International Trade Comparative Guide –

1 Trade agreements

1.1 Which bilateral, regional and multilateral trade agreements
have effect in your jurisdiction?

For a comprehensive overview of the United States’
engagement with the rest of the world through its trade agreements
programme, see the 2022 Trade Policy Agenda and 2021 Annual Report
located with other important US trade policy publications at https://ustr.gov/about-us/policy-offices/press-office/reports-and-publications/2022.

The United States is a member of and leader in the World Trade
Organization (WTO). It actively participates in the Organisation
for Economic Co-operation and Development, G20, G7 and other
multilateral and plurilateral organisations involving trade
matters. On a bilateral and regional basis, the United
States-Mexico-Canada Agreement applies to regional trade in North
America. The United States has also entered into free trade
agreements (FTAs) with:

• Australia;




• Bahrain;




• Chile;




• Colombia;




• Costa Rica;




• Dominican Republic;




• El Salvador;




• Guatemala;




• Honduras;




• Israel;




• Jordan;




• Morocco;




• Nicaragua;




• Oman;




• Panama;




• Peru;




• Singapore;




• South Korea

It has also concluded bilateral investment agreements and
regional agreements with:

• Albania;




• Argentina;




• Armenia;




• Azerbaijan;




• Bangladesh;




• Bolivia;




• Bulgaria;




• Cameroon;




• the Democratic Republic of Congo (Kinshasa);




• the Republic of Congo (Brazzaville);




• Croatia;




• Czech Republic;




• Ecuador;




• Egypt;




• Estonia;




• Georgia;




• Grenada;




• Jamaica;




• Kazakhstan;




• Kyrgyzstan;




• Laos;




• Latvia;




• Lithuania;




• Moldova;




• Mongolia;




• Mozambique;




• Poland;




• Romania;




• Rwanda;




• Senegal;




• Slovakia;




• Sri Lanka;




• Trinidad and Tobago;




• Tunisia;




• Turkey;




• Ukraine; and




• Uruguay.

See also the 2018 Trade Policy Review of the United States and
the 2019 revision at the WTO website (wto.org). In addition, the
Trade and Related Agreements database maintained by the US
Department of Commerce provides texts of agreements for download
and the Trade and Investment Framework Agreements section of the
Office of the US Trade Representative’s website also has a
helpful section about trade agreements.

1.2 Which authorities are responsible for the negotiation of
trade agreements? What does this process typically involve and how
long does it take?

Article 2 of the US Constitution vests the power to negotiate
agreements with foreign powers with the president of the United
States, who has delegated much of this responsibility to the Office
of the US Trade Representative, part of the Executive Office of the
President. The US Constitution also vests the authority to pass
treaties, set tariffs and regulate interstate commerce with
Congress. In order to have full authority to negotiate agreements
that other countries can rely upon the United States to uphold, a
mechanism has been developed for Congress to delegate its treaty
powers, tariff-setting and other authorities to the president
through a trade promotion authority (TPA) process. Integral to this
process is the agreement by the president to consult regularly with
Congress and to follow, as far as possible, the goals and
objectives set by Congress in its grant of TPA. The president and
the executive branch also agree to:

• consult regularly with Congress on the progress of the
  negotiations; and




• provide a draft agreement with implementing legislation and a
  statement of administrative action within strict time limits.

In exchange, Congress agrees to pass the legislation necessary
to implement the agreement without changes, so that US trading
partners can know that what they negotiated will be what the United
States passes and implements. The process generally takes several
years – often up to the final date set by Congress in its TPA
legislation for the TPA to expire.

1.3 Do interim provisions apply while new trade agreements are
under negotiation?

Usually not, but this depends on the terms of the trade
agreement and surrounding actions. Prior to negotiating FTAs, many
countries enter into trade and investment framework agreements that
spell out the legal and regulatory goals that the trading partners
seek from each other in order to deepen the relationship to a
broader-based legal arrangement such as an FTA.

2 Customs and imports

2.1 What laws and regulations govern customs in your
jurisdiction?

Title 19 of the US Code contains the codified customs laws of
the United States, including:

• the Trade Act of 1974;




• the Trade Facilitation and Trade Enforcement Act of 2015;




• the Customs Modernization Act of 2003; and




• the Trade Agreement Implementation Acts.

