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April 20 2012 issue

Friday, April 20, 2012
Sandler, Travis & Rosenberg Trade Report

Report Recommends Easing Export Controls on Satellites

The departments of Defense and State released April 18 a joint final report calling for a change in U.S. export controls on satellites and related items. A White House fact sheet states that these items are controlled on the U.S. Munitions List pursuant to the National Defense Authorization Act for fiscal year 1999, which makes them the sole USML items for which the president does not have the legal authority to adjust export controls to ensure they meet current and anticipated U.S. national security requirements and do not unintentionally harm the U.S. satellite industry and its supplier base. The fact sheet asserts that modernizing these controls is “essential” and that the Obama administration will work with Congress on legislation to that end.

The report makes several findings in favor of revising the current system. Compared to the U.S., the report states, other nations have fewer export controls on commercial space and space-related items and tend to control them as dual-use (i.e., non-munitions) items. In addition, over the past 15 years a substantial number of commercial satellite systems, subsystems, components and related technologies have become less critical to national security due to the transition from military to predominantly civilian uses such as direct broadcast television, satellite communications and earth mapping. In addition, other countries have become more proficient in space technologies.

In light of these developments, the report states, U.S. export controls on these items should reflect their decreased sensitivity while still ensuring that they cannot be used to significantly improve the military capabilities of another country. Specifically, the following items would be more appropriately controlled as dual-use items on the Commerce Control List: communications satellites that do not contain classified components, remote sensing satellites with performance parameters below certain thresholds, and parts and components associated with these satellites and with performance parameters below thresholds specified for items remaining on the USML. The report asserts that the risks of removing these items from the USML could be acceptably managed through controls and licensing policies under the CCL. The report also recommends relaxing controls on exports and reexports of space-related items to the United States’ allies and closest partners while maintaining controls as agreed in multilateral trade control arrangements.

On the other hand, the report finds a continued need for certain space-related items to remain on the USML because they and related services contain critical components and technologies (along with the implicit expertise to create and use them) that provide the U.S. with a critical military or intelligence advantage in space. These items include satellites that perform a purely military or intelligence mission, remote sensing satellites with high performance parameters, parts and components unique to the above satellite types and not common to dual-use satellites, and services in support of foreign launch operations for USML and non-USML designated satellites. The report also recommends that the U.S. maintain strict controls (i.e., the status quo) on exports and reexports of non-critical space-related items to end users and for end uses that are likely to be used against U.S. national interests.

Finally, the report urges Congress to return to the president authority to determine the appropriate export control status of satellites and space-related items.

The report concludes that implementing these changes would have a number of benefits. First, the federal government would better be able to focus its resources on the most sensitive items while facilitating secure trade with allies and close trading partners. Second would be the synchronization of State and Commerce licensing policies, which would ensure continued effective implementation of prohibitions to end-users and end-uses of concern. Third, the long-term health and competitiveness of the U.S. satellite industrial base would be improved, including by helping to eliminate the design-out of U.S. origin items, especially from second and third tier suppliers.

Click here for report

U.S. Begins to Ease Economic Sanctions on Burma

As part of an effort to ease U.S. economic sanctions against Burma in light of the political reforms underway in that country, the Office of Foreign Assets Control has issued General License No. 14-C authorizing certain financial transactions in support of humanitarian, religious and other non-profit activities in Burma. Specifically, this license authorizes the exportation and reexportation of financial services to Burma in support of the following.

- projects to meet basic human needs in Burma, including disaster relief; assistance to refugees, internally displaced persons and conflict victims; the distribution of food, clothing, medicine and medical equipment intended to be used to relieve human suffering; the provision of health-related services; and the provision of shelter and clean water, sanitation and hygiene assistance

- democracy building and good governance in Burma, including rule of law, citizen participation, government accountability, conflict resolution, public policy advice and civil society development projects

- educational activities in Burma, including combating illiteracy; increasing access to education at the elementary, high school, vocational, technical, college or university level; foreign language instruction; and assisting education reform projects at all levels

- sporting activities in Burma, including amateur sporting events, activities promoting physical health and exercise, and the construction and maintenance of sports facilities open to the Burmese public

- non-commercial development projects directly benefiting the Burmese people, including preventing infectious disease; promoting maternal/child health, animal husbandry, food security and sustainable agriculture; conservation of endangered species of fauna and flora and their supporting natural habitats; and the construction and maintenance of schools, libraries, medical clinics, hospitals and other infrastructure necessary to support the aforementioned non-commercial development projects

- religious activities, including religious education and training, including the training of missionaries, the establishment and maintenance of congregations, and the construction and improvement of houses of worship, schools, seminaries and orphanages

OFAC states that this general license does not authorize the exportation or reexportation of financial services to or for the benefit of any person whose property and interests in property are blocked pursuant to 31 CFR § 537.201(a), Executive Order 13448 of Oct. 18, 2007 or Executive Order 13464 of April 30, 2008.

