Legal framework

Domestic legislation

What is the main domestic legislation as regards trade remedies?

The primary legislation for US trade remedies law is the Tariff Act of 1930, as amended (the Act). The vast majority of US trade remedy actions take the form of anti-dumping (AD) or countervailing duty (CVD) actions. Statutory authority for AD actions is located in Subtitle B of Title VII of the Act (see 19 USC, section 1671 et seq). Authority for CVD actions is at Subtitle A of Title VII of the Act (see 19 USC section 1671 et seq).

The third most common trade remedy is safeguards. The Trade Act of 1974 provides for section 201 safeguard or ‘escape clause’ actions to provide temporary restrictions on imports (see 19 USC, sections 2251 to 2254). Other trade remedies include section 301 actions (see 19 USC, sections 2411 to 2420), which focus on violations of trade agreements or other foreign practices that restrict US commerce, section 406 actions for relief from ‘market disruption’ imports from non-market economy countries (see 19 USC, section 2436), section 232 national security investigations (see 19 USC, section 1862) and section 337, which focuses on unfair practices in import trade such as patent and copyright infringement.

International agreements

In general terms what is your country’s attitude to international trade?

The US believes in a system of open trade subject to the rule of law. Since the Second World War, the US’s policy has generally been that engagement in world trade offers US producers access to large foreign markets, while at the same time competition from foreign producers helps keep prices down for numerous goods, thereby reducing pressures from inflation. Additionally, the majority of US citizens have generally found that trade promotes economic growth, social stability and democracy in individual countries and advances world prosperity, the rule of law and peace in international relations.

However, an open trading system requires that countries allow fair and non-discriminatory access to each other’s markets. Thus, the US participates in multilateral and bilateral agreements granting countries favourable access to its markets if they reciprocate by reducing their own trade barriers. Efforts to liberalise trade have traditionally focused on reducing tariffs and certain non-tariff barriers to trade. However, the US also frequently urges foreign countries to deregulate their industries and to take steps to ensure that the remaining regulations are transparent, do not discriminate against foreign companies and are consistent with international practices. US interest in deregulation arises in part out of concern that some countries may use regulation as an indirect tool to keep exports from entering their markets.

Under the Trump Administration, US trade policy has focused increasingly on reducing trade deficits, obtaining reciprocity in the treatment of imports and exports between countries and promoting bilateral negotiations. In order to gain negotiating leverage with trading partners, the Trump Administration has imposed tariffs under section 232 (national security) on a variety of steel and aluminium products from nearly all countries and section 301 (unfair trade actions) on imports from China. The Trump Administration is also seeking reforms at the WTO, primarily with respect to the dispute settlement process.

While the US pursues a general adherence to the principles of non-discrimination, it has joined certain preferential trade arrangements. The US Generalized System of Preferences (GSP) programme, for instance, seeks to promote economic development in poorer countries by providing duty-free treatment for certain goods that these countries export to the US; the preferences cease when the producers of a product no longer need assistance to compete in the US market. Another preferential programme, the Caribbean Basin Initiative, seeks to help an economically struggling region that is considered politically important to the US; it gives duty-free treatment to all imports to the US from the Caribbean area except textiles, some leather goods, sugar and petroleum products. The US is currently a party to 14 free trade agreements (FTAs) with 20 countries.

Trade defence investigations (outside the WTO dispute settlement system)

Government authorities

Which authority or authorities conduct trade defence investigations and impose trade remedies in your jurisdiction?

AD and CVD investigations are carried out concurrently by the Enforcement and Compliance division in the International Trade Administration (ITA) of the Department of Commerce (DOC) (www.trade.gov) and the US International Trade Commission (ITC) (www.usitc.gov). The ITA is charged with determining whether sales have been made at less than fair value for AD investigations and whether illegal subsidies were granted in CVD investigations. The ITC meanwhile determines whether the relevant US domestic injury has been harmed or is threatened with harm by reason of dumped or subsidised merchandise. If both agencies make positive determinations (ie, dumping or subsidisation occurred and the US domestic injury has been harmed or is threatened with harm), then an order against the subject merchandise is imposed. The ITA will direct US Customs and Border Protection (CBP) to collect tariffs calculated to offset the dumping or subsidisation it ultimately finds.

