Print PDF

Feb 17 2012 issue

Friday, February 17, 2012
Sandler, Travis & Rosenberg Trade Report

Chinese Leader Emphasizes Trade and Economic Cooperation with the U.S.

Chinese Vice President Xi Jinping, who is widely expected to become China’s next president in 2013, met with U.S. officials in Washington, D.C., this week in a visit that emphasized the trade and economic relationship between the two countries. No major developments emerged from the visit, which saw each side reiterate long-standing concerns that are being more fully addressed via mechanisms such as the Strategic and Economic Dialogue and the Joint Committee on Commerce and Trade.

Following Xi’s discussions with President Obama, Vice President Biden and others on Feb. 14 the White House released a joint fact sheet on efforts being undertaken to further strengthen bilateral economic relations. In a nod to the U.S. trade deficit with China, which hit a record $295.5 billion in 2011, the two sides said they “commit to take comprehensive policy measures to achieve more balanced trade and expanded investment in each other’s economies.” The recent growth of U.S. exports to China already exceeds that of total U.S. exports, but Xi said the U.S. should ease its controls on exports of dual-use high-tech goods to China to further improve the trade balance. The joint statement included a U.S. commitment to process in a timely manner specific requests for items China wishes to procure that may be subject to export controls.

Some observers and policy analysts say another way to boost U.S. exports to China would be a more significant appreciation in the value of China’s currency. They argue that Beijing manipulates the yuan to keep Chinese exports cheap and make imports from the U.S. more expensive, which contributes to the burgeoning U.S. trade deficit with China as well as a decline in U.S. employment. Others reject such a direct link, pointing out that the yuan has actually gained about 12% against the dollar over the past 18 months, during which time the trade deficit worsened and the U.S. unemployment rate remained high. In their joint statement the two sides reaffirmed a commitment to “move more rapidly toward more market-determined exchange rate systems and enhance exchange rate flexibility.”

However, currency has become less of a concern for U.S. businesses, which are more worried about things like intellectual property rights violations and discriminatory industrial policies. The joint statement touched on these as well, with China asserting that “technology transfer and technological cooperation shall be decided by businesses independently and will not be used by the Chinese government as a pre-condition for market access.” In prepared remarks Xi added that “the Chinese side has taken steps to address [these types of issues] and will continue to do so.”

Other topics raised in the joint statement include the following.

- China said that in 2012 it will press ahead with the “VAT for business tax” pilot reform and adjust import tariffs at the appropriate time to “increase consumption, accelerate development of the services sector, actively expand imports, promote balanced trade, and satisfy the demands of people’s lives.”

- Both sides affirmed that World Trade Organization rules should be strictly observed when initiating trade remedy investigations and imposing trade remedy measures. Each has accused the other on numerous occasions of violating WTO rules in the way they respond to the illegal dumping and subsidization of goods foreign-made goods.

- A bilateral dialogue on investment policies, promotion and practices will be held at the Fifth Annual U.S.-China Investment Forum, which is to be held in the U.S. prior to the next S&ED.

- Recognizing the potential for each other’s firms to play a positive role in infrastructure financing, the U.S. and China will explore opportunities for deepening cooperation in this field.

- China will open up its mandatory third-party liability auto insurance market to foreign-invested insurance companies.

- Senior technical and policy officials will hold bilateral talks on each side’s export credit agency programs. The two sides will also establish an international working group of major providers of export financing to make concrete progress toward a set of international guidelines on the provision of official export financing that are consistent with international best practices, with the goal of concluding an agreement by 2014.

Delayed Implementation of New Mechanical Seal Standard for Cargo Containers

U.S. Customs and Border Protection informed members of the Customs-Trade Partnership Against Terrorism Feb. 15 that implementation of the updated International Organization for Standardization (ISO) mechanical seal standard will not be viable by March 1 as previously announced. CBP has learned that the tamper evidence element (clause 6) of the new standard (ISO 17712:2010) cannot be met and that to date no accredited independent laboratories have been willing to test and certify seals as complying with this requirement. While the ISO is working to resolve this issue, implementation of the new standard will be delayed until CBP receives definitive information that this has been accomplished.

