20 July 2011
2.5 Other Miscellaneous Restrictions and Standards
A. Precious Metals, Precious Stones, Jewellery, Currency and Stamps
a) Gold and Silver
The provisions of the National Stamping Act are enforced in part by CBP and the Federal Bureau of Investigation (FBI). US imports of articles made of gold or alloys thereof are prohibited if the gold content is one-half carat below the indicated fineness. In the case of articles made of gold or gold alloy, including the solder and alloy of inferior fineness, a one-carat divergence below the indicated fineness is permitted. Articles marked “sterling” or “sterling silver” must assay at least 0.925 of pure silver with a 0.004 divergence allowed. Other articles of silver or silver alloys must assay not less than 0.004 part below the indicated fineness thereof. Articles marked “coin” or “coin silver” must contain at least 0.900 part pure silver with an allowable divergence of 0.004 part below.
A person placing articles of gold or silver bearing a fineness or quality mark such as 14K, sterling, etc., in the mail or in interstate commerce must place his name or registered trademark next to the fineness mark in letters the same size as the fineness mark. The trademark or name is not required at the time of importation; therefore, CBP has no direct responsibility for enforcement of the law. Persons making inquiry or seeking advice or interpretation of the law should consult the DOJ.
Articles bearing the words “United States Assay” are prohibited from importation. Articles made wholly or in part of inferior metal and plated or filled with gold or silver or alloys thereof, and that are marked with the degree of fineness, must also be marked to indicate the plated or filled content; in such cases, the use of the words “sterling” or “coin” is prohibited.
All restrictions on purchasing, holding, selling or otherwise dealing with gold were removed effective 31 December 1974 and gold may be imported subject to the usual CBP entry requirements. Any imitation numismatic item must be plainly and permanently marked “copy;” those that do not comply are subject to seizure and forfeiture. Unofficial gold coin re-strikes must be marked with the country of origin. It is advisable to obtain a copy of the legal proclamation under which the coins are issued, or else an affidavit of government sanction of coins should be secured from a responsible banking official if the proclamation is unavailable.
b) Counterfeit Articles
Articles bearing facsimiles or replicas of coins or securities of the US or any foreign country cannot be imported. Counterfeits of coins in circulation in the US; counterfeited, forged, or altered obligations or other securities of the US or any foreign government; and plates, dies, or other apparatus that may be used in making any of the foregoing are prohibited from importation.
c) Monetary Instruments
If a person knowingly transports, is about to transport, or has transported more than US$10,000 in monetary instruments at one time to, through or from the US, or if a person receives more than US$10,000 at one time from or through a place outside the US, a report of the transportation (FinCEN Form 105) must be filed with CBP. Monetary instruments include US or foreign coin or currency; traveller’s cheques in any form, personal and other cheques, and money orders, either in bearer‑negotiable form or endorsed without restriction; and securities or stocks in bearer form. A bank check or money order made payable to a named person but not endorsed, or which bears a restrictive endorsement, is not considered to be a “monetary instrument”.
d) Anti-money Laundering Requirements
Effective 1 January 2006, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) is requiring US dealers and retailers handling precious metals, stones or jewels to have in place an anti-money laundering (AML) programme. As part of this requirement, US dealers may seek to gather various information from their foreign suppliers in order to evaluate the risks associated with transactions involving those companies. While foreign suppliers are under no legal obligation to respond to these inquiries, failure to do so could jeopardise existing business relationships.
The AML requirement applies to US dealers who have purchased and sold at least US$50,000 worth of covered goods during the previous year. It does not apply to foreign dealers who (a) ship products into the US without conducting further business activity within the US or (b) merely advertise in the US or attend a trade show in the US at which they do not purchase and sell covered goods above the threshold amounts. Covered goods include jewels, precious metals and precious stones, as well as finished goods that derive 50% or more of their value from such goods contained in or attached to the finished items.
US dealers and retailers are required to implement an AML programme that is reasonably designed to prevent them from being used to facilitate money laundering or the financing of terrorist activities. FinCEN allows significant flexibility in designing AML programmes, which must be based on a risk assessment that evaluates a company’s particular risks for being exploited for money laundering purposes. This assessment must reflect the company’s knowledge of, among other things, its particular suppliers and distribution channels. When the risk is determined to be low, the AML programme should be designed to have fewer reporting requirements.
AML programmes are likely to include the gathering of additional information from foreign suppliers. While suppliers are not legally bound to provide this information, a dealer or retailer will likely drop a supplier that fails to respond, as the dealer or retailer could be subject to penalties if it fails to gather and maintain sufficient information about its suppliers.
As a result, it is recommended that suppliers provide the information requested by a dealer or retailer. On the other hand, if the information requested is onerous and a company is an established supplier not routing payment through designated risk jurisdictions, it should request to supply less information.