Customs crimes can be found under Title 18, Chapter 27 of the US
Code. In addition, Title 19 of the Code of Federal Regulations
contains the regulations pertaining to customs enforcement and
related matters.

2.2 Which authority is responsible for enforcing the customs
regulations? What powers does it have?

US Customs and Border Protection (CBP), an agency of the
Department of Homeland Security (https://www.cbp.gov/trade), is the lead federal
agency for customs matters. The CBP manages the Automated
Commercial Environment (ACE), the ‘single window’ for
filing importing and exporting data, forms and other information
for the United States. While the CBP is the lead agency responsible
for customs matters, more than 40 other federal agencies have
regulatory or oversight authority for some aspects of trade
matters, all coordinated through the ACE Portal (https://www.cbp.gov/trade/automated).

2.3 What is the authority’s general approach to enforcing
the customs regulations? How vigorously are the rules
enforced?

The CBP focuses its enforcement efforts on seven priority trade
issues, representing high-risk areas that can cause significant
revenue loss, harm the US economy or threaten health and safety.
These are as follows:

• enforcement of agriculture and other quotas;




• collection of anti-dumping and countervailing duties
  (AD/CDV);




• enforcement of the terms of free trade agreements (FTAs) and
  preferential trade legislation;




• targeting of imports that violate IP rights;




• revenue collection;




• textiles and apparel; and




• consumer safety.

2.4 What customs import tariffs and duties apply in your
jurisdiction? How are they levied?

All imported goods are potentially subject to an ad
valorem duty rate, or a special duty rate depending on the
country of origin of the product and the Harmonized Tariff Schedule
(HTS) classification of the merchandise in question, as indicated
in the HTS published and maintained by the International Trade
Commission (https://hts.usitc.gov/current). The CBP issues
binding rulings regarding the application of the HTS to certain
products. Additional duties are also levied on certain products
from certain countries, such as:

• AD/CDV;




• Section 301 tariffs on goods from China; and




• Section 232 duties on steel and aluminium from certain
  countries.

The US Department of Commerce and the Office of the US Trade
Representative have important roles in determining whether
additional duties should be applied.

2.5 What types of preferential tariffs are available in your
jurisdiction? What are the criteria for eligibility?

Preferential tariff rates are available in the United States
under the United States-Mexico-Canada Agreement and other FTAs and
trade acts for qualifying merchandise. Certain multilaterally
agreed duty free tariff preferences apply for chemicals, speciality
chemicals and pharmaceuticals, all found in annexes to the HTS. The
United States also applies the Generalized Systems of Preferences,
a preferential tariff programme designed to permit duty-free entry
of a wide range of goods from 119 beneficiary countries.

2.6 Are tariffs applied to safeguard national security?

The general purpose of tariffs can be to generate revenue or
safeguard domestic interests. For example, the purpose of the
Section 232 duties on steel and aluminium is to safeguard domestic
steel and aluminium production in the interest of national
security. However, the United States operates several programmes to
facilitate trade, while also addressing national security concerns
as a joint public-private partnership. Among these programmes:

• the Customs-Trade Partnership Against Terrorism (C-TPAT)
  encompasses the entire supply chain, involving enhanced security
  measures and best practices;




• the Importer Self-Assessment Program builds on C-TPAT to
  achieve an even higher level of compliance; and




• the Free and Secure Trade Program speeds the clearance of
  low-risk shipments arriving from Canada or Mexico.

Maritime cargo destined for the United States is pre-screened at
foreign ports under the Container Security Initiative. The CBP has
security-based arrangements in force with 11 other customs
administrations and has signed joint work plans towards mutual
recognition with six countries.

2.7 What import controls and restrictions apply in your
jurisdiction? What exemptions are available?

Many customs-focused import procedures and restrictions are
provided in Title 19 of the Code of Federal Regulations, with
guidance and rulings from the CBP found on its website. However,
the CBP enforces a number of other import restrictions governed by
other agencies, such as:

• the Food and Drug Administration;




• the Consumer Product Safe Commission;




• the Department of Commerce;




• the Department of Defense;




• the Office of the US Trade Representative;




• the US Fish and Wildlife Service; and




• other agencies and federal laws.

2.8 How are customs and import decisions challenged in your
jurisdiction? What does this process typically involve and how long
does it take?

