Feb 24 2012 issue
President’s Corporate Tax Reform Plan Seeks to Discourage Offshoring
President Obama issued this week the framework of a plan to reform the U.S. system of business taxation. The framework appears to be more limited in ambition than an overseas taxation reform plan (wti/wti.asp?pub=0&story=30936) the president unveiled in May 2009, which was subsequently put on hold due to concerns that it could harm U.S. businesses struggling with the economic downturn. The framework also stands in contrast to a more sweeping reform plan proposed by Republicans last fall (wti/wti.asp?pub=0&story=38344&date=&company=).
Released as a joint report from the White House and the Treasury Department, the framework states that the current system “distorts choices such as where to produce, what to invest in, how to finance a business, and what business form to use” and “does too little to encourage job creation and investment in the United States while allowing firms to benefit from incentives to locate production and shift profits overseas.” To remedy this situation the framework enumerates the following elements that should be included in a business tax reform plan.
- eliminate dozens of tax loopholes and tax expenditures for specific industries, broaden the tax base and cut the corporate tax rate from 35% to 28%
- reform the domestic production activities deduction to effectively cut the top corporate tax rate on manufacturing income to 25% and to an even lower rate for income from advanced manufacturing activities; increase to 17%, simplify and make permanent the research and development tax credit; and make permanent the tax credit for the production of renewable electricity
- introduce a minimum tax on income earned by subsidiaries of U.S. corporations operating abroad, with a foreign tax credit allowed for income taxes on that income that are paid to the host country; eliminate tax deductions for moving operations overseas and give a 20% income tax credit for expenses associated with moving operations back to the U.S.; and impose stronger safeguards against transfer pricing abuses
- simplify tax filing and cut taxes for small businesses and entrepreneurs
- eliminate or make permanent and fully pay for temporary tax code provisions that are continually extended and often financed through deficit spending
Administration officials indicated that the framework is intended to be the starting point for a more detailed discussion on corporate tax reform between the White House and Congress. House Ways and Means Committee Chairman Dave Camp, R-Mich., expressed an interest in doing just that to try and resolve “policy differences” on issues like the taxation of foreign income, repatriation of profits earned overseas, and expanding reform efforts beyond corporate taxation. Senate Finance Committee Chairman Max Baucus, D-Mont., also welcomed the framework, which he said “helps advance the discussion,” but cautioned that there is “certainly more work to be done.” Senate Finance Ranking Member Orrin Hatch, R-Utah, downplayed the proposal, which he called “a set of bullet points designed more for the campaign trail than an actual blueprint for fixing our tax code.”
Click here for the president’s framework
Ways and Means Committee to Hold Feb. 29 Hearing on Trade Policy Agenda
The House Ways and Means Committee will hold a hearing Feb. 29 on U.S. trade policy. The committee will first hear from U.S. Trade Representative Ron Kirk on how the Obama administration intends to “sustain the momentum” generated by last year’s enactment of legislation implementing free trade agreements with Korea, Colombia and Panama with respect to current trade issues, including progress in the Trans-Pacific Partnership negotiations, Russia’s accession to the World Trade Organization, China’s trade restrictive practices and non-tariff barriers, the president’s trade agency reorganization proposal and National Export Initiative, and various bilateral and multilateral trade disputes and concerns.
The hearing will also feature a second panel of as-yet unidentified witnesses, who along with USTR Kirk will have an opportunity to focus on long-term issues relating to future trade negotiations. These include post-Doha Round WTO issues such as an international services agreement, expansion of the Information Technology Agreement and a trade facilitation agreement; bilateral investment treaties with China and India as well as new BITs and investment opportunities; and the United States’ trade and investment relationship with the European Union, India and Latin America.
Of Note: COAC Meeting Report, Trade Remedy Ruling, New Bed Rail Standard
Trade Advisory Committee Convenes in Washington, Hears Program Updates
EU Declines Appeal on WTO Ruling Faulting NME Antidumping Rules
CPSC Adopts New Federal Standard for Portable Bed Rails
Validated End-User Entries Amended for Six Entities
The Bureau of Industry and Security has issued a final rule that, effective Feb. 24, revises the existing Authorization Validated End-User listings for five VEUs in China and one VEU in India.
