CBP Increases MPF Effective October 1, 2018
U.S. Customs Border Protection has announced a 2.151 percent increase of the merchandise processing fee (MPF) effective October 1, 2018 for fiscal year 2019. The assessed rate of .3464 percent of the entered value of merchandise does not change, the minimum and maximum limitations for the MPF have changed. Please find the changes below.

• Formal entry minimum increases from $25.67 to $26.22
• Formal entry maximum increases from $497.99 to $508.70
• Informal entry electronically transmitted to CBP increases from $2.05 to $2.10
• Informal entry manually submitted to CBP increases from $6.16 to $6.29

Additional information can be found through this link:
https://www.gpo.gov/fdsys/pkg/FR-2018-08-01/pdf/2018-16510.pdf

China Tariff List Two – Effective Date and Rate announced
Please find the following attachments, for your reference:

1. List 1 (25%, effective July 6th, 2018) Click here 
2. List 2 (25%, effective August 23rd, 2018) Click here
3. Form to Request Exclusion of Product.  Click here– Instructions and form for how to apply for an exclusion to List 1 and List 2 tariffs. Note that the information provided will become publicly available and viewable for comment for a period of 14 days. Decisions on exclusions are anticipated to take some time to process, but would be retroactive, if granted. Generally speaking, it appears that importer must show that equivalent domestic goods are not available, not of sufficient quality, or that imposition of tariffs would cause ‘severe economic harm’ to either the requestor or the US as a whole. Further guidance and decision making criteria has not yet been made available.

Note: an application for exclusion can only be made for the effective List 1 and List 2 tariffs, NOT yet for List 3. It is anticipated that, like List 1 and List 2, a similar request for exclusion process will become available upon final announcement. We will forward at that time.
NOTE: List 3 – proposed 10% or 25%, no final rate or effective date announced yet – comment period extended through September 5th 2018

Important Sect 301 China Tariff Update

In the most recent and concerning developments in the “China Tariff War”, yesterday President Trump instructed the US Trade Representative’s office to consider a proposal to raise the proposed duty on products included on Section 301 List 3 from 10% to 25%.
As many know, “List 3” includes over 6,000 HTS line items including items from virtually every HTS chapter.
Many companies with products falling on List 3 were concerned with an increase of 10%.  However, an increase of 25% could have serious consequences for these companies.
There is no definitive decision on whether this will move forward.  However, the public comment period for the 301 List 3 has now been extended from August 30 to September 5.  In addition, the deadline to request to appear at the public hearing has been extended to August. 13.
The requirements for filing public comments were published in the Federal Register on July 17.  If you need a copy, please contact the office.
The USTR notice will be published in the Federal Register, likely in the next few days.
USTR Rpresentative Lighthizer’s statement is below:
“On June 18, the President directed me to identify $200 billion worth of Chinese goods for additional tariffs at a rate of 10 percent, in response to China’s decision to cause further harm to U.S. workers, farmers, and businesses by imposing retaliatory duties on U.S. goods.  I initiated this process on July 10.
“This week, the President has directed that I consider increasing the proposed level of the additional duty from 10 percent to 25 percent.  The 25 percent duty would be applied to the proposed list of products previously announced on July 10.
“The Trump Administration continues to urge China to stop its unfair practices, open its market, and engage in true market competition.  We have been very clear about the specific changes China should undertake.  Regrettably, instead of changing its harmful behavior, China has illegally retaliated against U.S. workers, farmers, ranchers and businesses.
“The increase in the possible rate of the additional duty is intended to provide the Administration with additional options to encourage China to change its harmful policies and behavior and adopt policies that will lead to fairer markets and prosperity for all of our citizens.
“The United States has joined forces with like-minded partners around the world to address unfair trade practices such as forced technology transfer and intellectual property theft, and we remain ready to engage with China in negotiations that could resolve these and other problems detailed in our Section 301 report.”
Interested parties may address this possible increase in the level of the additional duty in their comments on the proposed action.  The proposed list and process for the public notice and comment period is set out in the Federal Register notice issued on July 10 and published in the Federal Register on July 17.  To view the July 17 notice, including the list of proposed products to be subject to additional duties, click here.  In light of the possible increase of the additional duty rate to 25 percent, the close of the written comment period is extended from August 30 to September 5, and the due date for requests to appear at the public hearing is extended to August 13.  These modifications to the comment period will be set out in a notice to be published shortly in the Federal Register.
In addition, the public comment period for products on List 2 closed last week.  This list is under final review by the USTR’s office and could be published at any time now.   The products on this list are subject to 25% duty.  Keep in mind that this process could move very quickly.
If you have questions or need assistance with any of the Section 301 tariff issues, please contact our office.

