The COVID-19 pandemic is disrupting supply chains worldwide and causing economic and financial hardship on countries and companies alike. However, there are actions businesses involved in global trade can take to respond to this unprecedented situation, including the following.
(Bookmark ST&R’s new resource page for up-to-date information on COVID-related trade measures in the U.S. and around the world. Click here to register for ST&R’s upcoming webinar on the trade impact of COVID-19.)
90-Day Duty Deferral
U.S. Customs and Border Protection briefly accepted individual requests to delay import duty payments but then stopped. Affected companies are now pushing for legislation that would require CBP to suspend all import tariffs for 90 days. A dozen senators supported this idea in a March 25 letter to President Trump, saying that a duty deferral “similar to the IRS providing Americans an additional 90 days to make tax payments without incurring interest of penalties” is a “commonsense” idea. Nevertheless, more efforts will be needed to push this measure forward against what has thus far been resistance from the Trump administration. Those interested in participating in this initiative should contact trade consultant Nicole Bivens Collinson.
Uniform Essential Company Definition
Trade groups are asking President Trump as well as state governments and city mayors for more uniform determinations of which companies and industries are considered essential and can continue operating amid orders shutting down non-essential activities. ST&R is actively working to assist companies affected by such orders. For more information or assistance, please contact trade consultant Nicole Bivens Collinson.
Section 301 Tariff Exemptions
The Office of the U.S. Trade Representative is accepting comments through at least June 25 on the possible removal of the Section 301 25 percent tariff on medical products from China, including those that may have previously been rejected for an exclusion. Among other things, each comment must explain precisely how the produce relates to the COVID-19 response; e.g., the product may be directly used to treat the virus, limit the outbreak, or produce other needed medical care products. For more information or assistance filing a comment, please contact trade consultant Nicole Bivens Collinson or trade attorney Kristen Smith.
Companies are increasingly importing personal protective equipment, medical products, and related goods but are doing so against a backdrop of constantly changing federal trade regulatory agency operations. Imports are further complicated by the fact that some countries are imposing export requirements, testing, certification, etc. For assistance understanding and adapting to these changes, please contact trade attorney Lenny Feldman.
Until Aug. 8 exports of PPE being used to treat COVID-19 are prohibited without explicit approval by the Federal Emergency Management Agency. CBP will detain shipments of these materials, which include respirators and surgical masks and gloves, while FEMA determines whether to return them for domestic use, issue a rated (purchase) order, or allow the export of part or all of the shipment. Failure to comply with this rule is a crime punishable by a fine of not more than $10,000, imprisonment for not more than one year, or both.
For questions and support relating to PPE exports, please contact ST&R’s export controls and sanctions leader, Kristine Pirnia.
Reconciliation and Transfer Price Adjustments
Companies may be able to use a sophisticated transfer pricing strategy to achieve significant duty savings and conserve cash. Utilizing CBP’s reconciliation program can allow companies to take advantage of retroactive transfer price adjustments by reducing previously declared dutiable values, thereby lowering duty liability and providing liquidity. For more information, please contact customs attorneys Charles Crowley, Mark Segrist, or Lou Shoichet.
Retail Order Cancellations
Many vendors who act as importers are facing significant order cancellations from retail customers. Consequently, these importers must navigate corresponding upstream commercial agreements with their foreign vendors, including consideration of their ongoing imports and delivery options. ST&R can assist importers and strategically collaborate to identify cost and sales savings strategies. For more information, please contact trade attorney Beth Ring.
Copyright © 2021 Sandler, Travis & Rosenberg, P.A.; WorldTrade Interactive, Inc. All rights reserved.