More companies are seeking drawback payments as the economic slowdown has increased the importance of cash on hand, CBP officials and industry executives said during the American Association of Exporters and Importers virtual conference Aug. 20. “In general, I would say COVID's had a major impact on our businesses and it's also made our company even more focused on getting cash in the door,” said Kathleen Palma, senior executive for international trade compliance at GE. “One of the levers that our leadership has been looking at has been drawback.” At the same time, Palma expects that because the company is bringing in fewer shipments, that will be reflected in fewer drawback claims going forward.
The head of the Bureau of Industry and Security on Aug. 19 affirmed a more than $30 million penalty against a shipping company for export violations after ordering a judge to review the fine for being too high. Commerce Acting Undersecretary for Industry and Security Cordell Hull said in March the fine was perhaps disproportionate to the violations committed by Singapore-based Nordic Maritime Pte. Ltd and chairman Morten Innhaug (see 2003170040), but the judge “affirmed” the penalty. Although Hull said the administrative law judge’s “narrow analysis” for the reasoning behind the recommended penalty was “erroneous,” he said BIS will accept the fine. “BIS believes the penalty should be affirmed in its entirety,” Hull wrote.
Amina Mohamed, Kenya's Sports, Culture and Heritage minister and its nominee to lead the World Trade Organization, said strengthening rules on industrial subsidies and reforming the Appellate Body are critical for the WTO's continued success.
The U.S. is working on more measures to dissuade companies from doing business in China, administration officials said, including through financial incentives and more industry outreach about enforcement risks. Commerce Department official Nazak Nikakhtar and State Department official Keith Krach also said the administration is working to collaborate more with trading partners against China.
Experts disagreed on the utility of the Trump administration approach to World Trade Organization reform, during a Senate Finance Committee hearing on the topic, and senators on the left and right suggested that the negotiated trade rules disadvantage Americans.
U.S. rail and steel industry groups asked the Treasury Department to sanction the China Railroad Rolling Stock Corporation (CRRC), saying the state-owned company is undermining the U.S. rail sector. CRRC plans to dominate the global rail market and has used state-backed financing, below-market pricing and “other anti-competitive tactics” that threaten the U.S. rail industry, the groups said in a July 22 letter. CRRC was also mentioned in a June Defense Department list of Chinese companies with ties to the country’s military (see 2006250024).
President Donald Trump’s executive order ending preferential treatment for Hong Kong details a range of sanctions authorities and export bans but includes a carve-out for certain defense exports authorized before the order was issued. The State Department’s Directorate of Defense Trade Controls issued a July 15 guidance to clarify the new restrictions and answer industry questions.
The Commerce Department published its spring 2020 regulatory agenda for the Bureau of Industry and Security. The agenda includes a new mention of a rule to control “software” for the operation of “automated nucleic acid assemblers and synthesizers” capable of designing and building “functional genetic elements from digital sequence data.” BIS said the software can be used in the production of pathogens and toxins, with the potential for those to make their way into biological weapons if export controls on the software are lacking. The notice of proposed rulemaking, part of BIS’ effort to control emerging and foundational technologies (see 2005190052), will request industry comments about how the controls might affect “legitimate commercial or scientific applications.” BIS said it aims to issue the proposed rule this month.
The Alliance for Trade Enforcement is asking U.S. Trade Representative Robert Lighthizer to bring up intellectual property and agriculture issues with Mexico and Canada in the USMCA. The alliance includes trade groups in pharmaceutical, biotech and creative industries and the National Association of Manufacturers, in addition to broad trade groups such as the National Foreign Trade Council and the U.S. Council for International Business.
Jesus Seade, who led the USMCA negotiations on behalf of the president-elect in Mexico in 2018, said that while the World Trade Organization is a member-driven organization, the director-general should be more than just a facilitator, especially since the body is in crisis.