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April 24 2012 issue

Tuesday, April 24, 2012
Sandler, Travis & Rosenberg Trade Report

CBP Now Able to Share IPR Information with Rights Holders to Detect Counterfeiting

U.S. Customs and Border Protection has issued an interim rule that, effective April 24, allows CBP to disclose to an intellectual property right holder information appearing on merchandise or its retail packaging that may comprise information otherwise protected by the Trade Secrets Act for the purpose of assisting CBP in determining whether the merchandise bears a counterfeit mark. CBP states that these changes will provide a pre-seizure procedure for disclosing information about imported merchandise suspected of bearing a counterfeit mark for the limited purpose of obtaining the right holder’s assistance in determining whether or not the mark is counterfeit. Comments on this interim rule are due no later than June 25.

According to CBP, information to be provided to right holders under this rule will be in the form of photographs or a sample of the goods and/or their retail packaging in their condition as presented to CBP for examination as well as alphanumeric codes appearing on the goods. Disclosure may include serial numbers, dates of manufacture, lot codes, batch numbers, universal product codes, stock keeping unit numbers or other identifying marks, whether in alphanumeric or other formats.

However, this rule gives the importer a chance to demonstrate that an article is not counterfeit before the above information is released to the right holder. Specifically, importers will have seven days from date a notice of detention is issued (exclusive of weekends and holidays) to establish to CBP’s satisfaction that the goods do not bear a counterfeit mark. Only absent such a demonstration by the importer will information, images or samples be shared with the right holder. Nevertheless, in certain circumstances Department of Homeland Security criminal investigators may provide right holders such information or samples without notifying the importer; e.g., to obtain evidence that will assist in demonstrating probable cause when seeking a judicial order in the course of a criminal or national security investigation.

CBP is also making the following changes in this rule.

- making a clarifying amendment to the definition of “counterfeit trademark” that uses the term “mark” instead of “trademark”

- amending the regulations pertaining to goods bearing copying or simulating marks and restricted gray market goods by removing language that appears to restrict the respective detention periods to only 30 days

- amending the provisions of 19 CFR 151.16(a) to exclude imports of goods suspected of bearing counterfeit marks from the applicability of the regulations pertaining to detention of merchandise

In explaining the changes made by this interim rule CBP states that counterfeit imported goods can be a threat to public health and safety as well as national security. For example, counterfeit integrated circuits and electronic components can find their way into critical manufacturing, military, infrastructure and consumer product applications, and inquiries conducted by Congress and the Department of Defense have revealed that counterfeit electronic components have in fact entered military and government supply chains. Furthermore, due to the development of sophisticated techniques of some counterfeiters and the highly technical nature of some imported goods, it has become increasingly difficult for CBP to determine whether some goods suspected of bearing counterfeit marks in fact bear counterfeit marks. As a result, CBP is amending its regulations to allow it to solicit help in this area from right holders.

Click here for CBP notice
http://www.ofr.gov/OFRUpload/OFRData/2012-09762_PI.pdf

U.S. Announces Updated Model Bilateral Investment Treaty

After a three-year review, the Obama administration released April 20 an updated model bilateral investment treaty. BITs provide binding legal rules regarding the treatment of foreign investors and the U.S. currently has more than 40 of them in force, with substantially similar rules and protections in the investment chapters of its free trade agreements. While the updated model BIT does not require congressional approval, any BITs negotiated on the basis thereof will.

According to a joint press release from the State Department and the Office of the U.S. Trade Representative, the 2012 model BIT continues to provide strong investor protections and preserve the government’s ability to regulate in the public interest. In addition, changes have been made to enhance transparency and public participation; sharpen the disciplines that address preferential treatment for state-owned enterprises, including the distortions created by certain indigenous innovation policies; and strengthen protections relating to labor and the environment.

Transparency and Public Participation. The 2012 model BIT requires parties to consult periodically on how to improve their transparency practices, both in the context of developing and implementing laws, regulations and other measures affecting investment and in the context of investor-state dispute settlement.

Notice and Comment Procedures. The 2012 model BIT bolsters parties’ obligations to publish proposed regulations, explain their purposes and rationales and address substantive comments provided by stakeholders (among other actions), including, as appropriate, with respect to financial services.

