Global Trade Brief – November 2020

Global Trade Briefs

Global Trade Brief – November 2020

This month’s Global Trade Brief reviews Rules of Origin Change under the CAFTA -DR, U.S. amendments to Cuban sanction regulations, U.S. one-year waiver, trade of non-lethal defense articles with Cyprus, and more topics.

STEEL IMPORTED FROM BRAZIL

A presidential proclamation announces relief from an additional 25% tariff for certain steel imports from Brazil. The proclamation reflects a finding that steel articles imported from Brazil no longer threaten to impair the U.S. national security and, thus, that steel imported from Brazil is excluded from the additional 25% tariff. According to the proclamation, the United States and Brazil are to hold further consultations in December 2020 to discuss the state of the steel trade between the two countries in light of then-prevailing market conditions.

Source: https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-19595.pdf

RULES OF ORIGIN CHANGE UNDER THE CAFTA -DR

A notice from the Office of the U.S. Trade Representative reflects modifications to rules of origin under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) for purposes of the U.S. tariff schedule. The rules of origin changes will be effective on November 1, 2020.

The USTR notice announces that the rules of origin reflect presidential proclamations issued in 2016 and 2017 and that these changes will continue the same tariff treatment under CAFTA-DR despite revisions to the signatory countries’ tariff schedules. The USTR notice implements effective date provisions.

Source: https://www.govinfo.gov/content/pkg/FR-2020-09-03/pdf/2020-19507.pdf

DUAL-USE GOODS, TECHNOLOGIES, AND MUNITIONS

The Bureau of Industry and Security released a final rule to implement changes and to harmonize the Commerce Control List (CCL) with regard to dual-use goods and technologies and munitions.

The final rule revises the CCL and other corresponding parts of the EAR, to implement changes made with regard to the “Wassenaar Arrangement List of Dual-Use Goods and Technologies and Munitions List”—as maintained by the participating governments.

BIS published a final rule on May 23, 2019, implementing certain new controls on emerging technologies. This final rule harmonizes the CCL with the remaining decisions reached at the 2018 Wassenaar Arrangement meeting by:

  • Revising Export Control Classification Numbers (ECCNs) controlled for national security reasons in each category of the CCL, except Category 4.
  • Making other associated changes to the EAR, as well as adjustments to license exception eligibility for national security-controlled items and revisions to reporting requirements.

Source: https://www.govinfo.gov/content/pkg/FR-2020-09-11/pdf/2020-16286.pdf

U.S. COMPANY AGREES TO PAY $894,000 TO SETTLE VIOLATIONS OF SUDANESE SANCTION REGULATIONS

The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) announced that a New York company specializing in sales of advanced communications systems, software, and services agreed to pay approximately $894,000 to resolve its potential civil liability for four apparent violations of the U.S. Sudanese sanctions regulations.

According to an OFAC release, the company (through its Arizona subsidiary and a related Canadian company) between June 2014 and October 2015 indirectly exported warrantied satellite equipment and facilitated services and training to a government-owned entity in Sudan.

Source: https://home.treasury.gov/system/files/126/20200917_comtech.pdf

ALUMINUM IMPORTED FROM CANADA

The Office of the U.S. Trade Representative (USTR) issued a release announcing that the United States will resume duty-free treatment of non-alloyed, unwrought aluminum from Canada retroactive to September 1, 2020.

The USTR release explains that the United States has determined that trade in non-alloyed, unwrought aluminum is likely to normalize in the last four months of 2020, with imports declining sharply from the surges experienced earlier in the year.

Because average monthly imports are expected to decline 50% from the monthly average from January through July, the United States will modify the terms of the 10% tariffs imposed under Section 232 of the Trade Expansion Act of 1962, imposed in August.

Six weeks after the end of any month during the period of September through December 2020, the United States will determine whether actual shipments meet expectations.

  • If actual shipments exceeded 105% of the expected volume for any month during the four-month period, then the United States will impose the 10% tariff retroactively on all shipments made in that month.
  • If shipments in any month exceed the expected volume, the United States expects that shipments in the next month will decline by a corresponding amount.
  • If imports exceed 105% of the expected volume in any month, the United States may re-impose the 10% tariff going forward

Source: https://ustr.gov/about-us/policy-offices/press-office/press-releases/2020/september/ustr-statement-canadian-aluminum

U.S. AMENDMENTS TO CUBAN SANCTION REGULATIONS

The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) released a final rule that amends the Cuban Assets Control Regulations.

The Final Rule:

Amends four general licenses to restrict the importation into the United States of Cuban-origin alcohol and tobacco products

Amends a general license to remove the authorization for U.S. persons to attend or organize professional meetings or conferences in Cuba

Removes a general license that authorizes U.S. persons to participate in or organize certain public performances, clinics, workshops, other athletic or non-athletic competitions, and exhibitions, and replaces it with a specific licensing policy

Source: https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-21084.pdf

U.S. ONE-YEAR WAIVER, TRADE OF NON-LETHAL DEFENSE ARTICLES WITH CYPRUS

The U.S. State Department released for publication a temporary final rule amending the International Traffic in Arms Regulations (ITAR) to update the U.S. defense trade policy regarding Cyprus by temporarily removing prohibitions on exports, reexports, retransfers, and temporary imports of non-lethal defense articles and defense services destined for or originating in Cyprus.

The Secretary of State on June 2, 2020, determined that it was essential to the national security interest of the United States to waive the limitations on non-lethal defense articles and defense services destined for or originating in Cyprus.

The waiver is effective October 1, 2020, and expires September 30, 2021, unless subsequently extended.

Source: https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-20902.pdf

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