Russian-Origin Seafood: Executive Orders and Prohibitions

Understanding U.S. Seafood Sanctions in Response to Russia-Ukraine Conflict

In early 2022, Russia invaded Ukraine, escalating a conflict between the two countries that began in 2014. The impacts of the invasion have spread across the world, affecting the environment, the global economy, food production, millions of people, and more. In response to Russia’s invasion, the United States, among other countries and global organizations, has imposed economic sanctions on Russia in hopes that it will expedite an end to the conflict.  

These sanctions are contained in Executive Orders (EOs) issued by President Biden, and they include prohibitions on certain imports, exports, and investments related to the Russian Federation. EO 14068 was issued in 2022, and it outlined the basic structure of the sanctions and prohibitions. While effective in some ways, EO 14068 was not as comprehensive as first intended. President Biden therefore issued EO 14114 in 2023 to expand the sanctions to prohibit economic relationships with Russia more effectively. Select import prohibitions contained in these EOs affect the U.S. seafood industry, and they have a big impact on both the global market and the U.S. market. 

The Initial U.S. Sanctions on Russian-Origin Seafood

In March of 2022, President Joseph Biden issued EO 14068, which prohibited, amongst other things, the importation of Russian-origin fish and seafood to the United States. Russia has banned nearly all seafood products produced in the U.S. for a long time, but the U.S. had continued to allow importation of Russian-origin seafood products. For some, this prohibition prompted a response of “about time.” For others, it caused a scramble to locate other sources and restructure. While this certainly impacted the overall amount of imported Russian-origin fish and seafood in the U.S. market, a loophole remained – substantial transformation. 

What is ‘Substantial Transformation’ in Seafood Imports? A Closer Look

“Substantial transformation” is one of the rare cases where the meaning of the phrase is exactly what it sounds like – when a product undergoes a manufacturing or combining process that transforms the identity of the product substantially. While it could be argued that processing always transforms the product in some way, a substantial transformation must result in a product “with a new name, character or use” that is different from the original product. If the change is “merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred.” To determine the difference, a court must base its finding on the totality of the evidence. 

In practical terms, this means that if fish and seafood of Russian origin is processed in a third country and substantially transformed, it would become a product of the third country. For example, if whole fish were shipped from Russia to China and processed into fillets, the country of origin would then become China. This loophole allowed for fish and seafood of Russian origin to be imported, albeit in a roundabout way, to the United States. 

To close this loophole, President Biden issued another executive order in December of 2023.  

U.S. Closes Loophole with New Seafood Import Sanctions

EO 14114 amends EO 14068 to include additional prohibitions on the importation of certain products. In relevant part, it prohibits importation of fish and seafood “harvested in waters under the jurisdiction of the Russian Federation or by Russia-flagged vessels, notwithstanding whether such products have been incorporated or substantially transformed into other products outside of the Russian Federation.” Exec. Order 14,114, 88 Fed. Reg. 89,271 (Dec. 26, 2023). This prohibition is not without limits – the EO stops short of preventing all importation of substantially transformed Russian-origin fish and seafood. Instead, the E.O. leaves the final decisions regarding specific products to the Secretary of the Treasury. In conjunction with EO 14114, the Department of the Treasury Office of Foreign Assets Control (OFAC) issued a determination specifying that the prohibitions in the EO will apply to salmon, cod, pollock, and crab. 

Although EO 14114 expands coverage to include Russian-origin seafood, there are still some problems. The EO itself does not clearly define the categories of seafood that are prohibited; instead, the prohibitions are limited to those categories of seafood that OFAC specifies. In its determination, OFAC does not define salmon, cod, pollock, or crab; instead, the list of affected articles in the Harmonized Tariff Schedule of the United States (HTSUS) is provided elsewhere – in a Frequently Asked Questions (FAQ) answer on OFAC’s website. OFAC lists the HTSUS articles and states that it “anticipates publishing regulations” that will define the terms – salmon, cod, pollock, and crab – to include those articles listed. Access to this information requires a deep dive into the EOs and several related documents, and the inconvenience of locating all of the information is only outweighed by the potential for confusion and accidental violation of the new rules.

Self-Certification Requirements for Seafood Importers

To ensure these prohibitions are enforced, U.S. Customs and Border Protection (CBP) has issued additional guidance, outlining filing requirements that include a self-certification, placing the burden on importers. CBP will require importers that are receiving the covered products to self-certify that the products did not originate from the Russian Federation. The self-certification must be provided on official company letterhead in PDF format and contain the statement:

“I certify that any such products in this shipment were not harvested in waters under the jurisdiction of the Russian Federation or by Russia-flagged vessels, notwithstanding whether such product has been incorporated or substantially transformed into another product outside of the Russian Federation.”

The self-certification must be uploaded to the Automated Commercial Environment (ACE) Document Image System (DIS) using the following options:

• Agency Code: CBP
• Official Document Name/Description: Other
• Document Type: Other
• Document Label Code: Other
• DocCode: CBP03

If an OFAC investigation determines that a violation has occurred, the consequences could include monetary penalties, forfeitures, and even criminal prosecution. As such, it is critical that importers of the covered products conduct due diligence before certifying that their qualifying products are not of Russian-origin.

Legal Options for Challenging U.S. Executive Orders on Seafood Imports

As mentioned previously, this set of EOs has had a large impact on the U.S. seafood import industry by cutting off a supply chain that many U.S. importers relied on. The future is uncertain, but there are some long-term and short-term options for responding to an EO. Each branch of the government has some power to either overturn or limit an EO. 