In safeguard actions, the ITC determines whether merchandise is entering the country in such increased quantities as to constitute a ‘substantial cause of serious injury, or threat of serious injury’. If the ITC makes an affirmative determination, it provides remedy recommendations to the US Trade Representative (USTR), which then conducts its own inquiry with the assistance of the Trade Policy Staff Committee. The USTR then makes its final recommendation to the office of the President.

Complaint filing procedure

What is the procedure for domestic industry to start a trade remedies case in your jurisdiction? Can the regulator start an investigation ex officio?

AD and CVD investigations are typically initiated based on a petition filed simultaneously with the ITA and the ITC by a domestic interested party, such as a manufacturer or a union within the domestic industry producing the product which competes with the imports to be investigated (see 19 USC section 1673a(a) (AD); 19 USC section 1671a(a) (CVD)). The ITA can also self-initiate an investigation. While self-initiation rarely happens, in 2017, the US self-initiated investigations on aluminium plate from China.

The law requires that the petitioners represent at least 25 per cent of domestic production and that of the percentage of the industry expressing an opinion on the petition, greater than 50 per cent be in favour of the petition. The petition is required to contain certain information, including information about the party filing the petition and a thorough description of the goods and exporters of the goods addressed in the petition. The petition must also provide evidence supporting the allegation of dumping or subsidisation. The petition must provide data relevant to the price of the merchandise in the US market and appropriate comparison market, and names and addresses of US importers of the merchandise. Additionally, for subsidisation the petition should provide facts about the subsidy, such as what government body authorises it, how it is provided or paid, and its value to the producers or sellers of the merchandise.

The petition must also provide evidence of material injury, such as the volume and value of the imported merchandise over the last three years both in absolute terms and relative to US consumption or production; the effect of the merchandise in undercutting, depressing or suppressing the price of like products in the US; the actual and potential decline in output, sales, market share, profits, productivity, return on investment and utilisation of capacity; the actual and potential negative effects on cash flow, inventories, employment, wages, ability to raise capital and investment; and any further information that demonstrates actual or potential injury or retardation to US industry as a result of the dumped or subsidised merchandise.

The ITA must determine the sufficiency of the petition within 20 days of receiving it (this can be extended by an additional 20 days under certain circumstances) (see 19 USC section 1671a(c) and 1673a(c)). If the ITA finds the petition sufficient and initiates the investigation, the ITC must make a preliminary determination of injury within 45 days.

A section 201 investigation may be initiated by the filing of a petition by any group considered to be representative of an industry, including a trade association, firm, union or group of workers (see 19 USC section 2252(a)(1)). It can also be initiated at the request of the President, the USTR, the House Ways and Means or Senate Finance Committees or the ITC itself (see 19 USC section 2252(b)(1)(A)).

Contesting trade remedies

What is the procedure for foreign exporters to defend a trade remedies case in your jurisdiction?

The investigations and reviews conducted by the ITA and the ITC in trade remedy cases are done in a transparent manner that allows for the participation of all interested parties. Upon receipt of a petition, the administering authority must notify the government of any exporting country named in the petition by delivering a public version of the petition to an appropriate representative of such country (see 19 USC section 2271). If the ITA determines that a petition satisfies all statutory requirements to initiate an investigation, notice is made by the publication of a notice of initiation in the Federal Register. The notice of initiation will describe the general history of the proceeding and the ITA’s findings, and will specify due dates for the submission of comments or responses required to participate in the investigation. The ITA will then send questionnaires to mandatory respondents, specifying when responses to the questionnaires are due.

Meanwhile, the ITC posts an alert on its website a day or two after the petition is filed, posts a preliminary investigation schedule and publishes a notice in the Federal Register, sends questionnaires to the domestic producers, importers and foreign exporters and holds a staff conference 20 days after the petition is filed. Parties wishing to participate in the preliminary phase of the ITC investigation must file an entry of appearance within seven days of the Federal Register notice. The ITC preliminary phase must be completed within 45 days of receipt of the petition.

