Blog/News

CBP CONSIDERING DUTY PAYMENT EXTENSIONS

In response to the difficulties facing American businesses due to the COVID-19 pandemic and associated control measures, Customs and Border Protection is contemplating granting relief to importers.  In consideration of requests from the National Customs Brokers and Forwarders Association Customs Committee, chaired by GEODIS’ SVP of Trade Services and Government Relations Mary Jo Muoio, along with other industry group requests, CBP is looking at ways to provide flexibility to and extensions for a wide variety of deadlines importers face with customs obligations.

Specifically, CBP is considering granting a ninety-day extension of duty payments.  At this time CBP is working to understand authorities and mechanisms which may allow this and specifics are not available. In the meantime, CBP is reviewing extraordinary requests on a case-by-case basis.  As of today, lacking specific individual permissions, duty and related obligations remain in place.  We expect more information in the near future and will alert our clients as soon as known. If you would like to seek temporary duty-payment relief from CBP, please contact us immediately.  Initially, this relief would be for importers having duty payments due in the next week; if broader CBP issued extensions are not granted, we will pursue additional case-by-case requests.

 If you have questions about your duty payments, bond obligations or challenges meeting other CBP commitments, contact your account representative at Express Trade Capital, Inc. 

China Market Update

Overall Market Conditions:

China officials have extended the Spring Festival Holiday until after February 2. The length of the extensions may vary depending on the location. Shanghai has extended until February 10, while others until February 14 or longer. As factories re-open, labor continues to be minimal as public transportation in certain cities or provinces are still under restriction and quarantine. These can last up to an additional 14 days or longer. Trucking equipment and services as well are still impacted due to the lack of labor as well as road restrictions preventing normal pickup and delivery services.

Airlines:

Passenger Flights: Over 60 airlines have announced cancellation from flights to/from China.

Freighter Flights: Freighter flights are slowly returning as demand continues to increase. As of now, 60% of freighter flights are still not operating.

Airfreight Pricing: Due do the current supply & demand, transit is continued to be limited under a Force Majeure environment based on first come basis.

Infrastructure:

The major airports that are impacted are PVG & CGO with limited amount of staff. WUH is closed until further notice and those operating under normal conditions include, BJS, SZX, HKG, LAX, ORD, JFK, AMS, & FRA. 

All Seaports are operating under normal conditions, excluding Wuhan & Yichang a Hunan province. Ocean demand has dropped by more than half and is not expected to pick up again until after February 20.

Please contact our logistics office with any further questions contact@expresstradecapital.com.


If You Import from China – US and China have come to a decision regarding tariffs

Carli Valinoti, Express Trade Capital

Chinese President Xi Jinping with President Donald Trump in June in Japan. They are the primary actors in the longest-running, most serious trade war in history.
via Getty Images/WSJ

After months of negotiation, the US and China have announced that they have come to an agreement on trade. The US will cut the current taxes on $120 billion of Chinese goods from 15% down to 7.5% and has decided to not move forward with adding tariffs to the rest of the $160 billion Chinese goods. This will take effect on December 15, 2019. A 25% tariff rate will continue to stay in place on approximately $250 billion worth of US goods. In return, China has agreed to increase its purchases of US goods and services along with around $40-50 billion in agriculture products.

For questions on how this affects your imports from China, contact our logistics office for further assistance. Contact@expresstradecapital.com


Section 301 Tariffs Increase to 30 Percent on Chinese Goods Suspended

After meeting with Vice Premier Liu He of the People’s Republic of China, President Trump announced in a news release on October 11, 2019 that the duty increase from 25% to 30% on List 1, 2, and 3 products would be suspended. A final decision will be made later regarding the additional duties scheduled to go into effect December 15, 2019 for List 4B commodities.

Information regarding the phase one deal can be found in the White House news release here.


IF YOU IMPORT FROM THE E.U.

Following a World Trade Organization decision paving the way, the U.S. Trade Representative (“USTR”) has published a list of products form E.U. origin which will be subject to additional duty rates of 10% or 25% ad valorem, effective October 18, 2019.

We expect that a FEDERAL REGISTER notice will be published with the details including confirming the definition of the October 18 effective date; effective dates are commonly based on the date of entry. 