Paula M. Connelly, Esq.
Law Offices of Paula M. Connelly
100 Trade Center
Suite 660
Woburn, MA 01801
781-897-1771
www.connellycustomslaw.com
Paula M. Connelly is a principal in the Law Offices of Paula M. Connelly, a law firm specializing in Customs and international trade matters. She has been practicing law since 1991 and prior to working as an attorney, worked as a licensed Customs broker for several customs brokerage companies in the Boston area. She has over 20 years experience in Customs and International Trade matters and works with numerous importers and exporters in addressing and resolving import and export compliance issues.

 A Challenge to Shippers Who Would Never Dream of Controlling the Insurance
Shippers who rely on suppliers to furnish cargo insurance or who rely on their carriers to take responsibility for losses may be in for a big surprise. Protecting your investments by insuring your goods provides peace of mind.
Buying CIF: Who’s really responsible if your product is lost or damaged in transit? According to internationally accepted trade terms, referred to as Incoterms, suppliers selling “CIF” (Cost, Insurance, Freight) are responsible for arranging cargo insurance. But just because your supplier has the obligation to arrange insurance under CIF terms, it doesn’t mean that they are ultimately responsible if your product is lost or damaged during transit. The ultimate burden of loss falls upon you, the buyer. This is why many experts recommend importers change their buying terms to EXW, FOB, FCA, CFR or similar terms in order to control the selection, and thereby the quality, of insurance coverage.
How much is that insurance really costing you? Foreign suppliers and their forwarding agents often tack on placement fees to the insurance costs. Those added fees often inflate the cost of insurance well beyond market pricing for the same coverage purchased in the United States. Find out how much you’re really paying and then compare quotes received from BOC International.
Is the coverage your supplier purchased for you adequate? Importers relying on their suppliers to arrange insurance run the risk of having inadequate insurance coverage. Cargo insurance policies can vary widely in levels of coverage, deductibles and special restrictions. Ask your supplier for a complete copy of the insurance policy or for a certificate of insurance detailing all the policy terms and conditions
What’s the financial health of your supplier’s insurance company? Recent financial and catastrophic events have exposed the vulnerability of insurance companies to sudden economic devastation. Importers are encouraged to make certain their suppliers use insurers with a favorable financial rating supplied by a respected financial rating service. A.M. Best, Standard & Poor’s and Moody’s are among some of the world’s most respected. BOC’s insurance company, underwriters at Lloyd’s of London, has an A.M. Best financial rating of A (Excellent).
How will your claim be handled? If insurance is arranged overseas, will you be forced to  deal with an inexperienced, sub-contracted independent adjuster unfamiliar with the assessment of transportation related losses? Ask your supplier for a list of insurance claims adjusters contracted by the insurance company. Adjuster and surveyor networks approved by Lloyd’s of London and AIMA are among the most credible. BOC has a vested interest in your insurance needs and will directly handle cargo claim documentation requirements to ensure prompt processing and timely settlement.
Every Shipper Needs Cargo Insurance
Global trading involves risk; however, broad insurance coverage minimizes your financial risk. Don’t leave your livelihood up to chance! Statistics show that one ship sinks each day and you will experience a General Average loss every eight years. If you are depending on the carrier to cover losses, their responsibility is limited by law as follows:
Ocean Carriers  $500 per shipping unit
A shipping unit may be defined as one ocean container.
Air Carriers  $9.07 per pound
Truckers  $.50 per pound
The insurance we offer is competitively priced and insures approved merchandise against physical loss or damage from external causes. By purchasing cargo insurance, you can avoid inconvenience and frustration. Contact your BOC Representative at 617-345-0050 for your free quote.

Transpacific Network Service Updates
US Pacific Northwest
Dear Valued Customer,
We are reaching out to you to inform you of changes to our Transpacific – US Pacific Northwest services. Due to rising costs and overcapacity in the market, we have made adjustments to our TP2, TP8 and TP9 services.  Our existing TP1 service, serving Vancouver and Seattle, will be removed from our product offering.
Please find the updated service rotations:
TP9 Service

• First port of call changed to Vancouver
• Second port of call changed to Seattle and removal of Prince Rupert
• Addition of Yokohama, Kaohsiung and Xiamen
• Removal of Nansha from rotation
• Westbound rotation to maintain direct coverage of Yokohama and Kaohsiung

