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April 10 2012 issue

Tuesday, April 10, 2012
Sandler, Travis & Rosenberg Trade Report

CBP Strategic Plan Details Air Cargo Advance Screening Program

U.S. Customs and Border Protection recently made available a strategic plan for its Air Cargo Advance Screening program. ACAS is a joint effort between CBP and the Transportation Security Administration that was developed after an October 2010 incident in which authorities discovered in an airplane inbound from Yemen two packages containing bombs designed to detonate over Chicago. The plan states that the “trusted shipper” concept embedded in ACAS is an essential element in enabling passenger carriers to attain the 100% screening of inbound cargo required by law without disruption to the global air cargo supply chain.

Program Details. ACAS uses advance shipment data to assess risk on air cargo transported into the U.S. from foreign locations, identify cargo requiring enhanced pre-departure physical screening protocols, and prevent the loading of high-risk cargo before it departs from an overseas airport. Express carriers, passenger air carriers, freight forwarders and all-cargo air carriers can send and receive advance security filing data and related action messages for all air cargo through CBP’s Automated Targeting System based on three filing options.

Two-Part Carrier Filing. Air carrier transmits advance shipment data for security filing while subsequently transmitting post-departure Automated Manifest System data in accordance with Trade Act requirements.

Forwarder and Carrier Dual Filing. Freight forwarder may transmit house air waybill data directly to CBP to meet pre-loading targeting and manifest requirements. Forwarder and carrier receive ACAS responses prior to consolidation and delivery to air carriers. Air carriers accept forwarder cargo for transport after confirming successful ACAS transmission and perform required screening.

Single Filing of ACAS and AMS Data. Air carriers transmit the AMS manifest to CBP prior to loading of cargo and perform all required screening. The pre-loading transmission would be used by CBP to satisfy both ACAS and AMS requirements.

Phases. CBP and TSA are currently conducting a voluntary ACAS pilot program that was first rolled out for express cargo carriers in 2010, extended to passenger air carriers and forwarders in September 2011 and is now being expanded to heavy all-cargo carriers. The two agencies will continue to work with industry to seek voluntary participants in the pilot while working concurrently toward implementation of mandatory standards for ACAS usage. It is estimated that these endeavors will take approximately 28 months total to conclude.

CBP and TSA envision implementing an automated, data-driven international inbound “trusted shipper” concept utilizing pre-loading advance information based on criteria outlined in the existing air cargo security directives/emergency amendments for passenger and all-cargo air carriers transporting cargo inbound to the U.S. Over time, TSA will integrate these criteria into its standard security programs for passenger and all-cargo air carriers and CBP will incorporate them into its Automated Targeting System, which will enable the “trusted shipper” concept to move from a system that requires the air carrier to determine whether a particular shipper is “trusted” to an automated data-driven determination made by CBP and TSA. A shipper's
status as “trusted” would determine the type of screening procedures to be applied to its air cargo shipments.

Rulemaking. ACAS is currently a pilot project and rulemaking will be required to trigger mandatory data submissions. CBP recognizes that the rulemaking process should not only protect the public health and welfare but also promote economic growth, innovation, competiveness and job creation. CBP will therefore actively engage the public during the drafting process with a goal of making certain the proposed rule is informed and improved by public comment. TSA may not implement formal rulemaking but will issue SSI security programs to regulate industry screening procedures and incorporate the usage of ACAS procedures.

International Efforts. ACAS is being proposed as a model to the international community as an effective way to increase air cargo security by implementing baseline threshold targeting in the pre-loading air cargo environment without unduly burdening air carriers. If this effort is successful, it is anticipated that advance data collection and submission will expand to other areas of the globe, thereby further enhancing security worldwide.

Mexico and China Agree to Establish Restrictions on Bilateral Footwear Trade

[Editor’s note: This article was originally published in the April 5, 2012, issue of the Advisor, a weekly publication from ST&R’s STR-TAP service for the textile and apparel industry. Click here for more information.]

The relentless pressure that footwear manufacturers in Mexico have exerted on the Mexican government to remain tough on China following the Dec. 12, 2011, expiration of the high transition duties that were in place on various footwear, apparel and other products has finally yielded concrete results. Mexico’s Ministry of Economy (ME) announced March 28 that Mexico and China have agreed to establish a set of conditions to manage imports of Chinese footwear into Mexico. In exchange, the Mexican footwear sector has reportedly committed not to file a safeguard action against Chinese footwear.

