legl 4900 test 3- ch. 12

EU follows _____________ vs U.S. follows __________________

- EU- tariff shift - U.S.- substantial transformation

automated commercial environment

- Once export license has been received and it is time to ship the goods, information about the shipment has to be sent to various federal agencies. Which is done through this - it is an online system of customs and border protection

Operation Mega Flex (MAGA Flex)

- Operation Mega Flex- name given to this event where at the end of Trump's term, customs began to become very serious about imports, particularly imports from China. - A lot of Chinese shipments were being searched, more than other countries - Done before election, often viewed as political action as many believed Trump did this to show strength before 2020 election - Biden also seen being tough on China

informal entry

- an expedited process for low valued goods - personal and commercial shipments valued at $2,500 or less may be cleared through this - no surety bond required and import duties are payable immediately at time of entry

trademarks

- mark that uniquely identifies a product, service, or business - Words, phrases, logos, slogans, brand name -Can last forever. Register them and then re-new your registration every 10 years. - At the time of filing it, you have to show that you are using it in commerce

CFIUS

- regulates foreign investment in the US - regulates specifically certain industries- national security - anything over 10% of foreign investment in one of these protected industries will be ran by CFIUS - power to investigate and block transactions

Trading with the Enemy Act

- restrict trade with hostile countries during times of war or during a time of emergency declared by the president - Now limited to wartime use

Geneva Act

- single standard application and single DESIGN patent process - best harmonization law, but ONLY applies to design patents

Trade-Related Aspects of Intellectual Property Rights (TRIPS)

- the modern incarnation of IP harmonization - part of WIPO, administer by UN - updated Berne and Paris treaties - established minimum standards for trade secret protection - provides state-to-state resolution - mandates at minimum what each country's IPR laws must say

gross negligence and associated penalties

is committed when there is clear and convincing evidence that the act or omission was done with actual knowledge or reckless disregard - Penalty is approximately twice that for negligent violations, up to the value of goods

deemed reexport

is the release or transfer of an item from someone who was licensed to receive it to a different foreign person

deemed export

is the release or transfer of any item subject to control. Including technology or software, to a foreign person in the U.S.

anti-boycott law

legal responses by governments that make it unlawful for their citizens or companies to participate in a boycott

royalty

licensing fee

patriot act

made significant changes to IEEPA and other U.S. criminal statutes and gave far-reaching powers to law enforcement to deal with the threat of terrorism in America - strengthened seizure powers of government - banks must issue SARs

tax cuts and jobs act 2017

main goal was to reduce debts and bring corporation back into U.S. (no inversions) - U.S. corporate tax rate dropped to 21% from 35% - no tax for repatriating foreign dividends - global intangible low tax income - lower tax on US IP earnings- foreign derived intangible income - base erosion and anti-abuse tax

types of drawbacks - manufacturing - same condition -substitution -rejected merchandise

manufacturing- this is a refund of duties and taxes paid on merchandise that is imported, subjected to manufacture of production, and then exported within 5 years; most common form of drawback in U.S. same condition- rejected merchandise; drawback of duties paid on imported goods that are reexported in the "same condition" as they were imported, provided they were not significantly altered substitution- fungible goods or agricultural commodities; duties paid on imported goods may be received by U.S. firm that imports goods and then exports other goods of "same kind and quality" rejected merchandise- allowed for imported merchandise that was shipped without consent, is defective, or does not conform to specifications or to samples

Export control were replaced by:

multinational treaties

common standard for U.S. - substantial transformation

occurs when the original article loses identity as such and is transformed into a new or different article or new use that is different than the original - court will look at name, character, and use; the extent and nature of the operations performed; the added value; whether tariff classification of the finished article is different from that of components

customs of values/ dutiable value

of goods entered into any country must be reported by the importer-of-record to national custom authorities at the time of entry; it is the transactional value of goods

