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March 22 2012 issue

Thursday, March 22, 2012
Sandler, Travis & Rosenberg Trade Report

ACE Priorities Include Rail/Sea E-Manifest, Cargo Release, Exports

U.S. Customs and Border Protection posted to its Web site this week a document detailing the functionality already implemented in the Automated Commercial Environment as well as the following near-term program priorities. CBP notes that in fiscal year 2012 ACE has entered into an operations and maintenance phase, with no funding for additional development. The program is using carry-over dollars for development work on the initiatives listed below, CBP states, but unless future funding becomes available the development of new capabilities will cease

E-Manifest: Rail and Sea (M1). M1 will provide a consolidated view of rail and sea shipment manifest and entry data at the bill of lading or container level to facilitate the identification of shipments that may pose a risk and will expedite the pre-arrival processing of legitimate cargo. New capabilities will include enabling CBP to place and remove holds at the conveyance, container and master bill level, informing carriers which participating government agency has held their merchandise, allowing carriers to create through the ACE Portal a list of trade partners authorized to use their in-bond authorization, providing 12 new reports for rail and sea carriers along with seven new reports for brokers and two for importers, and allowing filers to create and maintain rail line release entry banks through the ACE Portal.

Deployment of M1 at all direct arrival ports is expected by the end of this month. This will begin a six-month transition period at the end of which the Automated Manifest System for rail and sea will be decommissioned. E-manifest for trucks was deployed in February 2007 and is used to process an average of 190,000 trucks nationally per week. E-manifest for air and integration of the multimodal manifest is anticipated at some point in the future but has not yet been planned.

Cargo Release. ACE Cargo Release will provide the trade community with a more automated and modern process that streamlines data requirements, removes paper and provides for expedited import decisions by federal agencies. The following components are in progress, and CBP is evaluating requirements and developing an analysis of alternatives to determine possible development options for the ultimate full delivery of Cargo Release.

Simplified entry will be the first phase of Cargo Release. CBP has selected nine customs brokers to participate in a pilot test of simplified entry, which had been expected to begin around Dec. 31, 2011. CBP has said this pilot will eliminate the current CBP Form 3461 used to make entry and replace it with a streamlined set of data – 12 required and three optional data elements – submitted prior to the arrival of air cargo. This simplified entry can be filed much sooner in the import process, allowing CBP to identify potential risks earlier. In addition, participants will be able to update entry information, providing CBP more accurate data and enhancing cargo security.

The Document Imaging System allows trade members to electronically supply documentation needed during the cargo release process to CBP and other federal agencies. DIS monthly releases have continuously enhanced features and functionality, and the set of documents supported in DIS also continues to expand as more PGAs participate in the program. CBP expects to publish within the next month or so a Federal Register notice authorizing the initiation of a pilot program allowing the trade to transmit scanned documents.

PGA Interoperability introduces a comprehensive set of technical services that enables CBP to share information, documents and events of interest in an automated manner with PGAs in an effort to significantly enhance the interagency collaboration required during the cargo importation, review and release process. The Consumer Product Safety Commission began successfully receiving automated production entry and entry summary data directly from CBP in September 2011, and to date over eight million entry summaries and over 680,000 entries have been transmitted to CPSC. Additional interoperability strategies and automated information exchange capabilities continue to be developed in collaboration between CBP and various PGAs.

PGA Message Set introduces a well-defined, harmonized set of data to be collected electronically from international traders by CBP on behalf of PGAs. This effort replaces the myriad of paper forms currently required by federal agencies during the cargo importation process. The PGA Message Set is planned to be delivered as part of the Simplified Entry Phase II/Cargo Release capability.

Exports. CBP is planning to establish ACE as the single processing platform for all export manifest, commodity, licensing and export control transactions. CBP plans to establish an interface between the Automated Export System and the ACE platform to allow CBP and PGA access to export control and licensing information required for processing and releasing export shipments, with the initial focus on the primary export control and licensing agencies. The automated export processing system will also focus on developing a standard data set document for export transactions, developing the capability to accept document images to support manifest, commodity or licensed export filings, and developing functionality for an interoperable Web-based system among CBP and PGAs.