- adds ECCN 3B001.a as an eligible item for all eligible Applied Materials (China) Inc. destinations
- corrects the address of the eligible Boeing Tianjin Composites Co. Ltd. facility and removes eligibility for items controlled by ECCN 2B001.a
- updates the address of one eligible destination for CSMC Technologies Corporation
- adds three addresses and updates six on the list of eligible Lam Research Corporation facilities
- revises the list of eligible items that may be exported, reexported or transferred (in-country) to Semiconductor Manufacturing International Corporation under authorization VEU to correspond with changes to an entry on the Commerce Control List
- changes the listed name for GE India to GE India Industrial Pvt Ltd.; revises the list of eligible items that may be exported, reexported or transferred (in-country) to GE India under authorization VEU (which has the effect of allowing all GE India eligible destinations to receive the same eligible items); and removes one of the company’s eligible destinations
Authorization VEU is a mechanism to facilitate increased high-technology exports to companies in China and India that have a verifiable record of civilian end-uses for such items. End-users qualified as VEUs are eligible to receive a wide range of specified items on the Commerce Control List under this authorization instead of under individual transaction-specific export licenses. Eligible items may include commodities, software and technology, except those controlled for missile technology or crime control reasons.
Click here for BIS notice
DOT Expands Applicability of Vehicle Child Restraint Standard
The Department of Transportation’s National Highway Traffic Safety Administration will publish in the Federal Register Feb. 27 a final rule making a number of amendments to the federal motor vehicle safety standard for child restraint systems (FMVSS No. 213). One change is to expand the applicability of this standard to CRSs recommended for use by children weighing 80 lb. or less from the current criterion of 65 lb. or less. The rule also amends the standard to incorporate the use of a Hybrid III 10-year-old child test dummy weighing 35 kg/78 lb. in compliance tests of child restraints newly subject to the standard. In addition, a label will be required to be placed on a CRS equipped with internal harnesses for which the combined weight of the CRS and the maximum recommended child weight for use with the internal harnesses exceeds 65 lb. to reduce consumer confusion about using lower LATCH anchorages and ensure that forces generated by the child and CRS in most crash conditions do not exceed the lower anchors’ design limits.
This final rule will be effective as of Feb. 27, 2014. Petitions for reconsideration of this rule are due no later than April 9.
Click here for NHTSA final rule
New Guidelines Discourage Distracting Electronic Devices in Vehicles
The Department of Transportation’s National Highway Traffic Safety Administration has issued a proposed set of voluntary, non-binding guidelines that aim to discourage the introduction of excessively distracting electronic and other devices in light motor vehicles. Comments on these guidelines and suggestions for how to improve them are being accepted through April 24. In addition, NHTSA will hold public meetings concerning these guidelines in March in Washington, D.C.; Los Angeles; and Chicago.
The NHTSA Driver Distraction Guidelines cover original equipment in-vehicle device secondary tasks (e.g., communications, entertainment, information gathering, and navigation tasks not required to drive) performed by the driver through visual-manual means (i.e., the driver looking at a device, manipulating a device-related control with the driver’s hand, and watching for visual feedback). The guidelines list the following tasks as those that NHTSA believes inherently interfere with a driver’s ability to safely control the vehicle: displaying images or video not related to driving, displaying automatically scrolling text, requiring manual text entry of more than six button or key presses during a single task, or requiring reading more than 30 characters of text (not counting punctuation marks). The guidelines recommend that the related in-vehicle devices be designed so they cannot be used by the driver to perform such tasks while driving. This recommendation is intended to prevent the driver from engaging in tasks such as
watching video footage, visual-manual text messaging, visual-manual Internet browsing or visual-manual social media browsing while driving. It is not intended to prevent the display of images related to driving, such as images related to the status of vehicle occupants or vehicle
maneuvering or images depicting the rearview or blind zone areas of a vehicle.
For all other secondary, non-driving-related visual-manual tasks, the guidelines specify a test method for measuring the impact of task performance on driving safety while driving and time-based acceptance criteria for assessing whether a task interferes too much with driver attention to be suitable to perform while driving. If a task does not meet the criteria, the guidelines recommend that the associated in-vehicle devices be designed so that the task cannot be performed by the driver while driving.
The guidelines also contain several design recommendations for in-vehicle devices to minimize their potential for distraction. For example, all device functions designed to be performed by the driver through visual-manual means should require no more than one of the driver’s hands to operate. In addition, each device’s active display should be located as close as practicable to the driver’s forward line of sight and there should be a maximum downward viewing angle to the geometric center of each display.
NHTSA notes that this proposal constitutes the first phase of the proposed guidelines. The second phase will include portable and aftermarket devices and the third phase will include auditory-vocal interfaces. The agency hopes to publish a final version of the visual-manual portion of the guidelines in the Federal Register during the first half of 2012.
Click here for NHTSA notice
IPR Enforcement Actions on Consumer Electronic Devices
New IPR Infringement Investigation of Image Capture and Transmission Devices. The International Trade Commission has instituted investigation 337-TA-831 to determine whether imports of camera phones, tablet computers and other handheld devices for capturing or transmitting images are violating Section 337 of the 1930 Tariff Act by reason of patent infringement. The complainant requests that after this investigation the ITC issue an exclusion order, which would direct U.S. Customs and Border Protection to prohibit the entry of the infringing products into the U.S., and cease and desist orders, which would require the named respondents to cease actions that violate Section 337, including selling infringing imported articles out of U.S. inventory. The respondents in this investigation are located in Taiwan and the U.S.
