April 4 2012 issue
Customs Clarifies Requirements for Documentation Substantiating Tariff Preference Claims
U.S. Customs and Border Protection’s Office of Trade has recently issued several rulings clarifying the requirements for documentation that must be submitted to substantiate claims for preferential tariff treatment under free trade agreements and unilateral preference programs. These rulings were the result of efforts by Sandler, Travis & Rosenberg on behalf of its clients but will benefit all companies seeking to take advantage of FTAs and preference programs. CBP has also recently published an updated document providing additional guidance on this issue.
In general, CBP’s rulings and guidance emphasize the importance for filers to ensure that their supporting documentation, including invoices, bills of lading and purchase orders, is clear and consistent. However, they also clearly indicate that CBP port personnel should seek any necessary clarification from importers or document issuers to avoid unnecessary protests.
Rulings. CBP has clarified in the rulings that it relies on the guidance set forth in an April 2006 memorandum on DR-CAFTA implementation as well as separate guidance issued in October 2007 and March 2011 concerning documents used to substantiate preference claims for textiles and apparel. In particular, CBP has ruled as follows.
- If the port does not request specific documents, a claim should not be denied on the basis of the importer’s failure to provide them.
- An affidavit of origin is not an absolute requirement, as other documentation is allowed provided that it contains the necessary information.
- The phrase “sold or to be sold” is acceptable as a blanket certification but it is appropriate for ports to request supporting documentation to show that sales actually occur.
- The use of various terms (e.g., greige thread yarn, greige (unfinished) yarn, thread yarn, sewing thread and industrial sewing thread) is acceptable because sewing thread is a type of yarn and depending on the stage of production may be more properly referred to as such.
- The use of the certain phrases (e.g., trim components) in the title is not sufficient cause to reject an affidavit as long as the body of the document is clear.
- Differences in tariff classification may be explained due to different stages in production of yarn destined to be sewing thread.
- An affidavit signed by someone else on behalf of the named person using initials to specify that it is not the original signatory is acceptable, and a signature does not have to clearly include each letter of the person’s name.
- A copy of an affidavit with a notary stamp may not be rejected simply because it is not the original, as a copy is sufficient for the purpose of conveying the relevant information to support a preference claim even though the notary stamp indicates that a photocopy will void the affidavit.
- An error on a certification in classification at the 10-digit level is not a basis to reject a claim and is an inconsequential error for the purpose of determining eligibility.
- Typographical errors need not be fatal to the claim if they are not inconsistent with the rest of the documentation.
- A purchase order that lacks the fiber content of the goods but has consistent product number and style number references should not be a basis for rejecting a claim.
- Documents reflecting materials consigned to a third party not named in the import transaction are acceptable if the roles of the parties are explained so the material is traceable.
Supplemental Instructions. On March 22, 2012, CBP published a document entitled “Supplemental Instructions for Document Review When Verifying Trade Preference Program Claims for Textiles and Wearing Apparel (TBT 12-003).” This notice emphasizes some of the same points made in the rulings referenced above but includes the following additional guidance as well.
- Other than a NAFTA certificate, the format of an origin certification or affidavit is unspecified as long as all necessary information is provided. Moreover, affidavits need not be on company letterhead.
- Importers should identify relevant materials when a document covers multiple materials.
- Importers should explain the relationship of any identified parties and documents to facilitate review.
- CBP import specialists should seek clarification or additional information in the case of omissions caused by oversight or inaccurate language translations before denying a claim.
- If an affidavit does not provide all details to confirm the validity of a claim, the importer should supply supporting documentation such as purchase orders, invoices and proofs of payment.
- Affidavits should be signed, but if they are not the CBP import specialist should call the official named on the document to verify its authenticity.
For more information on these rulings or guidance, please contact Elise Shibles at firstname.lastname@example.org or (415) 490-1403 or Beth Ring at email@example.com or (212) 549-0133.
FDA Refuses to Ban One Use of Bisphenol A, Receives More Petitions
The Food and Drug Administration has rebuffed an effort to ban the use of bisphenol A in human food and food packaging. The agency has also received three other requests seeking to disallow the use of BPA in several other uses.
The Natural Resources Defense Council had petitioned FDA in 2008 to prohibit the use of BPA in human food and food packaging and to revoke all regulations permitting the use of any food additive that may result in BPA becoming a component of food, but the agency determined that the petition “failed to provide sufficient data and information.” Instead, the FDA said, “the best course of action at this time is to continue our review and study of emerging data on BPA,” which “could influence FDA’s assessment and future regulatory decisions.” An NRDC official responded that the FDA is “out-of-step with scientific and medical research” and that its decision “illustrates the need for a major overhaul of how the government protects us against dangerous chemicals.”