Multilateral Appellate Procedures. Language regarding the possibility of a future multilateral appellate mechanism has been enhanced by requiring parties to strive to ensure that any such mechanism includes provisions on transparency and public participation comparable to those already provided for in investor-state dispute settlement under the BIT.

Labor and Environment. The 2012 model BIT includes obligations to not waive or derogate from domestic labor and environmental laws and to not fail to effectively enforce domestic labor and environmental laws as an encouragement for investment. It also reaffirms participants’ commitment under the International Labor Organization Declaration and recognizes the importance of multilateral environmental agreements. In addition, the articles on labor and environment are subject to more detailed and extensive consultation procedures.

State-Led Economies. In response to concerns regarding countries that organize economic activity to a significant degree on the basis of state-owned enterprises and other mechanisms of state influence and control, three innovations have been included: (1) a new discipline to prevent the imposition of domestic technology requirements (i.e., requiring the purchase, use or according of a preference to domestically developed technology in order to provide an advantage to a party’s own investors, investments or technology); (2) a requirement to allow investors of the other party to participate in the development of standards and technical regulations on nondiscriminatory terms (and a recommendation for non-governmental standards bodies to observe this requirement); and (3) clarification of the standard for whether a party has delegated governmental authority to an SOE or any other person or entity, which aims to help ensure that the actions of SOEs and other entities acting under delegated governmental authority are fully covered by the BIT’s obligations.

Initial reaction to the updated model BIT included disappointment from supporters as well as detractors. Public Citizen charged that the model is “fundamentally unchanged” and continues to allow companies to challenge public interest regulations outside of domestic court systems. An AFL-CIO spokesman added that it “remains lopsided in terms of granting overly broad rights and protections to multinational corporations … without requiring even the most basic minimum standards of responsible behavior with respect to labor and the environment.” The Emergency Committee for American Trade said that while the 2012 model “upholds many of the core provisions” this business group has long supported, it is “highly concerned” that the new language on labor and the environment could be “counterproductive” and “is very disappointed that the new 2012 model BIT does not strengthen core protections for U.S. investors overseas.”

Click here for 2012 model BIT
http://www.ustr.gov/sites/default/files/BIT%20text%20for%20ACIEP%20Meeting.pdf

Senate Committee Advances FY 2013 Funding for Trade Agencies

Legislation to fund various federal trade agencies in fiscal year 2013, which begins Oct. 1, 2012, is moving forward in the House and Senate. Although lawmakers are generally seeking to reduce federal spending, appropriations for trade agencies are increased in these bills, reflecting the view that their activities are important to economic recovery efforts such as boosting exports and enforcing trade rules.

In the Senate, the Appropriations Committee approved April 19 a bill that would fund the International Trade Administration at $496 million (up $31 million from FY 2012), including $80.2 million for the Import Administration, $299.4 million for trade promotion and the U.S. & Foreign Commercial Service, $102.3 million for the Bureau of Industry and Security (up $1.3 million), $7 million for the Office of China Compliance, $4.4 million for the China Countervailing Duty Group and “full support” for the new Interagency Trade Enforcement Center. The Senate bill would also fund the International Trade Commission at $82.8 million (up $2.8 million) and the Office of the U.S. Trade Representative at $53 million (up $1.8 million).

In the House, the Appropriations Subcommittee on Commerce, Justice, Science and Related Agencies would fund the ITA at $467.7 million, including $11.4 million for China antidumping and countervailing duty enforcement and compliance activities and $101 million for the BIS. The ITC would receive $83 million and the USTR would receive $51.3 million.

USTR Reviewing Ecuador’s Eligibility Under Andean Trade Preferences Act

The Office of the U.S. Trade Representative is seeking comments by May 22 on whether Ecuador is continuing to meet the eligibility criteria for benefits under the Andean Trade Preference Act, as amended by the Andean Trade Promotion and Drug Eradication Act. As of May 15, when the U.S.-Colombia free trade agreement takes effect, Ecuador will be the only remaining ATPA beneficiary, as the U.S.-Peru FTA is already in force and Bolivia’s eligibility was suspended effective June 30, 2009. Comments received in response to this notice will be used in developing USTR’s report to Congress on the operation of the ATPA, which is due no later than June 30.

