6.22.2022 China 301 Litigation Update - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
In its decision of April 1, 2022, in In Re Section 301 Cases, Court No. 21-00052, the U.S. Court of International Trade (CIT) ordered the United States Trade Representative (USTR) to provide the court with a report by June 30, 2022, that describes how the agency reached its decision to impose List 3 and List 4A additional tariffs. The court instructed USTR to include in its report a description of how it considered the comments from interested parties that it received prior to imposing the additional tariffs and to explain why certain provisions were included on the final versions of List 3 and List 4, while other provisions were removed from the final lists.
On June 17, 2022, the U.S. Department of Justice (DOJ) filed a motion requesting a 60-day extension of time to provide the court with USTR’s report. Plaintiff filed an opposition to DOJ’s motion.
On June 22, 2022, the CIT issued an order, granting USTR 30 additional days (to August 1, 2022) to file its report. In its order, the court reminded USTR that its report must be limited to a further explanation of the agency’s originally-stated justifications for imposing List 3 and List4A, as opposed to presenting new reasons for its decision.
The parties are to file a joint status report with the court within 14 days of the filing of the USTR report.
Should you have any questions, please do not hesitate to contact one of our attorneys.
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Implementation of the Uyghur Forced Labor Prevention Act - U.S. Department of State
Starting today (6/21/22), U.S. Customs and Border Protection (CBP) will begin to implement the Uyghur Forced Labor Prevention Act’s provisions to prohibit imports made by forced labor into the United States of products made in Xinjiang. President Biden signed the Act into law on December 23, 2021, after it passed with overwhelming bipartisan support in the United States Congress, underscoring our commitment to combating forced labor everywhere, including in Xinjiang, where genocide and crimes against humanity are ongoing.
The State Department is committed to working with Congress and our interagency partners to continue combating forced labor in Xinjiang and strengthen international coordination against this egregious violation of human rights. Addressing forced labor and other human rights abuses in the People’s Republic of China (PRC) and around the world is a priority for President Biden and this Administration. We have taken concrete measures to promote accountability in Xinjiang, including visa restrictions, financial sanctions under Global Magnitsky, export controls, Withhold Release Orders and import restrictions, as well as the release of a multi-agency business advisory on Xinjiang to help U.S. companies avoid commerce that facilitates or benefits from human rights abuses, including forced labor. Together with our interagency partners, we will continue to engage companies to remind them of U.S. legal obligations which prohibit importing goods to the United States that are made with forced labor.
We are rallying our allies and partners to make global supply chains free from the use of forced labor, to speak out against atrocities in Xinjiang, and to join us in calling on the government of the PRC to immediately end atrocities and human rights abuses, including forced labor.
For more information on implementation of the Act, see: https://www.dhs.gov/uflpa.
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Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China - U.S. Customs & Border Protection
The Uyghur Forced Labor Prevention Act was enacted on December 23, 2021, to strengthen the existing prohibition against the importation of goods made wholly or in part with forced labor into the United States and to end the systematic use of forced labor in the Xinjiang Uyghur Autonomous Region. Among its mandates, the UFLPA charged the Forced Labor Enforcement Task Force, chaired by DHS, to develop a strategy for supporting the enforcement of Section 307 of the Tariff Act of 1930, as amended (19 U.S.C. § 1307) to prevent the importation into the United States of goods mined, produced, or manufactured wholly or in part with forced labor in the People’s Republic of China.
