.35 percent iron; and at least 15 percent zinc.
  • No-lead or low-lead brass rod covered by the scope contains by weight 59.0- 76.0 percent copper; 0 – 1.5 percent lead; no more than 0.35 percent iron; and at least 15 percent zinc.
  • Brass rod may also include other elements.
  • Brass rod can be finished or unfinished.
  • Brass rod may be produced in accordance with ASTM Bl 6, ASTM B124, ASTM B981, ASTM B371, ASTM B453, ASTM B21, ASTM B138, and ASTM B927, but such conformity to an ASTM standard is not required for the merchandise to be included within the scope.
  • Brass rod is produced by melting and casting into billets or strand casting into rod.
  • Brass rod may or may not be heated, extruded, pickled, or cold-drawn.
  • Preliminary determination is due by June 12, 2023.

On April 25, 2023,  a petition was filed to initiate an Anti-dumping Duty Investigation on Boltless Steel Shelving Units Prepackaged for Sale from India, Malaysia, Taiwan, Thailand, and Vietnam.

  • Federal Register:: Boltless Steel Shelving Units Prepackaged for Sale from India, Malaysia, Taiwan, Thailand, and Vietnam – Institution of Antidumping Investigation.
  • The below scope information was taken from the Antidumping Order for Boltless Steel Shelving Units from China. The scope language could change in this investigation.
  • Boltless Steel shelving units are provided for in subheading 9403.20.0075 in the Harmonized Tariff Schedule of the United States (HTSUS).
  • The investigation covers boltless steel shelving prepackaged for sale, with or without decks.
  • The term “prepackaged for sale means” at the minimum, the steel vertical supports and horizontal supports necessary to assemble a completed shelving unit are packaged together for ultimate purchase by the end-user.
  • The term ”boltless” refers to steel shelving in which the vertical and horizontal supports forming the frame are assembled primarily without the use of nuts, bolts, or screws.
  • The term “deck” refers to the shelf that sits on or fits into the horizontal supports (beams or braces) to provide the horizontal storage surface of the shelving unit.
  • The vertical and horizontal support members for boltless steel shelving are assembled by methods such as, but not limited to, fitting a rivet, punched or cut tab or other similar connector on one support into a hole, slot, or similar receptacle on another support. The supports lock together to form the frame for the shelving unit and provide the structural integrity of the shelving unit separate from the inclusion of any decking.
  • The incidental use of nuts and bolts or screws to add accessories, wall anchors, tie-bars or shelf supports does not remove the product from scope.
  • Boltless steel shelving units may also come packaged as partially assembled, such as when two upright supports are welded together with front-to-back supports or are otherwise connected, to form an end unit for the frame.
  • The scope also includes add-on kits. Add-on kits include, but are not limited to, kits that allow the end-user to add an extension shelving unit onto an existing boltless steel shelving unit such that the extension and the original unit will share common frame elements (ex. two posts).
  • The boltless steel shelving covered by this petition may be commonly described as rivet shelving, welded frame shelving, slot and tab shelving, and punched rivet shelving as well as by other trade names.
  • Goods excluded from the scope include:
    1. Wall-mounted shelving, defined as shelving that is hung on the wall and does not stand on, or transfer load to, the floor (The addition of a wall bracket or other device to attach otherwise freestanding subject merchandise to a wall does not meet the terms of this exclusion.)
    2. Wire shelving units, which consist of shelves made from wire that incorporate both a wire deck and wire horizontal supports (taking the place of the horizontal beams and braces) into a single piece of tubular collars that slide over the posts and onto plastic sleeves snapped on the posts to create the finished shelving unit.
    3. Bulk-packed parts or components of boltless shelving units
    4. Made to order shelving units.
  • Preliminary determination is due by June 09, 2023.

On April 12, 2023, Commerce issued affirmative preliminary determinations in the below Circumvention Inquires:

  1. Circular Welded Carbon Quality Steel Pipe completed in Vietnam from China origin Hot Rolled Steel were circumventing the Antidumping and Countervailing order on Circular Welded Carbon Quality Steel Pipe from China. Cases A-552-009/C-552-010 (Original Case Number A-570-910 and C-570-911)

Federal Register: Circular Welded Carbon Quality Steel Pipe completed in Vietnam from China origin Hot Rolled Steel

  1. Certain Circular Welded Non-Alloy Steel Pipe completed in Vietnam using Korea origin Hot Rolled Steel were circumventing the Antidumping order on Certain Circular Welded Non-Alloy Steel Pipes from Korea. Case –