BPA is an industrial chemical used to make a hard, clear plastic known as polycarbonate, which has been used in many consumer products, including reusable water bottles and baby bottles. BPA is also found in epoxy resins, which act as a protective lining on the inside of metal-based food and beverage cans. These uses are subject to premarket approval by FDA as indirect food additives or food contact substances.
In January 2010 the FDA expressed “some concern” about the use of BPA in food contact applications, particularly its potential effects on the brain, behavior and prostate gland in fetuses, infants and young children. Rather than banning such use, however, the agency has been conducting studies on the risks of BPA and supporting industry actions to reduce human exposure to it. The Environmental Protection Agency has also been investigating the effects of this chemical and has said it will consider regulatory actions as necessary.
In the meantime, the NRDC states, consumer demand for BPA-free products has led to the withdrawal of baby bottles, sippy cups and infant formula containers containing this chemical from store shelves. Canada, the European Union, China and at least five other countries, as well as 11 U.S. states, have prohibited the use of BPA in children’s products. In addition, some U.S. canned food manufacturers are voluntarily removing BPA from can linings.
In related news, Rep. Ed Markey, D-Mass., has sent the FDA three separate petitions seeking bans on the use of BPA in infant formula and baby and toddler food packaging, small reusable household food and beverage containers, and canned food packaging. Markey said a survey of all major manufacturers of these products revealed that they no longer use BPA, have never used it or are phasing out its use in their products.
USTR Issues Annual Reports on Foreign Trade Barriers, Including Technical and SPS Measures
The Office of the U.S. Trade Representative issued April 2 its annual National Trade Estimate report, which describes significant foreign barriers to U.S. exports of goods and services, foreign direct investment and intellectual property rights protection as well as the actions being taken to address those barriers. USTR has also issued its third annual reports focusing specifically on technical barriers to trade, such as product standards and testing and certification requirements, and sanitary and phytosanitary barriers, which include measures used to ensure that foods and beverages are safe for consumers and to protect animals and plants from pests and diseases.
NTE. The NTE report covers significant barriers in 58 countries, the European Union, Taiwan, Hong Kong and one regional body. Many barriers to U.S. exports are consistent with existing international trade agreements, USTR states, noting that even a very high tariff does not violate international rules unless a country has made a commitment not to exceed a specified rate. On the other hand, where measures are not consistent with U.S. rights in international trade agreements, they are actionable under U.S. trade law, including through the World Trade Organization.
Click here for NTE report
SPS Report. USTR states that while many SPS measures are fully justified, too often governments cloak discriminatory and protectionist trade measures in the guise of ensuring human, animal or plant safety. As a result, this report focuses on SPS measures that appear to be unscientific, unduly burdensome, discriminatory or otherwise unwarranted and create significant barriers to U.S. exports. Among these are restrictions related to export certifications, biotechnology, bovine spongiform encephalopathy, avian influenza and maximum residue limits for pesticides.
The U.S. has achieved some important successes in this area since last year, USTR notes, including the removal of measures in Korea that restricted imports of U.S. cherries, blueberries and citrus, the establishment of pesticide residue levels in Japan that will help increase U.S. exports of citrus, strawberries, cherries and celery, the lifting of restrictions on U.S. exports of poultry and poultry products to China, Egypt, Ghana, Kuwait and Taiwan, and the restoration of full market access for U.S. beef to the United Arab Emirates.
Click here for SPS report
TBT Report. Governments, market participants and other entities can use standards-related measures as an effective and efficient means of achieving legitimate commercial and policy objectives, USTR states, but when standards-related measures are outdated, overly burdensome, discriminatory or otherwise inappropriate they can reduce competition, stifle innovation and create unnecessary technical barriers to trade. This report focuses on such measures in 19 countries as well as the EU and the Central American Customs Union.
The report notes several positive developments over the past year, including the passage of FTAs with Korea, Colombia and Panama that strengthen the ability to ensure that the standards-related measures these trading partners adopt are transparent and serve legitimate objectives; the creation of new cooperation initiatives related to regulatory and standards issues in the WTO, APEC, FTAs and other bilateral fora; and progress on the negotiation of a modernized TBT chapter in the Trans-Pacific Partnership agreement that will build on and strengthen current TBT disciplines. The report also highlights a mutual recognition agreement with Mexico on trade in telecommunications products, measures easing the testing for phthalates of toys for sale in Argentina, the withdrawal of proposed regulations in Vietnam that would have restricted U.S. exports of distilled spirits to that country, and an agreement on organic agricultural products with the EU.