The first effective sailing will depart from Kaohsiung the week of August 20-26.
TP9 Eastbound: Kaohsiung > Xiamen > Yantian > Ningbo > Shanghai > Busan > Vancouver > Seattle
TP9 Westbound: Vancouver > Seattle > Yokohama > Busan > Kaohsiung > Xiamen > Yantian > Ningbo > Shanghai
TP8 Service

• Addition of Prince Rupert
• Addition of Shanghai
• Removal of Ningbo

The first effective sailing will depart from Xingang on the week of August 20-26.
TP8 Eastbound: Xingang > Qingdao > Shanghai > Busan > Yokohama > Prince Rupert > Long Beach > Oakland
TP8 Westbound: Prince Rupert > Long Beach > Oakland > Xingang > Qingdao > Shanghai > Busan > Yokohama
TP2 Service

• Addition of Ningbo
• Removal of Shekou

The first effective sailing will depart from Singapore on the week of August 20-26.
TP2 Eastbound: Singapore > Vung Tau > Yantian > Ningbo > Shanghai > Long Beach > Oakland
TP2 Westbound: Long Beach > Oakland > Busan > Shanghai > Ningbo > Chiwan > Singapore
We would like to take this opportunity to say thank you for doing business with us. If you have any questions, please feel free to reach out to your local sales or customer service representative. You will find contact details of our local offices on maerskline.com.

Sincerely,
Your Maersk Line North America Team

China Trade War Continues – Important Updates for Importers
There are two important updates in the Section 301 investigation on China practices.

First, as many have probably heard, the U.S. Trade Representative’s office has issued a notice on a new proposed list of products that could be subject to an additional 10% duty.  This list includes over 6,000 HTS provisions, covering many items.  Specifically excluded are certain pharmaceutical products of Chapter 30 and apparel items of Chapters 61 and 62.

As with the prior proposed lists, the USTR’s office is allowing for a public comment period and public hearing.

Written comments must be submitted by August 17, 2018, with a post-hearing rebuttal comments by August 30, 2018.

The public hearing will be held in Washington, D.C. on August 20, 2018. Those interested in attending must submit requests to appear at the hearing by July 27, 2018. The request to appear must include a summary of testimony and may be accompanied by a pre-hearing submission.

As with the previous proposed lists, the USTR requests that that those seeking inclusion or exclusion that commenters of a specific HTS provision “address specifically whether imposing increased duties on a particular product would be practicable or effective to obtain the elimination of China’s acts, policies, and practices, and whether maintaining or imposing additional duties on a particular product would cause disproportionate economic harm to U.S. interests, including small- or medium-size businesses and consumers.”

The USTR notice including the list of HTS provisions can be accessed at the link below.   If you import from China, I highly recommend that you review this list as there are many HTS provisions included.

https://ustr.gov/sites/default/files/301/2018-0026%20China%20FRN%207-10-2018_0.pdf

Second, the USTR’s office has issued instructions on requesting exclusions from the Section 301 25% duties that became effective on July 6.  These cover the HTS provisions that were included in the first 301 list.  Keep in mind that the second proposed list is still under review by the U.S. government.   The list published on July 10 is a third list of products.
Regarding the exclusion request process, requests must be filed by October 9, 2018.  Any exclusions granted will be retroactive to July 6.   The Federal Register notice includes the following requirements for submissions:

• Identification of the particular product in terms of the physical characteristics (e.g., dimensions, material composition, or other characteristics) that distinguish it from other products within the covered 8- digit subheading. USTR will not consider requests that identify the product at issue in terms of the identity of the producer, importer, ultimate consumer, actual use or chief use, or trademarks or tradenames. USTR will not consider requests that identify the product using criteria that cannot be made available to the public.
• The 10 digit subheading of the HTSUS most applicable to the particular product requested for exclusion.
• Requestors also may submit information on the ability of U.S. Customs and Border Protection to administer the exclusion.
• Requestors must provide the annual quantity and value of the Chinese-origin product that the requestor purchased in each of the last three years. For trade association requestors, please provide such information based on your members’ data. If precise annual quantity and value information is not available, please provide an estimate and explain the basis for the estimation. With regard to the rationale for the requested exclusion, each request for exclusion should address the following factors:
• Whether the particular product is available only from China. In addressing this factor, requestors should address specifically whether the particular product and/or a comparable product is available from sources in the United States and/or in third countries.
• Whether the imposition of additional duties on the particular product would cause severe economic harm to the requestor or other U.S. interests.
• Whether the particular product is strategically important or related to ‘‘Made in China 2025’’ or other Chinese industrial programs

The Notice also states that the USTR office prefers requests to be submitted electronically.  It also provides the following instructions on submission:

To submit requests via www.regulations.gov, enter document ID number USTR–2018–0025–0001 on the home page and click ‘‘search.’’ The site will provide a search-results page listing the Federal Register Notice associated with this docket. Find a reference to this notice and click on the link titled ‘‘comment now!’’. Once posted on the electronic docket, the exclusion request will be viewable in the ‘‘primary documents’’ section.