CBP notes that since the ISO 17712: 2010 (18 mm) certification for high-security seals is attainable without the clause 6 testing portion of the standard, C-TPAT partners are encouraged to buy seals that meet this part of the standard. If they do so, however, they should request documentation to confirm that the purchased seals comply with the current testing requirements for ISO 17712: 2010 (18 mm) certification.

Click here for more information on this new standard

Petitions for DR-CAFTA Non-Textile/Apparel Rules of Origin Changes Requested by USTR

The Office of the U.S. Trade Representative is accepting through April 17 petitions requesting changes to the non-textile and non-apparel products rules of origin under the Dominican Republic–Central America–United States Free Trade Agreement. The DR-CAFTA Free Trade Commission recently agreed to consider modifying these rules, particularly in light of more recent FTAs, but no decision has yet been made on whether to make changes and, if so, the scope or extent of such changes. Several factors will be considered in making this determination, including the extent to which any such changes may reduce transaction and manufacturing costs or increase trade among the parties; the feasibility of devising, implementing and monitoring new rules of origin; and the level and breadth of interest that manufacturers, processors, traders and consumers express for making particular changes. Only those changes that are broadly supported by stakeholders in all countries are likely to be made.

USTR encourages interested parties to review the broadest appropriate range of items and to submit proposals that reflect a consensus reached after this review. A single proposal can thus include requests covering multiple tariff headings. Proposals should cover entire 8-digit tariff subheadings and may also be submitted at the 6-, 4- or 2-digit level where the intent is to cover all subsidiary tariff lines.

Click here for USTR notice

Next Customs Broker License Exam Scheduled for April 2; STR/STTAS Offer Prep Courses

U.S. Customs and Border Protection will conduct its next customs broker license examination April 2 at various locations. Sandler, Travis & Rosenberg and Sandler & Travis Trade Advisory Services continue to offer several comprehensive training courses for those preparing to take the broker exam.

Details on Broker Exam. Exam applications and the accompanying $200 fee must be submitted no later than 12:00 p.m. EST on March 5. Applicants should note that the application and fee are now submitted electronically at this Web site ( Any applicant who files an application and subsequently wishes to withdraw from the exam must submit a written notice to the CBP service port noted on the application by close of business March 28.

The broker license exam consists of 80 multiple-choice questions and a score of 75% is required to pass. Exam topics typically include entry, classification, country of origin, trade agreements, antidumping and countervailing duties, value, broker responsibilities, fines, penalties and forfeitures, protests, marking, prohibited and restricted merchandise, drawback, intellectual property rights and other subjects pertinent to a broker’s duties.

To take the broker license exam, applicants must be a U.S. citizen and at least 18 years old as of the date of the exam. To apply for a license once the exam is passed, applicants must be a U.S. citizen and at least 21 years old as of the date the application is filed. In neither case may the applicant be an officer or employee of the U.S. government.

Exam Prep Course. STTAS conducts a three-day broker exam preparation course at its Detroit office. In addition, STR offers a webinar-style course that includes nearly 15 hours of on-demand content that can be accessed at your convenience and as often as necessary through April 1. Also during this period our professionals will be available to field test-related questions. As a further benefit, the webinar course provides test-taking strategies for each category of CBP law covered by the exam as well as techniques on how to utilize the time allowed for the exam. Click here ( and search on “broker training” for a list of our course offerings.

CBP Rulings on Saddle Blankets, Ball Set, Frozen Dessert, Toy Money

In the Feb. 15, 2012, Customs Bulletin and Decisions, U.S. Customs and Border Protection proposed to revoke a classification ruling on the following product. Comments are due by March 16.