Attachment: Strategy to Prevent the Importation of Good Mined, Produced, or Manufactured with Forced Labor in the People's Republic of China
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Federal Register Notices:
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Sodium Nitrite From India: Preliminary Affirmative Countervailing Duty Determination and Alignment of Final Determination With the Final Antidumping Duty Determination
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Steel Nails From India, Oman, Sri Lanka, Thailand, and Turkey; Scheduling of the Final Phase of Countervailing Duty and Anti-Dumping Duty Investigations
• Investigations; Determinations, Modifications, and Rulings, etc.: Circular Welded Carbon-Quality Steel Pipe From Oman, Pakistan, and the United Arab Emirates; Scheduling of a Full Five-Year Review
• Investigations; Determinations, Modifications, and Rulings, etc.: Certain Gas Spring Nailer Products and Components Thereof; Commission Decision To Grant Complainant's Motion To Terminate the Investigation on Remand; Rescission of Remedial Orders and Termination of the Investigation
• Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Notice of Scope Ruling Applications Filed in Antidumping and Countervailing Duty Proceedings
• Urea Ammonium Nitrate Solutions From the Republic of Trinidad and Tobago: Final Affirmative Countervailing Duty Determination
• Urea Ammonium Nitrate Solutions From the Russian Federation: Final Affirmative Countervailing Duty Determination
• Sales at Less Than Fair Value: Urea Ammonium Nitrate Solutions From the Republic of Trinidad and Tobago: Final Affirmative Determination of Sales at Less Than Fair Value
• Acrylonitrile-Butadiene Rubber From the Republic of Korea: Final Affirmative Determination of Sales at Less Than Fair Value and Final Affirmative Determination of Critical Circumstances, in Part
• Acrylonitrile-Butadiene Rubber From Mexico: Final Affirmative Determination of Sales at Less Than Fair Value
• Urea Ammonium Nitrate Solutions From the Russian Federation: Final Affirmative Determination of Sales at Less Than Fair Value
• Acrylonitrile-Butadiene Rubber From France: Final Affirmative Determination of Sales at Less Than Fair Value, and Final Affirmative Determination of Critical Circumstances, in Part
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Federal Trade Commission Finalizes Action Against “Made in USA” Repeat Offender - Federal Trade Commission
Resident Home Must Pay $753,000 and Cease Made in USA Fraud
The Federal Trade Commission has finalized an order against Resident Home LLC and owner Ran Reske for allegedly making false, misleading, or unsupported advertising claims that their imported DreamCloud mattresses were made from 100% USA-made materials. Resident Home LLC and Reske will pay $753,000.
In the company’s promotional material, Resident Home LLC and Reske claimed that their DreamCloud mattresses were “proudly made with 100 percent USA-made premium quality materials.” But, according to the complaint, these claims were false or misleading, and violated the FTC Act. The FTC says all DreamCloud mattresses are finished overseas and, in some cases, are wholly imported or use significant imported materials.
Under the terms of the final order, in addition to paying $753,000, Resident Home LLC and Reske are prohibited from making several claims that deceive consumers and harm law-abiding businesses whose sales were siphoned because of this behavior. The order specifically covers unqualified U.S.-origin claims (claims made with no limitations) for any product, unless they can show that:
• the product’s final assembly, final processing, and all significant processing takes place in the United States; and
• all or virtually all ingredients or components of the product are made and sourced in the United States.
The order also governs any qualified Made in USA claims (claims that include explanatory information). For qualified claims, Resident Home LLC and Reske must include a clear disclosure about the extent to which the product contains foreign parts, ingredients, components, or processing.
The FTC’s Enforcement Policy Statement on U.S. Origin Claims offers guidance on making Made in USA claims. The Made in USA Labeling Rule went into effect on August 13, 2021. Companies that violate the Rule from that date forward may be subject to civil penalties.
The Commission voted 3-2 to approve the complaint and settlement order, with Commissioners Noah Joshua Phillips and Christine S. Wilson voting no. The majority issued a statement, and Commissioners Phillips and Wilson issued a joint dissenting statement.
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FTC Report Warns About Using Artificial Intelligence to Combat Online Problems - Federal Trade Commission
Agency Concerned with AI Harms Such As Inaccuracy, Bias, Discrimination, and Commercial Surveillance Creep
Today the Federal Trade Commission issued a report to Congress warning about using artificial intelligence (AI) to combat online problems and urging policymakers to exercise “great caution” about relying on it as a policy solution. The use of AI, particularly by big tech platforms and other companies, comes with limitations and problems of its own. The report outlines significant concerns that AI tools can be inaccurate, biased, and discriminatory by design and incentivize relying on increasingly invasive forms of commercial surveillance.
