United States: 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.