Case A-552-011 (Original Case Number A-580-809)

Federal Register: Certain Circular Welded Non-Alloy Steel Pipe completed in Vietnam using Korea origin Hot Rolled Steel

  1. Certain Welded Carbon Steel Standard Pipes and Tubes completed in Vietnam using Indian origin Hot Rolled Steel were circumventing the Antidumping order Certain Welded Carbon Steel Standard Pipes and Tubes from India. Case – A-552-012 (Original Case Number A-533-502)

Federal Register: Certain Welded Carbon Steel Standard Pipes and Tubes completed in Vietnam using Indian origin Hot Rolled Steel

  • Suspension of liquidation and cash deposit requirements will apply to all unliquidated entries that were entered, or withdrawn from warehouse, for consumption on or after August 04, 2022.
  • Cash deposit for Case A-552-009: 85.55%
  • Cash deposit for Case C-552-010: 39.01%
  • Cash deposit for Case A-552-011: 4.80%
  • Cash deposit for Case A-552-012: 7.08%
  • Certifications are required to be filled out by the exporter and the importer verifying that the merchandise was produced from non-origin China, non-origin Korea, and non-origin India hot rolled steel. If there is no certification provided for an entry, antidumping and countervailing orders from three countries (China, India, and Korea) could potentially apply to that entry.
  • For entries during the period of August 04, 2022 – April 12, 2023, for which certifications are required and certifications were not submitted, importer and exporter certifications must be completed, signed, and dated no later than May 27, 2023.
  • If the required certifications for an entry were not submitted as part of the entry process, the required certifications from the importer and exporter must be submitted to CBP (Customs).
  • For entries going forward for these items or other items that would possibly be subject to these cases, the importer and exporter certifications are required to be submitted as to CBP as part of the entry package.
  • The importer and exporter are required to maintain sufficient documentation supporting their certifications.
  • The importer and exporter are required to maintain the certifications and supporting documentation for the later of (1) the date that is five years after the latest entry date of the entries covered by the certification; or (2) the date that is three years after the conclusion of any litigation in United States courts regarding such entries.
  • The exporter certification should be completed by the party selling the merchandise manufactured in Vietnam, which is not necessarily the producer of the product.

FY2023 Q1

Intellectual Property Rights

IPR stands for Intellectual Property Rights and refers to the legal rights and protections granted to individuals or entities for their creations or inventions. These creations can include inventions, designs, logos, brand names, software code, artistic works, trade secrets, and more. The CBP has put some serious emphasis on IPR seizures in recent years totaling over $2.5 billion annually since 2021.

IPR Seizure Data Chart
IPR Seizure Data Chart

In the supply chain context, IPR compliance is essential for businesses to protect their intellectual property assets and ensure that they aren’t being infringed upon or misused by other parties within the supply chain. Here are some key aspects of IPR in supply chain compliance:

  1. Counterfeit Goods: IPR compliance helps prevent the manufacture, distribution, or sale of counterfeit products that imitate and infringe on the trademarks, patents, or copyrights of legitimate products. Counterfeit goods can harm the reputation of a brand and lead to financial losses.
  2. Licensing and Royalties: When a company licenses its intellectual property to other parties for use or distribution, IPR compliance ensures that the terms of the licensing agreement are followed, and appropriate royalties or fees are paid.
  3. Supply Chain Partners: Businesses must ensure that their supply chain partners, such as suppliers and manufacturers, respect and protect their intellectual property rights. This may involve contractual agreements and regular audits to verify compliance.
  4. Data and Software Protection: In supply chains involving digital products or software, IPR compliance helps safeguard against unauthorized copying, distribution, or modification of copyrighted materials or proprietary software.
  5. International IPR Laws: Supply chains often span multiple countries, each with its own set of intellectual property laws and regulations. IPR compliance requires businesses to understand and adhere to these laws in the regions where they operate.
  6. Due Diligence: Conducting due diligence on potential supply chain partners is crucial to ensure that they have a track record of IPR compliance and are committed to protecting intellectual property rights.
  7. Dispute Resolution: In case of IPR infringement or disputes within the supply chain, businesses should have appropriate mechanisms in place for resolution, which may involve mediation, arbitration, or legal action.

Maintaining IPR compliance in the supply chain helps businesses protect their valuable innovations, brands, and creative works, promoting fair competition and fostering an environment where creativity and innovation can thrive. It also reduces the risk of legal challenges, financial losses, and reputational damage associated with intellectual property violations. 

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