The time frames for investigation differ for the ITA and the ITC. In CVD cases, the law allows the ITA 65 days to make a preliminary determination, which can be extended to 130 days at the petitioner’s request or if the ITA determines that the case is extraordinarily complicated. Final determinations are due 75 days after publication of the preliminary determination, unless the ITA aligns the CVD investigation with the AD investigation, in which case it is due on the due date of the AD final determination. In AD cases, the ITA preliminary determination must be made within 140 days, but this can be extended to 190 days at the petitioner’s request or if the case is deemed by the ITA to be extraordinarily complicated. The final determination is due 75 days after publication of the preliminary determination. The final determination can be extended to 135 days at the request of the petitioner if the preliminary determination was negative, or the exporters if the preliminary determination was affirmative.

Between initiation of the investigation and the preliminary determination, the ITA solicits information from foreign producers and exporters. The ITA selects as many mandatory respondents as it deems its resources will allow it to investigate - typically the largest two or three exporters of the merchandise under investigation - and requires these mandatory respondents to provide extensive company, sales and cost data in response to standard questionnaires. The ITA uses these data to calculate AD and CVD margins for each respondent. The ITA assigns an average of these calculated margins to cooperating parties that were not individually investigated. After the preliminary determination, the ITA conducts on-site verification of the submitted data and releases a report of its findings. All parties have the opportunity to submit comments and arguments at times throughout the process, and to submit case briefs regarding the ITA preliminary determination before the final determination.

As discussed above, the ITC preliminary determination must be made within 45 days of receipt of the petition. If that determination is negative, the investigation ends. If that determination is affirmative, and the ITA final determination is affirmative, the ITC investigation continues to its final determination, which must take place by the later of either within 120 days of the ITA’s preliminary affirmative determination or within 45 days of the ITA’s affirmative final determination. The ITC also holds hearings prior to making its final determination and allows parties to submit briefs both before and after the hearing.

For safeguard investigations, the ITC usually makes its injury determination within 120 days, but may extend that deadline by up to 30 additional days if the investigation is deemed extraordinarily complicated. The ITC’s report to the President must be submitted within 180 days of the petition filing, but this can be extended to 240 days if critical circumstances are alleged.

WTO rules

Are the WTO rules on trade remedies applied in national law?

The US is a signatory member of the WTO. While the WTO Agreements are not US law, to ensure that US AD and CVD procedures comply with the WTO Anti-Dumping and Subsidies Agreements, Congress enacted the Uruguay Round Agreements Act (URAA) in 1994. As the statement of administrative action for the URAA explains, the URAA was ‘intended to bring US law fully into compliance with US obligations under [the WTO Agreements]’, including the provisions of the Anti-Dumping and Subsidies Agreements. Thus, in Congress’s view, the URAA ensures that the ITA and ITC will act fully in conformity with the provisions of the Anti-Dumping and Subsidies Agreements when issuing their AD and CVD. In instances where the WTO Dispute Settlement Body has ruled that US laws or practice have violated WTO provisions, the US has generally sought to change US law or agency practice to bring it into conformity.

Appeal

What is the appeal procedure for an unfavourable trade remedies decision? Is appeal available for all decisions? How likely is an appeal to succeed?

Parties may appeal any final factual findings or legal conclusions by the ITA or ITC, or any negative preliminary determination by the ITC, at the US Court of International Trade (CIT). Parties may also contest decisions to suspend an investigation and decisions not to initiate an investigation, the final results of administrative reviews, and scope determinations. CIT decisions can be further appealed to the Court of Appeals for the Federal Circuit, and even the US Supreme Court. Countries subject to the North American Free Trade Agreement (NAFTA) may request binding review by a binational panel.

The courts and binational panels apply a deferential standard of review when assessing administrative agency determinations. The court examines whether factual determinations by the agency are supported by substantial evidence, and whether legal determinations are in accordance with the law. In instances where the law is not clear, the court cannot substitute its own judgment for that of the agency, but only determine whether the agency’s interpretation of the law ‘is based on a permissible construction of the statute’.