While specific details of the new arrangement are yet to be published in the Diario Oficial de la Federación (Mexico’s official journal), a press release from the ME indicates that the goal of this new arrangement is not to hinder imports or avoid competition but to set the ground for fair competition and ensure that Chinese footwear is imported into Mexico at “real prices” rather than at prices that injure the domestic industry. Compliance with this new arrangement is likely to be enforced through the price alert system launched by Mexico’s Servicio de Administración Tributaria (SAT) on Dec. 15, 2011, to detect any practices of undervaluation that may adversely affect domestic producers. Under this system, imports of certain sensitive products with a price below a reference price provided by the domestic industry are to be flagged and the collected data is used to generate information and risk analysis models to enable Mexican authorities to carry out comprehensive audits. The new footwear arrangement is expected to enter into force on May 1 and be in place through the end of 2014.

The Mexican government is also expected to use antidumping actions to target Chinese products that were previously subject to transition duties. For example, the ME recently launched an AD investigation on Chinese children’s bicycles classified under HTSMX 8712.00.02 and 8712.00.04. These products were subject to a transition duty of 65% from Dec. 12, 2010, through Dec. 11, 2011. Apparel companies doing business in Mexico should keep a close eye on any potential actions against textile or apparel imports from China.

Arms Export Violation Penalties to be Used for Remedial Efforts

The State Department announced April 5 an administrative agreement with two New Jersey companies to resolve violations of the Arms Export Control Act and the International Traffic in Arms Regulations related to the export of parts for use on a missile system. According to a department press release, from July 2005 through January 2007 the two companies arranged several foreign sales without obtaining the proper approvals prior to exporting and in some instances cited licenses that did not cover their exports. They also failed to obtain the appropriate non-transfer and use certifications for exports of significant military equipment.

The press release states that following the filing of charges against the two companies in October 2010 they approached State to propose an administrative settlement and disclose additional violations. Under the terms of the agreements, separate penalties of $20,000 and $30,000 will be suspended on the condition that they are to be used for remedial compliance measures. The companies will also provide additional training to staff and principals and undergo two external audits of their compliance programs. State notes that an administrative debarment of these companies is not appropriate at this time because they have acknowledged the seriousness of their violations, cooperated with the department, expressed regret for their actions and taken steps to improve their compliance with law and regulations.

AD Notices: Glycine, Thermal Paper, Steel Plate, Crawfish, Ammonium Nitrate, Furniture

Agency: ITA.
Commodity: Glycine.
Country: China.
Nature of Notice: Preliminary determination on circumvention of AD duty order and initiation of scope inquiry.
Details: Two companies are circumventing the order but another is not. A scope inquiry is being launched on Chinese-origin glycine processed into a purer grade lycine in India.

Agency: ITA.
Commodity: Lightweight thermal paper.
Country: Germany.
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 3.99% for sole reviewed manufacturer/exporter. AD duties based on this margin will be assessed on entries of subject merchandise during the period of review (once the preliminary injunction against liquidation is lifted), and AD cash deposits at this rate will be required for all shipments of subject merchandise entered or withdrawn from warehouse for consumption on or after April 9.

Agency: ITA.
Commodity: Cut-to-length carbon quality steel plate products.
Country: Korea.
Nature of Notice: Final results of administrative review of AD duty order for the period Feb. 1, 2010, through Jan. 31, 2011.
Details: Weighted average dumping margin of 1.64% for sole reviewed exporter. This rate will be used to assess AD duties on entries of subject merchandise during the period of review, and AD cash deposits at this rate will be required for shipments entered or withdrawn from warehouse on or after April 10.

Agency: ITA.
Commodity: Freshwater crawfish tail meat.
Country: China.
Nature of Notice: Final results of administrative review of AD duty order for the period Sept. 1, 2009, through Aug. 31, 2010.
Details: Weighted average dumping margins of 18.87% and 70.12% for two reviewed companies. AD duties based on these margins will be assessed on entries of subject merchandise during the period of review, and AD cash deposits at these rates will be required for shipments entered or withdrawn from warehouse for consumption on or after April 10. In addition, this review has been rescinded for three companies that had no shipments of subject merchandise to the U.S. during the period of review.