Tiel 19, section 1592 of U.S. code

outlines basic enforcement and civil penalty provisions of the customs laws

patent

processes or the ways of doing things - ex: recipes - 2 types: 1. utility- way things work- 20 years 2. design- way things look- 15 years

diversion

unlawful transfer, transshipment, rerouting, or reexporting of controlled goods or technology from one destination to which the goods or technology were legally shipped to another destination or foreign person who has not been licensed to receive the items

principle use

when article has several different uses, the principle use prevails - this is the ordinary use to which articles of the same class and kind being imported are usually put and which is greater than any other single use article

commerce country chart

where you are shipping too; tell you what countries are of concern

trade secret

any non-public proprietary information that gives competitive advantage- lasts as long as secret

global supply chain

an integrated international network of logistics, communications, finance, and trade relations designed to take a product form inception through production and delivery to customers

rules of origin

the legal rules used to determine the country of origin of imported products

for liquidation, customs has _________ to make final determination

314 days

The WCO revises the harmonized schedule every ___ years

5

Prior Disclosure

Congress enacted this statute to encourage importers to voluntarily report their own possible violations of the customs laws

entry process

all commercial shipments must go through this process that is supervised by national customs authority, "clearing customs"

tariff shift rule

states that the country of origin is that last country in which all "inputs" (raw materials, component parts, etc) into the finished article underwent a required change in tariff classification

essential character

If two or more headings or subheadings each describe only certain materials or components in composite goods, the article must be classified under the heading that describes the material or components that give the article its - helps to determine classification of assembled products

production assists

goods, services, or IP furnished by the importer to a foreign producer, free or at a reduced price, for use in producing merchandise for import into the U.S. - the value of assist must be included in transaction value when the goods are imported in the U.S. - often used in contract manufacturing

the domestic or regional value content test (rule)

a type of value-added test that requires some minimum percentage of the value of material and direct processing of operations be performed in a country in order for it to have "originated" there

statute of limitations

government is barred from brining any action to collect and import duty after five years from the date of violation involving negligence or gross negligence or give years from the date of discovery of the violation involving fraud

articles substantially transformed

if a product in not wholly the growth, product, or manufacture of one country, but has been produced in multiple countries, then the country of origin is that country where the article last underwent a substantial transformation in a new and different article of commerce

rule of relative specificity

if an article can be classified under 2 or more heading or subheadings, it must be classified under the one that most specifically- most narrowly- describes the article with the greatest degree or accuracy or certainty

country of origin

the country from which an imported article is said to have originating according to specific rules, known as rules of origin

copyright

the exclusive legal right, given to an originator or an assignee to print, publish, perform, film, or record literary, artistic, or musical material, and to authorize others to do the same. - lasts for the life of author + 70 years - most easy to infringe

Dutiable Status (and 3 pieces customs needs)

the legal status of imported goods at the time of entry for purposes of compliance with the tariff and custom laws 1. what? (tariff classifications) 2. how much? (tariff value) 3. where? (country of origin)

transactional value

the price actually paid or payable for merchandise when sold for export in the U.S., plus the following amounts if not included in purchase price: - packaging - royaltues - profit made by importer - consider "production assists"

General Rules of Interpretation

this is the first step in determining the dutiable status of an article and how you determine the tariff classification - found at the beginning of tariff schedule - gives only an overview

sanctions

whether financial or economic, it is a regulation that restricts or prohibits certain relationships with specified or targeted foreign countries, foreign entities, or named foreign individuals because of their support for international terrorism, the proliferation of weapons of mass destruction, for international drug and narcotics trafficking, or other threats to national security. - Focus on problematic individuals and sometimes countries, focused on where and who is receiving the product (export control concerned about product itself - Administered by Treasury Department

commerce control list

· list of all products regulated by the EAR; tells you what products are of concern - If a product is on this list, then one need to know if they are allowed to ship it certain places. For this, you look at the Commerce Country Chart.

WTO Agreement on Rules of Origin (1995)

the long-term project of achieving the goal of standardized and simplified rules of origin

tariff engineering

the process of modifying or engineering a product prior to importation, or importing it at an earlier stage of manufacturing, for the purpose of obtaining a lower rate of duty

Base Erosion and Profit Shifting (BEPS)

use of tax havens (meaning countries that have very low corporate tav), inversions (most of your company is abroad), profit-shifting (ability to determine where revenue is generate) and creative IP accounting

How long is one supposed to keep records?

5 years

BDS

Boycott Divest and Sanction- opposition to Israeli settlements (modern movement) done independently by businesses - Boycott Israeli products, do not invest in Israeli businesses, and encourage the U.S. government to put sanctions on Israel

in the U.S. who regulates market access?