Review of duties/quotas

How and when can an affected party seek a review of the duty or quota? What is the procedure and time frame for obtaining a refund of overcharged duties? Can interest be claimed?

Each year an interested party may request an administrative review under an AD or CVD order at the ITA (see 19 USC section 1675 and 19 CFR section 351.213). The review requests are due by the last day of the anniversary month of the order (ie, the month in which the order was published). Administrative reviews are similar to investigations, but with longer timetables. The ITA will recalculate AD and CVD margins pursuant to the review. Preliminary results of review are due within 245 days (or 365 if extended) of the last day of the anniversary month and final results within 120 days of the publication of the preliminary results (or 180 if fully extended).

In instances where the cash deposit of duties exceeds the final liquidation amount, the CBP will refund the difference, plus interest. Likewise, if the cash deposit is less than the final liquidation, the party is charged the difference, plus interest for any entries made after publication of the order or orders.

The ITA and ITC also conduct periodic reviews pursuant to US laws implementing article 11.2 of the Anti-Dumping Agreement and article 21.2 of the Subsidies Agreement to determine the need for continued imposition of duties. These reviews are referred to as ‘sunset reviews’ at the ITA and ‘five-year reviews’ at the ITC. During these reviews, at the request of interested parties, the ITA determines whether the continued imposition of the duties is necessary to offset the dumping or subsidies, and the ITC determines whether the injury would be likely to continue or recur if the duty were removed or varied, or both. If either determination is negative, the order is terminated.

Compliance strategies

What are the practical strategies for complying with an anti-dumping/countervailing/safeguard duty or quota?

Parties may have the opportunity to have their AD or CVD rates lowered during yearly administrative reviews. Each year, the ITA reviews as many mandatory respondents as it deems its resources will allow - usually two respondents. Thus, a party wishing to reduce its AD or CVD margin will only be selected for individual review if it is one of the largest producers or exporters to apply. Other companies that request reviews (but are not selected) generally receive the weighted-average margin of the selected respondents.

If a party has applied for review and is selected as a respondent, strategies for obtaining a lower AD rate are primarily based on having increased the US price, lowered the normal value, or identified and eliminated sales and practices that tend to increase margins (eg, sample sales, sales of second quality product). For CVD cases, the respondent would have to eliminate the use of subsidies found to be countervailable.

Customs duties

Normal rates and notification requirements

Where are normal customs duty rates for your jurisdiction listed? Is there an exemption for low-value shipments, if so, at what level? Is there a binding tariff information system or similar in place? Are there prior notification requirements for imports?

Tariff duty rates are listed in the Harmonized Tariff Schedule of the United States (HTSUS) and can be found at www.usitc.gov/tata/hts/index.htm. The HTSUS lists the applied duty rates for countries with most-favoured nation (MFN) status, the non-MFN rates and special rates applied to countries with which the US has entered into FTAs or to which it provides unilateral trade preferences under the GSP or other programmes. Eligible shipments made to one person on one day with a value of under $800 are generally exempt from duties. Alcohol, cigarettes and tobacco and goods subject to Partner Government Agency requirements (Food and Drug Administration, Environmental Protection Agency etc) are not eligible for this exemption.

Pursuant to 19 CFR Part 177, an importer can request a binding ruling from the CBP’s Office of Regulations and Rulings. The request can cover classification and other issues such as customs valuation and right to make entry. The rulings are binding on the CBP with respect to the specific goods and transactions described in the ruling request. These rulings also provide guidance to the importing public. Published rulings are available at rulings.cbp.gov. Ruling requests can be submitted electronically at https://erulings.cbp.gov/home.

For cargo security reasons, importers are required to provide prior notification to the CBP of goods imported by ocean vessel. These security-related prior notifications are known as the ‘Importer Security Filing’ (ISF). The Food and Drug Administration (FDA) requires prior notification for food imports. Rules for prior notice can be found at www.fda.gov/Food/GuidanceRegulation/ImportsExports/Importing/ucm2006837.htm. The notification requirements allow the FDA to manage risk associated with imported food.