Secretary of State Hillary Clinton said April 4 that the U.S. is prepared to take a number of steps to recognize the progress Burma has made in recent months, including the release of political prisoners, new legislation broadening the rights of political and civic association, and dialogue between the government and ethnic minority groups. Aside from enabling private organizations to pursue the non-profit activities outlined above, these steps include establishing an in-country USAID mission and supporting a normal country program for the United Nations Development Program, facilitating travel to the United States for select government officials and parliamentarians, and beginning the process of a targeted easing of the ban on the export of U.S. financial services and investment.

No AD/CV Duty Orders on Steel Wheels from China, Refrigerators from Korea and Mexico

In an unusual move, the International Trade Commission voted unanimously April 17 not to issue antidumping and countervailing duty orders on steel wheels from China or bottom-mount combination refrigerator-freezers from Korea and Mexico. In both cases the ITC determined that no U.S. industry is materially injured or threatened with material injury by reason of imports of the subject goods.

The International Trade Administration had earlier made affirmative final AD and CV duty determinations on these goods and required U.S. Customs and Border Protection to begin collecting estimated AD and/or CV duties at the following rates: steel wheels - 44.96% to 193.54%, refrigerators from Korea - zero to 15.41% (AD) and 0.3% to 12.90% (CV), and refrigerators from Mexico - 6% to 30.34% (AD). In light of the ITC’s negative injury determinations those deposits will be refunded and no entries of subject merchandise will be assessed AD or CV duties. However, at least one of the complainants said it may appeal the ITC’s determinations.

Of Note: U.S.-Brazil FTA?, CBP Report on Import Trade Trends, Arms Trade Treaty, Bangladesh Apparel Exports, Taiwan-Canada Customs Pact

Clinton Says U.S., Brazil Should Consider FTA in the Future

CBP FY 2011 report on import trade trends

Positions for the United States in the Upcoming Arms Trade Treaty Conference

Duty-free garment exports to US hinge on new trade deal

Taiwan, Canada ink customs cooperation pact

Dates and Deadlines in the Week Ahead

Following are highlights of regulatory effective dates and deadlines and federal agency meetings coming up in the next week.

April 23 – effective date of final rule allowing labeling of imported wines with multistate appellations of origin

April 23 – comments on CBP proposal to update in-bond regulations

April 23 – comments on CBP declaration of persons who performed repairs or alterations

April 23 – comments on remedy, the public interest and bonding in IPR investigation of digital photo frames

April 24 – comments on DOT voluntary guidelines on distracting electronic devices in vehicles

April 25 – comments on proposed safety standard for infant swings

April 25 – effective date of final rule providing for interest on untimely vessel repair duties

April 26 – comments on remedy, the public interest and bonding in patent infringement investigation of handbags and luggage

April 26 – ST&R webinar on textile and apparel rules of origin
Textile and Apparel Rules of Origin: In Which Nation Was Transformation?
Webinar - 4/26/2012

AD/CV Notices: Orange Juice, Steel Sinks, Brass Sheet and Strip, Silicon Metal

Agency: ITA.
Commodity: Orange juice.
Country: Brazil.
Nature of Notice: Revocation of AD duty order.
Details: U.S. Customs and Border Protection will discontinue suspension of liquidation and collection of AD cash deposits on entries of subject merchandise entered or withdrawn from warehouse on or after March 9, 2011. Any pending administrative reviews will be completed.

Agency: ITC.
Commodity: Drawn stainless steel sinks.
Country: China.
Nature of Notice: Preliminary affirmative AD and CV injury determinations.

Agency: ITC.
Commodity: Brass sheet and strip.
Country: France, Germany, Italy and Japan.
Nature of Notice: Sunset review determination that revocation of AD duty orders would be likely to lead to continuation or recurrence of material injury to an industry in the U.S. within a reasonably foreseeable time. As a result, these orders will be continued for another five years.

