301 Breather : Trade Potpourri

As the deadline to file List 3 exclusions requests for goods from China (the 301 investigation) has now expired, there is the opportunity to take a bit of a deep breath and survey the trade landscape. Doing so serves as a reminder, there is much more than "just" the 301 tariffs to be concerned about. Here is a sampling of relevant topics, in no particular order of importance:

More Vigorous Pest Searches: USDA/APHIS and CBP seem to be ratcheting up their inspection of soft wood lumber packing materials, said to be based on risk factors, with the net result that the finding of the presence of pests has increased, even with properly marked wood packing materials. Is the wood not properly treated from the outset? Is the wood being reinfested? Is the challenge the nature of the chemicals with which treatment is permitted? Methyl bromide is not permitted in Europe. Does the infestation come from other cargo in the same hold as your shipment? The amount of wood and the nature of the commodity in your shipment may make the difference between whether you are permitted to remove the infested wood and clear the goods or are ordered to export the entire shipment. Substantial Transformation Definition Changed? Much was made at the time of the decision in Energizer Battery, Inc. v U.S., 190 F.Supp.3d 1308 (2016). Therein, the Court of International Trade held that because the foreign parts being imported had a pre-determined end use when delivered for assembly in the U.S., the manner in which Energizer assembled its flashlight did not meet the substantial transformation test. The court was asked to reach its decision in the context of the Buy America provisions for government contracting. While seen as significant at the time, a reasonable reading of the situation is this case further clarified when assembly is taking place, and typically assembly does not confer origin. Whether any broader application of this decision will occur remains to be seen. CBP Enforcement. There has been a noticeable increase in the number of audits conducted by CBP, along with a serious increase in the number of Requests for Information (CBP Form 28) and Notices of Action (CBP From 29) and the related inquiries regarding classification and value, especially as relates to free trade agreement and similar duty deferral claims. FDA's Shot Across the Bow re FSVP. Also well publicized earlier this year was the FDA warning letter to Brodt Zenatti Holdings LLC. The basis for the...