Steel products must also be licensed prior to importation. The Steel Import Monitoring and Analysis system requires licences for imports of steel mill products. Rules for the steel importation licensing requirements can be found at https://hq-web03.ita.doc.gov/Steel/SteelLogin.nsf.

Special rates and preferential treatment

Where are special tariff rates, such as under free trade agreements or preferential tariffs, and countries that are given preference listed?

All tariff rates are set forth in the HTSUS at the website listed above. The FTA and preferential tariff eligible countries are identified in the General Notes to the HTSUS.

How can GSP treatment for a product be obtained or removed?

Importers can request GSP treatment at the time of importation by claiming GSP on the entry documents submitted to the CBP.

The US has a system for requesting modifications to the GSP list. The instructions can be found at https://ustr.gov/issue-areas/trade-development/preference-programs/generalized-system-preference-gsp.

The USTR chairs an inter-agency group that governs the GSP programme. The GSP Committee conducts an annual review to consider changes to the lists of products and countries that are eligible for GSP treatment. Interested parties can submit petitions for the removal of products or countries. Products generally automatically lose eligibility if a country becomes proficient in the production and export of that product as evidenced by import values exceeding a threshold established by USTR. However, countries can submit petitions requesting a waiver of the GSP eligibility requirement.

Is there a duty suspension regime in place? How can duty suspension be obtained?

Historically, Congress has passed a Miscellaneous Tariff Bill that included non-controversial duty suspensions (generally for goods not produced in the US). In accordance with the American Manufacturing and Competitiveness Act of 2016, the US has adopted a more formal duty suspension process. Entities seeking duty suspension must now submit a request to the ITC, which will review the requests and make recommendations to Congress. Under these new procedures, duty suspension requests must demonstrate that the potential loss of revenue to the US will be less than $500,000 in a calendar year.

Challenge

Where can customs decisions be challenged in your jurisdiction? What are the procedures?

Once an entry is liquidated by the CBP, the first step is filing a protest with the CBP port following the procedures provided in 19 CFR 174.12. The protest must be filed within 180 days of liquidation of an entry. If this fails, then the decision can be appealed to the US Court of International Trade, and that decision can be appealed to the US Court of Appeals for the Federal Circuit.

Trade barriers

Government authorities

What government office handles complaints from domestic exporters against foreign trade barriers at the WTO or under other agreements?

Generally, complaints related to foreign trade barriers are taken to the USTR. However, depending on the issue, other agencies may be involved. For example, if the dispute includes an agricultural product, then the US Department of Agriculture will be involved. However, the USTR always has the lead on WTO disputes.

Complaint filing procedure

What is the procedure for filing a complaint against a foreign trade barrier?

Generally, complaints against foreign trade barriers are handled informally with the USTR and other agencies as appropriate. However, in 2007, the administration created the Interagency Trade Enforcement Center (ITEC). ITEC is an USTR-led body with 22 trade analysts with expertise in a wide range of areas needed for successful enforcement. This is the group tasked with investigating cases and working with domestic industries in collecting data to support possible cases.

However, there is a formal process under which petitions can be filed under section 301 of the Trade Act of 1974, which provides the authority and procedures to commence dispute settlement proceedings and if necessary impose trade sanctions. Any party may file a petition requesting that the USTR initiate an investigation of an act, policy or practice that violates a trade agreement or is unjustifiable and burdens and restricts US commerce. The USTR has 45 days in which to decide whether to initiate an investigation.

Grounds for investigation

What will the authority consider when deciding whether to begin an investigation?

First, the legal merits of the case will be considered. If the USTR does not consider the foreign action to be a violation, the case will not be brought. Moreover, the weaker the case, the less likely it is that it will be brought. Assuming that the legal merits are strong, the USTR will consider the US economic interest in the case. For example, is a trade barrier having a significant impact on US exports? The greater the volume of exports impacted, the greater the chance that the case will be brought. Finally, the political relations with the target country will be taken into consideration.

