CBP provides instructions on submitting entries to CBP concerning products that have been granted exclusions from the 25% duty assessed on imported goods from China under Section 301.The CBP release states that the functionality for the acceptance of products excluded from Section 301 duties will be available in the Automated Commercial Environment (ACE) on February 10, 2019.
CBP Instructions are as follows:
The apparent violations involved the importation of false eyelash kits from two suppliers located in the People’s Republic of China that contained materials sourced by these suppliers from the Democratic People’s Republic of Korea.
OFAC determined that e.l.f. Cosmetics, Inc. (“ELF”) of Oakland, California voluntarily self-disclosed the apparent violations and that the apparent violations constitute a non-egregious case. OFAC announced a settlement of $996,080 with, ELF has agreed to settle its potential civil liability for 156 apparent violations of the North Korea Sanctions Regulations, 31 C.F.R. part 510 (NKSR)
Between May 2012 and February 2016, AppliChem violated § 515.201 of the Cuban Assets Control Regulations when it fulfilled Cuba orders of chemical reagents on 304 invoices. OFAC determined that AppliChem’s U.S. parent voluntarily self-disclosed the apparent violations, and that the apparent violations constitute an egregious case. On January 1, 2012, Illinois Tool Works, Inc. (ITW), a company based in Glenview, Illinois, acquired AppliChem, a German company that manufactures chemicals and reagents for the pharmaceutical and chemical industries. While conducting acquisition negotiations in December 2011, ITW discovered references to countries subject to U.S. economic and trade sanctions on AppliChem’s website. On December 19, 2011, ITW warned AppliChem that it would be required to cease all Cuban transactions after its acquisition by ITW. After finalizing the acquisition, ITW incorporated AppliChem into its Reagents Division, whose management is located in Spain. ITW agreed with AppliChem’s former owners that they would stay on as manager-employees. On January 12, 2012, the General Manager of ITW’s Reagents Division sent AppliChem’s former owners a memorandum explaining ITW’s guidelines for complying with U.S. sanctions, including the CACR. Notwithstanding both of the above-referenced warnings, AppliChem continued to complete and collect on existing orders with Cuban nationals under pre-acquisition contracts following its acquisition by ITW. Upon discovering AppliChem’s continued Cuban business, ITW’s European legal department sent a third warning to AppliChem’s former owners on April 5, 2012, that all sales to Cuba were to be ceased with immediate effect. Subsequently, ITW submitted a voluntary self-disclosure to OFAC on January 23, 2013. In the 2013 disclosure, ITW stated that based on representations from AppliChem’s former owners, “all [of AppliChem’s] open [Cuba] transactions were cancelled[.]” On May 29, 2015, OFAC issued a cautionary letter to ITW in response to AppliChem’s post-acquisition Cuba sales. On or about January 27, 2016, an anonymous report was made through the ITW ethics helpline alleging that AppliChem continued to make sales to Cuba through an intermediary company in Berlin, Germany. ITW immediately began a full investigation, which revealed that AppliChem’s former owners had continued AppliChem’s Cuba business by creating a scheme that concealed this business from ITW after specifically representing to ITW that it had ceased. The former owners of AppliChem are no longer employed by ITW.
The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has announced a $5,512,564 penalty against AppliChem GmbH (“AppliChem”) of Darmstadt, Germany for 304 violations of the Cuban Assets Control Regulations, 31 C.F.R. Part 515
The company’s business involves global sourcing and marketing of raw cement materials. OFAC reported that between July 2014 and January 2015, the company purchased approximately 264,000 metric tons of Iranian-origin cement clinker from a company located in the United Arab Emirates, but with knowledge that the cement clinker was sourced from Iran. The U.S. company then resold and transported the clinker to a company in Tanzania.The company voluntarily self-disclosed five apparent violations Iranian Sanctions to OFAC.
OFAC determined that the apparent violations constitute a non-egregious case. The OFAC concluded that this case demonstrates the importance for companies operating in high-risk industries (e.g., international trading) to implement risk-based compliance measures, especially when engaging in transactions involving exposure to jurisdictions or persons implicated by U.S. sanctions. Companies engaging in international transactions need to consider and respond to sanctions-related warning signs—such as information that goods are originating from, being loaded or unloaded at ports located in, or being trans-shipped through countries or regions subject to comprehensive U.S. economic and trade sanctions. The Connecticut company is to pay over $500,000 to settle the apparent violations of the Iranian sanction’s regulations
ADC Telecomms., Inc. v. United States, 2018-1316 (Fed. Cir. February 19, 2019)
Appellant ADC Telecommunications, Inc. (“ADC”) sued Appellee United States (“the Government”) in the U.S. Court of International Trade (“CIT”), challenging U.S. Customs and Border Protection’s (“Customs”) classification of imported Value-Added Modules (“VAM”) consisting of fiber optic telecommunications network equipment under Harmonized Tariff Schedule of the United States (“HTSUS”) Subheading 9013.80.90, which bears a duty rate of 4.5% ad valorem. ADC and the Government filed cross-motions for summary judgment, with ADC arguing that the subject merchandise should be classified under HTSUS Subheading 8517.62.00, which bears a duty-free rate.
“HTSUS Heading 8517 covers “[t]elephone sets, including telephones for cellular networks or for other wireless networks” and “other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of [H]eading 8443, 8525, 8527, or 8528; parts thereof.” Chapter 85 of the HTSUS is contained in Section XVI, and Note 1 to Section XVI provides that “[t]his section does not cover . . . (m) [a]rticles of [C]hapter 90.” Therefore, because the subject merchandise is classifiable in HTSUS Heading 9013, which is found in Chapter 90, see supra Section II.B, it is not classifiable in Section XVI, in which HTSUS Heading 8517 is found.
Having determined that the subject merchandise is properly classified under HTSUS Heading 9013, we apply GRI 6, which is employed in a classification analysis to determine the appropriate subheading. See GRI 6 (applying to “the classification of goods in the subheadings” and explaining that “only subheadings at the same level are comparable”)
At the six-digit subheading level, the subject merchandise does not fall within the terms of HTSUS Subheading 9013.10, which covers “[t]elescopic sights for fitting to arms; periscopes; telescopes designed to form parts of machines, appliances, instruments or apparatus of this [C]hapter or [S]ection XVI,” or HTSUS Subheading 9013.20, which covers “[l]asers, other than laser diodes.” Instead, the subject merchandise is aptly described by HTSUS Subheading 9013.80, which covers “[o]ther devices, appliances and instruments.”
Because the subject merchandise does not fall within any of the eight-digit level subheadings preceding HTSUS Subheading 9013.80.90, it is properly classified under HTSUS Subheading 9013.80.90, which covers “[o]ther.”
The U.S. Court of International Trade denied the company’s motion for summary judgment, and agreed with the government that CBP had properly classified the imported merchandise under HTSUS subheading 9013.80.90.