Agency: ITA.
Commodity: Ammonium nitrate.
Country: Russia.
Nature of Notice: Opportunity to request administrative review of AD duty order for the period May 2, 2011, through March 31, 2012.

Agency: ITA.
Commodity: Wooden bedroom furniture.
Country: China.
Nature of Notice: Final rescission of new shipper review of AD duty order for the period Jan. 1 through June 30, 2011.
Details: Subject merchandise exported by the sole reviewed company was entered into the U.S. for consumption prior to the period of review.

CBP Reviewing Info Collections on Temporary Import Bond Extension, Container/Vehicle Certification, Lien Notice, Container Station Transfer

U.S. Customs and Border Protection is seeking comments on the proposed extension without change of the following information collections. Comments should address whether these collections are necessary for the proper performance of CBP’s functions, how to enhance the quality, utility and clarity of the information to be collected, the accuracy of the estimated burden and ways to minimize that burden.

Application for Extension of Bond for Temporary Importation (CBP form 3173). Imported merchandise that is to remain in the customs territory for one year or less without the payment of duties is entered as a temporary importation. This form can be used to request an extension of this time period when it is not sufficient. (comments due by May 10; click here for CBP notice

Cargo Container and Road Vehicle Certification for Transport under Customs Seal. CBP has the responsibility of collecting information for the purpose of certifying containers and vehicles for international transport under customs seal. The procedures for obtaining a certification are set forth in 19 CFR 115. (comments due by June 11; click here for CBP notice

Lien Notice (CBP form 3485). This form is usually prepared and submitted by carriers, cartmen and similar persons or firms. It is used to assure that liens have been satisfied or discharged before delivery of the freight from public stores or bonded warehouses and to ensure that proceeds from public auction sales are duly distributed to the lienholder. (comments due by June 11; click here for CBP notice

Transfer of Cargo to a Container Station. Before the filing of an entry of merchandise, for the purpose of breaking bulk and redelivery of the cargo containerized cargo may be moved from the place of unlading or may be received directly at the container station from a bonded carrier after transportation in-bond. This also applies to loose cargo as part of containerized cargo. The container station operator may make a request for the transfer of a container to the station by submitting an abstract of the manifest for the transferred containers, including the bill of lading number, marks, numbers, description of the contents and consignee. (comments due by May 10; click here for CBP notice

Foreign Regulatory Changes Could Affect Exports of Paints, Explosives, Chemicals, Fertilizers, Biological Products, Tobacco, Foods

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.

Argentina – lead content in paints, inks, lacquers and varnishes

Canada – proposed modernization of Explosives Regulations (comments due by May 31)

Japan – amended enforcement order on indium compounds, ethylbenzene, cobalt and cobalt compounds (comments due by June 4)

Japan – draft amended official standard on ordinary fertilizers (comments due by June 4)

Japan – partial amendment to minimum requirements for biological products (comments due by April 27)

Oman – conformity assessment procedures for tobacco products (comments due by Aug. 9)

Turkey – communique on foods intended for use in energy-restricted diets for weight reduction

Uganda – final draft standard on netting materials for malaria vector control, surgical instruments and materials, and dried vegetables and herbs (comments due by June 4)

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.

- A.I.B. Internacional LLC, Miami, Fla.
- American Guardship LLC, Elkridge, Md.
- American Red Ball International Inc., Seattle, Wash.
- American Vanpac Carriers Inc., Seattle, Wash.
- Atlas Van Lines International Corp., Seattle, Wash.
- Clover Internacional LLC d/b/a Clover Marine, Houston, Texas
- Dix McGuire International Inc., Pal, Ill.
- Global Distribution & Logistics LLC, Miami, Fla.
- Global Vision Group Inc., Statesville, N.C.
- Icon Logistics Services LLC, Laurel, Md.
- Javelin Logistics Corporation, Newark, Calif.
- Kelvin Logistics Inc., Torrance, Calif.
- North American Cargo Solutions Inc., Mississauga, Canada
- Pine Logistics Corp., Billerica, Mass.
- Sasco America Inc., Seattle, Wash.
- Transmarine Shipping Inc., Inglewood, Calif.
- Universal Shippers Group USA LLC, Morrow, Ga.
- Valueway Global Logistics Inc., Valley Stream, N.Y.