A contract to begin the initial work on a draft concept of operations and operational requirements document was issued in December 2011. Meetings have begun and have first concentrated on the electronic export manifest “to be” process. The CONOPs and ORD are scheduled for completion in fiscal year 2012.

In addition, an automated export manifest pilot test (http://strtradenews.com/rv/ff0003d1612a425082dfc6bfe046841b121c6207/p=3741603) using the DIS capability is scheduled to begin March 26 at five ports (Norfolk, Charleston, Savannah, Brunswick, and Wilmington). Fourteen pilot test carriers, representing 56% of the total containerized U.S. export volume and including the top three U.S. export carriers, have volunteered to participate.

CBP Rulings on Jewelry Sets, Photoelectric Sensors

In the March 21, 2012, Customs Bulletin and Decisions, U.S. Customs and Border Protection proposed to modify the following admissibility ruling. Comments are due by April 20.

Product: Jewelry set with tumbled diamonds from Zambia.
Proposed action: Modification of NY N018792.
Current determination: Jewelry set is not admissible.
Proposed determination: Jewelry set is not considered a rough diamond and is therefore not subject to Kimberley Process Certification Scheme requirements and not prohibited from importation under the Clean Diamond Trade Act. Classification of the set will remain unchanged.

Also in the March 21, 2012, Customs Bulletin and Decisions, CBP withdrew its June 2009 proposal to revoke rulings NY I87325 and NY K86469 pertaining to the classification of Sunx Fiber Sensors and photoelectric sensors. Those products are currently classified as optical coupled isolators under HTSUS 8541.40.80, and after reviewing the comments opposed to the proposed revocation CBP has determined that this classification should stand.

Click here for Customs Bulletin
http://www.cbp.gov/linkhandler/cgov/trade/legal/bulletins_decisions/bulletins_2012/vol46_03212012_no13/vol_46_no_13_title.ctt/vol_46_no_13_title.pdf

AD/CV Notices: Brightening Agents, Steel Wire, Nails, Solar Cells, Corrosion-Resistant Steel, Bearings

Agency: ITA.
Commodity: Stilbenic optical brightening agents.
Country: China and Taiwan.
Nature of Notice: Affirmative final dumping determinations.
Details: CBP will be instructed to collect AD cash deposits or bonds equal to the weighted-average dumping margins, which are 63.98-109.95% for China and 6.20% for Taiwan. If the ITC’s final injury determinations (due by May 3) are also affirmative, AD duty orders will be issued; otherwise, these proceedings will be terminated.
Link: http://ia.ita.doc.gov/download/factsheets/factsheet-prc-taiwan-soba-adcvd-final-20120320.pdf

Agency: ITA.
Commodity: Galvanized steel wire.
Country: China and Mexico.
Nature of Notice: Affirmative final dumping determinations (China/Mexico) and countervailable subsidy determination (China).
Details: CBP will be instructed to collect AD cash deposits or bonds based on the dumping margins, which range from 194% to 235% for China and 20.89% to 37.69% for Mexico. Cash deposits of CV duties will not be required unless the ITC makes a final affirmative CV injury determination, in which case the countervailable subsidy rates ranging from 19.06% to 223.27% will be used. The ITA will issue AD and/or CV duty orders if the ITC’s final injury determinations (due by May 3) are affirmative; otherwise, these proceedings will be terminated.
Link: http://ia.ita.doc.gov/download/factsheets/factsheet-prc-mexico-steel-wire-ad-final-20120320.pdf

Agency: ITA.
Commodity: Steel nails.
Country: United Arab Emirates.
Nature of Notice: Affirmative final dumping determination.
Details: CBP will be instructed to collect AD cash deposits or bonds equal to the weighted-average dumping margins, which range from 4.55% to 184.41%. The ITA will issue an AD duty order if the ITC’s final injury determination (due by May 3) is affirmative; otherwise, this proceeding will be terminated.
Link: http://ia.ita.doc.gov/download/factsheets/factsheet-uae-steel-nails-ad-final-20120320.pdf