The Federal Register Notice, published today, can be accessed at the following:

https://www.gpo.gov/fdsys/pkg/FR-2018-07-11/pdf/2018-14820.pdf

If you have questions on either of these developments, please contact our office and we would be happy to discuss these further.

Paula M. Connelly, Esq.
Law Offices of Paula M. Connelly
100 Trade Center
Suite 660
Woburn, MA 01801
781-897-1771
www.connellycustomslaw.com

Customs Lawyer
Paula M. Connelly is a principal in the Law Offices of Paula M. Connelly, a law firm specializing in Customs and international trade matters. She has been practicing law since 1991 and prior to working as an attorney, worked as a licensed Customs broker for several customs brokerage companies in the Boston area. She has over 20 years experience in Customs and International Trade matters and works with numerous importers and exporters in addressing and resolving import and export compliance issues.

BOC International will be closed on Wednesday for the 4th of July holiday. Please contact your BOC Representative if you have any questions.

Under Section 301 Action,  USTR Releases Proposed Tariff List On Chinese Products
 
WASHINGTON, DC – As part of the U.S. response to China’s unfair trade practices related to the forced transfer of U.S. technology and intellectual property, the Office of the U.S. Trade Representative (USTR) today published a proposed list of products imported from China that could be subject to additional tariffs.
Following USTR’s Section 301 investigation, President Trump announced in March that the United States will impose tariffs on approximately $50 billion worth of Chinese imports and take other actions in response to China’s policies that coerce American companies into transferring their technology and intellectual property to domestic Chinese enterprises.  These policies bolster China’s stated intention of seizing economic leadership in advanced technology as set forth in its industrial plans, such as “Made in China 2025.”
The proposed list of products is based on extensive interagency economic analysis and would target products that benefit from China’s industrial plans while minimizing the impact on the U.S. economy.  Sectors subject to the proposed tariffs include industries such as aerospace, information and communication technology, robotics, and machinery.
The proposed list covers approximately 1,300 separate tariff lines and will undergo further review in a public notice and comment process, including a hearing.  After completion of this process, USTR will issue a final determination on the products subject to the additional duties.
The total value of imports subject to the tariff increase is commensurate with an economic analysis of the harm caused by China’s unreasonable technology transfer policies to the U.S. economy, as covered by USTR’s Section 301 investigation.
Today’s announcement comes just days after the USTR filed a request for consultations with China at the World Trade Organization (WTO) to address China’s discriminatory technology licensing requirements.  Such consultations are the first step in the WTO dispute settlement process.  If the United States and China are unable to reach a solution through consultations, the United States may request the establishment of a WTO dispute settlement panel to review the matter.
https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/april/under-section-301-action-ustr

UPDATE: Additional Duty on Imports of Steel and Aluminum Articles under Section 232
Related CSMS:  18-000240, 18-000249, 18-000257, 18-000258, 18-000296, 18-000317, 18-000352
BACKGROUND:
On March 8, 2018, the President issued Proclamations 9704 and 9705 on Adjusting Imports of Steel and Aluminum into the United States, under Section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862), providing for additional import duties for steel mill and aluminum articles, effective March 23, 2018.  See the Federal Register, 83 FR 11619 and 83 FR 11625, March 15, 2018.  On March 22, 2018, the President issued Proclamations on Adjusting Imports of Steel and Aluminum into the United States. See the Federal Register, 83 FR 13355 and 83 FR 13361, March 28, 2018.  On April 30, 2018, the President issued Proclamations 9739 and 9740 on Adjusting Imports of Steel and Aluminum into the United States.  See the Federal Register, 83 FR 20683 and 83 FR 20677, May 7, 2018.  On May 31, 2018, the President issued Proclamations on Adjusting Imports of Steel and Aluminum into the United States.
These duty requirements are effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on March 23, 2018.
COMMODITY:
Steel mill and aluminum articles, as specified in the Presidential Proclamations.
COUNTRIES COVERED BY SECTION 232 IMPORT DUTIES:
Please note that the Section 232 measures are based on the country of origin, not the country of export.
Steel:
As of June 1, 2018:  All countries of origin except Argentina, Australia, Brazil, and South Korea.
Aluminum:
As of June 1, 2018:  All countries of origin except Argentina and Australia.
COUNTRIES COVERED BY SECTION 232 ABSOLUTE QUOTAS:
Steel:
As of June 1, 2018:  Argentina, Brazil, and South Korea.
Aluminum:
As of June 1, 2018:  Argentina.
For both steel and aluminum, imports of United States origin are not covered by the Section 232 measures.
FILING INSTRUCTIONS:
SECTION 232 IMPORT DUTIES:
Use non-quota entry type codes.
UPDATE:  As of June 1, 2018, for all imports of aluminum from South Korea, importers should also use non-quota entry type codes.
Steel Products
In addition to reporting the regular Chapters 72 & 73 of the Harmonized Tariff Schedule (HTS) classification for the imported merchandise, importers shall report the following HTS classification for imported merchandise subject to the additional duty:
9903.80.01 (25 percent ad valorem additional duty for steel mill products)