Brightening Agents from China and Taiwan, Nails from UAE to be Subject to AD Duties

On April 19 the International Trade Commission made final affirmative antidumping injury determinations on stilbenic optical brightening agents from China and Taiwan and steel nails from the United Arab Emirates. As a result, the International Trade Administration will shortly issue AD duty orders covering these goods, as described below.

Brightening agents – The subject items are synthetic organic chemicals used to increase the brightness of paper and other materials and are derivatives of 4-4'-bis[1,3,5-triazin-2-yl] amino-2-2'- stilbenedisulfonic acid. They are classified under HTSUS 3204.20.80 but may also be imported under HTSUS 2921.59.40, 2921.59.80 and 2933.69.60.

Nails – The subject items are certain steel nails having a shaft length up to 12 inches, including nails made of round wire and nails that are cut. Nails may be of one piece construction or constructed of two or more pieces. They may be produced from any type of steel and have a variety of finishes, heads, shanks, point types, shaft lengths and shaft diameters. Nails may be sold in bulk or they may be collated into strips or coils using materials such as plastic, paper or wire. The nails subject to this investigation are currently classified under HTSUS 7317.00.55, 7317.00.65 and 7317.00.75. A number of specific types of nails are excluded from this investigation, primarily certain types of roofing nails and certain nails for use in powder- actuated or gas-actuated hand tools.

U.S. Customs and Border Protection will continue to collect AD cash deposits on entries of subject merchandise at the following rates.

Brightening agents – 63.98-109.95% for China and 6.20% for Taiwan

Nails – 4.55% to 184.41%

AD/CV Notices: Bearings, Citric Acid, Pipe Fittings, Corrosion-Resistant Steel, Tubular Goods

Agency: ITA.
Commodity: Tapered roller bearings and parts thereof, finished and unfinished.
Country: China.
Nature of Notice: Amended final results of administrative review of AD duty order for the period June 1, 2009, through May 31, 2010.
Details: Amended final dumping margin of 14.98% for three reviewed exporters. AD duties based on this rate will be assessed on entries of subject merchandise made during the period of review, and AD cash deposits at this rate will be required retroactively for entries of subject merchandise entered or withdrawn from warehouse for consumption on or after Jan. 17, 2012.
Link: http://www.gpo.gov/fdsys/pkg/FR-2012-04-23/pdf/2012-9740.pdf

Agency: ITA.
Commodity: Citric acid and certain citrate salts.
Country: Canada.
Nature of Notice: Final results of administrative review of AD duty order for the period May 1, 2010, through April 30, 2011.
Details: Weighted average dumping margin of 2.34% for sole reviewed manufacturer/exporter. AD duties based on this rate will be assessed on entries of subject merchandise made during the period of review, and AD cash deposits at this rate will be required for entries of subject merchandise entered or withdrawn from warehouse on or after April 24.
Link: http://www.ofr.gov/OFRUpload/OFRData/2012-09826_PI.pdf

Agency: ITA.
Commodity: Stainless steel butt-weld pipe fittings.
Country: Italy.
Nature of Notice: Final results of administrative review of AD duty order for the period Feb. 1, 2010, through Jan. 31, 2011.
Details: No shipments or sales of subject merchandise by the named manufacturer/exporter. No AD duties will be assessed, and AD cash deposit requirements will be eliminated for shipments of subject merchandise entered or withdrawn from warehouse for consumption on or after April 24.
Link: http://www.ofr.gov/OFRUpload/OFRData/2012-09819_PI.pdf

Agency: ITC.
Commodity: Corrosion-resistant carbon steel flat products.
Country: Germany and Korea.
Nature of Notice: Determination to conduct full sunset reviews of AD and/or CV duty orders.
Link: http://www.gpo.gov/fdsys/pkg/FR-2012-04-23/pdf/2012-9665.pdf

Agency: ITA.
Commodity: Oil country tubular goods.
Country: China.
Nature of Notice: Extension from April 30 to May 30 of time limit for preliminary results of administrative review of AD duty order for the period May 19, 2010, through April 30, 2011.