Suppliers should note that most US dealers are also required to file FinCEN Forms 8300 (Report of Cash Payments Over $10,000 Received in a Trade or Business), TD F90-22.1 (Report of Foreign Bank and Financial Accounts), and 105 (Report of International Transportation of Currency or Monetary Instruments), and should therefore supply the information needed for dealers to fill out these forms.
B. Petroleum and Petroleum Products
Importations of petroleum and petroleum products are subject to DOE requirements. An import licence is no longer required but an import authorisation may be needed. These importations may also be subject to an oil import licence fee collected and administered by the DOE.
C. Lottery Tickets
The importation of lottery tickets is prohibited, unless printed in Canada for use in a US (or in some cases other foreign) lottery.
D. Artefacts/Cultural Property
A number of US laws are applicable to importations of artefacts such as archaeological and ethnological objects. For example, US law prohibits the importation of pre‑Columbian monumental and architectural sculpture and murals from countries in Central and South America without proper export permits from the country of origin. CBP will not accept an export permit from a third country.
CBP has published import restrictions on objects and artefacts in the Federal Register; these restrictions may also be viewed on-line at the Web site of the State Department’s Bureau of Educational and Cultural Affairs. These restrictions are aimed at deterring the pillage of other countries’ cultural heritage and fostering opportunities for access to cultural objects for legitimate scientific, cultural and educational purposes.
CBP established in January 2009 restrictions on the importation of certain archaeological materials from mainland China. These materials include archaeological materials representing China’s cultural heritage from the Paleolithic period (c. 75,000 B.C.) through the end of the Tang Period (A.D. 907) and monumental sculpture and wall art at least 250 years old. This comprises ceramic vessels; ceramic sculpture; jade ornaments and jewellery; jade weapons, tools and insignia; jade ceremonial paraphernalia; jade vessels; items made from amber and other stones; bronze vessels; bronze sculpture; bronze coins; bronze musical instruments; bronze tools, weapons and other miscellaneous items; iron items; gold and silver items; bone, ivory, horn and shell items; silks and textiles; lacquer and wood items; bamboo and paper; glass items; and wall paintings and other paintings, among other products. The subject archaeological materials are restricted from entry into the US unless they meet the conditions set forth in 19 US Code 2606 and Section 12.104c of Chapter 19 of the US Code of Federal Regulations. These conditions include the presentation of a valid government-issued certificate or evidence supporting that the exportation was made according to the regulations.
Federal law also prohibits the importation of any article of cultural property stolen from museums or from religious or secular public monuments.
E. Arms, Ammunition and Explosives
Arms, ammunition, explosives and implements of war may not be imported into the US unless the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) has issued a licence for that importation or the importation is in compliance with ATF regulations. The temporary importation, in-transit movement and exportation of arms and ammunition listed on the US Munitions List is prohibited unless the Department of State’s Directorate of Defense Trade Controls issues a licence or a licence exemption is available.
F. Radioactive Materials and Nuclear Reactors
Many radioisotopes, all forms of uranium, thorium and plutonium, and all nuclear reactors imported into the US are subject to the regulations of the Nuclear Regulatory Commission (NRC), in addition to any other import regulations. A licence from the NRC is required to import these goods into the US. Radioisotopes and radioactive sources intended for medical use are subject to the certain import restrictions and the provisions of the FFDCA.
G. Trademarks, Trade Names and Copyrights
a) Trademarks and Trade Names
Articles bearing counterfeit trademarks are subject to seizure and forfeiture. A counterfeit trademark is defined as a spurious trademark that is identical with, or substantially indistinguishable from, a registered trademark. Marks that copy or simulate a registered trademark that has been recorded with CBP are subject to detention and possible seizure and forfeiture. The importation of “parallel” or “grey market” goods is restricted where the registered trademark has been recorded with CBP and grey market protection has been afforded. In such instances, grey market merchandise is subject to detention and possible seizure and forfeiture. CBP also affords similar protection against unauthorised shipments bearing trade names that are recorded with CBP pursuant to regulations.
An exemption is provided for articles accompanying any person arriving in the US when such articles are for his or her personal use and not for sale. Only one infringing item of each type bearing a registered trademark is permitted. An individual may take advantage of this exemption only once within a 30‑day period.
Articles imported into the US that are piratical of a registered copyright are subject to seizure and forfeiture.
H. Miscellaneous Security, Ethical and Trade Remedy-Related Restrictions
a) Foreign Assets Control Restrictions
The Office of Foreign Assets Control (OFAC) administers regulations and executive orders that impose a range of sanctions, including import or export bans, on countries, companies an individuals. In some instances, the importation/exportation of certain products may be permissible even when most other are prohibited.