The CBP has administrative jurisdiction over tariff
classification, levying of duties and most other customs actions.
Many importing and classification issues are resolved through
electronic or more formal rulings and other issues are handled
through a variety of procedures. After all procedural avenues are
exhausted at the agency level, disputes between importers and the
CBP can usually be escalated to the US Court of International Trade
(CIT), the US district court with exclusive jurisdiction to resolve
customs-related matters. Cases before the CIT are appealable to the
US Court of Appeals for the Federal Circuit and potentially to the
US Supreme Court.

2.9 What penalties are imposed for breach of the customs
rules?

The consequences of violating the customs rules and other laws
enforced by the CBP include:

• detainment and seizure of imported merchandise;




• liquidated damages for breach of bond requirements;




• customs penalties, which vary depending on:




• • the nature of the violation;

  
  

  • the culpability of the importer; and

  
  

  • the value of the merchandise in question;




• increased examinations upon entry; and




• additional bond requirements.

3 Exports

3.1 What export controls and restrictions apply in your
jurisdiction? What exemptions are available?

Exports from the United States are most often governed by:

• the Export Administration Regulations (EAR) enforced by the
  Bureau of Industry and Security (BIS) of the US Department of
  Commerce; and




• the International Traffic in Arms Regulations enforced by the
  Directorate of Defense Trade Controls (DDTC) of the US Department
  of Defense.

Exports procedures, data collection and comprehensive trade
statistics are also regulated by the Census Bureau, part of the US
Department of Commerce.

3.2 Which authority is responsible for enforcing the export
controls? What powers does it have?

Both BIS under the Department of Commerce and the DDTC under the
Department of Defense have the power to implement and enforce
regulations that restrict or prohibit the export, re-export or
transfer of physical items, defence services, software, technology,
technical data and other types of goods and services relating to
the national and economic security of the United States. These
agencies can also:

• issue licences authorising the export of otherwise prohibited
  items;




• conduct physical site visits to company locations; and




• investigate parties in violation of the export laws in the
  interest of issuing monetary penalties and imprisonment.

3.3 What is the authority’s general approach to enforcing
the export controls? How vigorously are the rules enforced?

Both BIS and the DDTC regularly monitor exports with the
assistance of Customs and Border Protection, and have numerous
restrictions and licensing presumptions when granting authority to
exports.

3.4 How are export decisions challenged in your jurisdiction?
What does this process typically involve and how long does it
take?

Export decisions are primarily challenged at the agency level
before BIS and the DDTC in the form of licence applications and
investigations, which can lead to penalties and court action.

3.5 What penalties are imposed for breach of export
controls?

Monetary penalties can be issued by BIS, the DDTC and the Census
Bureau for violations of each of their regulations, with some
transactions being penalised for multiple violations across
multiple jurisdictions. Companies can also be subject to
non-monetary penalties, such as limiting export activities under
the EAR after a series of violations.

4 Trade remedies

4.1 What laws and regulations govern trade remedies in your
jurisdiction?

Trade remedies in the United States include:

• anti-dumping duties and countervailing duties (AD/CVD);
  and




• import surges (safeguard duties).

These duties are derived from three World Trade Organization
agreements:

• the Agreement on Subsidies and Countervailing Measures;




• the Agreement on Implementation of Article VI; and




• the Agreement on Safeguards.

In addition, unfair import (‘Section 337’)
investigations conducted by the US International Trade Commission
(USITC) involve allegations of patent infringement, trademark
infringement, and other violations of IP rights by imported
goods.

4.2 Which authority is responsible for enforcing the trade
remedy regulations? What powers does it have?

The Department of Commerce’s International Trade
Administration (ITA) is responsible for implementing AD/CVD after
an investigation, in conjunction with the USITC, which is also
responsible for enforcing Section 337 remedies. Other trade
remedies are implemented by the Office of the US Trade
Representative (USTR). Customs and Border Protection (CBP) is
responsible for enforcing these trade remedies. The Enforce and
Protect Act of 2015 created a new framework for CBP to investigate
allegations of evasion of AD/CVD orders. Remedies generally
involve:

• suspending the liquidation for any entry after a certain date;
  and




• requiring that the importer post a cash deposit prior to the
  entry’s release

4.3 What is the authority’s general approach to enforcing
the trade remedy regulations? How vigorously are the rules
enforced?

The CBP is instructed by the Department of Commerce, the USITC
and the USTR to vigorously enforce the restrictions or duties
imposed by the trade remedies, similar to how the CBP enforces
other laws.