More Time to Comment on Guidelines to Discourage Distracting Electronic Devices in Vehicles

The Department of Transportation’s National Highway Traffic Safety Administration is extending through May 18 the period for public comments on a proposed set of voluntary, non-binding guidelines that aim to discourage the introduction of excessively distracting electronic and other devices in light motor vehicles. These guidelines apply to communications, entertainment, information gathering and navigation devices or functions that are not required to operate the vehicle safely and that are operated by the driver through visual-manual means (i.e., the driver looking at a device, manipulating a device-related control with the driver’s hand and watching for visual feedback). Click here for more information on the proposed guidelines: http://strtradenews.com/rv/ff00033012efba306ae7ca9f3a4dad004a94a234/p=3396779

FTZ Board Approves Manufacturing Authority in Indiana, Reorganizes Three Zones, Terminates Hawaii Subzone

The Foreign-Trade Zones Board has approved the following applications.

- from the Ports of Indiana, grantee of FTZ 177, requesting (a) manufacturing authority at the Hoosier Stamping & Mfg. Corp. facility in Chandler, Ind., which is used for the manufacturing, testing, warehousing, packaging, processing, inspecting, repairing and distributing of wheel assemblies and accessories, and (b) authority to include a broad range of inputs and finished wheel assemblies that Hoosier Stamping may produce under FTZ procedures in the future

- from the Richland-Lexington Airport District, grantee of FTZ 127, for authority to reorganize and expand this zone under the alternative site framework with a service area of Aiken, Allendale, Bamberg, Barnwell, Calhoun, Clarendon, Edgefield, Fairfield, Kershaw, Lee, Lexington, McCormick, Newberry, Richland, Saluda and Sumter counties in South Carolina, within and adjacent to the Columbia U.S. Customs and Border Protection port of entry

- from the County of Jefferson, N.Y., grantee of FTZ 109, for authority to reorganize and expand this zone under the ASF with a service area of Jefferson County, adjacent to the Alexandria Bay CBP port of entry

- from the Board of Supervisors of the County of Merced, grantee of FTZ 226, for authority to reorganize this zone under the ASF with a service area that includes portions of Fresno, Kings, Madera, Mariposa, Merced, Stanislaus and Tulare counties in California, within and adjacent to the Fresno CBP port of entry

The FTZ Board has also terminated the subzone status of subzone 9D at the Maui Pineapple Company Ltd. facility in Kahului, Hawaii, after the State of Hawaii advised that zone procedures are no longer needed there.

Potential IPR Probe of Electronic Devices Evaluated for Public Interest Issues

The International Trade Commission is requesting comments no later than May 2 on any public interest issues raised by a Section 337 intellectual property rights infringement complaint filed on behalf of Anu IP LLC against certain electronic devices having a retractable USB connector. 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.

Export Committees on Information Systems, Transportation Equipment to Meet

Information Systems. The Bureau of Industry and Security’s Information Systems Technical Advisory Committee will hold a partially open meeting May 8-9 in Washington, D.C. This committee advises BIS on technical questions that affect the level of export controls applicable to information systems equipment and technology.

The open session of the upcoming meeting will include industry presentations on e-beam lithography, the ENC threshold for satellite modems and semiconductor manufacturing equipment as well as reports from the committee’s working groups. The open session will be accessible via teleconference to 20 participants on a first come, first served basis, and requests to participate in this manner are due no later than May 1. In addition, a limited number of seats will be available at the public session, but reservations are not accepted. (click here for meeting notice http://www.gpo.gov/fdsys/pkg/FR-2012-04-23/pdf/2012-9752.pdf)

Transportation and Related Equipment. The BIS Transportation and Related Equipment Technical Advisory Committee will hold a partially open meeting May 10 in Washington, D.C. This committee advises BIS on technical questions that affect the level of export controls applicable to transportation and related equipment or technology.

The open session of the upcoming meeting will include status reports from the committee’s working groups as well as public comments and proposals. The open session will be accessible via teleconference to 20 participants on a first come, first served basis, and requests to participate in this manner are due no later than May 3. In addition, a limited number of seats will be available at the public session, but reservations are not accepted. (click here for meeting notice http://www.gpo.gov/fdsys/pkg/FR-2012-04-23/pdf/2012-9744.pdf)

Foreign Regulatory Changes Could Affect Exports of Lamps, Yogurt, Mushrooms

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.