CFIUS- committee for foreign investment in the US

first place customs ruling can be challenged

CIT- court of international trade

Madrid Protocol

allows international registration- basically, allows one to register trademark in home country, and then extra filing one can make with the Madrid Protocol- where you can indicate that the trademark will also apply to all the countries that have signed the Madrid protocol

civil fraud

clear and convincing evidence that the import knowingly made a materially false statement or omission while entering or attempting to enter goods in U.S. - do not go to a court or jury, go to a judge in the CIT - max penalty equal to 100% value of goods - more serious than negligence

Commerce imposes __________ and Treasury imposes ___________

- commerce- exports - treasury- sanctions

Terms used to describe an article in the scheduling are interpreted according to their ___________________ UNLESS a ____________________________ is more applicable

- common and commercial meaning - scientific meaning

paris convention

- first IP treaty - multilateral agreement to respect foreign PATENT filings- treat them like domain patent filings - national treatment - respect foreign patent filings

binding ruling/ ruling letter

- from Customs in advance entry - · Represents the official position of Customs with respect to the specific transaction for which it was issued - binding on customs personnel until revoked

manufacturing drawback

- import a lot of input products and I put them into some final product, and then I export the final product. Designed to encourage U.S. manufacturers to export, as this refund of duties and taxes paid on merchandise that is imported, subjected to manufacture of production, and then exported within 5 years - most common form of drawback in U.S.

export administration regulations (EAR)

- legal basis for export controls - Control over "dual-use" items , technology, and most software- export control laws, controlled by Commerce Department, found online in the Code of Federal Regulations. Very broad.

When you appeal a customs decision, it first goes to the ________ and then the _________

-CIT -Federal Circuit

EAR prohibits these 3 things without required licensed

-export -reexport -diversion

with a protest of liquidation, importer has __________ to challenge

180 days

Defense Production Act of 1950

Defense Production Act not only allows Trump to monitor foreign investment in the U.S., it also says the U.S. government can compel production by private companies when it serves the national interest

European Patent Convention

Europe only has to register patent 1x

Patent Cooperation Treaty

a cooperative union for the filing of UTILITY patents among member countries- allows international registration through WIPO

foreign trade zones

are legally defined areas (usually 60 miles) around the port, and we say to companies if you want to build a warehouse in this foreign trade zone, we will let you bring stuff in from the port, keep it in your warehouse, but not pay duties on that until it actually leaves your warehouse for the U.S.; save time - warehouse and manufacturing facilities - licensed, regulated, bonded - 60 miles - duty deferral and duty saving device - assemble, repackage, and export without paying duties

BIT (Bilateral Investment Treaty)

basically says that we will respect your citizen's investments in our country, if you will respect our citizens investments in your country - and if something goes wrong we will go to international arbitration- called investor-state arbitration

inversions

companies more headquartered out of U.S.

deferral principle

don't pay U.S. taxes until repatriation

Customs takes two-prolonged approach to enforcement of the customs laws - enforced compliance - informed compliance

enforced compliance- refers to the active investigation of customs violations and the prosecution of violators informed compliance- refers to the "softer" mechanisms designed to place the burden of voluntary compliance on importers

FRAND licensing

fair, reasonable, and nondiscriminatory licensing - make sure that standard-essential patent (SEP) owners are benefiting from using their parents without gaining an unfair bargaining advantage - keeping competitors out of the market place

liquidation

final computation and assessment of the applicable duty on entered goods by Customs - In a normal import transaction, assuming no errors or penalties are at issue, the entry will be liquidated - closes the book, making entry complete

export controls

focus on what the product is and where it is going- laws and regulations that govern the control and licensing of certain goods and technology exported from the U.S. or releases/transferred to anyone who is not a U.S. citizen (in U.S. or not) - administered by the Commerce Department - concerns product that is particularly dangerous, could be sent one place and not another - has roots in NATO

