What the Trans Pacific Partnership Agreement Could Mean for U.S. Manufacturers, Retailers and Distributors

What the Trans Pacific Partnership Agreement Could Mean for U.S. Manufacturers, Retailers and Distributors

By Melissa Miller Proctor

The Trans Pacific Partnership agreement (“TPP”), the largest regional free trade and investment agreement that has ever been negotiated, was signed by the United States and eleven other countries in the Asia Pacific region (i.e., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and, Vietnam.). The signatory countries will have a maximum period of two (2) years in which to implement the TPP into their respective local laws. What does this mean for U.S. retailers, distributors, and manufacturers? For starters, the TPP will eliminate import tariffs on more than 18,000 goods, many of which are currently subject to high duty rates. U.S. companies will enjoy significant duty-savings opportunities on imports of qualifying goods into the United States, and U.S. exporters will likely find their goods in greater demand by foreign buyers located in TPP countries. The Obama Administration has also touted the TPP as a means for supporting higher paying jobs in the United States, growing the U.S. economy, and countering China’s economic expansion. 

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Key Lessons from a Recent Export Enforcement Case against a U.S. Pharmaceutical and Medical Supply Company

Key Lessons from a Recent Export Enforcement Case against a  U.S. Pharmaceutical and Medical Supply Company

By Melissa Miller Proctor

Recently, a U.S. pharmaceutical and medical supply company was fined over $16 Million for illegal sales, exports and reexports to Iran, Sudan and Syria—countries that are currently subject to U.S. embargoes and economic sanctions programs. Alcon Laboratories, Inc., located in Fort Worth, Texas, as well as its Swiss affiliates (Alcon Pharmaceuticals, Ltd. and Alcon Management SA), recently settled with the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) and the U.S. Commerce Department’s Bureau of Industry and Security (“BIS”) for exporting surgical and pharmaceutical products from the United States to its affiliates in Switzerland, and then reexporting the items to distributors in Iran, Sudan, and Syria to fulfill orders in those countries.  

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U.S. Commerce Department Announces Creation of Trade Finance Advisory Council to Address Financing Challenges Faced by U.S. Exporters

U.S. Commerce Department Announces Creation of Trade Finance Advisory Council to Address Financing Challenges Faced by U.S. Exporters

By: Melissa Miller Proctor

On July 25th, the U.S. Department of Commerce announced the establishment of the new Trade Finance Advisory Council (“TFAC”), which will advise the Secretary of Commerce on strategies and the implementation of new programs that would provide greater access to trade finance for U.S. exporters. Expanding access to public and private sources of finance for U.S. exporters is one of the five primary objectives of the Obama Administration’s National Export Initiative. The Commerce Department reports that access to capital is an obstacle for many exporters—particularly small and medium-sized enterprises. Such companies currently represent 98% of all U.S. exporters, but only 35% of the total U.S. export revenue.

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Every Exit is an Entrance to Somewhere Else: The Lowdown on Brexit

Every Exit is an Entrance to Somewhere Else: The Lowdown on Brexit

By Melissa Miller Proctor

In Rosencrantz and Guildenstern Are Dead, playwright Tom Stoppard noted as follows: “Look on every exit as being an entrance somewhere else.” This brilliantly sums up the recent Brexit decision in the United Kingdom, which will undoubtedly lead to new challenges and opportunities for companies engaged in global trade over the course of the next few years. On June 23, 2016, and to the world’s astonishment, the UK voted by popular referendum to terminate its membership and formally withdraw from the European Union. Unless a second referendum ensues, the UK will soon submit formal notification of its intention to leave the EU and begin negotiating the terms of its departure with the remaining EU member states. The UK’s exit will become final either upon the entry into force of such exit agreement or two years following the filing of its notification of withdrawal, whichever occurs first. The EU member states may also agree to extend this two-year transition period if necessary. The earliest date on which the UK could separate from the EU would be late 2018; however, it is likely that the transition toward full separation will occur several years beyond that date, if at all.

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Committees in Chapter 11 Cases: To Serve or Not to Serve…

Committees in Chapter 11 Cases: To Serve or Not to Serve…

By Christopher A. Ward and Jeremy R. Johnson

"I've searched all the parks in all the cities and found no statues of committees.”
– G.K. Chesterton

In the United States, Chapter 11 cases can move with incredible speed and fundamentally alter or eliminate the rights of unsecured creditors or equity holders. In many cases, the debtors and their lenders are highly incentivized, often by incentives they created to manipulate the process, to implement their proposed plan to the detriment of unsecured creditors or equity holders. The U.S. Bankruptcy Code created committees to serve as representatives for the underrepresented. Although committees rarely receive the glory and may never be commemorated with statues in their honor, they serve a critical role in the bankruptcy process.

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The Problems Associated with Cash Transactions

The Problems Associated with Cash Transactions

By Karen Dickinson, Melissa Ho, and Ed Novak

In one form or another, in one denomination or many, paper money has been used in the U.S. for over 300 years.  However, recently the U.S. government has begun more closely scrutinizing cash transactions in U.S. banks as part of a larger U.S. effort to curb money laundering related to drug trafficking and other crimes.   As a result, new bank rules regarding cash transactions are making it more difficult for U.S. and foreign businesses and individuals to deal with U.S. banks on a cash basis.