Chile – certification procedures for electronic ballasts for fluorescent lamps and self-ballasted LED lamps (comments due by June 18)

Mexico – April 11 publication of amended official standard on yogurt (effective 60 days after publication)

Uganda – final draft standard on methods of sampling and testing for dried edible mushrooms after preparation and packaging (comments due by June 18)

Marine Transportation System Council to Meet May 8

The Marine Transportation System National Advisory Council will hold an open meeting May 8 in Washington, D.C., to discuss recommendations on the integration of marine highways into the national transportation system and the development of a steady and reliable funding mechanism for port infrastructure development. Members of the public who would like to speak at this meeting must contact DOT (Richard.lolich@dot.gov) by May 1. Written comments must be filed no later than May 11.

Agricultural Export Program Funding Available for 2013

The Department of Agriculture is inviting applications no later than May 21 for fiscal year 2013 funding under the following agricultural export programs.

Emerging Markets Program. The EMP (http://www.gpo.gov/fdsys/pkg/FR-2012-04-23/pdf/2012-9637.pdf) is designed to assist in developing, maintaining or expanding exports of U.S. agricultural commodities and products by funding activities that improve emerging markets’ food and rural business systems, including reducing potential trade barriers in such markets. All EMP projects must fall into at least one of the following four categories.

• assistance to teams consisting primarily of U.S. individuals expert in assessing the food and rural business systems of other countries

• assistance to enable individuals from emerging markets to travel to the U.S. so that they can, for the purpose of enhancing the food and rural business systems in their countries, become familiar with U.S. technology and agribusiness and rural enterprise operations by consulting with food and rural business system experts in the U.S.

• assistance to enable U.S. agricultural producers and other individuals knowledgeable in agricultural and agribusiness matters to travel to emerging markets to assist in transferring their knowledge and expertise to entities in emerging markets

• technical assistance to implement the recommendations, projects and/or opportunities identified above

All U.S. agricultural commodities except tobacco are eligible for consideration under the EMP, but products should have at least 50% U.S.-origin content by weight (exclusive of added water). Proposals seeking support for multiple commodities are also eligible.

Market Development/Market Access Programs. The Foreign Market Development Cooperator Program (http://www.gpo.gov/fdsys/pkg/FR-2012-04-23/pdf/2012-9638.pdf) and the Market Access Program (http://www.gpo.gov/fdsys/pkg/FR-2012-04-23/pdf/2012-9639.pdf) are designed to create, expand and maintain foreign markets for U.S. agricultural commodities and products through assistance in sharing the costs of certain overseas marketing and promotion activities. All U.S. agricultural commodities, except tobacco, are eligible for consideration.

Quality Samples Program. The QSP (http://www.gpo.gov/fdsys/pkg/FR-2012-04-23/pdf/2012-9635.pdf) is designed to encourage the development and expansion of export markets for U.S. agricultural commodities by assisting U.S. entities in providing commodity samples to potential foreign importers to promote a better understanding and appreciation for the high quality of U.S. agricultural commodities. The program supports projects that address a single market/commodity combination, benefit whole industries rather than individual companies, and develop a new market for a U.S. product, promote a new U.S. product or promote a new use for a U.S. product. Participants may seek reimbursement for the sample purchase price and the cost of transporting the samples domestically to the port of export and then to the foreign port or point of entry.

Technical Assistance for Specialty Crops. The TASC program (http://www.gpo.gov/fdsys/pkg/FR-2012-04-23/pdf/2012-9633.pdf) is designed to provide funding for projects that address sanitary, phytosanitary or related technical barriers that
prohibit or threaten the export of U.S. specialty crops. For TASC purposes specialty crops include all cultivated plants, or the products thereof, that are produced in the U.S. except wheat, feed grains, oilseeds, cotton, rice, peanuts, sugar and tobacco.

TASC projects should benefit the represented industry rather than a specific company or brand and must address barriers to exports of commercially-available U.S. specialty crops whose removal would predominantly benefit U.S. exports. Expenses that may be reimbursed under the TASC program include initial pre-clearance programs, export protocol and work plan support, seminars and workshops, study tours, field surveys, development of pest lists, pest and disease research, database development, reasonable logistical and administrative support, and travel and per diem expenses.

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