Print PDF

March 16 2012 issue

Tuesday, March 13, 2012
Sandler, Travis & Rosenberg Trade Report

USTR Starts Process for Redesignation and Removal of Certain Products under GSP

U.S. importers, trade associations and foreign governments have until 5:00 p.m. on April 6 to submit comments to the Office of the U.S. Trade Representative concerning the eligibility of certain goods for duty-free treatment under the Generalized System of Preferences. These comments may seek to preserve, reinstate or revoke this treatment.

The U.S. GSP program includes provisions, known as competitive need limitations, that trigger the removal of duty-free treatment if imports of a covered product from a beneficiary developing country exceed certain limits. For calendar year 2011, these limits are (a) 50% of the value of total U.S. imports of the product from all countries or (b) $150 million. Once the president determines that a CNL has been exceeded, GSP duty-free treatment for the subject article must be terminated no later than July 1 of the next calendar year.

However, CNL waivers are permitted for products that are imported in de minimis quantities and for products that apply for waiver consideration based on the president’s authority to grant such waivers. Products that have applied and been accepted for waiver consideration are lysine and esters from Brazil (HTSUS 2922.41.00); pneumatic tires from Sri Lanka (HTSUS 4011.93.80); rubber gloves from Thailand (HTSUS 4015.19.10); and calcium silicon ferroalloys from Argentina (HTSUS 7202.99.20). Once a waiver is received, this remains in effect until the president determines that it is no longer warranted due to changed circumstances. Waivers that have been in effect for more than five years may also be revoked if U.S. imports of the article exceed (a) $225 million (1.5 times the applicable CNL value limit) or (b) 75% of the value of total U.S. imports of that article.

In addition to waiver considerations, the USTR is requesting comments on products eligible for redesignation that were once eligible for GSP but ceased to receive duty-free treatment due to exceeding a CNL in a prior year.

A list of products that may qualify for one of these actions can be found on the USTR website. The USTR notice on GSP CNLs is available here.

In a separate action, the USTR has postponed from March 20 to March 29 the date for the 2011 annual GSP product review hearing. The deadline for submitting post-hearing briefs has been extended from April 10 to April 16. The hearing will cover only the petitions for new products and CNL waivers that have been previously submitted and accepted for review in the 2011 GSP annual review.

ST&R has extensive experience helping companies navigate all aspects of the GSP program, including the issues outlined above. For more information, including on how ST&R can assist you in the preparation and submission of comments to USTR, please contact David Olave. The USTR notice on GSP CNLs is available here.

CBP Issues Interim U.S.-Korea FTA Implementing Procedures

U.S. Customs and Border Protection has issued an interim rule amending the customs regulations on an interim basis to implement the preferential tariff treatment and other customs-related provisions of the U.S.-Korea Free Trade Agreement, which entered into force March 15. The new regulations address the procedures for claiming preferential treatment under the Korea FTA, import and export requirements, post-importation duty refund claims, rules of origin, origin verifications and determinations, penalties, retroactive preferential tariff treatment for textiles and apparel, and goods returned after repair or alteration, among other things. Interested parties may submit comments on this interim rule by May 18.

A copy of the interim regulations is available here

Proposal to Amend BSE-Related Import Conditions for Bovines and Bovine Products

The Department of Agriculture’s Animal and Plant Health Inspection Service has unveiled a proposal that would revise the conditions for the importation of live bovines and products derived from bovines with regard to bovine spongiform encephalopathy. APHIS is proposing to base importation conditions on the inherent risk of BSE infectivity in specified commodities, as well as on the BSE risk status of the region from which the commodities originate. The proposal would establish a system for classifying regions as to BSE risk that is consistent with the system employed by the World Organization for Animal Health, the international standard-setting organization for guidelines related to animal health. APHIS is also proposing to classify certain specified countries as to BSE risk and remove BSE restrictions on the importation of cervids and camelids and products derived from such animals.

APHIS indicates that the proposed import conditions are based on internationally accepted scientific literature and, except in a few instances, are consistent with guidelines set out in the OIE’s Terrestrial Animal Health Code. After performing a thorough review of relevant scientific literature and a comprehensive evaluation of the issues, the agency concluded that the proposed changes to the regulations would continue to guard against the introduction of BSE into the United States while allowing the importation of additional animals and animal products into the country.

Interested parties may submit comments on this proposal by May 15. A copy of the proposal is available here.