Measures against foreign trade barriers

What measures outside the WTO may the authority unilaterally take against a foreign trade barrier? Are any such measures currently in force?

Section 301 provides for unilateral action, but only when the alleged violation is not covered by the WTO Agreements, NAFTA or certain other FTAs. If the alleged violation is not covered by a trade agreement and the action is deemed to be ‘unjustifiable, unreasonable, or discriminatory, and burdens and restricts US commerce’ then the USTR is authorised to take unilateral action to remedy the trade barrier.

Section 232 also authorises the President to impose tariffs or quotas to address imports that negatively impact the national security of the US. For the purposes of section 232, the economic security of the US is considered part of its national security.

The US has used Section 301 to apply duties of up to 25 per cent on a wide variety of Chinese goods as part of the ongoing dispute with certain Chinese practices with respect to forced technology transfers and lack of adequate protection of intellectual property rights.

Private-sector support

What support does the government expect from the private sector to bring a WTO case?

Formally none. The USTR has a group of lawyers and professionals that will prepare the written statements, conduct negotiations and participate in hearings. However, the resources of the USTR are very thin and if an industry wants to increase the chances of having a case brought and winning the case, it will offer legal and other support for the case. This support could, and often does, include collecting data, drafting portions of the written submission, conducting research and providing technical support. This support is paid for by the private parties and not the USTR.

Notable non-tariff barriers

What notable trade barriers other than retaliatory measures does your country impose on imports?

If asked, the US government generally and the USTR in particular would say none. However, in fact there are a number of explicit trade restrictions. For national security reasons, trade with certain countries - including North Korea, Cuba, Iran and Syria - is restricted or largely prohibited. Under the guise of its export control laws, the US has also restricted certain commercial dealings with certain Russian entities.

Outside of the national security area, restrictions are in place for phytosanitary reasons. For example, the US maintains restrictions on poultry imports from various countries due to health concerns. Additionally, importation of endangered species and items from endangered species is restricted under the Convention on International Trade in Endangered Species of Wild Fauna and Flora regime. The US also maintains quotas on such products as sugar, peanuts, peanut butter and cheese. A list of the commodities subject to quotas can be found at www.cbp.gov/trade/quota/guide-import-goods/commodities.

Export controls

General controls

What general controls are imposed on exports?

Export controls serve multiple purposes, such as guarding national security, protecting the economy and supporting national foreign policy. As a result, different government agencies have different rules and lists specifying who or what is considered export-sensitive and where export controls apply. Most US exports, however, take place under expressly defined exceptions or waivers and do not require a specific export licence or other special authorisation. Export licences are only required in certain situations involving national security, foreign policy and terrorist concerns. Additionally, certain places, as well as denied persons and organisations, are subject to additional restrictions.

Government authorities

Which authorities handle the controls?

The US Department of Commerce - Bureau of Industry and Security (BIS) (www.bis.doc.gov) is responsible for implementing and enforcing the Export Administration Regulations (EAR), which regulate the export and re-export of most commercial items. The government often refers to the items and products that the BIS regulates as dual-use - items that have both commercial and military or proliferation applications - but purely commercial items without an obvious military use are also subject to the EAR.

The US Department of State, Directorate of Defence Trade Controls (www.pmddtc.state.gov) has authority over defence articles and defence services, under the International Traffic in Arms Regulations (ITAR).

The US Treasury, Office of Foreign Assets Control (OFAC) (www.treasury.gov), prohibits or restricts trade with a list of countries and an ever-growing directory of individuals and companies.

The Department of Energy’s US Nuclear Regulatory Commission (www.nrc.gov) controls the export and re-export of nuclear materials, nuclear technology and technical data for nuclear power.

Special controls

Are separate controls imposed on specific products? Is a licence required to export such products? Give details.