Click here for TBT report
Of Note: Trade Talks, Product Safety
S. Korea, Indonesia announce launch of free trade talks
United States and Tunisia Discuss New Approaches to Foster Trade and Investment
Joint Readout of the 10th United States and Sri Lanka TIFA Joint Council Meeting
More Companies Penalized For Not Reporting Safety Defects
Rare Earth Case Against China Subject of USTR Comment Request
The Office of the U.S. Trade Representative is inviting comments through April 30 on the issues raised in a World Trade Organization complaint the U.S. filed regarding restraints on the export from China of various forms of rare earths, tungsten and molybdenum. These restraints include export duties; quantitative restrictions such as quotas; additional requirements and procedures in connection with the administration of the quantitative restrictions, including fees and formalities, restrictions on the right to export such as prior export experience requirements and minimum capital requirements, and other conditions that appear to treat foreign-invested entities differently from domestic entities; export licensing requirements, including in connection with the administration of the quantitative restrictions; and a minimum export price system. The U.S. also alleges that China appears to administer these export restraints and the associated requirements and procedures in a manner that is not uniform, impartial, reasonable or transparent and that China appears to impose and administer these restraints through measures that are not published.
Click here for USTR notice
Advance Notice Required for Imports of 17 Chemical Substances
The Environmental Protection Agency has issued a direct final rule imposing new import restrictions on 17 chemical substances. Under this rule, persons who intend to import, manufacture or process any of these substances for an activity that is designated as a significant new use by this rule must notify EPA at least 90 days before commencing that activity. This notification will provide EPA with the opportunity to evaluate the intended use and, if necessary, to prohibit or limit that activity before it occurs.
This rule will be effective as of June 4. Written adverse or critical comments, or notice of intent to submit adverse or critical comments, must be received on or before May 4.
Click here for EPA rule
AD Notices: PET Film, Shrimp, Fish
Commodity: Polyethylene terephthalate film, sheet and strip.
Country: United Arab Emirates.
Nature of Notice: Final results of administrative review of AD duty order for the period Nov. 1, 2009, through Oct. 31, 2010.
Details: Weighted average dumping margin of 3.14% for sole reviewed respondent. This rate will be used to determine AD duties assessed on entries of subject merchandise during the period of review, and AD cash deposits at this rate will be required for shipments of subject merchandise entered or withdrawn from warehouse for consumption on or after April 4.
Commodity: Frozen warmwater shrimp.
Nature of Notice: Final results of new shipper review of AD duty order for the period Feb. 1, 2010, through Jan. 31, 2011.
Details: No dumping found for sole reviewed respondent. The zero rate will be used to determine AD duty rates on entries of subject merchandise during the period of review, and AD cash deposits will no longer be required for shipments of subject merchandise entered or withdrawn from warehouse for consumption on or after April 4.
Commodity: Frozen fish fillets.
Nature of Notice: Extension from May 2 to Aug. 30 of time limit for preliminary results of administrative and new shipper reviews for the period Aug. 1, 2010, through July 31, 2011.
IPR Enforcement Actions on Starter Motors, Mobile Devices, Food Containers, Cameras
Remedial Orders Issues on Starter Motors and Alternators. In patent infringement investigation 337-TA-755 of certain starter motors and alternators, the International Trade Commission has issued the following remedial orders.
- a limited exclusion order prohibiting the unlicensed entry of alternators that infringe one or more of the specified patents and are manufactured abroad or imported by or on behalf of the named company or any of its affiliated companies, parents, subsidiaries, licensees, contractors or other related business entities, or its successors or assigns
- a cease and desist order prohibiting the company from conducting any of the following activities in the U.S.: importing, selling, marketing, advertising, distributing, offering for sale, transferring (except for exportation) and soliciting U.S. agents or distributors for alternators that infringe one or more of the specified patents
The ITC has further determined that no public interest factors preclude the issuance of these remedial orders and that a bond of 100% of the entered value of the covered products is required to permit temporary importation during the 60-day presidential review period.
As all nine of the other original respondents were previously terminated from this investigation based on either a consent order or a settlement agreement, the ITC is now terminating this investigation.
Click here for ITC notice
New IPR Infringement Investigations of Mobile Devices, Food Containers. The International Trade Commission has instituted the following patent infringement investigations.
- investigation 337-TA-834 of certain mobile devices incorporating haptics; i.e., smartphones with a feature that signals the user when a key or icon has been touched, for example by vibrating or pulsing in response to the touch (complainant Immersion Corporation; respondents located in Taiwan and the U.S.)
