Impact of the Government Shutdown

The U.S. federal government shut down at midnight on Friday, December 21st. The Senate has adjourned for its Christmas break without a resolution, so the shutdown will continue for several more days at the least. December 24th - 25th are already designated federal holidays.

The passenger and cargo processing by U.S. Customs and Border Protection are considered essential services and will continue to operate during the shutdown. The Centers of Excellence and Expertise will be open. The Food and Drug Administration import operations will remain open as well. U.S. Fish and Wildlife Services will operate at the ports as normal, and edecs processing remains available. The U.S. Department of Agriculture’s Agriculture Marketing Service will continue to inspect cargo. The National Marine Fisheries Service will be closed. 

For other participating government agency information, please contact your Vandegrift representative for information.  We will continue to monitor the situation and bring you new information as it becomes available.

Vandegrift and USFIA Host Compliance Webinar

Please join Vandegrift's Janet Labuda and the U.S. Fashion Industry Association as they host Keeping Up With the Compliance Challenges: What Brands and Retailers Need to Know in 2019, a webinar scheduled for Wednesday, December 12th at 2:30 pm ET.

If you are wondering how to maintain control over your company's supply chain through ongoing trade disruptions and how it all impacts overall compliance we urge you to register for this important discussion.

Janet will draw upon her experience at U.S. Customs & Border Protection to discuss what can be expected in terms of enforcement and share tips on how to keep up with your supply chain, even if you’re moving to new suppliers.  

Register here.

Next Round of 301 Tariffs Hinges on Meeting with Chinese President

President Trump is scheduled to meet with Chinese President Xi on November 20th. Yesterday, Trump said the 301 tariffs on the remaining $267 billion Chinese imports will be imposed if the US and China cannot make a deal. 

Should China fail to meet demands for changes in their trade, technology transfer, and industrial subsidy policies, the US is prepared to issue “List 4” by early December with the additional duties going into effect in January or early February. 

This final list would include apparel, footwear, toys, and other consumer products. While nothing is final yet, importers should prepare for additional duties in 2019.

Vandegrift continues to follow this issue and will advise as new information becomes available.

Blog Post: VFI Track Upgrades Visual Efficiency by Josh Kohn

When people think of IT system updates they often think first of improved functionality or increased operational output. We tend to get so focused on network speed or reducing data run times that we forget to consider how important the visual component can be in positively impacting the overall user experience. It was with that idea in mind that Vandegrift's Application Development team set out to design the most recent round of VFI Track enhancements. 

VFI Track is Vandegrift’s wholly owned, in-house developed real-time data visibility on-demand report writer. VFI Track also houses several other modules including our Global Classification Tool, Purchase Order Management system, and Vendor Compliance Portal. The system was built to deliver our clients their data in a quick and concise manner without need for expensive customized programming or client IT involvement. Essentially, VFI Track becomes your in-house brokerage reporting software! 

Our latest round of improvements grew out of our desire to make the visual component as efficient as the system functionality. We are very proud to be releasing a new visual update to VFI Track on October 27.

Some key changes will include:

  • Brighter color scheme with refreshed fonts and icons.

  • Insights and Reports moved under the new Analytics module.

  • Home button and User Menu added for quick access to important pages.

  • Instructional tours added for easier system interaction and navigation.

  • Instructional tour added for Advanced Search usage (available on the advanced search screen from any module).

We will deploy the visual update during a one hour maintenance window starting at 9pm ET. Our clients will experience virtually no down time during the deployment. We are excited to roll out these visual enhancements and hope that they make your overall VFI Track experience more enjoyable.

And we’re not stopping here. We are already designing more enhancements to VFI Track in the coming weeks and months.

Please feel free to provide your feedback on the system. Your comments are very important to us and are always considered when we develop future enhancements.

Blog Post: Let the Games Begin by Janet Labuda

With additional products added to the 301 sanctions list on September 21, the familiar Olympics starting signal “let the games begin” comes to mind. As we know, with any adjustments made to trade, such as the imposition of quotas, antidumping duties, and 301 sanctions, our affected foreign trading partners are going to seek ways to continue accessing the U.S. market by using all means to circumvent the trade action.

These means include illegal transshipment through third countries, the misdescription of merchandise to change applicable duty rates, and outright smuggling. With that comes the concerns of altered/counterfeited invoices and other documents and corporate identity theft, which results in an insecure supply chain.

Importers need to carefully watch for offers, by current suppliers, to source products in third countries not included in the sanctions, to structure Delivered Duty Paid transactions, and to attempt the introduction of new supplier companies.

In changing suppliers and countries of origin, importers must take steps to verify and validate the production capacity and the security of the supply chain. If there is no history of a sanctioned product being manufactured in the third country then now is not the time to shift sourcing to that country. Any unauthorized or suggested shifts in the players should raise an alarm. It is better to sit on the sidelines than to enter the game playing into the hands of the opposing team.