Potential IPR Probe of Consumer Electronics Evaluated for Public Interest Issues. The International Trade Commission is requesting comments no later than March 5 on any public interest issues raised by a Section 337 intellectual property rights infringement complaint against certain consumer electronics, including mobile phones and tablets. Comments should address whether the issuance of exclusion orders and/or cease and desist orders pursuant to this complaint would affect the public health and welfare in the U.S., competitive conditions in the U.S. economy, the production of like or directly competitive articles in the U.S., or U.S. consumers. In particular, the ITC is interested in comments that:
- explain how the articles potentially subject to the orders are used in the U.S.;
- identify any public health, safety or welfare concerns in the U.S. relating to the potential orders;
- identify like or directly competitive articles that the complainant, its licensees or third parties make in the U.S. that could replace the subject articles if they were to be excluded;
- indicate whether the complainant, the complainant’s licensees and/or third-party suppliers have the capacity to replace the volume of articles potentially subject to the requested orders within a commercially reasonable time; and
- explain how the requested orders would impact U.S. consumers.
Click here for ITC notice
Termination of Portable Electronic Device Investigation. The International Trade Commission has terminated patent infringement investigation 337-TA-721 of certain portable electronic devices and related software made by Apple Inc. after determining that the importation, sale for importation and sale within the U.S. after importation of the subject items are not infringing the specified patents.
Click here for ITC notice
CV Notice: Pasta from Turkey
Nature of Notice: Extension from April 1 to July 30 of time limit for preliminary results of administrative review of CV duty order for the period Jan. 1 through Dec. 31, 2011.
TSA Reviewing Information Collections on Air Cargo Security, Cargo Screening Program
The Transportation Security Administration is requesting public comments no later than April 24 on the proposed renewal of the following information collections.
Air Cargo Security Requirements. The forms used in this collection of information include the Aviation Security Known Shipper Verification Form, the Cargo Reporting Template and the Security Threat Assessment Application.
Regulated entities, which may include passenger and all-cargo aircraft operators, foreign air carriers and indirect air carriers, must implement a standard security program or submit modifications to TSA for approval and update such programs as necessary. Regulated entities must also collect personal information and submit it to TSA so the agency can conduct security threat assessments on individuals with unescorted access to cargo. This includes each individual who is a general partner, officer or director of an IAC or an applicant to be an IAC, certain owners of an IAC or an applicant to be an IAC, and any individual who has responsibility for screening cargo under 49 CFR parts 1544, 1546 or 1548. Aircraft operators, foreign air carriers and IACs must report the volume of accepted and screened cargo transported on passenger aircraft. Further, TSA will collect identifying information for both companies and individuals whom aircraft operators, foreign air carriers and IACs have qualified to ship cargo on passenger aircraft, also referred to as known shippers. This information is collected electronically via the Known Shipper Management System and the Indirect Air Carrier Management System. Whenever the information cannot be entered on KSMS or IACMS, the regulated entity must conduct a physical visit of the shipper using the Aviation Security Known Shipper Verification Form and subsequently enter that information into these systems. Regulated entities must also maintain records, including records pertaining to security programs, training and compliance.
Click here for TSA notice
Certified Cargo Screening Program. The forms used for this collection of information include the CCSF Facility Profile Application (TSA Form 419B), CCSF Principal Attestation (TSA Form 419D), Security Profile (TSA Form 419E), Security Threat Assessment Application (TSA Form 419F), Aviation Security Known Shipper Verification (TSA Form 419H) and the Cargo
Companies seeking to become certified cargo screening facilities are required to submit an application for a security program and for certification to TSA at least 90 days before the intended date of operation. All CCSF applicants submit applications and related information either electronically through email or the online Air Cargo Document Management System or by postal mail. CCSF applicants submit personally identifiable information on individuals performing screening and related functions as well as security coordinators and their alternates for CCSFs so that TSA can conduct security threat assessments on them. TSA requires CCSFs to accept and implement a standard security program provided by TSA or to submit a proposed modified security program to the designated TSA official for approval. The CCSF must also submit to an assessment of its facility by TSA. Once TSA approves the security program and determines that the applicant is qualified to be a CCSF it will send the applicant a written notice of approval and certification to operate as a CCSF. Once certified, CCSFs must provide information on the amount of cargo screened and other cargo screening metrics at an approved facility. CCSFs must also maintain screening, training and other security-related records of compliance and make them available for TSA inspectors.
Click here for TSA notice