International Trade Law
Clark Hill’s International Trade Group offers a full range of services for clients involved in the international trade of goods. Our attorneys represent clients before all of the federal agencies that have jurisdiction over the importation and exportation of goods into and out of the United States.
One of the group’s greatest strengths is the diversified backgrounds and experiences of its attorneys and other professionals. This enhances their ability to provide clients with solutions that evaluate issues in the context of Customs and international trade law, while also considering other governmental agency requirements associated with a matter.
Compliance and Recordkeeping
Importers must exercise “reasonable care” when determining the classification, value, and country of origin of imported goods, and must monitor compliance with all other laws and regulations governing their imported products. An effective compliance program is essential to meeting the “reasonable care” standard. Clark Hill’s International Trade attorneys have helped numerous clients implement effective compliance programs.
Country of Origin Determinations
The country of origin of an imported product may affect the duty rate. For example, some products are duty free if imported from countries eligible for benefits under the Generalized System of Preferences, while others may be subject to higher duties if the product originates in a country subject to antidumping or countervailing duties or retaliatory duties imposed because of a trade dispute.
Country of Origin Marking
With few exceptions, every article imported into the United States must be marked with the country of origin. Products violating this requirement may be denied entry, seized, subjected to liquidated damages equal to the value of the goods, or be subject to 10% additional marking duties. Country of origin marking issues often affect an importer’s entire product line and have the potential to delay the timely delivery of products to customers. The International Trade group has the ability to address both the legal and practical issues that arise in marking cases. The appropriate use of the “Made in USA” claim, which is governed by the Federal Trade Commission, also is a common issue addressed by Clark Hill’s attorneys.
Customs routinely conducts audits to determine whether importers are adequately managing their compliance risks. Clark Hill attorneys guide importers through this complex and time-consuming process.
Customs Penalties and Seizures
Penalties for Customs law violations are among the most draconian civil penalties under federal law. The penalties range from two times the loss of revenue (unpaid duties) for negligent violations to the full commercial value of the merchandise in the United States where the degree of culpability is found to be fraud. Our attorneys have an excellent track record in minimizing or eliminating importers’ penalty liability. They also routinely assist importers in the preparation of voluntary disclosures of violations, which reduce the potential penalty to the interest owed on the loss of revenue.
In certain situations, importers may claim refunds (drawback) of 99% of duties paid on imported goods when the goods are exported in unused condition or are used to manufacture goods that are subsequently exported. Clark Hill’s International Trade attorneys have substantial experience with the complex regulations governing drawback and routinely advise clients on the benefits of establishing a drawback program.
Free Trade Agreements & Special Tariff Programs
The United States currently has Free Trade Agreements with Canada and Mexico (NAFTA), Israel, Jordan, Chile, Singapore, Morocco, Australia and Korea. Other programs provide for free or reduced duties on products from the Caribbean Basin, GSP eligible countries, and Andean countries. Clark Hill attorneys routinely work with importers to determine whether their imported products qualify for free trade benefits and to develop procedures to ensure compliance with the governing laws and regulations.
Intellectual Property Services
CBP officials have the authority to seize imported goods that violate trademarks and copyrights of others. Clark Hill’s International Trade group routinely assists in registering intellectual property with U.S. Customs and represents importers whose goods have been seized for alleged intellectual property violations.
Certain imported goods such as textiles, fruits and vegetables, sugar and products containing sugar, and dairy products are subject to quotas. The quotas may be absolute where a given quantity and no more can be imported each year. They may also be tariff rate quotas where a certain quantity is eligible for a reduced duty rate and any quantities imported over this amount are subject to a higher duty rate. Clark Hill’s attorneys routinely guide importers through the complicated rules governing quotas.
The duty rate applicable to imported merchandise depends on its classification in the Harmonized Tariff Schedules of the United States. Tariff classification also plays a critical role in qualifying products for free trade agreement benefits, identifying whether merchandise is subject to quotas, and in determining the country of origin. The attorneys in Clark Hill’s International Trade group have a wealth of experience in tariff classification issues and have successfully litigated tariff classification disputes before the U.S. Court of International Trade and the U.S. Court of Appeals for the Federal Circuit.
Relief under the antidumping or countervailing duty laws, or reliance on Sections 201, 301, or 337 of the1974 Tariff Act, represent the primary vehicles available to U.S. companies that believe their ability to sell their products is being hampered by unfair price competition, market distorting practices, or violations of their intellectual property rights, caused by imports. The International Trade Practice Group advises clients in all aspects of these trade remedy mechanisms. We closely monitor pending actions, enabling us to move quickly to help clients protect their interests.
We have defended foreign exporters and U.S. importers in initial antidumping and countervailing duty investigations at both the U.S. Department of Commerce (“DOC”) and the U.S. International Trade Commission (“ITC”). We also regularly represent clients in DOC annual administrative reviews, new shipper reviews, scope reviews, circumvention investigations, changed circumstance reviews and DOC and ITC sunset reviews. In addition to representing clients in these administrative proceedings, we litigate cases before the United States Court of International Trade (“CIT”) and the Court of Appeals for The Federal Circuit (“CAFC”) in challenges to the results of antidumping and countervailing duty proceedings. We also represent clients in Section 301 unfair trade practice proceedings before the Office of the United States Trade Representative (“USTR”); and in Section 201 escape clause (“safeguard”) proceedings before the ITC and the USTR.
Clark Hill has a considerable amount of experience representing industries and suppliers from a variety of market economy countries including Sri Lanka, Japan, Korea, Latvia, Taiwan, Mexico, Argentina, and Canada.
Clark Hill also has extensive experience representing exporters and U.S. importers in antidumping and countervailing duty proceedings including cases filed against China, a non-market economy, involving wood flooring, tires, aluminum extrusions, aluminum foil, wooden bedroom furniture, tissue paper, corrosion resistant steel, cold rolled steel, petroleum wax candles, artist canvas, desktop counters and scanners, folding gift boxes, folding metal tables and chairs, steel wheels, steel wire garment hangers and color television receivers.
The Customs value of goods is important because almost all duty rates are a percentage of the value of the imported merchandise. The value of imported goods is generally the price paid or payable by the importer, but may be increased to account for the value of any assists (tools, molds, materials, etc. provided by the importer to the manufacturer at free or reduced cost), selling commissions, royalties or license fees, and proceeds of subsequent resale that accrue to the seller. Common issues include establishing the value of transactions between related parties and determining Customs value when a middleman is involved in the transaction. Clark Hill’s attorneys routinely advise importers on Customs value issues.