$12 Million in Penalties for Bribery of Mexican and Panamanian Officials

The Department of Justice announced March 14 that an Oklahoma-based provider of aircraft maintenance repair and overhaul services has agreed to pay an $11.8 million criminal penalty to resolve violations of the Foreign Corrupt Practices Act. The company also agreed to cooperate with the DOJ in ongoing investigations, report periodically on its compliance efforts, and continue to implement an enhanced compliance program and internal controls designed to prevent and detect FCPA violations. In addition, the firm’s German-based indirect parent company agreed to cooperate with DOJ officials and implement rigorous internal controls.

According to a DOJ press release, the company paid bribes to government officials employed by various entities in Mexico and Panama. The bribes were either paid directly to the foreign officials or funneled through a shell company owned and operated by a company sales manager. Company executives allegedly orchestrated, authorized and approved the unlawful payments.

AD/CV Notices: Orange Juice, Steel Pipe, Certain Pasta

Agency: ITC.
Commodity: Certain orange juice.
Country: Brazil.
Nature of Notice: Final negative determination in AD sunset review.
Details: The ITC has determined that revoking this AD duty order would not be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time. As a result, the order will be revoked.

Agency: ITA.
Commodity: Circular welded carbon-quality steel pipe.
Countries: India, Oman, United Arab Emirates and Vietnam.
Nature of Notice: Postponement from April 3 to May 23 of time limit for preliminary AD duty determinations.

Agency: ITA.
Commodity: Certain pasta.
Country: Italy.
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, 2010.

Implementation of Special Import Quota for Upland Cotton

CBP indicates in Quota Book Transmittal QBT-11-590 that the Department of Agriculture’s Commodity Credit Corporation has announced a special import quota for upland cotton that permits importation of a quantity of upland cotton equal to one week’s domestic mill use. This action is being carried out under the authority of PL 110-246, enacted June 18, 2008, which requires that a special import quota be determined and announced immediately if, for any consecutive 4-week period, the U.S. Far East price exceeds the prevailing world market price. To be counted under this quota, cotton must be imported during the period “Begin Date,” purchased by the “Buy Date” and entered into the United States before the “End Date.” CBP notes that the quota is not specific as to staple length or country of origin and it does not affect tariff rates or phytosanitary regulations or apply to extra long staple cotton.

Additional information on this quota is available here.

EPA Revokes Testing Requirements for Certain Chemical Substances

The Environmental Protection Agency has issued a direct final rule that revokes certain testing requirements for six chemical substances and all the testing requirements for four chemical substances. As a result, persons who export or intend to export the four chemical substances for which all the testing requirements are revoked (i.e., acetyl chloride; imidodicarbonic diamide; methane, isocyanato-; and urea, reaction products with formaldehyde) will no longer be subject to section 12(b) of the Toxic Substances Control Act export notification requirements triggered by the first test rule for certain high production volume chemical substances (HPV1).

This rule will enter into force March 15 unless the EPA receives by April 16 adverse comments in writing or a request to present comments orally. If this occurs, the EPA will publish a timely withdrawal notice in the Federal Register informing the public that this direct final rule, or relevant portions of the rule, will not take effect.

Click here for direct final rule

FTC Seeks Input on FPLA Information Collection

The Federal Trade Commission is seeking input by April 16 on the extension of the current information collection requirements included in the Fair Packaging and Labeling Act rules. The FPLA was enacted to eliminate consumer deception concerning product size and package content and requires packages or labels to be marked with a statement of identity, a net quantity of contents disclosure, and the name and place of business of a company that is responsible for the product. The FPLA rules specify how manufacturers, packagers and distributors of consumer commodities must do this.

Click here for FTC notice

Treasury Invites Comments on Information Collections

The Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau is seeking comments by April 16 on the following information collections.

• Form TTB F 5620.7, Claim for Drawback of Tax on Tobacco Products, Cigarette Papers, and Cigarette Tubes: This form is used by taxpayers to claim drawback for tax paid on exported products.

• Form TTB F 5110.30, Drawback on Distilled Spirits Exported: This form describes the claimant, spirits for tax purposes, amount of tax to be refunded, and a certification by the U.S. government agent attesting to exportation.

• Forms TTB F 5630.5a, 5630.5d, 5630.5t, Special (occupational) Tax Registration and Return: These forms are used for registration and tax payment, by persons already in business who failed to register or pay on or before a certain date, or to register alcohol dealers.

Click here for a copy of this notice

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

Customs & International Headlines