Aluminum Products
In addition to reporting the regular Chapter 76 of the HTS classification for the imported merchandise, importers shall report the following HTS classification for imported merchandise subject to the additional duty:
9903.85.01 (10 percent ad valorem additional duty for aluminum products)
SECTION 232 ABSOLUTE QUOTAS:
Use quota entry type codes (entry types 02, 06, 07, 12, 23, 32, 38, or 52).
For further guidance, see CBP quota bulletins at https://www.cbp.gov/trade/quota/bulletins
Generalized System of Preferences (GSP) and African Growth and Opportunity Act (AGOA)
GSP and AGOA-eligible goods that are subject to Section 232 duties or quotas may not receive GSP or AGOA duty preference in accordance with 19 USC 2463(b)(2).
On imports subject to Section 232 duties or quotas (including imports from Argentina and Brazil), in addition to any applicable Section 232 duties, importers should pay the normal trade relations (column 1) duty rates and not submit the GSP Special Program Indicator (SPI) “A” or the AGOA SPI “D”
FOR FURTHER INFORMATION:
For more information, please refer to the Presidential Proclamations on Adjusting Imports of Steel and Aluminum into the United States, Federal Register, 83 FR 11619 and 83 FR 11625, March 15, 2018; the March 22, 2018 Presidential Proclamations on Adjusting Imports of Steel and Aluminum into the United States. 83 FR 13355 and 83 FR 13361, March 28, 2018; and the April 30, 2018 Proclamations on Adjusting Imports of Steel and Aluminum into the United States. 83 FR 20683 and 83 FR 20677, May 7, 2018; and the May 31, 2018, Proclamations on Adjusting Imports of Steel and Aluminum into the United States.
Also see Frequently Asked Questions at https://www.cbp.gov/trade/programs-administration/entry-summary/232-tariffs-aluminum-and-steel
Questions related to Section 232 entry filing requirements should be emailed to traderemedy@cbp.dhs.gov.  Questions from the importing community concerning ACE rejections should be referred to their Client Representative.

NEW REQUIREMENTS FOR EXPORTS TO CHINA
ADJUSTMENT TO CHINA CUSTOMS ADVANCED MANIFEST (CCAM) REGULATIONS
Advisory, Customer Services
General Administration of Customs China (GACC) has released Order No.56 [2017] to adjust the Advanced Manifest rule (GACC advisory in Chinese) to ensure smooth customs clearance and effectively strengthen customs’ implementation of safe entry and risk prevention for import and export goods into/from China.
The rule will be effective from 1st June 2018 and includes the implementation of following.
1.China Customs Advanced Manifest (CCAM) enforcement wherein Advanced Manifest must be submitted to China Customs 24 hours prior to cargo loading on vessels sailing to/from China mainland ports.

2.The manifest data must be accurate and complete for all goods under the Bill of Lading (BL).

3.Full details of the Shipper and Consignee (or Notify Party if Consignee is To Order) must be provided in the shipping instruction (SI). Due to this adjustment in policy, Enterprise codes are newly required as follows.
In accordance with China Customs requirements, we will require the following information upon booking for cargo destined to China to ensure that shipments will not be delayed or denied entry into the People’s Republic of China:
o Shipper contact name and phone number
o Shipper Tax ID or Unified Social Credit Code (USCI)
o Consignee contact name and phone number
o Consignee Tax ID or Unified Social Credit Code (USCI)
To comply with the above regulatory requirements and ensure no delays with China Customs clearance, please ensure to provide the data in your shipping instruction (SI) for vessels loading to China from 1st June 2018 onwards. Please follow the documentation cut off as advised by your nearest booking office.
We will keep you informed of any further development.
If you have any questions, please contact your BOC Representative.
Thank you for your support.