“Our report emphasizes that nobody should treat AI as the solution to the spread of harmful online content,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “Combatting online harm requires a broad societal effort, not an overly optimistic belief that new technology—which can be both helpful and dangerous—will take these problems off our hands.”
In legislation enacted in 2021, Congress directed the Commission to examine ways that AI “may be used to identify, remove, or take any other appropriate action necessary to address” several specified “online harms.” The harms that are of particular concern to Congress include online fraud, impersonation scams, fake reviews and accounts, bots, media manipulation, illegal drug sales and other illegal activities, sexual exploitation, hate crimes, online harassment and cyberstalking, and misinformation campaigns aimed at influencing elections.
The report warns against using AI as a policy solution for these online problems and notes that its adoption could also introduce a range of additional harms. Indeed, the report outlines several problems related to the use of AI tools, including:
• Inherent design flaws and inaccuracy: AI detection tools are blunt instruments with built in imprecision and inaccuracy. Their detection capabilities regarding online harms are significantly limited by inherent flaws in their design such as unrepresentative datasets, faulty classifications, failure to identify new phenomena, and lack of context and meaning.
• Bias and discrimination: In addition to inherent design flaws, AI tools can reflect biases of its developers that lead to faulty and potentially illegal outcomes. The report provides analysis as to why AI tools produce unfair or biased results. It also includes examples of instances in which AI tools resulted in discrimination against protected classes of people or overblocked content in ways that can serve to reduce freedom of expression.
• Commercial surveillance incentives: AI tools can incentivize and enable invasive commercial surveillance and data extraction practices because these technologies require vast amounts of data to be developed, trained, and used. Moreover, improving AI tools accuracy and performance can lead to more invasive forms of surveillance.
Congress instructed the Commission to recommend laws that could advance the use of AI to address online harms. The report, however, finds that, given that major tech platforms and others are already using AI tools to address online harms, lawmakers should consider focusing on developing legal frameworks that would ensure that AI tools do not cause additional harm.
The Commission voted 4-1 at an open meeting to send the report to Congress. Chair Lina M. Khan as well as Commissioners Rebecca Kelly Slaughter, and Alvaro Bedoya issued separate statements. Commissioner Christine S. Wilson issued a concurring statement and Commissioner Phillips issued a dissenting statement.
The Federal Trade Commission works to promote competition and protect and educate consumers. Learn more about consumer topics at consumer.ftc.gov, or report fraud, scams, and bad business practices at ReportFraud.ftc.gov. Follow the FTC on social media, read consumer alerts and the business blog, and sign up to get the latest FTC news and alerts.
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USITC Institutes Section 337 Investigation of Certain Barcode Scanners, Scan Engines, Mobile Computers - Department of Commerce
The U.S. International Trade Commission (USITC) voted to institute an investigation of certain barcode scanners, scan engines, mobile computers with barcode scanning functionalities, products containing the same and components thereof. The products at issue in the investigation are described in the Commission’s notice of investigation.
The investigation is based on a complaint filed by Honeywell International Inc. of Charlotte, NC and Hand Held Products, Inc. of Charlotte, NC on May 20, 2022. The complaint alleges violations of section 337 of the Tariff Act of 1930 in the importation into the United States and sale of certain barcode scanners, scan engines, mobile computers with barcode scanning functionalities, products containing the same and components thereof that infringe patents asserted by the complainants. The complainant requests that the USITC issue a limited exclusion order and cease and desist orders.
The USITC has identified the following as the respondents this investigation:
Zebra Technologies Corporation of Lincolnshire, IL; and
Symbol Technologies, Inc. of Holtsville, NY.
By instituting this investigation (337-TA-1321), the USITC has not yet made any decision on the merits of the case. The USITC’s Chief Administrative Law Judge will assign the case to one of the USITC’s administrative law judges (ALJ), who will schedule and hold an evidentiary hearing. The ALJ will make an initial determination as to whether there is a violation of section 337; that initial determination is subject to review by the Commission.
The USITC will make a final determination in the investigation at the earliest practicable time. Within 45 days after institution of the investigation, the USITC will set a target date for completing the investigation. USITC remedial orders in section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the U.S. Trade Representative within that 60-day period.