Product: Hand-woven saddle blankets.
Proposed action: Revocation of HQ 082167.
Current classification: HTSUS 6301, blankets and traveling rugs (no subheading due to insufficient information).
Proposed classification: HTSUS 4201.00.60, saddlery, including saddle cloths (2.5% duty).
Explanation: After weighing all of the factors of the Carborundum analysis, CBP finds that the subject blankets are principally used as saddle blankets. Classification in heading 4201 is also consistent with prior rulings.

Also in the Feb. 15, 2012, Customs Bulletin and Decisions, CBP revoked or modified classification rulings on the following products, effective April 16.

Product: Sky catch ball set.
Action: Revocation of NY N02143.
New ruling: HQ H092279.
New classification: HTSUS 9503.00.00, other toys (duty-free).
Explanation: This item had been classified as an article for general physical exercise in HTSUS 9506.99.60, but CBP now finds that it is designed as a source of amusement rather than as a serious athletic activity meant to equip its users for competition.

Product: Frozen baked crème brulee.
Action: Revocation of NY K86702.
New ruling: HQ H035563.
New classification: HTSUS 1905.90.90, pastry, cakes, etc. (4.5% duty).
Explanation: The classification of substantially similar merchandise was addressed in HQ H015429 of Dec. 11, 2007, which classified frozen crème brulees in heading 1905.

Product: Toy money featuring redeemable coupon on reverse side.
Action: Modification of NY C89928.
New ruling: HQ W968412.
New classification: HTSUS 4911.99.80, other printed matter.
Explanation: The toy money does not hold value until it is redeemed at the cash register, and CBP has consistently held that printed coupons are classifiable under subheading 4911.99.

Click here for full Customs Bulletin and Decisions

CPSC Amends Registration Rule for Durable Infant Products, Will Meet on Bed Rails

The Consumer Product Safety Commission has amended its December 2009 rule setting forth requirements for consumer registration of durable infant or toddler products. The CPSC has also scheduled a Feb. 22 meeting to consider more stringent safety requirements for portable bed rails.

Durable Infant or Toddler Products. The CPSC’s December 2009 rule (wti/wti.asp?pub=0&story=33587&date=&company=) requires manufacturers of durable infant or toddler products to (1) provide with each product a postage-paid consumer registration form, (2) keep records of consumers who register such products with the manufacturer, and (3) permanently place the manufacturer name and contact information, model name and number, and date of manufacture on each such product. The rule specifies the text and format for the registration form and establishes requirements for registration through the Internet. The rule also prohibits manufacturers from using or disseminating the consumer information collected under this requirement to any other party for any purpose other than notification of the consumer in the event of a product recall or safety alert.

The CPSC is now making the following clarifications and corrections to that rule (click here for full text of this amendment -

- organizing the requirements for the format of registration forms more clearly, moving logically from the front top of the form to the front bottom, to the back top, and ending with the back bottom

- specifying the physical measurement of the type that must be used rather than referring to “point;” e.g., instead of requiring 12-point type this rule will require 0.12 inch (3.0 mm) type

- clarifying what part of the registration form consumers need to return to the manufacturer by (a) specifying that the manufacturer’s name and contact information on the top portion of the form is to be stated in sentence format and appear underneath the heading “Manufacturer’s Contact Information” and (b) requiring each form to state in capital letters just above the perforation line “KEEP THIS TOP PART FOR YOUR RECORDS. FILL OUT AND RETURN BOTTOM PART.”

- allowing the product’s brand name to be listed in addition to the manufacturer’s name

- omitting the requirement for the manufacturer’s name to appear on the back bottom of the registration form (although this practice will still be allowed) because the front bottom will always have the manufacturer’s name, even when a third party is used to process the form

- allowing manufacturers to include on their registration forms a quick response (QR) code or other machine readable data that would provide a link for the consumer to register the product

- specifying that if a manufacturer uses a third party to process the registration form the third party’s name may be included as a “c/o” on the form

- requiring registration records to be made available within 24 hours of a request by CPSC (however, there will be no requirement for registration information to be maintained in the U.S.)