A link to the list of products, countries and additional tariff rates may be accessed at:  https://ustr.gov/sites/default/files/enforcement/301Investigations/EU_Large_Civil_Aircraft_Final_Product_List.pdf

As with other tariffs, close coordination with your carrier and EXPRESS representative is needed to avoid duties assessed to shipments arriving before the effective date.  EXPRESS Trade Capital, Inc. is available to answer your questions, help assess impact to your business and discuss mitigation strategies. Reach out to us at logistics@expresstradecapital.com


Changes to GSP Eligibility

Results of a GSP review have just been published as Presidential Proclamation 9813. This announcement lists changes to select products and countries. The GSP status of these identified articles is effective for goods entering on/after November 1, 2018.

If you would like more information or analysis as to how this impacts your company, please contact our logistics department at logistics@expresstradecapital.com.


AMS Plans Cotton Fee Increase

The Agricultural Marketing Service has released a statement announcing that it plans to raise the “cotton fee” applied to imported cotton goods from $0.011510 to $0.011905 per kilogram. Adjustments to the fee occur regularly to ensure that assessments collected on imported cotton match those paid on domestically produced cotton.

The announcement stipulates that the new rule will take effect October 16th, 2018, barring significant adverse feedback between now and September 17th.


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CBP Strengthens Penalties on Wood Packaging Material Violations

Peter Stern, Express Trade Capital

Harmful invasive pests and pathogens are found in the solid wood packing material (SWPM) that accompanies shipments in international trade. Wooden pallets, crating, and dunnage can harbor environmentally and economically harmful species that use the wood as host material, feed upon it, or hitch a ride on it and then threaten domestic timber. Outbreaks of the Asian long-horned beetle, Anoplophora glabripennis (Motschulsky), pine shoot beetle, Tomicus piniperda (L.), and the emerald ash borer, Agrilus planipennis (Fairmaire), have been traced to importations of SWPM. Coping with the risks associated with the introduction of these pests via SWPM has become an increasingly important issue with the expansion of international trade.

For over a dozen years now, regulations have been in place that require treatment and marking of non-exempt wood packing material (WPM) imported into the United States. CBP recently issued a notice that effective November 1, 2017 penalties will be issued for violations of the wood packaging material regulations. The full notice with a link to detailed regulatory requirements can be found at CSMS# 17-000609 – ISSUANCE OF WOOD PACKAGING MATERIAL PENALTY. Importers are encouraged to understand these regulations and monitor compliance.


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CBP 201: Products to Watch Out For

Sadie Keljikian, Express Trade Capital

A galaxy of constantly changing regulations governs the complex world of US imports. In our previous article on this subject, we focused on agricultural and licensed products. This time, we focus on some of the primary regulatory requirements imposed on other varieties of goods.

Medications/Medical Equipment

Prescription drugs, and even certain non-prescription drugs, are strictly regulated in the US, so much so that imported medications and medical equipment must be declared and permitted by CBP and the FDA ahead of shipment. Adding to the difficulty of regulatory compliance, international laws regarding medical supplements and equipment change quickly and often, which requires importers to stay vigilant and nimble.

Paperwork is paramount. For example, drug paraphernalia imports are illegal in the US unless intended for “authentic medical conditions.” If you import goods classified as drug paraphernalia, it is safest to include as much documentation as possible to specify and confirm the intended use of the items in question, including medical records if possible. Thorough documentation should, in theory, help your goods move more quickly, but you should always build in extra time in case CBP flags your shipment for inspection.

Automobiles

Depending on your level of experience in the automotive industry, you may have trouble auditing your automobile imports since regulations are more technical than those for most other products.

First and foremost, any automobiles imported into the US must adhere to the Environmental Protection Agency’s fuel-emission requirements, unless the vehicle was manufactured before a designated date. Gasoline-fueled cars or light-duty trucks, for example, must adhere to federal emission standards unless they were manufactured before January 1st, 1968.

Furthermore, if the vehicle has ever been driven outside the US, its undercarriage must be thoroughly cleaned to remove any foreign soil or dangerous pests. CBP indicates that you must have the car steam-sprayed or thoroughly cleaned by other means prior to shipment to prevent ecological damage.

There are also specific documentary requirements for automobile imports including EPA form 3520-1 and DOT form HS-7. Depending on the vehicle’s size, vintage, and fuel efficiency, there may be more. As always, do your research or hire a customs broker if you aren’t confident in your compliance.

Ceramic Home Goods

Although items like ceramic tableware and other home goods are not restricted per se, some ceramic goods from outside the US contain dangerous levels of lead in their glaze. These products are ultimately unsafe because the lead can seep into food and beverages served on or in them. Therefore, when importing ceramics, the primary concern is lead concentration.