If you have any concerns about merchandise on the 301 sanction list please contact Vandegrift for assistance.

Miscellaneous Tariff Bill to Take Effect October 13th

The Miscellaneous Tariff Bill was signed into law by the President on September 13th and takes effect October 13th. About 1650 items will receive tariff reductions lasting through December 31, 2020. 

Items on the list that are subject to the 301 tariffs from China will still be assessed those duties on top of any reduced duty granted by the MTB. The text of what is included may be found here. The list is mostly chemicals, but some apparel and footwear items are also included.

Please contact Vandegrift if you would like an excel version of the MTB list or have any questions regarding the implementation.

FDA Food Facility Registration Renewal 10/1 through 12/31

The Biennial Renewal of Food Facility Registration will open on October 1, 2018 and run through 12/31/2018.  

If you registered or updated your food facility before October 1, 2014, you must return to the FDA Industry Systems before December 31 to renew your registration and to provide any updated information, if applicable.

As a reminder, if you are the new owner of a registered food facility, the previous owner is required to cancel the food facility’s registration within 60 calendar days of the change of ownership and you must re-register the facility reflecting the new ownership (see 21 CFR 1.234 and 1.235).

Please remember that this renewal process repeats every two years on even-numbered years from October 1 through December 31.

Please contact Vandegrift with any questions regarding the FDA Food Facility registration and renewal process.

301 Tariffs for List 3 to Take Effect 9/24/2018

The White House announced on Monday that the 301 tariffs for List 3 will go into effect on September 24th. The final list may be found here and has been reduced by 297 tariff numbers from the proposed list of 6031. 

The tariffs will start at 10% and will increase to 25% on January 1, 2019. President Trump stated that if China takes retaliatory action against US farmers "or other industries," the US will seek to impose tariffs on all remaining imports from China worth $267 billion.

Please contact Vandegrift with any questions regarding the impact these additional tariffs will have on your business.

CTPAT Importer Criteria Update

US Customs and Border Protection has published long overdue proposed updates to the CTPAT minimum security criteria. This is the first major overhaul of the criteria since the program began in 2002. There are new sections on cybersecurity, agricultural protection, money laundering, terrorist financing, and use of security technology. Additionally, CTPAT will now encompass both supply chain security and trade compliance to bring the program into alignment with AEO (authorized economic operator) programs around the world. The new criteria are influenced by lessons learned from validations and new security threats. Security audits and training will now be mandatory. The proactive role of management is accentuated throughout the criteria.

CTPAT members are strongly urged to review the new criteria and submit comments and suggestions. The updates may be found in the Partner Library on the CTPAT portal. Customs will be accepting feedback through October with implementation expected in 2020. Validation cycles will not change. Validations in 2019 will be based on the current criteria. Validations on the new criteria will start in 2020 and will focus on a phased implementation cycle.

  • Phase 1 will be cybersecurity, conveyance and IIT security, and seal security. The cybersecurity risk assessment is the most important thing a company needs to do now.

  • Phase 2 will be security training and threat awareness, business partner requirements, and risk assessment.

  • Phase 3 will be security, vision, and responsibility, physical security, and physical access security.

  • Phase 4 will be agriculture security, personnel security, and procedural security.

As always, we remind CTPAT members to perform their annual security profile review and ensure all information is up to date. If you have any questions, please contact Vandegrift at

Voluntary SIM Filing to Begin October 9, 2018

We are reminding importers of shrimp and abalone that beginning October 9, the National Marine Fisheries Service (NMFS) will accept voluntary Seafood Import Monitoring (SIM) filings before they become mandatory after Decemeber 31, 2018.

The voluntary filing period is intended to give importers time to comply with the change in regulation and begin providing the necessary documention in order to make compliant entries once the mandatory period commences. 

Entries submitted without the proper filing codes during the voluntary period will receive a warning but will still be accepted.  After December 31, 2018 entries submitted without proper SIM data will be rejected.

Please contact Vandegrift with any questions regarding SIM requirements.

APHIS To Begin Issuing Letters For Lacey Noncompliance

The Animal and Plant Health Inspection Service (APHIS) has announced its intention to begin notifying importers and customs brokers when entries have been submitted with Lacey Act declaration errors.  

Effective October 1, 2018 the agency will send letters, via email, identifying the error and asks importers to take steps to correct future declarations.  

No corrective action needs be taken regarding the error contained in the letter but if errors continue to occur and APHIS does not see any attempt to correct future filings the importer could be subject to an investigation or possible enforcement action.