The US Department of State controls the export of ‘defense articles and defense services’ under the ITAR. Items in this category to be export-controlled are placed on the US Munitions List, which is maintained by the Department of State in conjunction with the US Department of Defense. This list includes such obvious things as firearms, ammunition and explosives, but also military vehicles (land, air and sea); spacecraft (including non-military); military and space electronics; protective personnel equipment; guidance and control equipment; and components, auxiliary equipment and miscellaneous articles related to military equipment. Export of any item or technology on the US Munitions List requires specific authorisation from the Department of State. For practical purposes, the ITAR regulations dictate that information and material pertaining to defence and military-related technologies may only be shared with US persons if approval from the US Department of Defense is received or special exemption is used.

Dual-use items are regulated under the EAR, based on the Commerce Control List maintained by the BIS. The export control provisions of the EAR are intended to serve the national security, foreign policy, non-proliferation and short-supply interests of the US and, in some cases, to carry out its international obligations. Some controls are designed to restrict access to dual-use items by countries or persons that might apply such items to uses inimical to US interests. The EAR also include some export controls to protect the US from the adverse impact of unrestricted export of commodities in short supply.

The Department of Energy’s US Nuclear Regulatory Commission controls the export and re-export of nuclear materials, nuclear technology and technical data for nuclear power.

Supply chain security

Has your jurisdiction implemented the WCO’s SAFE Framework of Standards? Does it have an AEO programme or similar?

The CBP has taken a lead role in the development of international standards in customs security, including the adoption of the World Customs Organization’s SAFE Framework. In this leadership role, the CBP has developed the US Customs-Trade Partnership Against Terrorism (C-TPAT), a voluntary government-business initiative to build cooperative relationships that strengthen international supply chain and US border security. The C-TPAT engages with industry by providing certifications to companies that voluntarily agree to adopt and integrate the programme’s security guidelines into their supply chains. The programme is open to all parties participating in the movement of international goods, including carriers for ocean, air, rail and road; and importers, foreign manufacturers, brokers, consolidators, ocean transportation intermediaries, port authorities and terminal operators (see www.cbp.gov/border-security/ports-entry/cargo-security/ctpat).

The Container Security Initiative (CSI) is a programme through which the US CBP negotiates bilateral cargo security agreements with the governments of US trading partners to establish procedures for screening and inspecting high-risk maritime cargo containers before they are loaded aboard vessels bound for the US. The CSI is now operational at 58 ports in North America, Europe, Asia, Africa, the Middle East, and Latin and Central America (see www.cbp.gov/border-security/ports-entry/cargo-security/csi/csi-brief).

Applicable countries

Where is information on countries subject to export controls listed?

In the Commerce Country Chart, the EAR maintain lists of every country subject to export controls and the reasons for the listing (see www.bis.doc.gov/index.php/regulations/export-administration-regulations-ear).

The ITAR includes a list of ‘proscribed countries’ that are subject to US arms embargoes. The State Department maintains a general policy of denying licence applications for exports of ITAR-controlled items to the proscribed countries. The list of ITAR-proscribed countries, which is available at www.pmddtc.state.gov/ddtc_public?id=ddtc_public_portal_country_landing, is significantly broader than the list of countries subject to US economic sanctions (see question 29).

OFAC administers and enforces economic and trade sanctions against targeted countries for particular foreign policy and national security reasons. The list is subject to change at any time. A current list of OFAC sanctions programmes and additional guidance regarding prohibited transactions is available at www.ustreas.gov/ofac.

Named persons and institutions

Does your jurisdiction have a scheme restricting or banning exports to named persons and institutions abroad? Give details.

The US government provides a downloadable file that consolidates the export screening lists of the Departments of Commerce, State and the Treasury into one spreadsheet as an aid to industry in conducting electronic screens of potential parties to regulated transactions at http://2016.export.gov/ecr/eg_main_023148.asp.

Penalties

What are the possible penalties for violation of export controls?