- investigation 337-TA-835 of certain food containers, cups, plates, cutlery and related items (complainant Fabri-Kal Corporation; respondents located in the U.S.)
In each of these investigations the complainant has requested that 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 a cease and desist order, which would require the named respondents to cease actions that violate Section 337, including selling infringing imported articles out of U.S. inventory.
Potential IPR Probe of Cameras and Mobile Devices Evaluated for Public Interest Issues. The International Trade Commission is requesting comments no later than April 12 on any public interest issues raised by a Section 337 intellectual property rights infringement complaint against certain cameras and mobile devices, related software and firmware, and components thereof and products containing the same. 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
Foreign Regulatory Changes Could Affect Exports of Animal Feed, Alcoholic Beverages, Pesticides
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. For information on how these restrictions may affect your business, contact ST&R.
Costa Rica – technical regulation on good manufacturing practices for products used in animal feed (comments due by April 13)
Guatemala – technical regulation establishing labeling requirements for pre-packaged fermented alcoholic beverages for human consumption
Guatemala – technical regulation establishing registration requirements for botanical pesticides for agricultural use
Honduras – technical regulation establishing registration requirements for microbiological pesticides for agricultural use (comments due by April 7)
USTDA Grant to Aid Improvements at El Salvador Port
The U.S. Trade and Development Agency announced March 30 the award of a $216, 582 grant to support a technical assistance program for the development of vessel traffic improvements at the port of La Unión, El Salvador. CEPA, the Salvadoran government entity responsible for developing and managing the nation’s transportation infrastructure, intends to expand operations at this port under a public-private partnership. The USTDA grant will help CEPA facilitate the safe passage of shipping vessels through the port’s approach channel by assessing vessel traffic management and navigation, dredging and maintenance, and tug boat and pilot boat service.
FTZ Manufacturing Authority Sought for Arizona Solar Panel Facility
The Foreign-Trade Zones Board has received an application from the Greater Maricopa Foreign Trade Zone Inc., grantee of FTZ 277, requesting manufacturing authority at the Suntech Arizona Inc. facility in Goodyear, Ariz. This facility is located within site 5 of FTZ 277 and is used for the manufacture of 275 and 290 watt solar panels for industrial use.
FTZ procedures could exempt Suntech from customs duty payments on the foreign components used in export production. The company has no current exports but has indicated that it may export in the future. On its domestic sales, Suntech would be able to choose the duty rates that
apply to solar panels (zero) for foreign inputs. Suntech would also be exempt from duty payments on any foreign inputs that become scrap or waste during manufacturing. FTZ designation would further allow Suntech to realize logistical benefits through certain customs procedures, and customs duties could possibly be deferred or reduced on foreign-status production equipment.
Comments on this application are due no later than June 4.
Click here for FTZ Board notice
New Ocean Transportation Intermediary 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.
- AIT Ocean Systems Inc., Itasca, Ill.
- Alternative Global Logistic LLC, Pembroke Pines, Fla.
- Armada USA LLC d/b/a Armada Logistics, North Bergen, N.J.
- Bremol Inc. d/b/a Molcan Freight Forwarding Services, Davie, Fla.
- Carlo Shipping International Inc. d/b/a CSI Logistics, Elizabeth, N.J.
- E and M International Transport LLC, Jacksonville, Fla.
- Embarque Tenares Corp., Bronx, N.Y.
- F J Cargo Corporation, Medley, Fla.
- HYC Logistics Inc., Memphis, Tenn.
- Hydra Logistics Inc., Houston, Texas
- Joy Cargo Inc., Los Angeles, Calif.
- Lars Courier Inc. d/b/a Lars International Freight Forwarders, Miami, Fla.
- Meest-America Inc., Elizabeth, N.J.
- National Air Cargo Inc., Orchard Park, N.Y.
- Novargo Inc., Edison, N.J.
- Pinki Enterprises Inc., Astoria, N.Y.
- Tigers (USA) Global Logistics Inc. d/b/a Tigers Ocean Line, Valley Stream, N.Y.
Click here for FMC notice
Amended Maritime Agreement Filed
The Federal Maritime Commission has issued notice that the following amended agreement has been filed. Interested parties may submit comments by April 16.
CMA CGM /Maersk Line Space Charter, Sailing and Cooperative Working Agreement Asia to USEC and PNW-Suez/PNW & Panama Loops – The amendment would delete Morocco from the scope of the agreement, reflect the deployment of a sixteenth vessel and revise the space allocations of the parties accordingly.
Click here for FMC notice