Whit’s Global Trade Compliance Update

Global Trade Compliance is an ever-evolving and complex environment and a vital component of shipping internationally. Our updates aim to keep you well-informed on important changes to Trade Compliance laws, regulations, or requirements—which could fundamentally impact your international shipping business.

At FlavorCloud, our mission is to make international shipping easy, affordable, and friction-free—anywhere in the world. We automate and simplify global trade compliance and customs clearance so you can reach end consumers in any country.

Here’s a roundup of current compliance updates.

EU

Logistics, Dangerous Goods, and Batteries

European regulators may classify lithium as a toxin, making lithium-ion batteries more expensive to ship and more difficult to label, process, and ultimately import. This could also harm the EUs 2030 and 2050 climate targets, as these substances are essential for the batteries used in electric cars. We’ll continue to monitor closely and keep you posted.

US, China, & Global Supply Chain

Microchips + Semiconductors + CHIPS Bill = Further Potential Global Supply Constraints

Intel and other major industry players, along with their trade organization, have been pressuring the US Congress on a few issues regarding microchips and semiconductors:

• to define more clearly what they’re able to manufacture overseas
• to not limit their ability to manufacture microchips and semiconductors in China
• to access funding earmarked to start making more advanced microchips in the United States

Why is this important? Microchips are increasingly used in various goods, from printer ink to Keurig cups. With current rules and regulations, the price and availability of microchips have been negatively impacted. This translates to delays and increased costs for consumers.

US – Steel & Aluminum and Chinese Tariffs

Remove Tariffs to Reduce Inflation

Foreign-origin steel, aluminum, and Chinese-Origin goods imported into the United States are subject to tariffs. These tariffs are controversial and ultimately expensive to American manufacturers and consumers.

One proposed method of fighting the current runaway inflation the US  is experiencing, is to eliminate these Tariffs. The current administration is not keen on enacting such policies, and even if passed, it may only reduce inflation by 1.3%. This means that both tariffs are likely here to stay, and alternative methods will be needed to fight inflation.

Global

Uyghur Forced Labor Prevention Act

On June 13, 2022, US Customs and Border Protection (CBP) issued operational guidance on the Uyghur Forced Labor Prevention Act (“UFLPA”). The Uyghur Forced Labor Prevention Act asserts that all goods mined, produced, or manufactured wholly or in part in Xinjiang, China, or by entities identified on the “UFLPA Entity List” are made with forced labor and prohibits them from being imported into the United States.

This is important as many merchants import raw materials, subcomponents, or other products from China and other Asian countries for their manufacturing process. Merchants must ensure they follow new regulations, which CBP began enforcing on June 21, 2022. Through CBP’s enforcement, we expect to see more audits, detentions, seizures, and other enforcement activities.

Along with CBP’s operational guidance, here are some details for merchants importing goods into the US and others involved in supply chains subject to US laws and/or connected to geographies impacted by the UFLPA. You can review the below resources to assess whether you need to further improve your import compliance and responsible sourcing programs.

• US Department of Homeland Security’s “Strategy to Prevent the Importation of Goods Mined, Produced, or Manufactured with Forced Labor in the People’s Republic of China” (“FLETF”) publication from June 17, 2022.
• Baker McKenzie Uyghur Forced Labor Prevention Act Implementation Guidance

That concludes our compliance roundup.  

FlavorCloud is here to help. If you have any questions or need help with your international shipping, please contact us at support@flavorcloud.com. We will continue to keep you up to date on relevant compliance news.