Agency: ITA.
Commodity: Silicon metal.
Country: China.
Nature of Notice: Continuation of AD duty order.
Details: Imports covered by this order are shipments of silicon metal containing at least 96.00% but less than 99.99% of silicon by weight. Also covered is silicon metal containing between 89.00% 96.00% silicon by weight but containing a higher aluminum content than silicon metal described above. Silicon metal is currently provided for under HTSUS 2804.69.10 and 2804.69.50. Semiconductor-grade silicon (silicon metal containing by weight not less than 99.99% of silicon and provided for in HTSUS 2804.61.00) is not subject to this order.

CBP Reviewing Information Collection on Origin Marking for Containers or Holders

U.S. Customs and Border Protection is extending through May 21 the period for public comment on the proposed extension without change of an information collection associated with the country of origin marking requirements for containers or holders. U.S. law requires each imported article of foreign origin, or its container, to be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article or container permits with the English name of the country in which the article was manufactured or produced. Comments should evaluate whether this collection of information is necessary for the proper performance of CBP’s functions, detail ways to enhance the quality, utility and clarity of the information collected, evaluate the accuracy of the estimate of the associated burden and/or discuss ways to minimize that burden.

More Consumer Electronics Targeted for IPR Infringement; Ink Cartridge Restrictions Expanded

New IPR Infringement Petition on Electronic Devices. The International Trade Commission received April 18 a petition requesting on behalf of Anu IP LLC a Section 337 investigation regarding certain electronic devices having a retractable USB connector. The proposed respondents are located in Taiwan, France, China, Japan, Belgium and the U.S.

Section 337 investigations primarily involve claims regarding intellectual property rights violations by imported goods, including the infringement of patents, trademarks and copyrights. Other forms of unfair competition involving imported products, such as misappropriation of trade secrets or trade dress and false advertising, may also be asserted. The primary remedy available in Section 337 investigations is an exclusion order that directs U.S. Customs and Border Protection to stop infringing imports from entering the U.S. In addition, the ITC may issue cease and desist orders against named importers and other persons engaged in unfair acts that violate Section 337, including selling infringing imported articles out of U.S. inventory.

New IPR Infringement Investigation of Consumer Electronics. The International Trade Commission has instituted investigation 337-TA-839 to determine whether imports of certain consumer electronics, including mobile phones and tablets, are violating Section 337 of the 1930 Tariff Act by reason of patent infringement. The complainant, Pragmatus AV LLC, 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, Korea, Canada and the U.S.

Modification of Remedial Orders on Ink Cartridges. In patent infringement investigation 337-TA-565 of certain ink cartridges and components thereof, the International Trade Commission has modified the general exclusion order and cease and desist order it issued in October 2007 to indicate that components of certain ink cartridges are covered by those orders.

Ocean Transportation Intermediary License Revocations, Applicants

OTI Licenses Revoked. The Federal Maritime Commission has given notice that the following ocean transportation intermediary licenses have been revoked. A revocation may occur after a license is surrendered voluntarily by the OTI or for failure to maintain a valid bond.

- license #013552N: Boston Shipping Enterprise Inc., Brooklyn, N.Y.
- license #14169N: Expedited Transportation Services Inc., Loganville, Ga.
- license #14803N: Rocky International LLC, El Monte, Calif.
- license #15121N: Lee, Michelle Eun Jung d/b/a Pac Marine Express, Gardena, Calif.
- license #015548N: Demars International Inc. d/b/a Service America Independent Line, Astoria, N.Y.
- license #17826F: The Relocation Freight Corporation of America, Scottsdale, Ariz.
- license #017827F: Prudential Relocation Inc. d/b/a Prudential Relocation, Scottsdale, Ariz.
- license #019572N: ENL Global Inc., City of Commerce, Calif.
- license #019720NF: Atlantic Coast Trading Inc., Doral, Fla.
- license #019947N: Airgate International Corporation (Chicago), Addison, Ill.
- license #020193N: Summit Logistics Inc., Jamaica, N.Y.
- license #020545F: Denizabel Shipping Inc., Miami Gardens, Fla.
- license #020597N: Ferrara International Worldwide Inc., Hillside, N.J.
- license #020849N: Master Freight America Corp., Miami, Fla.
- license #021062F: International Trade Compliance Group LLC, Pompano Beach, Fla.
- license #021103N: The Visca Corp., Los Angeles, Calif.
- license #021378NF: Interex Mega Line USA Inc., Houston, Texas
- license #021621N: Supreme International Shippers and Movers Inc., Miami, Fla.
- license #021932N: Cargolinx Inc., Miami, Fla.
- license #022238NF: Grimes Supply Chain Services Inc., Jacksonville, Fla.
- license #022431N: SPG Logistics Inc., Miami, Fla.