This rule will not take effect until Feb. 18, 2013, to allow manufacturers to expend any existing inventories of registration forms. During this period registration forms will be deemed compliant if they meet the requirements of the existing rule or this amended rule.

Meeting on Portable Bed Rails. The CPSC will hold an open meeting Feb. 22 in Bethesda, Md., to consider a final rule that would establish a more stringent safety standard for portable bed rails. Click here for information on the proposed standard - wti/wti.asp?pub=0&story=36795&date=&company=. Click here for CPSC meeting notice -

AD Notices: Woven Ribbons, Wooden Bedroom Furniture

Agency: ITA.
Commodity: Narrow woven ribbons with woven selvedge.
Country: Taiwan.
Nature of Notice: Rescission of administrative review of AD duty order for the period Sept. 1, 2010, through Aug. 31, 2011, with respect to 11 respondents due to withdrawal of petitioner’s request for review.
Details: Imports of subject merchandise from the affected respondents will be assessed AD duties at rates equal to the cash deposits required at time of entry or withdrawal from warehouse for consumption.

Agency: ITA.
Commodity: Wooden bedroom furniture.
Country: China.
Nature of Notice: Extension from Feb. 21 to March 22 of time limit for final results of administrative review of AD duty order for the period Jan. 1 through Dec. 31, 2010.

New IPR Infringement Petition on Radio Frequency Integrated Circuits

The International Trade Commission received Feb. 15 a petition requesting that it institute a Section 337 investigation regarding certain radio frequency integrated circuits and devices containing same. The proposed respondents are located in the U.S.

Section 337 investigations primarily involve claims regarding intellectual property rights violations by imported goods, including the infringement of patents, trademarks and copyrights. Other forms of unfair competition involving imported products, such as misappropriation of trade secrets or trade dress and false advertising, may also be asserted. The primary remedy available in Section 337 investigations is an exclusion order that directs U.S. Customs and Border Protection to stop infringing imports from entering the U.S. In addition, the ITC may issue cease and desist orders against named importers and other persons engaged in unfair acts that violate Section 337, including selling infringing imported articles out of U.S. inventory.

FMC to Meet Feb. 22 to Discuss OTI Licensing, Rules of Practice, Etc.

The Federal Maritime Commission will hold a partially open meeting Feb. 22 in Washington, D.C. During the open session the FMC will consider (a) a staff recommendation and draft proposed rule concerning changes to the Commission’s rules of practice and procedure in 46 CFR Part 502 and (b) a staff recommendation on small business impacts of financial responsibility requirements for nonperformance of transportation. The closed session will include a staff briefing on economic and trade conditions as well as a discussion of the ocean transportation intermediary licensing requirement.

Click here for FMC meeting notice

Ocean Transportation Intermediary License Revocations, Reissuances, Applicants

OTI Licenses Revoked. The Federal Maritime Commission has given notice that the following ocean transportation intermediary licenses have been revoked. A revocation may occur after a license is surrendered voluntarily by the OTI or for failure to maintain a valid bond.

- license #2178N: Leschaco Inc., Jersey City, N.J.
- license #2452F: R.C. Shipping Company Inc., Houston, Texas
- license #3729N: Tratto International Forwarders Corporation, Coral Gables, Fla.
- license #11374N: S P C Consolidators Inc., Houston, Texas
- license #018356N: Americar Global Logistics Inc., Miami, Fla.
- license #020297N: Lorimer Cargo Express Inc., Hialeah Gardens, Fla.
- license #022406N: GTO Autotrade Inc. d/b/a Global Trade Organization, Doral, Fla.
- license #022436NF: RLE International Inc., Miami, Fla.
- license #022258N: Platinum Moving Services Inc., Gaithersburg, Md.
- license #022750NF: Viva Logistics Inc., Brooklyn, N.Y.
- license #022799N: Atlantic Cargo Logistics LLC, Deland, Fla.