Agency: ITA.
Commodity: Crystalline silicon photovoltaic cells, whether or not assembled into modules.
Country: China.
Nature of Notice: Preliminary affirmative countervailable subsidy determination.
Details: CBP will be instructed to collect CV cash deposits or bonds based on the preliminary subsidy rates, which range from 2.90% to 4.73%, on all entries made up to 90 days prior to the preliminary determination. The ITA’s companion preliminary dumping determination is due by May 17.
Link: http://ia.ita.doc.gov/download/factsheets/factsheet-prc-solar-cells-adcvd-prelim-20120320.pdf

Agency: ITA.
Commodity: Corrosion-resistant carbon steel flat products.
Country: Korea.
Nature of Notice: Extension from May 2 to Aug. 30 of time limit for preliminary results of administrative review of CV duty order for the period Jan. 1 through Dec. 31, 2010.
Link: http://www.ofr.gov/OFRUpload/OFRData/2012-06942_PI.pdf

Agency: ITC.
Commodity: Tapered roller bearings.
Country: China.
Nature of Notice: Scheduling of full sunset review of AD duty order.
Details: Hearing to be held June 19, requests to appear due by June 13, pre-hearing briefs due by June 11, post-hearing briefs due by July 2, final comments due by July 26.
Link: http://www.ofr.gov/OFRUpload/OFRData/2012-06917_PI.pdf

Foreign Regulatory Changes Could Affect Exports of Tires, Flooring Material, Foods, Motors, Blankets, Pipes

According to the National Institute of Standards and Technology, the World Trade Organization has been notified of regulatory changes that may affect exports of specific products to the following countries. More details, including regulatory texts, can be accessed here (https://tsapps.nist.gov/notifyus/data/request/new_notifications.cfm). For information on how these restrictions may affect your business, contact ST&R.

Indonesia – national standards for tires and totalizing water meters (effective Feb. 2)

Korea – PVC flooring material (comments due by April 19)

Uganda – draft standards on sausages, dressed poultry, minced meat, beef livestock and carcasses thereof, three-phase cage induction motors, flame-resistant blankets and pipeline components (comments due by May 19)

IPR Enforcement Actions Terminated on Navigation Products, Mobile Devices

The International Trade Commission has terminated the following patent infringement investigations.

- investigation 337-TA-783 of certain GPS navigation products, components thereof and related software on the basis of a settlement agreement (click here for ITC notice http://www.ofr.gov/OFRUpload/OFRData/2012-06907_PI.pdf)

- investigation 337-TA-750 of certain mobile devices and related software thereof on the basis of a finding of no violation (click here for ITC notice http://www.ofr.gov/OFRUpload/OFRData/2012-06914_PI.pdf)

OFAC Clarifies Licensing Policy to Support Internet Freedom in Iran

The Treasury Department’s Office of Foreign Assets Control issued March 20 guidance and licensing information to further support the free flow of information to citizens of Iran. In March 2010 OFAC amended the Iranian Transactions Regulations to authorize the exportation to Iran of certain services and software incident to the exchange of personal communications over the Internet (e.g., instant messaging, chat and email, social networking, sharing of photos and movies, Web browsing and blogging). In its new interpretive guidance OFAC has determined that the categories of services and software listed below fall within the scope of this authorization.

- personal communications (e.g., Yahoo Messenger, Google Talk, Microsoft Live, Skype (non-fee based))
- updates to personal communications software
- personal data storage (e.g., Dropbox)
- browsers/updates (e.g., Google Chrome, Firefox, Internet Explorer)
- plug-ins (e.g., Flashplayer, Shockwave, Java)
- document readers (e.g., Acrobat)
- free mobile apps related to personal communications
- RSS feed readers and aggregators

In addition, OFAC is clarifying that its favorable licensing policy through which U.S. persons can request approval to export to Iran certain services and software not covered by section 560.540 of the ITR that directly benefit the Iranian people applies to services and software such as Web hosting, online advertising, fee-based mobile apps and fee-based Internet communication services.

Click here for OFAC guidance
http://www.treasury.gov/resource-center/sanctions/Programs/Documents/internet_freedom.pdf

Imported Wines Allowed to be Labeled with Multistate Appellations of Origin

The Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau has issued a final rule that, effective April 23, will allow the labeling of imported wines with multistate appellations of origin. This amendment provides treatment for imported wines similar to that currently available to domestic wines.

Under this rule, an appellation of origin comprising two or no more than three states, provinces, territories or similar political subdivisions of a country equivalent to a state that are all contiguous may be used on imported wines if the following requirements are met.