OTI 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.

- Barthco International Inc., Philadelphia, Pa.
- Hua Yang Transportation Co., Carson, Calif.
- Bertschi North America Inc., Houston, Texas
- Cibao Cargo Inc., Bronx, N.Y.
- Clutch Global Logistics Inc., Northlake, Ill.
- CMA CGM Logistics USA LLC, East Rutherford, N.J.
- Convergent Logistics LLC, Dallas, Texas
- EMI Freight International LLC, Miami, Fla.
- Euro Cargo Express Inc. d/b/a Pacific Anchor Line Group, Jamaica, N.Y.
- Gandhi International Shipping Inc., Chicago, Ill.
- King Solutions Inc., Dayton, Minn.
- NIT Logistics Inc., Hackensack, N.J.
- Ocean Cargo Transportation Inc., West Covina, Calif.
- Priority Import-Export Services Inc., Inglewood, Calif.
- Ship International Inc., Carson, Calif.
- Victory Maritime Services USA, Alhambra, Calif.

DOT Notes Hazmat Exception Applications, Decisions, Delays in Processing

The Department of Transportation’s Pipeline and Hazardous Materials Safety Administration has issued the following concerning exceptions from the Hazardous Materials Regulations.

- a list of applications for special permits ( for exceptions from the HMR, including for motor vehicles, rail freight, cargo vessels, cargo aircraft and passenger-carrying aircraft (comments due no later than May 21)

- a list of applications to modify ( previously issued special permits; e.g., to provide for additional hazardous materials, packaging design changes, additional mode of transportation, etc. (comments due no later than May 4)

- a list of actions taken on special permit applications (, including modified, new and emergency permits granted or withdrawn and permits denied

- a list of special permit applications that have been in process for 180 days or more (, including the reason(s) for delay and the expected completion date

Foreign Regulatory Changes Could Affect Exports of Numerous Goods

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.

Brazil – April 4 publication of technical regulation on fermented acetic products

Chile – certification procedures for gas-fired instantaneous condensing water heaters (comments due by June 18)

Colombia – technical regulation on compressed natural gas cylinders, conversion kits and spare parts to enter into force Dec. 29, 2012

Denmark – requirement on composition and approval of personal diving equipment (comments due by July 4)

Korea – proposed revision of enforcement decree on agricultural products, fishery products or processed fishery products (comments due by June 16)

Mexico – April 4 publication of amended official standard on pesticides

Swaziland – draft national standard on the examination and roadworthiness testing of vehicles used on public roads (comments due by May 30)

Thailand – draft revision to regulations on weighing and measuring instruments (comments due by June 17)

Turkey – revised regulation on cosmetics that includes additional chemical substances as well as revised directives and instructions

More Airports Approved to Accept Aircraft Traveling to or from Cuba

U.S. Customs and Border Protection has updated the list of airports authorized to accept aircraft traveling to or from Cuba, effective April 20. Prior to January 2011 there were only three such airports: John F. Kennedy International, Los Angeles International and Miami International. This list has since been updated to include the following.

- Hartsfield-Jackson Atlanta International Airport
- Austin-Bergstrom International Airport
- Baltimore/Washington International Thurgood Marshall Airport
- O’Hare International Airport
- Dallas/Fort Worth International Airport
- Fort Lauderdale-Hollywood International Airport
- Southwest Florida International Airport
- George Bush Intercontinental Airport
- Key West International Airport
- Louis Armstrong New Orleans International Airport
- Oakland International Airport
- Orlando International Airport
- Pittsburgh International Airport
- San Juan Luis Muñoz Marín International Airport
- Tampa International Airport
- Palm Beach International Airport

Raw Sugar Tariff-Rate Quota Increased

Effective April 19, the Department of Agriculture is increasing by 420,000 short tons raw value the quantity of raw cane sugar eligible for the lower tier of duties in the fiscal year 2012 raw sugar tariff-rate quota. Raw cane sugar imported under this TRQ must be accompanied by a certificate for quota eligibility and may be entered until Sept. 30, 2012. The Office of the U.S. Trade Representative will allocate this increase among supplying countries and customs areas. USDA states that further such increases are likely.

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