Click here for FMC revocation notice

OTI License Reissued. The Federal Maritime Commission has given notice that the following ocean transportation intermediary license has been reissued.

- license #001890F: JIB International Incorporated d/b/a JIB International d/b/a JIB Worldwide Freight Forwarding, Lodi, Calif.

Click here for FMC reissuance notice

OTI License Applicants. The Federal Maritime Commission has provided notice that the following applicants have filed applications for licenses as non-vessel-operating common carrier and/or ocean freight forwarder ocean transportation intermediaries. Persons knowing of any reason why any of these applicants should not receive a license are requested to contact the FMC.

- A A Shipping Incorporated, Houston, Texas
- Cargo Partner Network Inc., Rosedale, N.Y.
- Cargo Tours International Inc. d/b/a CTI Global Logistics, Jamaica, N.Y.
- Deckwell Sky (USA) Inc. d/b/a Monarch Container Line, City of Industry, Calif.
- Eagle Van Lines Inc., Temple Hills, Md.
- Expert Log LLC, Miami, Fla.
- G Trading Group Inc. d/b/a Cargomax International, Hialeah Gardens, Fla.
- J.A. Logistics Inc., McHenry, Ill.
- J K Moving & Storage Inc., Sterling, Va.
- Maxworld Logistics Inc., Rosedale, N.Y.
- NIT Logistics Inc., Hackensack, N.J.
- Purely Global Inc., Doral, Fla.
- Sifa USA Inc., Miami, Fla.
- TBIF LLC, Bozeman, Mont.
- UTi, United States, Inc. d/b/a Unitainer d/b/a UTi, Long Beach, Calif.

Click here for FMC applicant notice

$490,000 in Penalties for Violating Maritime Regulations

The Federal Maritime Commission announced Feb. 15 five compromise agreements recovering a total of $490,000 in civil penalties to settle charges that the companies involved violated the 1984 Shipping Act or FMC regulations.

- A tariffed and bonded non-vessel-operating common carrier located in the British Virgin Islands, a licensed NVOCC and freight forwarder located in New York, and a licensed NVOCC and freight forwarder located in California have paid $235,00 to settle allegations that they knowingly and willfully applied reduced rates in service contracts contrary to provisions limiting the application of such rates to certain named accounts. One of the companies also provided service that was not in accordance with the rates or charges contained in its NVOCC tariff.

- A licensed and bonded NVOCC located in California paid $105,000 after being charged with knowingly and willfully misdescribing cargo under applicable service contracts and failing to charge its applicable NVOCC rates.

- A licensed and bonded NVOCC based in New York and a foreign unlicensed NVOCC located in China were charged with knowingly and willfully misdescribing cargo under applicable service contracts and made a payment of $75,000.

- A licensed NVOCC located in New York was charged with knowingly and willfully misdescribing commodities under its applicable service contracts and paid $40,000 in compromise of these allegations.

- A New York company that was a licensed and bonded NVOCC at the time of the alleged violations and a related New York trading company paid $35,000 to settle charges that they knowingly and willfully obtained transportation under service contracts to which they were not a party and that the NVOCC unlawfully allowed others to obtain transportation using its corporate name and service contracts.

USDA Reviewing Info Collection on Gypsy Moth Host Materials Imported from Canada

The Department of Agriculture’s Animal and Plant Health Inspection Service is requesting comments no later than March 19 on an information collection concerning the importation of gypsy moth host materials from Canada. Using phytosanitary certificates, certificates of origin, written statements and compliance agreements from individuals both within and outside the United States, APHIS collects information to ensure that imported foreign logs, trees, shrubs and other articles do not harbor plant or insect pests such as the gypsy moth.

Click here for USDA notice

To get news like this in your inbox daily, subscribe to the Sandler, Travis & Rosenberg Trade Report.

Customs & International Headlines