Common Lacey Act declaration errors include:

  • misidentifying the species of imported wood or wood products 

  • listing unlikely country and plant species pairs 

  • submitting incomplete declarations 

  • failing to file a declaration in a timely manner

Please contact Vandegrift with any questions regarding Lacey Act declarations.

Vandegrift Rolls Out New VFI Track Enhancements

Vandegrift has been hard at work upgrading both the operational functionality and visual appearance of VFI Track. Our goal is to always bring you the most thorough capability to access and analyze your data while at the same time making information easy to find and understand.

You may have already noticed the recent “At A Glance” (or Traffic Lights) enhancement that can found at the top of the VFI Track entry tracking screen. This gives you a quick view of your shipment status by using green circles to identify when each milestone has been successfully cleared. It also displays the mode of transportation and even the origin and destination ports when available.


On the operational side we have deployed new customized reporting columns with hardcoded values to provide better search results. These new column headings can be created to identify unique values specific to your business.


Additionally, we have built a Random Audit Generator into the VFI Track platform. This allows VFI Track to randomly select lines from the advanced search functionality for audit purposes. Our compliance team can assist you with many types of audits in coordination with this new functionality.  


We have added How To guides with instructions for using both Custom Columns and the Random Audit Generator. To access these step-by-step How To guides simply click the bell in the upper right corner of any VFI Track screen and then click Manuals.

All of these new features are designed to not only enhance workflow and increase efficiency but to also provide real time compliance, more easily identify areas of concern and operate with confidence in a risk based environment. 

Please contact Vandegrift to learn more about how VFI Track can enhance your daily operational compliance. And don’t forget to register for VFI Track Insights to receive your shipment information directly to your inbox.

Blog Post: Forced and Child Labor Resources by Janet Labuda

On August 22, U.S. Customs and Border Protection (CBP) hosted an informative webinar on resources available to address issues of forced and child labor. While CBP reiterated their legal authorities and steps they take to combat forced labor, the Departments of State and Labor and a non-profit called Verite discussed resources available to companies which provide outstanding help and guidance on this issue.

It is highly recommended that corporate social compliance personnel take full advantage of the information provided in the Department of State’s annual report called Trafficking in Persons. Typically, this report is published in June and provides information reported from U.S embassies on affected products and on country trends.

The Department of Labor has created two applications, one called Sweat and Toil, which gives insights into the problem of forced labor to include child labor, and, another called Comply Chain, which tells companies how to address the problem.

The Comply Chain app discusses 8 steps to effectively begin addressing forced labor in your supply chain. These include:

  1. How to effectively engage stakeholders and partners
  2. Assessing risks and the impact on your organization
  3. Developing and implementing a code of conduct
  4. Communication and Training
  5. Monitoring Compliance
  6. Remediation of Violations
  7. Independent Review
  8. Reporting Performance

Each of these steps provides a treasure trove of materials from helpful advice for setting up a forced labor social compliance program to best practices and developing effective strategies for keeping your company compliant.

Using Comply Chain with Verite’s Responsible Sourcing Tool gives companies a sensible platform for structuring a robust approach to keeping forced labor out of their supply chain.

It was obvious that the government is continuing to take the enforcement of forced and child labor seriously. It is incumbent upon companies to be diligent and proactive to protect their corporate brand and not be an unwitting participant in this heinous practice. Using the aforementioned tool kit and information no one can say they didn’t know.

Please contact Vandegrift with any questions regarding forced and child labor compliance. 

Chinese 301 Tariffs to Restrict Exemption for US Goods Repaired, Processed, or Assembled Abroad

In a Federal Register notice published August 16th, the US Trade Representative has announced that the additional 25% duties imposed under the Chinese 301 tariffs List 1 (effective 7/6/18) and List 2 (effective 8/23/18) do not apply to goods for which entry is properly claimed under a provision of chapter 98 of the HTSUS, except for goods entered under subheadings 9802.00.40, 9802.00.50 (articles returned after being exported for repairs and alterations), 9802.00.60 (articles returned after further processing abroad), and heading 9802.00.80 (articles assembled abroad with US components). 

For subheadings 9802.00.40, 9802.00.50, and 9802.00.60, the additional duties apply to the value of repairs, alterations, or processing performed abroad, as described in the applicable subheading. 

For heading 9802.00.80, the additional duties apply to the value of the article less the cost or value of such products of the United States, as described in heading 9802.00.80. These goods were previously exempt from the 25% duties. 

This change goes into effect 8/23/18.

Please contact Vandegrift with any questions regarding the application of these provisions.

Import Restrictions Placed on Certain Imported Fish From Mexico

According to CSMS 18-000484, CBP has placed restrictions on certain fish and fish products from Mexico.  The restrictions apply to fish and fish products from Mexico that are "...caught with gillnets  deployed in the range of the vaquita, a species of porpoise endemic to northern Gulf of California waters in Mexico and listed as an endangered species under the U.S. Endangered Species Act."