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Getting the Itch to Go Global with a Foreign Distributor? Proper Vetting and Due Diligence Are the Keys to Success

Getting the Itch to Go Global with a Foreign Distributor?  Proper Vetting and Due Diligence Are the Keys to Success

By: Melissa Miller Proctor

Companies tend to “get the itch” to begin selling internationally when they see their competitors going global, when they receive multiple inquiries from prospective buyers in foreign markets, and perhaps when they are approached by a third party offering to become their distributor in foreign markets. With regard to the latter, one of the initial decisions that must be made by a first-time exporter is whether to ship product directly to foreign customers, or engage a third party distributor to assist in this effort. While it is true that using a distributor, especially in a foreign country, can alleviate some of the risks and burdens for U.S. companies, there are several steps that a U.S. Seller should take before jumping into the deep end of the pool with a new partner in a foreign market.

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U.S. Exporters Should Seek the Assistance of Customs and Border Protection in Resolving Disparate Tariff Classification and Customs Valuation Treatment in Foreign Markets

U.S. Exporters Should Seek the Assistance of Customs and Border Protection in Resolving Disparate Tariff Classification and Customs Valuation Treatment in Foreign Markets

By Melissa Miller Proctor

Last summer, U.S. Customs and Border Protection (“CBP”) published a General Notice in the Federal Register announcing its process for allowing U.S. exporters to request CBP’s assistance in resolving disputes with foreign government authorities involving tariff classification and customs valuation issues. See 80 Fed. Reg. 34924. U.S. companies from time to time receive pushback from customers in foreign markets on the classifications and values that are being used for their products. Exporters are encouraged to seek assistance from CBP when they encounter differing interpretations on classification and valuation in foreign countries, as they can lead to the disparate treatment of their goods resulting in additional costs and potential liability for foreign customers. In addition, U.S. exporters may experience a competitive disadvantage due to these varying interpretations and costly delays in the clearance of their goods in the countries of importation. The following describes the mechanics of CBP’s new process, as well as provides tips for preparing and submitting effective requests to CBP.

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Accellerate Your Tech Company by Tapping into These Global Markets

Accellerate Your Tech Company by Tapping into These Global Markets

By: Karen Dickinson

Arizona companies are regularly dealing with customers and competitors from outside the United States. Technology companies know better than most that dealing globally is an economic imperative. That’s why understanding U.S. treaty negotiations that have been in the news this year—and will continue to be so—can be a game changer for tech companies expanding globally.

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CPSC Cuts Red Tape and Eliminates General Certificate of Conformity Requirements for Low-Risk Adult Apparel Items

CPSC Cuts Red Tape and Eliminates General Certificate of Conformity Requirements for  Low-Risk Adult Apparel Items

By Melissa Miller Proctor

On March 25, 2016, manufacturers and importers of adult apparel products comprised of low-risk fabrics designated as such under the Flammable Fabrics Act (FFA), will no longer be required to generate Certificates of Conformity required under the Consumer Product Safety Improvement Act of 2008 (CPSIA). The CPSIA requires that manufacturers and importers of products that are subject to a CPSC rule certify, based on a test or reasonable testing program, that their products comply with that rule. Adult apparel is subject to the flammability standards established under the FFA; however, as noted above, the FFA also provides a list of fabrics that have been determined to be low-risk because they consistently satisfy the applicable flammability standards. Please read on for a list of those fabrics, and additional information.

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Reports of the Complete Lifting of Sanctions on Iran Have Been Greatly Exaggerated

Reports of the Complete Lifting of Sanctions on Iran Have Been Greatly Exaggerated

By: Melissa Miller Proctor

Despite the many reports in the media and discussions around the water coolers of many U.S. companies, the complete lifting of U.S. sanctions on Iran has been greatly exaggerated. Rather, only certain secondary, nuclear-related sanctions have been lifted to dated, and that limited sanctions relief primarily impacts non-U.S. companies. U.S. companies and their foreign affiliates are still prohibited from selling and exporting products to Iran without prior authorization from the Treasury Department’s Office of Foreign Assets Control (OFAC).

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Personal Liability for Trade Compliance Violations? How the Trek Leather Case May Impact Board Members, Officers and Compliance Professionals

Personal Liability for Trade Compliance Violations?  How the Trek Leather Case May Impact Board Members, Officers and Compliance Professionals

By: Melissa Miller Proctor

Many a board member, officer and compliance professional could be losing more sleep than usual as a result of the U.S. v. Trek Leather case. Generally, owners, directors and officers of corporations and limited liability companies are not personally liable for the actions of the company where their decisions are made on an informed basis, in good faith and in the best interest of the company (unless there is criminal or fraudulent conduct, breach of a fiduciary duty, or the company is found to be an alter ego of the individual). However, the Court of Appeals for the Federal Circuit recently held in U.S. v. Trek Leather that individuals may be held personally liable violations of the U.S. customs laws and regulations—even where the corporate veil is not pierced.

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California SB 633 May Be a Gift for U.S. Companies, But Using Unqualified “Made in the USA” Labels Still Poses Risks

California SB 633 May Be a Gift for U.S. Companies,  But Using Unqualified “Made in the USA” Labels Still Poses Risks

By: Melissa Miller Proctor

On January 1, 2016, the State of California amended Section 17533.7 of the California Business and Professions Code to allow goods sold in California to labeled “Made in the USA” if: (1) the finished product is manufactured in the United States; and, (2) any foreign materials or parts contained in the finished product do not exceed 5% of the final wholesale value of the merchandise. The amendment was rolled out through enactment of SB 633, which replaces the previous, more restrictive requirements that put California law squarely at odds with the Federal Trade Commission’s “Made in the USA” rules. However, despite SB 633, the FTC and California rules are still not identical, and it is likely that some products bearing “Made in the USA” labels may pass the FTC test while failing the California standard. Therefore, companies are urged to exercise caution and reflect carefully before proceeding with unqualified “Made in the USA” claims for products sold in the state of California.

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