The penalties are provided for under the follow legislation:

  • International Traffic in-Arms Regulations (ITAR)
    • up to $1 million per violation or imprisonment of up to 20 years, or both pursuant to 22 USC 2778(c).
      • Export Administration Regulations
        • Export Administration Act of 1979
          • criminal: up to $1 million per violation or imprisonment of up to 20 years, or both; and
          • administrative: up to $11,000 per violation or $120,000 per violation for items involving national security.
        • International Emergency Economic Powers Enhancement Act
          • criminal: up to $100,000 per violation or imprisonment of up to 20 years, or both; and
          • administrative: up to the greater of $250,000 per violation or twice the amount of the transaction.
  • Office of Foreign Assets Control
    • Trading with the Enemy Act of 1917, 50 USC, section 5
      • criminal (wilful violation): up to $1 million per violation, and up to $100,000 in individual fines, per violation or imprisonment of up to 10 years, or both;
      • criminal (knowing violation): up to $100,000 or up to 10 years in prison, or both, per violation; and
      • civil: up to of $65,000 per violation.
      • International Emergency Economic Powers Act, 20 USC section 1701
        • criminal: up to $1 million per violation or imprisonment of up to 20 years, or both; and
        • civil: up to $250,000 per violation or twice the amount of the transaction that is the basis of the violation, whichever is the greater.

Financial and other sanctions and trade embargoes

Government authorities

What government offices impose sanctions and embargoes?

Economic sanctions are administered by OFAC (www.treasury.gov/about/organizational-structure/offices/Pages/Office-of-Foreign-Assets-Control.aspx).

Applicable countries

What countries are currently the subject of sanctions or embargoes by your country?

A list of the current OFAC sanctions list is included at www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx. Comprehensive sanctions are imposed on North Korea, Syria, Iran, Sudan and Cuba. Other sanctions are maintained against Belarus, the Central African Republic, Myanmar and Russia. This list is revised frequently.

Specific individuals and companies

Are individuals or specific companies subject to financial sanctions?

Yes, OFAC maintains a list of specially designated persons, which can be found at www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx.

Other relevant issues

Other trade remedies and controls

Describe any trade remedy measures, import or export controls not covered above that are particular to your jurisdiction.

The US has a range of import measures intended to protect the environment and wildlife that have extraterritorial reach. These laws include the Marine Mammal Protection Act, which bans the importation of marine mammals and marine mammal products. It also prohibits the importation of tuna that is not caught in nets that protect dolphins. A similar law is in effect to protect sea turtles. Similarly, the High Seas Driftnet Fisheries Enforcement Act imposes sanctions on countries that allow driftnets to be used in the high seas. The Lacy Act makes it illegal to engage in the trade of fish, wildlife or plants taken in violation of US law.

Intellectual property rights and unfair trade practices are also enforced with the use of the trade laws. Under section 337 of the Tariff Act of 1930, it is unlawful to engage in unfair methods of competition and unfair acts if the effect is to injure or threaten to injure an industry in the US. Under section 337, it is also unlawful to import goods that infringe a valid patent, copyright or design.

UPDATE & TRENDS

Recent developments

Are there any emerging trends or hot topics in trade and customs law and policy in your jurisdiction?What effects are Brexit, the withdrawal of the US from TPP, the slowdown of TTIP, RCEP; and negotiations of FTAs (such as the EU–Japan Free Trade Agreement) expected to have on your jurisdiction?

Key developments32 Are there any emerging trends or hot topics in trade and customs law and policy in your jurisdiction?

The Trump Administration has prioritised the reduction of US trade deficits and has expressed a strong preference for bilateral negotiations over multilateral approaches. The Trump Administration has consistently raised concerns regarding what it identifies as a lack of reciprocity between the US approach to imports and those of certain trading partners. Increasingly, the Administration is identifying higher foreign duties (as compared to US duty rates) as a barrier to US exports. The WTO MFN obligations and US bound tariff rates are seen as restricting the negotiating power of the US.

In an effort to gain leverage in trade negotiations, the US has looked to domestic legislation, such as Section 301 and Section 232, as a legal mechanism (under US law) to impose tariffs on trading partners.

The US, Mexico, and Canada have signed the USMCA, which will replace NAFTA if enacted by all three countries. The conclusion of the ‘new NAFTA’ could result in increased focus on other trade concerns, such as rebalancing trade with China.