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CF 28�s & CF 29�s � Customs hardens its existing policy re notice of a "Commencement of a Formal
Investigation." Just by
opening Customs �routine� correspondence, importers may
be cut off from making prior disclosures.
AAEI Letter to CBP
CBP Response to AAEI
T.D. 98-49
September
21, 2010
In a recently published letter
from Customs to the American Association of Exporters
and Importers, Customs voiced its policy regarding when
"commencement" occurs -- specifically, whether Customs
Forms 28�s (Request for Information) and 29�s (Notice of
Action) constitute "commencement documents"
for prior disclosure purposes.
As you know, prior disclosures are valid only if made "before, or
without knowledge of, the commencement of a formal
investigation of that violation." 19 C.F.R. 162.74.
What is knowledge? Is receipt of a CF 28 or CF 29
notice, sufficient to cut off a prior disclosure?
According to Customs the answer seems to be �maybe� and
�yes,� respectively:
As a
matter of policy, the Form 29 can and will be used as
a document commencing a formal investigation and
providing notification to the importer. As a matter of
policy, however, the CBP Form 28 alone should not be
routinely considered a �commencement document.�
However, this policy statement is inconsistent with Customs�
clarifying comments in
Treasury Decision 98-49, which
indicate that the mere receipt of a CF 28 or CF 29 does
not alone preclude eligibility for prior disclosure
treatment under 19 C.F.R. 162.74, to wit:
�Customs
Forms 28 and 29 which merely request information or
propose rate or value advances could not be considered
�commencement� documents for prior disclosure purposes
unless they articulate that a possibility of a violation
existed.�
If Customs� position is that the issuance of a CF 28 or a CF 29,
without specific notification language, precludes prior
disclosure treatment, this policy will eventually be
tested (and likely reversed) in court. Meanwhile,
Customs brokers need to know Customs� position so they
don�t render bad advice to importer clients, which we
understand to be:
A CF 28 or
CF 29, absent specific language which clearly gives
notice that a formal investigation is underway, is not a
�commencement document�,
for purposes of cutting off a prior disclosure.
How this will all work out remains to be seen. Customs promises to
publish guidelines as to when a CF 28 will be a
�commencement document,� but stands pat on its language
as to the CF 29 being a �commencement document.�
One thing is clear � just by opening a CF 28 or a CF 29 envelope,
an importer may be cutting off its right to make a prior
disclosure.
As always, we are here to help, if you have any questions or need
advice.
Call or email Robert Givens or Joseph Acayan.
Robert
Givens & Joseph Acayan
Givens & Johnston, PLLC
950 Echo Lane, Suite 360
Houston, Texas 77024
Tel. (713) 932-1540 or (800) 285-8042
Fax (713) 932-1542; Cell (713) 256-3038
Email:
rgivens@givensjohnston.com
Email:
jacayan@givensjohnston.com
USITC Votes To Continue Cases
On Drill Pipe And Drill Collars From China
The United States
International Trade Commission (USITC) today determined
that there is a reasonable indication that a U.S.
industry is threatened with material injury by reason of
imports of drill pipe and drill collars from China that
are allegedly subsidized and sold in the United States
at less than fair value.
Commissioners Charlotte R.
Lane, Irving A. Williamson, and Dean A. Pinkert made
affirmative determinations on the basis of threat.
Chairman Shara L. Aranoff, Vice Chairman Daniel R.
Pearson, and Commissioner Deanna Tanner Okun made
negative determinations.
As a result of the
Commission's affirmative threat determinations, the U.S.
Department of Commerce will continue to conduct its
countervailing and antidumping duty investigations on
imports of this product from China, with its preliminary
countervailing duty determination due on or about March
26, 2010, and its preliminary antidumping duty
determination due on or about June 9, 2010.
The
Commission's public report Drill
Pipe and Drill Collars from China (Investigation
Nos. 701-TA-474 and 731-TA-1176 (Preliminary), USITC
Publication 4127, February 2010) will contain the views
of the Commission and information developed during the
investigations.
https://www.usitc.gov/press_room/news_release/2010/er0219hh1.htm
U.S.
Considers Anti-Dumping & Countervailing Duties on Chinese
Drill Pipe
On December
31, 2009, a group of US manufacturers and labor
organizations started an antidumping and countervailing duty
action on Chinese made drill pipe (includes drill pipe, both
with and without tool joints, green pipe and intermediate
pipe, as well as tool joints, alone, and maybe drill collars
and compressive service drill pipe, and certain subs and
materials used to make any of the foregoing). If the ITC
determines that the domestic industry is injured or
threatened with injury, huge new duties may soon be in store
for imported Chinese drill pipe.
The domestic industry wants duties up to 500%!
We are
bringing this issue to the attention of the oil field
equipment industry because the law on the subject is very
complicated and even honest mistakes have the potential
to literally destroy a business overnight.
At this
point, the initial investigation is ongoing and no decision
has been made. The ITC will vote on whether or not the
duties are warranted on 2/12/2010. If the ITC votes to
apply sanctions, then sanctions will be announced after
further proceedings. If the action results in duties on
drill pipe here are some facts that anyone considering
importing these items should know.
1. Unless
specifically excepted, the ADD/CVD order affects both new
and used drill pipe produced in China. And, Customs
will collect these duties every time the pipe is reimported
into the US.
2.
Ignorance or mistake is not an excuse. For example, an
importer may �make entry� (import) goods incorrectly so that
the government does not immediately demand payment of the
extra duties. However, the ADD/CVD liability attaches once
the goods are imported and exporting the goods later does
not eliminate this liability. The government will also
apply ADD/CVD on drill pipe that turns out to be of Chinese
origin even if the importer honestly believed otherwise or
if the importer was intentionally misled by the supplier.
3. The
domestic industry will likely claim that �critical
circumstances� exist (like it recently did on Chinese line
pipe) and if the ITC agrees, duties can be applied
retroactively, up to 90 days before the government announces
a preliminary duty rate.
4. These
laws are intentionally written and enforced in a manner that
is very difficult to understand. Anyone in the business of
importing Chinese drill pipe or used drill pipe that might
be of Chinese origin must know exactly how to proceed to
avoid accruing unnecessary liability.
We are an
AV rated law firm in Houston specializing in customs and
trade law for 35 years. We are not involved in the
underlying action occurring in Washington and do not take
any position on whether the action itself is just or
unjust. We do not favor either US producers or US importers
in this dispute, but our goal is to offer sound guidance to
businesses that must deal with its results.
Givens & Johnston,
950 Echo Lane, Suite 360
Houston, Texas 77024
Tel. (713) 932-1540 or (800)
285
Fax (713) 932-1542
Email:
jhurst@givensjohnston.com
or
rgivens@givensjohnston.
________________________________________
Export-Related News
October 2009:
Three Chinese Nationals and Two Corporations Charged with Illegally Exporting Defense Articles and Commerce Controlled Electronics Components to China and Conspiring to Violate US Export Laws
September
2009:
Affiliates of Texas Company Settle Charges for Unlawful Exports and Reexports to Sanctioned Countries and Listed Entities
August 2009:
Houston Firm Settles Export Allegations
June 2009:
Defendant Sentenced in Conspiracy to Export Military Aircraft Parts to Iran
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