4.4 How is a trade remedy action initiated in your jurisdiction
and on what grounds? Can the authority initiate an action ex
officio?

Trade remedies can be initiated by an investigation by:

• the ITA for AD/CVD;




• the USITC to determine material injury to the domestic industry
  in AD/CVD matters;




• the USTR for import surges; and




• the USITC for complaints in Section 337 matters.

The ITA can assign separate rates in AD/CVD matters for certain
foreign exporters depending on their responses to its
questionnaires provided during the investigation, which can be
higher or lower than the country-wide rates assigned for certain
products. ITA also administers annual reviews of AD/CVD matters, in
which the duties applied may vary from preceding reviews. In
Section 337 matters, infringing goods may be subject to exclusion
orders to prevent importation and cease and desist orders to
prevent sale in the United States.

4.5 What does the action typically involve and how long does it
take?

Investigations for trade remedies can take months. When in
place, trade remedies are reviewed on a periodic basis and may be
amended or removed every five years if the circumstances warranting
the trade remedies no longer exist.

4.6 How can interested parties defend against a trade remedy
action in your jurisdiction?

Typically, importers have relatively few methods to challenge a
trade remedy. Importers provide sufficient information to the
investigating authority to enable them to determine that the
company is not dumping or being subsidised. This is often difficult
for foreign companies to prove. They may also apply for:

• a product-specific exclusion to the scope of an AD/CVD order;
  or




• an exclusion to Section 201 safeguard duties if allowed by the
  USTR.

Section 337 matters are adjudicated by administrative law judges
of the USITC permitting participation by exporters through legal
counsel in the United States.

4.7 How are trade remedy decisions challenged in your
jurisdiction? What does this process typically involve and how long
does it take?

Trade remedies are usually challenged at the investigation or
administrative review level, which usually takes several months of
intense and frequent participation in the investigation. They may
then be challenged at the US Court of International Trade or to
binational panels under the US-Mexico-Canada Agreement. Section 337
decisions by administrative law judges of the USITC are subject to
review by the full commission and appeal to the US Court of Appeals
for the Federal Circuit.

4.8 What strategies should be considered to ensure compliance
with a trade remedy decision? What penalties are imposed for
non-compliance?

Compliance should focus on verifying that certain trade remedies
do not apply to their products based on their physical
characteristics or country of origin. Non-compliant imports could
be subject to customs penalties based on culpability. It is
important for foreign parties that are subject to trade remedy
actions to have accounting systems that are compliant with
standards for generally accepted accounting practices.

5 Trade barriers

5.1 What laws and regulations govern trade barriers in your
jurisdiction?

The United States operates a transparent system for regulating
trade. In the 2018 Trade Policy Review of the United States by the
World Trade Organization (WTO), the analysis focused on what the
United States actually does to regulate trade rather than on
barriers to trade. Concerning the identification of trade barriers
in other countries, the Office of the US Trade Representative
(USTR) annually issues the National Trade Estimates Report on
Foreign Trade Barriers (NTE). As stated in the NTE:

5.2 Which authority is responsible for enforcing the trade
barrier regulations? What powers does it have?

The USTR is charged with monitoring and acting upon trade
barriers identified in the NTE or other sources. The NTE is
available at https://ustr.gov/about-us/policy-offices/press-office/reports-and-publications/2022.

5.3 What is the authority’s general approach to enforcing
the trade barrier regulations? How vigorously are the rules
enforced?

Because there are established administrative and legal
procedures associated with enforcement of trade laws and
regulations in the United States, the USTR does not act on such
importing and exporting matters, deferring to the relevant
agencies. In order to address trade barriers in other countries,
the USTR has a variety of means to address such issues. These are
detailed in the annual report on the Trade Policy Agenda and the
Trade Agreements Program, found on the USTR website at https://ustr.gov/about-us/policy-offices/press-office/reports-and-publications/2022.

5.4 How is a trade barrier action initiated in your
jurisdiction and on what grounds?

Please see question 4.4.

5.5 What does the action typically involve and how long does it
take?

This question is not applicable to the United States directly.
Because most trade actions involve administrative procedures within
agencies and may involve appeals to the courts, most trade matters
take months or years to fully resolve.

5.6 What measures can the authority take against a foreign
trade barrier?

Please see question 4.4. The USTR has a variety of means to
discuss, consult on, negotiate and otherwise resolve foreign trade
barriers.