Importers are urged to verify that none of their product falls under the restricted list outlined in the notice.  Confirmation and/or statements of verification that product is not from restricted sources should accompany the importation.

Please contact Vandegrift if you have any questions regarding these new restrictions or if you are unsure how your product will be impacted.

Chinese 301 Tariffs List 2 Finalized

The US Trade Representative has published the final list 2 for the Chinese 301 tariffs. The list contains 279 of the original 284 proposed items. The 25% tariff on list 2 items will go into effect on August 23rd. 

A formal notice will be published shortly in the Federal Register which will include information on filing product exclusion requests.

Please contact Vandegrift with any questions regarding the new tariffs.

MPF to Increase October 1st

According to CSMS 18-000465 the merchandise processing fee is being adjusted for inflation and will increase on October 1, 2018. 

The minimum MPF will be $26.22 (up from $25.67). The maximum MPF will be $508.70 (up from $497.99). The MPF for informal entries will increase from $2.05 to $2.10. 

The MPF rate of 0.3464% will not increase at this time.

Please contact Vandegrift with any questions regarding the upcoming increases.

Vandegrift Blog: The Calm Before the Storm by Janet Labuda

On July 12, I attended an all-day Washington DC meeting of the U.S. Fashion Industry Association. First to address the audience was Congresswoman Jackie Walorski (R-Indiana) a ranking member of the House Ways and MeansCommittee. Also, Angela Ellard, Chief International Trade Counsel for House Ways and Means Committee and Shane Warren, Chief International Trade Counsel for the Senate Finance Committee addressed the attendees. The hot topic, for the day, was the imposition of tariffs by the Trump Administration to counteract unfair trade practices by China and various other trading partners.

The take away was that it “may get worse before getting any better.” Over the years, the Congress has given ever increasing authority to the President to take unilateral action regarding harmful trade practices. These take the form of 232 cases and 301.

Section 232 of the Trade Expansion Act of 1962, as amended, gives the executive branch the ability to conduct investigations to “determine the effects on the national security of imports.” Within 270 days of initiating any investigation, the Commerce Department issues a report to the President with the investigation’s findings, including whether certain imports threaten to impair America’s national security. The President has 90 days to determine whether he concurs with the findings and, if so, to use his statutory authority under Section 232 “to adjust the imports” as necessary, including through tariffs or quotas.

Under Section 301 of the Trade Act of 1974, the U.S. Trade Representative (USTR) initiated an investigation to determine whether China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation are unreasonable, unjustifiable, or discriminatory and burden or restrict U.S. commerce.

Following a thorough analysis of available evidence, USTR, with the assistance of the interagency Section 301 committee, prepared findings showing that the acts, policies, and practices of the Chinese government related to technology transfer, intellectual property, and innovation are unreasonable or discriminatory and burden or restrict U.S. commerce.

  • China uses joint venture requirements, foreign investment restrictions, and administrative review and licensing processes to force or pressure technology transfers from American companies.
  • China uses discriminatory licensing processes to transfer technologies from U.S. companies to Chinese companies.
  • China directs and facilitates investments and acquisitions which generate large-scale technology transfer.
  • China conducts and supports cyber intrusions into U.S. computer networks to gain access to valuable business information.
  • An interagency team of subject matter experts and economists estimates that China’s policies result in harm to the U.S. economy of at least $50 billion per year.

After these conclusions, the administration announced tariffs affecting $200 billion in imports. While it appears that both the Executive and Legislative branches, bilaterally, agree that China engages in unfair trade practices there is disagreement on the imposition of the tariffs. The presenters were hard pressed to predict when and if new tariffs will be imposed and continue to monitor the effects of the current round on individual U.S. businesses and industrial sectors.

The take away recommendation is to reach out to representatives from both houses of Congress if you are adversely affected by the tariff imposition. This outreach should include any data that shows impacts to your economic viability, competitiveness, or employment strength.

The Congressional representative and staffers assured everyone that all actions taken or contemplated by the President are being monitored and assessed and that regular communication is occurring to ensure that corrective measures are helping and not harming the economy.

USTR Announces Intent to Impose Additional Duties on Chinese Goods

On July 10th, the U.S. Trade Representative (USTR) announced its intent to impose an additional 10% duties on products of China with an annual trade value of $200 billion. 

The new list contains over 6000 tariff subheadings, but does not include wearing apparel or footwear (HTS Chapters 61-64). This latest action is in response to China’s retaliation last week of 25% duties on $34 billion worth of US exports, with threats to impose tariffs on an additional $16 billion of US goods. The USTR will accept public comments until August 17th. 

A public hearing will be held August 20th-23rd, with post-hearing rebuttal comments due August 30th. The USTR notice and list of proposed items is available here.