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The latest chapter in the ongoing efforts to save the endangered vaquita porpoise and the resulting impact on trade with Mexico unfolded on July 17 when the current administration published a letter to Congress outlining what trade sanctions, if any, would be imposed upon the government of Mexico. The letter was mandated by a settlement between the U.S. Department of the Interior (Interior) and three conservation groups that had filed suit in the Court of International Trade. The conservation groups had been petitioning Interior since 2014 to take action under the Pelly Amendment to the Fishermen’s Protective Act of 1967 to certify that Mexico was in violation of the act and international agreements by not taking adequate measures to protect the vaquita. Interior agreed to certify that Mexico was not meeting its obligations and that the executive branch must then determine what action to take. The vaquita is a miniature porpoise indigenous only to the Northern Gulf of California. It is protected under several U.S. laws. There are believed to be only 15 or less left in the wild.
The main threat to the vaquita is the use of gillnets to catch the totoaba fish that shares the same habitat with the vaquita. The vaquita can become entangled in these nets and drown. The totoaba are also endangered, however, the swim bladder of the totoaba is highly valued in China for its supposed medicinal properties. Customs and Border Protection in June seized 242 pounds of totoaba bladders attempting to be smuggled through the Port of Nogales. The estimated value was almost 3 million dollars. In the letter, it was stated that no sanctions would be imposed on Mexico at this time, as progress is being made in the ongoing dialogue between the two countries. There certainly will be more to come concerning the fate of the vaquita and how this will impact trade.
In a Federal Register notice, the Transportation Security Administration (TSA) announced the opportunity for qualified, interested shippers to register as Certified Cargo Screening Facilities (CCSF). While the TSA had approved shippers to become CCSF’s previously when requested, the TSA had never fully integrated these operations into the Certified Cargo Screening Standard Security Program (CCSSSP). An incentive for shippers to consider becoming a CCSF is that, on October 31, the Impracticable to Screen (ITS) amendments that the TSA had in effect will expire. These amendments allowed cargo not easily screened due to the commodity packaging type or size to move via airfreight. After October 31, ITS cargo will require 100% screening. ITS cargo could be screened by the airline or other third-party service provider, however, higher costs for the shipper are likely to result.
To initiate the registration process, shippers must send an email indicating their interest to an address identified in the notice and TSA will respond with additional information regarding the application requirements.
Several prominent information technology associations, including the Semiconductor Industry Association, Retail Industry Leaders Association, and the Information Technology Industry Council, sent a letter to U.S. Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo expressing concern over the recent announcement by the Indian Government to require a license to import computers and related information and communication technology products into India. The licensing requirement is to take effect on November 1, 2023. One concern raised was that the licensing regime could make it difficult for U.S. companies with data centers in India to import servers into India that are needed for their operations. While the government announcement included certain exemptions, the associations requested more comprehensive details on the scope of the exemptions. Licensing requirements have also been used in the past as major non-tariff import barriers by various countries, which was another concern raised. The U.S. government was urged to request that India reconsider the implementation of the policy.
In an important recent decision, the U.S. Court of Appeals for the Federal Circuit ruled in the case, Royal Brush Manufacturing, Inc. vs. United States Dixon Ticonderoga Company, that Customs and Border Protection (CBP) violated the Fifth Amendment right to due process of Royal Brush by providing only redacted versions of reports that CBP utilized in making its determination that antidumping duty (ADD) evasion occurred in connection with an Enforce and Protect Act (EAPA) investigation. The EAPA investigation centered around pencils shipped from the Philippines to Royal Brush in the United States. CBP concluded that the pencils were of Chinese origin and were transshipped via the Philippines to avoid paying the ADD under case A-570-827 for Cased Pencils from China. However, in making this determination, CBP relied on reports from a verification visit made to the Philippine factory. When Royal Brush requested copies of the reports, production number data and photographs taken at the factory were redacted due to CBP deeming this information to be confidential business information. CBP stated that there was no provision in the EAPA law itself that empowered them to issue a protective order which could have allowed release of the confidential information. Royal Brush then filed suit in the Court of International Trade (CIT).
The CIT ruled in favor of CBP, then Royal Brush appealed. The appellate court stated in its decision: “In short, the law is clear that, in adjudicative administrative proceedings, due process includes the right to know what evidence is being used against one.” The decision further stated: “As best we can make out, the government’s argument is that due process does not require public disclosure of confidential business information relied on in adjudication but only requires disclosure to affected parties under protective orders… We are aware of no case supporting any such extraordinary theory, and it is untenable on its face. The right to due process does not depend on whether statutes and regulations provide what is required by the constitution.” The case was remanded back to the CIT for CBP to provide Royal Brush the redacted information and give them an opportunity for rebuttal.
In legal circles, it is believed that this decision could also have an impact on CBP’s investigations under the Uyghur Forced Labor Prevention Act as CBP often does not release the evidence that it has compiled to the party whose cargo is being detained, which may now lead to court challenges of those decisions.
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