The US enforces full or partial trade embargoes on products from Cuba, Iran, North Korea, Sudan, Syria and Myanmar (Burma). The embargo on imports from Myanmar also applies to all articles of jewellery containing rubies or jadeite mined or extracted in Myanmar, regardless of where the jewellery is manufactured. Sanctions involving targeted persons are also enforced with respect to Belarus, Cote d’Ivoire, Democratic Republic of the Congo, Iraq, Lebanon, Liberia, Somalia, Zimbabwe, the Western Balkans, and the Taliban in Afghanistan. In addition, OFAC administers sanctions involving individuals or entities generally identified as having been involved in: (a) terrorist activities; (b) illegal diamond trading (i.e., trade in “conflict diamonds”); (c) narcotics trafficking; (d) acts of violence; (e) threatening international stabilisation efforts; (f) crimes against humanity; or (g) proliferation of weapons of mass destruction.
b) Obscene, Immoral and Seditious Materials
The importation of the following materials is prohibited.
- Seditious Materials. Any book, writing, advertisement, circular or picture containing any matter advocating or urging treason or insurrection against the US, or forcible resistance to any law of the US, or containing any threat to take the life of or inflict bodily harm upon any person in the US.
- Obscene Materials. Any obscene book, writing, advertisement, circular, picture or other representation, figure, or image on or of paper or other material, and any instrument or other article which is obscene or immoral.
c) Products of Convict or Forced Labour or Forced or Indentured Child Labour
Merchandise produced, mined or manufactured wholly or in part by means of the use of convict labour, forced labour or indentured labour under penal sanctions is prohibited from importation, provided a finding has been published pursuant to CBP regulations that certain classes of merchandise from a particular country, produced by convict, forced or indentured labour, were either being, or are likely to be, imported into the US in violation of US law.
Federal agencies are prohibited from buying products that have been made with forced or indentured child labour. Executive Order No. 13126 (EO 13126) requires federal contractors who supply products on a list published by the Department of Labor (DOL) to certify that they have made a good faith effort to determine whether forced or indentured child labour was used to mine, produce or manufacture those products. This list includes four products from mainland China: bricks, cotton, electronics and toys. It also includes bamboo, beans (green, soy, yellow), bricks, rice, rubber, sugarcane and teak from Burma; Brazil nuts/chestnuts and sugarcane from Bolivia; bricks, cottonseed (hybrid), embroidered textiles (zari), garments, rice and stones from India; bricks, carpets, embroidered textiles (zari) and stones from Nepal; bricks, carpets and coal from Pakistan; charcoal from Brazil; coca (stimulant plant) from Colombia; cocoa and coffee from Cote d’Ivoire; cocoa, granite and gravel (crushed stones) from Nigeria; cotton from Benin, Tajikistan and Uzbekistan; cotton and gold from Burkina Faso; diamonds from Sierra Leone; garments from Argentina; garments and shrimp from Thailand; pornography from Russia; rice from Mali; tilapia fish from Ghana; and tobacco from Malawi. For more information on the EO 13126 list, see http://www.dol.gov/ILAB/regs/eo13126/main.htm.
The DOL published on 10 September 2009 a separate list of 122 products from 58 countries that the agency has reason to believe are produced by child labour or forced labour in violation of international standards under the Trafficking Victims Protection Reauthorization Act of 2005 (TVPRA). The so-called TVPRA list was updated on 15 December 2010 and included 128 goods from 70 countries as of 15 March 2011.
The TVPRA list includes a range of products made in mainland China, namely artificial flowers (forced labour), bricks (child and forced labour), Christmas decorations (forced labour), coal (forced labour), cotton (child and forced labour), electronics (child and forced labour), fireworks (child and forced labour), footwear (forced labour), garments (forced labour), nails (forced labour), textiles (child labour) and toys (child and forced labour). The list also includes key products from several large US suppliers, including garments from India, Thailand, Malaysia and Jordan; cotton from Brazil, Egypt, Pakistan, Turkey and Uzbekistan; footwear from Bangladesh, Brazil and India; textiles from Bangladesh; and leather goods and accessories from India. The list does not include any products made in Hong Kong.
The DOL has said that the inclusion of any particular good and country on the TVPRA list does not indicate that all production of that good in that country involves forced or child labour, but rather that there is a significant incidence of forced or child labour in the production of the good. In fact, the DOL has acknowledged that there may be firms in any given country that produce listed goods in compliance with the law and others that wilfully employ child and forced labour.