Click here for FMC notice

FTZ Board Asked to Reorganize Two Zones, Extends Comment Periods on Two Applications

The Foreign-Trade Zones Board has recently announced the following actions.

- received an application from Port Freeport, grantee of FTZ 149, requesting authority to reorganize this zone under the alternative site framework with a proposed service area of Brazoria and Fort Bend counties in Texas (comments due no later than June 8; click here for FTZ Board notice

- received an application from the City of San Jose, grantee of FTZ 18, requesting authority to reorganize this zone under the ASF with a proposed service area of the City of San Jose, Calif. (comments due no later than June 11; click here for FTZ Board notice

- reopened through April 24 the period for comments on applications for subzone authority at the Dow Corning Corporation silicon-based product manufacturing facility in Midland, Mich., and the Hemlock Semiconductor polysilicon manufacturing facilities in Hemlock, Mich., and Clarksville, Tenn. (click here for FTZ Board notice

- reopened through May 9 the period for comments on an application from the Port of Portland, grantee of FTZ 45, to expand the scope of manufacturing authority approved within subzone 45F at the Epson Portland Inc. facility in Hillsboro, Ore. (click here for FTZ Board notice

FDA Reviewing Information Collection on Administrative Detentions and Banned Devices

The Food and Drug Administration is inviting public comments no later than June 11 on the proposed extension of an information collection concerning administrative detention and banned medical devices. Comments are sought on whether this collection is necessary for the proper performance of FDA's functions, ways to enhance the quality, utility and clarity of the information collected, the accuracy of the estimated burden and ways to minimize that burden.

FDA may detain during established inspections devices that are believed to be adulterated or misbranded. Under FDA regulations, an applicant of a detention order must show documentation of ownership if devices are detained at a place other than that of the appellant. In addition, the owner or other responsible person must supply records about how the devices may have become adulterated or misbranded as well as records of distribution of the detained devices. These recordkeeping requirements permit FDA to trace devices for which the detention period expired before a seizure is accomplished or injunctive relief is obtained.

FDA also has the statutory authority to ban devices that present risk of substantial deception or an unreasonable and substantial risk of illness or injury. Under FDA regulations a manufacturer, distributor or importer of a device may be required to submit all relevant and available data and information to enable FDA to determine whether the device presents such risks.

Click here for FDA notice

USDA to Hold April 18 Meeting Ahead of Food Labeling Committee Session

The Department of Agriculture and the Food and Drug Administration are sponsoring a public
meeting April 18 in Washington, D.C., to provide information and receive public comments on agenda items and draft U.S. positions that will be discussed at the 40th session of the Codex Committee on Food Labeling, which will be held May 15-18 in Ottawa. The following items on the agenda for the 40th session of the CCFL will be discussed during the public meeting.

- labeling provisions in draft Codex standards

- proposed draft revision of Guidelines for Use of Nutrition and Health Claims on additional conditions for nutrient content claims and comparative claims

- draft definition for nutrient reference values for inclusion in Guidelines for Nutritional Labeling

- guidelines for production, processing, labeling and marketing of organically produced foods

- modified standardized common names

Click here for USDA notice

Proposed Test Procedures for LED Lamps

The Department of Energy is proposing to establish test procedures for light-emitting diode lamps to support the Federal Trade Commission’s implementation of labeling provisions established under the Energy Policy and Conservation Act. The proposed test procedures define methods for measuring the lumen output, input power and relative spectral distribution of LED lamps. They also define methods for measuring the lumen maintenance of the LED source (the component of the LED lamp that produces light) to project the rated lifetime of LED lamps. DOE has tentatively identified the test methods described in the relevant Illuminating Engineering Society of North America standards as appropriate for developing test procedures for LED lamps.

DOE will hold a public meeting on this proposal May 3 in Washington, D.C. In addition, the department will accept comments, data and information regarding this proposal no later than June 25.

Click here for DOE notice

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