• Executive: The President that issued an EO may also revoke it. An incumbent President can also revoke an E.O. issued by their predecessor. 
• Legislative: Congress can pass legislation that alters or invalidates an EO. The President can veto such legislation, but Congress can override the veto by a two-thirds majority. Congress can also use its spending power to deny the necessary funding for the EO, which would effectively thwart its purpose. 
• Judicial: For an EO to be valid, it must be issued pursuant to a delegation of power by Congress or pursuant to the President’s constitutional powers. If no delegation of power by Congress or constitutional authority exists, a federal court can stay enforcement or ultimately overturn the EO.  

Lobbying for Clearer Regulations in the U.S. Seafood Industry

The seafood industry is quite active in lobbying Congress, and this would be an excellent opportunity to advocate for clearer standards. This would be the best long-term option as it would prevent a situation where the rules change depending on the whims of the executive branch. Additionally, legislation could outline the rules with more specificity, and the scrutiny that potential legislation generally goes through before it is enacted would allow legislators to work through concerns and problem areas. It could prove difficult, however, to garner the support needed if the President were to veto any proposed legislation. 

Judicial Review: How Courts Can Challenge Executive Orders

Judicial review of an EO stems from a Supreme Court case called Youngstown Sheet & Tube Co. v. Sawyer, in which the Supreme Court analyzed President Truman’s EO that directed the Secretary of Commerce to take possession of most of the steel mills in the United States. The goal was to ensure continued production in the face of a workers’ strike during the Korean War. Exec. Order No. 10,340, 71 Fed. Reg. 3139 (Apr. 10, 1952). The steel companies challenged President Truman’s EO., and upon review, the Supreme Court held that it was unconstitutional. 

Although the majority in Youngstown reasoned that any presidential authority to issue an EO must stem “from an act of Congress or from the Constitution itself,” Justice Jackson’s concurrence provided the three-part scheme used to assess the validity of presidential actions and their constitutional authority. According to Justice Jackson, there are three different categories of executive action, each with differing levels of presidential authority.

1. “When the President acts pursuant to an express or implied authorization of Congress.”

Presidential authority to act is at its highest when the President acts with the authorization of Congress. When both the executive and legislative branches are in agreement, there is the strongest presumption of authority. 

2. “When the President acts in absence of a congressional grant or denial of authority.”

When Congress has neither granted nor denied the President’s authority, the President can act upon their own independent powers. This creates a “zone of twilight” where the President and Congress could both have authority or where it is uncertain who has authority. If Congress agrees with the President or is silent, this effectively enables the President’s authority. Essentially, if Congress does not disagree, this raises the presumption that Congress consents to the President’s actions. 

3. “When the President takes measures incompatible with the expressed or implied will of Congress.” 

When the President acts in a manner that is contrary to Congress’s expressed or implied will, the President has the least amount of authority. To act in this category, the President can only act upon constitutional powers that do not infringe on Congress’s constitutional powers. These actions will only survive judicial review if courts find that Congress cannot act on the subject. 

There are additional considerations that may limit a President’s authority – for example, a President may not take an unconstitutional action even if Congress authorizes it. However, this framework for analysis provides a judicial roadmap for federal courts to assess the validity of a Presidential action, such as an EO. To reach this analysis, there would first need to be a challenge to the EO in a federal court. 

Final Thoughts – The Future of Russian-Origin Seafood Imports

Although EO 14114 is not exactly new ground in that it expands already existing prohibitions, it does impose additional requirements on fish and seafood importers, and it presents new obstacles for the U.S. seafood industry. Additionally, the EO itself fails to outline the requirements. Rather, it relies on determinations and guidance from multiple federal agencies that produce a confusing list of anticipated regulations while placing the burden of certifying compliance solely on the importer. False statements during the certification process can carry heavy consequences, so self-certification carries fairly high risk. 

This is, however, hardly the end of the conversation. Indeed, many uncertainties lie ahead: depending on the outcome of the Presidential election later this year, the EO may be revoked; Congress could draft legislation that overrides the EO; or a federal court may stay enforcement of or overturn the EO. Nevertheless, it is important to ensure that you are following the requirements when importing fish and seafood and that you can defend yourself against accusations otherwise. 

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1. New York Ruling Letter (NY) N334669, dated September 12, 2023 (see also United States v. Gibson-Thomsen Co., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Ass’n v. United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982)).
2. Id. (see also Uniroyal, Inc. v. United States, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983)).
3. See Headquarters Ruling Letter (HQ) W968434, dated January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987).
4. Prohibitions Related to Imports of Certain Categories of Fish, Seafood, and Preparations Thereof, Determination Pursuant to Section 1(a)(i)(B) of Executive Order 14068, Off. of Foreign Assets and Control (Dec. 22, 2023); see FAQ 1157, Office of Foreign Assets Control, https://ofac.treasury.gov/faqs/1157 (last updated Jan. 18, 2024) (list of tariff schedule subheadings affected).
5. Id.
6. FAQ 1157, Office of Foreign Assets Control, https://ofac.treasury.gov/faqs/1157 (last updated Jan. 18, 2024
7. Id.
8. CSMS # 58813725 – Executive Order (EO) “Taking Additional Steps with Respect to the Russian Federation’s Harmful Activities” – Guidance on Fish and Seafood (Cust. B. & Dec. Dec. 22, 2023).
9. Id.
10. Id.
11. Id. See https://www.cbp.gov/document/guidance/ace-dis-implementation-guide for the current DIS Implementation Guide.
12. 31 C.F.R. Pt. 501, App. A (2024).
13. Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952).
14. Youngstown, 343 U.S. at 585.
15. Id. at 635-38 (Jackson, J., concurring).
16. Id. at 635.
17.  Id. at 637.
18. Id. at 637.
19. Clinton v. New York, 524 U.S. 417, 436 (1998).