- all of the fruit or other agricultural products were grown in the areas indicated and the percentage of the wine derived from fruit or other agricultural products grown in each area is shown on the label with a tolerance of plus or minus 2%

- the wine conforms to the requirements of the foreign laws and regulations governing the composition, method of production and designation of wines available for consumption within the country of origin

Click here for TTB final rule
http://www.ofr.gov/OFRUpload/OFRData/2012-06930_PI.pdf

USDA Withdraws Proposal for Weekly Export Sales Reports on Pork, Distillers Dried Grain

The Department of Agriculture has withdrawn a proposal (http://strtradenews.com/rv/ff00036a908d9737c843c07a6b498cf9cc7a5250/p=7723786) to require all exporters of U.S. pork (fresh, chilled and frozen box/primal cuts) and distillers dried grain to report information on export sales of those products to USDA’s Foreign Agricultural Service on a weekly basis. Subsequent to the March 8 publication of that proposed rule USDA ascertained that Office of Management and Budget clearance had not yet been received. It is expected that the rule will be reissued once OMB approval is obtained.

Defense Exports Allowed to Sri Lanka to Aid Aerial and Maritime Surveillance

The State Department has issued a final rule that, effective March 22, amends the International Traffic in Arms Regulations to add another exception to the policy of denial for defense export licenses for Sri Lanka. This change allows for exports to Sri Lanka for assistance for aerial and maritime surveillance.

Click here for State Dept. notice
http://www.ofr.gov/OFRUpload/OFRData/2012-06822_PI.pdf

New and Amended Maritime Agreements Filed

The Federal Maritime Commission has issued notice that the following new or amended agreements have been filed. Interested parties may submit comments by April 2.

Australia and New Zealand-United States Discussion Agreement - The amendment deletes A.P. Moller-Maersk AS, trading under the name of Maersk Line, as a party.

East Coast of North America to West Coast of South America and Caribbean Cooperative Working Agreement – The amendment would revise terms and conditions of the agreement, reduce the number of vessels operated under the agreement, increase the vessel capacity and revise the space allocations of the parties.

GWF/Dole Space Charter and Sailing Agreement - The amendment changes the name of Great White Fleet (US) Ltd. to Great White Fleet Liner Services Ltd.

The Maritime Credit Agreement - The amendment adds A.P. Moller-Maersk A/s, trading under the name Maersk Line, as a party.

Grand Alliance/Hanjin Vessel Sharing Agreement - The agreement authorizes the parties to share vessels in the trades between Japan and the U.S. Pacific Coast and between the U.S. Pacific Coast and the Middle East and Asia.

Siem Car Carrier Pacific AS/Hyundai Glovis Co., Ltd. Space Charter Agreement - The agreement authorizes the parties to engage in a limited range of cooperative activities, including vessel space chartering in the trade between the U.S. West Coast and South Korea.

Hoegh Autoliners/Hyundai Glovis Space Charter Agreement - The agreement authorizes Hoegh to charter space to Hyundai Glovis in the trade from South Korea to the U.S. Atlantic Coast.

Click here for FMC notice
http://www.ofr.gov/OFRUpload/OFRData/2012-06826_PI.pdf

Additional Changes Proposed to Energy Conservation Standards for HVAC Equipment

The Department of Energy has issued a supplemental proposed rule concerning a January 2012 proposal (wti/wti.asp?pub=0&story=39024&date=&company=) to amend the energy conservation standards for several classes of commercial heating, air conditioning and water heating equipment and to adopt new energy conservation standards for computer room air conditioners. These amendments would modify the proposed definition of “computer room air conditioner” and incorporate additional provisions to clarify the proposed test procedure provisions for commercial package air-conditioning and heating equipment and variable refrigerant flow systems. DOE is also proposing to include with modification certain provisions from Air-Conditioning, Heating, and Refrigeration Institute operations manuals in its test procedures that would clarify the application of the DOE test procedures and harmonize DOE testing with the testing performed by industry. Comments on this supplemental proposed rule are due no later than April 2.

Click here for DOE rule
http://www.ofr.gov/OFRUpload/OFRData/2012-07022_PI.pdf

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