CBP recommends testing the lead content in imported ceramics to avoid distribution of harmful goods. Since a lot of countries do not have strict legal guidelines for vessels intended to handle food, foreign government agencies will often skip this step. Thus, it is up to the ceramics importer to obtain satisfactory inspections and documentation.

If you must import and distribute ceramics that are not safe for food or drink, or you cannot ensure quality control or compliance, you must provide clear instructions to use those ceramics for decorative purposes only when you distribute them to avoid endangering customers and possible litigation.

Cultural Artifacts

One of the more prevalent challenges in importing is monitoring your supply chain. If your goods come from a foreign country, and you aren’t familiar with your supplier’s practices, you could find yourself in possession of, and liable for, stolen cultural artifacts. The best way to avoid this is to know with whom you are doing business and remain extra cautious in countries that are home to frequent artifact smuggling. As always, obtaining thorough documentation is key to avoiding confrontations with the CBP and other government agencies with jurisdiction over the matter.

Alcohol

While alcohol imports are generally legal in the US, one must acquire a permit from the Alcohol and Tobacco Tax and Trade Bureau before importing alcohol for sale. It is also important to note that most alcohol regulations differ between states. Thus, there are limits on the quantity of alcohol one can bring into certain states. Importers must always thoroughly research the regulations of state into which they plan to import alcohol and acquire any additional permits.

It is important to note that absinthe and any comparable spirits fall under stricter regulations. If you import absinthe, you need full details on the brand you plan to purchase and its packaging. Bottles labeled with the word “absinthe” or printed with images implying psychotropic effects may not be imported into the US. The product must also contain less than 10 parts per million of thujone due to its potentially dangerous effects.


These are just a few of CBP’s regulatory requirements and restrictions. CBP’s numerous regulations cover virtually all commercially traded goods. Before importing goods, educate yourself thoroughly, or, hire a competent customs broker to guide you through the process and to ensure that your goods are never delayed or detained due to lack of compliance.

If you need assistance in transporting your goods and ensuring compliance, contact our logistics department.

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Lack of Insurance adds to Hanjin’s Woes

Sadie Keljikian, Express Trade Capital

The latest issue in the Hanjin Shipping bankruptcy scandal surrounds a lack of insurance on chassis in the US.

Chassis provider Flexi-Van Leasing has requested assistance from a federal judge to cancel all its per-diem leasing agreements with Hanjin. Flexi fears that Hanjin will send “thousands” of chassis onto US highways without proper insurance coverage.

Ever since Hanjin’s filing for protection in a Korean bankruptcy court on August 31st, significant controversy has surrounded the fate of goods, containers, and ships under the Korean shipper’s jurisdiction. Formerly the seventh-largest container shipping company in the world, Hanjin’s losses dramatically affected the international shipping and trade industries.

Flexi-Van Leasing, a New Jersey-based provider filed the motion in US District Bankruptcy Court. The claim is that Hanjin’s insurance ceased on October 10th when the shipper failed to pay its premium. Flexi-Van says that when Hanjin failed to pay its premium, thousands of uninsured chassis in Hanjin’s possession. Hanjin has suspended all deliveries except to ports, but can resume deliveries at any time, according to Flexi-Van’s filing.

The current state of affairs relating to Hanjin is concerning US creditors and customers, understandably, but the Newark court is attempting to resolve some of them. Hanjin is seeking Chapter 15 status in the US, which would allow the shipper to move forward with bankruptcy domestically.

Although the court has yet to rule on Hanjin’s Chapter 15 status, it has on many of the other issues surrounding the shipper’s recent difficulties. Keeping up has proven a challenge as the court addresses dozens of attorneys working for numerous involved parties. Cargo owners, container companies, logistics providers and terminals are just some of those approaching the court for assistance.

In the last month, the court has already determined next steps for Hanjin and its customers. The court has instructed shippers in securing release of their cargo, told Hanjin what to do in order to deliver goods to their destinations, and decided what happens to the containers and chassis after the goods have been delivered. Customers of Hanjin continue to raise issues, mostly relating to damages incurred and payments made to Hanjin.

Flexi-Van claims that Hanjin owes them $3 million for services provided prior to the bankruptcy filing and held several contracts with the shipper, all requiring insurance coverage. Flexi-Van has requested a termination of their agreements with Hanjin, as well as payment for their insurance premium. In theory, this will allow delivery of all goods to move forward as originally planned.

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