Customs Bulletin Weekly, Vol. 56, November 2, 2022, No. 43

Below is a recap for this week’s Custom’s Bulletin.

• Elimination of Customs Broker District Permit Fee
  • Section 641 of the Tariff Act of 1930, as amended (19 U.S.C. 1641), provides that individuals and business entities must hold a valid customs broker’s license and permit to transact customs business on behalf of others. The statute also sets forth standards for the issuance of broker licenses and permits; provides for disciplinary action against brokers in the form of suspension or revocation of such licenses and permits or assessment of monetary penalties; and, provides for the assessment of monetary penalties against other persons for conducting customs business without the required broker’s license.
  • On June 5, 2020, U.S. Customs and Border Protection (CBP) published a notice of proposed rulemaking (NPRM) in the Federal Register (85 FR 34549), proposing the elimination of customs broker district permit fees in parts 24 and 111.
  • Consistent with the June 5, 2020, notice, CBP is publishing a final rule to, among other things, eliminate customs broker districts (see ‘‘Modernization of the Customs Broker Regulations’’ RIN 1651–AB16). Specifically, CBP is transitioning all brokers to national permits and expanding the scope of the national permit authority to allow national permit holders to conduct any type of customs business throughout the customs territory of the United States. As a result of the elimination of customs broker districts, CBP is amending in this document the regulations to eliminate customs broker district permit fees.
• Modernization of the Customs Broker Regulations
  • This document adopts as final, with changes, proposed amendments to the U.S. Customs and Border Protection (CBP) regulations modernizing the customs broker regulations. CBP is transitioning all customs brokers to a single national permit and expanding the scope of the national permit authority to allow national permit holders to conduct any type of customs business throughout the customs territory of the United States.
  • To accomplish this, CBP is eliminating broker districts and district permits, which in turn removes the need for the maintenance of district offices, and district permit waivers. CBP is also updating, among other changes, the responsible supervision and control oversight framework, ensuring that customs business is conducted within the United States, and requiring that a customs broker have direct communication with an importer. These changes are designed to enable customs brokers to meet the challenges of the modern operating environment while maintaining a high level of service in customs business.
  • Further, CBP is increasing fees for the broker license application to recover some of the costs associated with the review of customs broker license applications and the necessary vetting of individuals and business entities (i.e., partnerships, associations, and corporations).
  • Additionally, CBP is announcing the deployment of a new online system, the eCBP Portal, for processing broker submissions and electronic payments. Lastly, CBP is publishing a concurrent final rule document to eliminate all references to customs broker district permit user fees (see ‘‘Elimination of Customs Broker District Permit Fee’’ RIN 1515–AE43) to align with the changes made in this final rule document.
  • This final rule is effective December 19, 2022.
• BGH Edelstahl Siegen GmbH v. United States and Ellwood City Forge Company, et al.
  • Before the court was BGH Edelstahl Siegen GmbH’s (“BGH”) Rule 56.2 motion for judgment on the agency record challenging various aspects of the U.S. Department of Commerce’s (“Commerce”) final determination in its countervailing duty (“CVD”) investigation of forged steel fluid end blocks (“Fluid End Blocks”) from the Federal Republic of Germany (“FRG”).
  • BGH challenged Commerce’s Final Results on three grounds, arguing (1) that Commerce improperly initiated its CVD investigation and impermissibly expanded the CVD investigation to include new subsidy programs, (2) failed to include ex-parte communications in the record, and (3) incorrectly determined that seven programs used by BGH during the period of investigation were countervailable subsidies.
  • Defendants argued that Commerce’s decisions to initiate and expand its CVD investigations were in accordance with law because the petition to initiate the CVD investigation “included the relevant laws and policies that provided the countervailable subsidies, tied those facts to the legal framework, and established a reasoned basis to conclude that BGH received subsidy benefits[,]” and that Commerce may consider new subsidy programs uncovered during its investigation.
  • Defendants further argued that the record for the CVD investigation is complete because the ex parte communication that BGH asserts is missing from the record pertained to the antidumping investigation, not the CVD investigation, and therefore need not be included in the record. Finally, Defendants argued that Commerce correctly determined the Contested Programs are countervailable.
  • The CIT held:
    • 1. That Commerce’s Final Results are sustained with respect to the initiation of the CVD investigation, the determination that the administrative record is complete, the determination that the provisions of the Electricity Tax Act and the Energy Tax Act, the EEG and KWKG Reduced Surcharge Programs, the ETS Additional Free Emissions Allowances, and the CO2 Compensation Program are countervailable subsidies, and the determination that Commerce’s calculations for the EEG and KWKG Reduced Surcharge Programs, the ETS Additional Free Emissions Allowances, and the CO2 Compensation Program are supported by substantial evidence;
    • 2. That Commerce’s Final Results are remanded for further explanation or reconsideration consistent with this opinion with respect to its determination that the KAV Program is a specific subsidy;
    • 3. That Commerce’s Final Results are remanded for further explanation or reconsideration consistent with this opinion with respect to its calculations of the CVD rates for the Electricity Tax Act and the Energy Tax Act; and it is further ORDERED that Commerce shall file its remand redetermination with the court within 90 days of this date;
    • 4. That Commerce shall file the administrative record within 14 days of the date of filing of its remand redetermination;
    • 5. That the parties shall file any comments on the remand redetermination within 30 days of the date of filing of the remand determination;
    • 6.That the parties shall have 30 days to file their replies to the comments on the remand redetermination;
    • 7. That the parties shall file the joint appendix within 14 days of the date of filing of responses to the comments on the remand redetermination.
• Keirton USA v. United States
  • Before the court was Keirton USA, Inc.’s (“Keirton”) Rule 12(c) motion for judgment on the pleadings.
  • Keirton challenged CBP’s protest denial arguing possession and importation of the subject merchandise is permissible because Washington State law authorizes the possession and importation of marijuana paraphernalia.
    • Keirton sells Twisted Trimmers to companies in the State of Washington that process marijuana plants.
  • Defendant United States argued that, although Washington State repealed its laws criminalizing possession of marijuana paraphernalia like the Twisted Trimmer, that repeal does not explicitly authorize Keirton to use the subject merchandise to manufacture, possess, or distribute marijuana paraphernalia under Federal law.
  • The CIT held that it is lawful for Keirton to possess and import its merchandise into the state of Washington. Therefore, Keirton’s motion for judgment on the pleadings is granted, and Defendant’s cross-motion for judgment on the pleadings is denied.

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