Civil penalties can be severe- can be:

full value of goods or 2x the duty lost on goods

transfer pricing

prices charged in sales between an organization's units

patent controls

produce nothing but patents - one can develop and idea and a prototype (show you intend to use in commerce) and never make product - they just troll/wait till someone makes something similar and then they sue or threaten to sue them - legal

formal entry

refers to the administrative process required to import goods into the customs territory of a country; most big commercial shipments

reexport

refers to the shipment/transfer of American-controlled items or technology from one foreign country to another foreign country or foreign person

specific processing rules

states that an item originates in a country if it was subject to specific forms of manufacturing or processing in that country

· If actual duties owed exceed the estimated duties paid at time of entry, the importer must pay them within __________ days of the posting of the notice of liquidation

15

The Wassenaar Arrangement

- Voluntary arrangement, not a treaty, between 41 governments, including the U.S. - Coordinate national export control strategies and develop lists of items and technologies that should be controlled

International Emergency Economic Powers Act

- this provides the current grant of authority to the President to regulate economic and financial transactions and to place restrictions on importing or exporting during a peacetime international emergency - Broad executive power to seize assets - Or impose trade embargoes - Financial sanctions imposed under IEEPA are primarily enforced by Office of Foreign Assets Control of the Department of Treasury

the 2 forms of foreign direct investment

1. direct- when you start the foreign business abroad - stand alone company or subsidiary of an already established US company -own company in itself, organized and subject to law of that country 2. indirect- invest in a company that is already established abroad - investing in corporate stock, LLCs, joint ventures - i am not running or controlling company

the 2 types of rules of origin that U.S. and most developed countries follow

1. non-preferential rules or origin- those applicable to imports from developed countries that receive normal tariff treatment - also used to calculate antidumping and countervailing duties, and to enforce trade embargoes and quotas - strictest - must be wholly obtained in a certain country 2. preferential rules of origin- found in the trade agreement or tariff program that creates the preference, and so the rules can differ from program to program - need to be wholly obtained to qualify for trade preference

3 policy reasons for control (why to license and control certain exports)

1. to protect national security 2. to promote U.S. foreign policy 3. prevent short supply of essential domestic material

what created CFIUS?

1950 defense production act

who regulates the term made in the U.S.A.

FTC- federal trade commission

what was the first US patent for transgenic animal?

Harvard Mouse

Tariff Duty Rates under the HTSUS (explain column 1 and 2)

Rate 1 (normal rate)- split into general or special - general= tariff rate with countries in which the U.S. has normal trade relations with (PNTR) - special- tariff rate with beneficiaries of some trade preference program (developing nations)- they are going to get better deal than PNTR countries Rate 2- no PNTR- these are rates from the Smoot Hawley Tariff Act amended. These tariffs are so high that imports from these countries become cost-productive as determined by Congress.

international traffic in arms regulations (ITAR)

Set of United States government regulations that control the export and import of defense-related articles and services - weapons and military tech - controlled by state department

Cybersquatting

The act of registering a domain name that is the same as, or confusingly similar to, the trademark of another and then offering to sell that domain name back to the trademark owner- intent to make profit from goodwill of trademark

criminal fraud

When the perpetrator intentionally makes false statements - have to show beyond reasonable doubt - max penalty is 2 years imprisonment, fine, or both - knowingly or willfully, with intent to defraud U.S.

drawbacks

a refund of duties already paid on imported goods when the goods (or other goods manufactured from the original goods) are reexported or destroyed; refund of collected tariffs when imports are not "consumed" in US - most common in U.S. is manufacturing drawback

berne convention

international treaty that protects copyrights- allows international recognition -grants copyrights among signatory nations based on national treatment where each signatory must afford foreigner the same treatment as its own citizen - protection at moment of creation, rather than time of filing

Customs Modernization and Informed Compliance Act of 1993 (Mod Act)

introduced the doctrine of informed compliance, which shifted to the importer a major responsibility to comply with all custom laws and regulations. It requires that importers, custom brokers, and carriers use reasonable care in complying with the law, in handling all import transactions, and in preparing all documentation for the entered goods.

Extraterritorial jurisdiction

nation being able to extend the power of its export control laws over its good and technologies once they have left its territory- huge question today if should be allowed in export control law.

grey market goods

not illegal goods perhaps- but being resold in a way that it is not intended to or being sold for or ending up in region not supposed to be in

boycott

organized refusal of one or more nations, often backed by economic sanctions, to trade with one or more nations and often used for political reasons