This list has been published in accordance with the TVPRA, which also requires the DOL to work with persons who are involved in the production of the listed goods to create a standard set of practices that will reduce the likelihood that forced or child labour will be used in the production of their goods. The DOL has explicitly stated that the TVPRA list is not intended to be punitive in nature and that its primary purpose is to raise public awareness about the incidence of child labour and forced labour in the production of the listed goods and promote efforts to eliminate such practices. The DOL hopes that better information on exploitive labour practices “will spur actions to eliminate child and forced labor and that goods and countries can be removed from the List over time.” The DOL will update the list as it obtains additional information through research and will also consider updates based on public information submissions, which may be filed at any time. Submissions requesting the removal of an item from the list must provide information that demonstrates that there is no significant incidence of child or forced labour in the production of that good in the country in question.
While inclusion on the TVPRA list does not represent an import ban and the DOL does not have the authority to detain any of the listed goods at the border, the TVPRA also mandates the DOL to work with other US agencies to ensure that products made (or harvested) by forced or child labour in violation of international standards are not imported into the US. DOL officials could therefore work with the Department of Homeland Security’s Immigration and Customs Enforcement (ICE) to selectively target violative products in the future, possibly beginning with imported products known for particularly egregious violations. As part of this process, ICE would have the authority to direct CBP to start issuing detention notices for those goods.
Perhaps a more pressing concern for Hong Kong and mainland Chinese exporters is the risk that the TVPRA list becomes a point of reference or even a sort of “black list” used by consumer groups and non-governmental organisations to pressure US businesses to refrain from sourcing any of the listed goods. In addition, Congress could conceivably take steps in the future to assess specific sanctions on products included on the list or to otherwise expand labour-related enforcement efforts.
Hong Kong and mainland Chinese exporters of any of the listed goods would be well-served to seek ways to participate in DOL efforts to create a standard set of practices that will reduce the likelihood that forced or child labour will be used in the production of their goods, so that these standards reflect business realities and promote compliant practices. Exporters should also ensure their own operations will pass muster, through measures such as assessing and understanding risk levels, strengthening compliance programmes, ensuring due diligence on monitoring enforcement, developing and documenting best practices, and effectively communicating efforts to appropriate audiences.
For more information on the TVPRA, see http://www.dol.gov/ILAB/programs/ocft/tvpra.htm.
Hong Kong and mainland Chinese exporters should also keep aware of potential state actions on matters related to labour and human rights. For example, California enacted legislation into law on 30 September 2010 that will require retailers and manufacturers doing business in California and having annual worldwide gross receipts that exceed US$100 million to disclose effective from 1 January 2012 their efforts to eradicate slavery and human trafficking from their respective direct supply chains for tangible goods offered for sale. The disclosure will have to be posted on the retailer’s or manufacturer’s Web site with a conspicuous and easily understood link to the required information and will have to disclose, at a minimum, to what extent, if any, the retailer or manufacturer:
- engages in verification of product supply chains to evaluate and address risks of human trafficking and slavery (the disclosure must specify if the verification was not conducted by a third party);
- conducts audits of suppliers to evaluate supplier compliance with company standards for trafficking and slavery in supply chains (the disclosure must specify if the verification was not an independent, unannounced audit);
- requires direct suppliers to certify that materials incorporated into the product comply with the laws regarding slavery and human trafficking of the country or countries in which they are doing business;
- maintains internal accountability standards and procedures for employees or contractors failing to meet company standards regarding slavery and trafficking; and
- provides company employees and management who have direct responsibility for supply chain management training on human trafficking and slavery, particularly with respect to mitigating risks within the supply chains of products.
Companies failing to comply with this requirement would be subject to injunctive action by the California attorney general.
d) Unfair Competition
Section 337 of the Tariff Act of 1930 prohibits the importation of merchandise if the president finds that unfair methods of competition or unfair acts exist. This section is most commonly invoked in the case of patent violations, although a patent need not be at issue. Prohibitions on entries of the merchandise in question are generally for the term of the patent, although a different term may be specified.
Following a section 337 investigation, the USITC may find that unfair methods of competition or unfair acts exist with respect to the importation of certain merchandise and order that such importations cease. After the USITC has issued such an order, the president is allowed 60 days to communicate his approval or disapproval. Should the 60 days expire without presidential action, the order becomes final. During the 60‑day period, or until the president acts, importations of subject merchandise are allowed under a special bond, but they must be recalled by CBP if appropriate under the conditions of the order when it becomes final. If the president determines that entry of the merchandise is not in violation of Section 337, the bond is cancelled.
e) Treasury Department
Importations of articles bearing the title, abbreviations, initials, symbols, emblems, seals or badges of any subdivision of the Treasury Department, or likeness thereof, are prohibited unless the subdivision has authorised such use.
f) US Trade Representative Actions
The USTR handles Section 301 complaints against foreign unfair trade practices that harm US exporters. USTR actions that may directly affect US importers include the suspension of trade concessions. For example, the USTR may suspend the normal trade relations (NTR) rate of duty and substitute a substantially higher rate of duty on designated products from a foreign country that is found to be discriminating against US products.