5.7 What non-tariff trade barriers are imposed in your
jurisdiction?

See the WTO Trade Policy Review of the United States for a
comprehensive discussion of US trade policies and
administration.

6 Sanctions

6.1 What laws and regulations govern sanctions in your
jurisdiction?

The president and the US Treasury Department have historically
implemented and enforced sanctions programmes under the authority
of such acts as:

• the Global Magnitsky Human Rights Accountability Act;




• the Venezuela Defense of Human Rights and Civil Society
  Act;




• the Arms Export Control Act;




• the Countering America’s Adversaries Through Sanctions Act;
  and




• many more, found under Title 33 of the Code of Federal
  Regulations.

6.2 Which authority is responsible for enforcing the sanctions
regulations? What powers does it have?

The US Department of the Treasury’s Office of Foreign Asset
Controls (OFAC) has the authority:

• to impose and enforce sanctions, such as freezing assets and
  issuing penalties;




• to designate certain individuals as specially designated
  nationals (SDNs) for prohibited activities; and




• to grant general and specific licences for prohibited
  activities.

6.3 What is the authority’s general approach to enforcing
the sanctions regulations? How vigorously are the rules
enforced?

OFAC has a strict approach to enforcing its sanctions
programmes, including those for:

• SDNs;




• Russia;




• Belarus;




• Iran;




• Syria;




• China; and




• global terrorism.

6.4 What countries are currently subject to sanctions in your
jurisdiction?

The primary companies subject to the most comprehensive and
restrictive sanctions in the United States are:

• Iran;




• Syria;




• Cuba;




• Russia;




• Belarus;




• Burma;




• Libya; and




• North Korea.

6.5 Are individuals or companies subject to sanctions in your
jurisdiction?

OFAC maintains the following prohibitive lists for individuals
and companies:

• the Consolidated Sanctions List;




• the Sectoral Sanctions Identifications List;




• the Foreign Sanctions Evaders List;




• the Non-SDN Palestinian Legislative Council List;




• the Non-SDN Iranian Sanctions List;




• the List of Foreign Financial Institutions Subject to Part
  561;




• the List of Foreign Financial Institutions Subject to
  Correspondent Account or Payable-Through Account Sanctions;




• the Non-SDN Menu-Based Sanctions List; and




• the Non-SDN Chinese Military-Industrial Complex Companies
  List.

6.6 How are sanction decisions challenged in your jurisdiction?
What does this process typically involve and how long does it
take?

Individuals and entities placed on US sanctions lists may
petition OFAC to be removed. Requests for removal can be sent to
OFAC in hard copy or by email. OFAC typically sends at least one
questionnaire within 90 days and follow-up questionnaires are
common. The time for review is generally at least 120 days, and
often much more. It is also possible to petition OFAC for a licence
to authorise specific actions despite sanctions.

6.7 What strategies should be considered to ensure compliance
with a sanction decision? What penalties are imposed for
non-compliance?

The key to compliance and avoidance of penalties is:

• screening potential customers or transacting parties in a
  project or transaction; and




• avoiding parties that deal frequently with sanctioned entities
  or persons.

7 Trends and predictions

7.1 How would you describe the current legal landscape and
prevailing trends affecting international trade in your
jurisdiction? Are any new developments anticipated in the next 12
months, including any proposed legislative reforms or the
negotiation of new trade agreements?

There is a high probability that additional trade restrictions
will be designed for curbing imports of manufactured materials from
China and prohibitions on exporting technology to China. Additional
sanctions against Russia for the continuing war in Ukraine are also
a real possibility. In general, there will likely be additional
sanctions on individuals and entities in general, and further
regulations for imported goods in other areas, such as the Food and
Drug Administration. The president has outlined a trade policy
agenda with the following goals:

• advancing a worker-centric trade policy;




• realigning the US-China trade relationship;




• engaging with key trading partners and multilateral
  institutions;




• promoting confidence in trade policy through enforcement;
  and




• promoting equitable, inclusive and durable trade policy and
  expanding stakeholder engagement.

8 Tips and traps

8.1 What are your top tips for ensuring compliance with the
regulatory framework for international trade and what potential
sticking points would you highlight?

The key to compliance with import or export laws is a top-down
management approach to compliance. The highest level of decision
makers of the company must make a conscious effort to make sure the
company’s operations are compliant.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.