May 14 2012 issue
Constitutionality of Law Allowing CV Duties on NME Goods to be Reviewed by CIT
The Court of Appeals for the Federal Circuit issued May 9 an order directing the Court of International Trade to review the constitutionality of a law enacted earlier this year that explicitly allows the federal government to impose countervailing duties on goods from non-market economy countries like China and Vietnam. That law reversed the CAFC’s December 2011 ruling against this practice in GPX International Tire Corporation v. U.S. and allowed about two dozen CV duty orders, mostly on goods from China, to remain in place.
According to the CAFC, GPX argues that the law is unconstitutional because it “improperly creates a special rule applicable only to this case (or perhaps a few others) due to the different effective dates” in two of its key provisions. Specifically, the provision allowing CV duties to be imposed on NME goods was retroactive to Nov. 20, 2006, while the provision prohibiting the concurrent imposition of antidumping and countervailing duties on the same product from an NME country (i.e., double counting) in accordance with World Trade Organization rules only applied to proceedings initiated on or after March 13, 2012 (the date the law was enacted). GPX argued that this dichotomy “creates a situation in which both antidumping and countervailing duties may be imposed, without providing a mechanism to account for potential double counting.”
The CAFC agreed that this is a new issue not raised within the original case and should therefore be first considered by the CIT. It is unclear at this point how broad the CIT’s review may be and how its decision might affect importers.
Ways and Means Sets May 17 Hearing to Help Develop Customs Reauthorization Bill
The House Ways and Means Committee will hold a hearing May 17 to inform its development of customs reauthorization legislation. This hearing will focus on efforts to enhance economic growth and job creation by facilitating legitimate trade, modernizing customs procedures and enforcing U.S. customs and trade laws. George Weise, former CBP commissioner and currently executive vice president of Sandler & Travis Trade Advisory Services, will be among those testifying.
A press release notes that Ways and Means last conducted a comprehensive review of the structure and resources of U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement from a commercial operations and customs enforcement perspective in May 2010. Since that time “there has been growing concern that, in particular, existing efforts to modernize trade functions, facilitate legitimate trade, and enforce customs laws may not be keeping pace with the growing volumes of trade.” The press release states that CBP has been implementing several programs to automate trade (e.g., the Automated Commercial Environment and the International Trade Data System), improve compliance and identify shipments that violate U.S. laws and that the trade community has made large investments in international supply chains through advance submissions of cargo data and partnership programs between government and business (e.g., the Customs-Trade Partnership Against Terrorism). The May 17 hearing will explore how these enhanced targeting and screening tools can be improved to reduce costs, smooth movements of legitimate trade by trusted partners and increase compliance. The hearing will also address how CBP manages its resources and whether any structural or other changes are needed to ensure that it can effectively enforce U.S. customs and trade laws, including in the areas of antidumping and countervailing duties, intellectual property rights and textiles.
Both the House and Senate have been working on customs reauthorization bills for some time. Click here for a list of topics that could be included in this legislation (wti/wti.asp?pub=0&story=36992&date=&company=).
Textile and Apparel Imports Reverse Course, Move Upward in March
The Department of Commerce’s Office of Textiles and Apparel reported May 10 that monthly U.S. textile and apparel imports rose 1.7% in March compared to a year earlier. Imports of cotton, wool, manmade fiber, silk blends and non-cotton vegetable fiber textile and apparel products totaled 4.01 billion square meter equivalents. Textile imports jumped 7.0% from a year before to 2.35 billion SME while apparel imports fell 4.9% to 1.66 billion SME.
For the year to date as of March 2012, compared to the same period in 2011, imports of textiles and apparel were down 1.6% to 12.33 million SME. Textile imports edged up 0.2% to 6.92 million SME while apparel imports saw a 3.9% drop to 5.41 million SME. For the 12-month period ending in March total imports fell 4.5% to 53.5 billion SME as textile imports slid 3.4% to 29.8 billion SME and apparel imports declined 5.9% to 23.6 billion SME.
With respect to specific sources, imports of textile and apparel products (except cotton and silk blend textiles) saw a year-on-year increase in March from China (18.5% to 1.53 billion SME), Vietnam (8% to 245.5 million SME), Taiwan (33.9% to 67.0 million SME), Korea (7.1% to 119.6 million SME), EU15 (1.7% to 131.6 million SME) and Turkey (0.5% to 44.9 million SME). Imports declined from Hong Kong (29.3% to 3.8 million SME), Canada (4.9% to 108.3 million SME), Mexico (4.0% to 225.4 million SME), DR-CAFTA countries (10.2% to 264.3 million SME), the Caribbean Basin Initiative region (11.2% to 284.7 million SME), ASEAN (4.7% to 592.5 million SME), South Asia (10.7% to 721.7 million SME) and Israel (27.3% to 30.3 million SME).
Monthly Trade Deficit Up as Import Gain Outstrips Increase in Exports
Trade statistics released May 10 by the Department of Commerce show that the monthly U.S. trade deficit in goods and services resumed its upward trend in March and rose 14.1% to $51.8 billion. Exports saw an increase of $5.3 billion to $186.8 billion but imports jumped $11.7 billion to $238.6 billion. Compared to a year earlier, the March trade deficit was down $5.8 billion as exports climbed $12.8 billion (7.3%) and imports rose $18.5 billion (8.4%).
According to DOC, the goods trade deficit rose $6.5 billion in March to $67.6 billion after a $6.0 billion decline in February. The services surplus rose $0.1 billion to $15.8 billion after a $0.5 billion gain a month earlier. Exports of goods were up $4.7 billion to $132.7 billion and imports shot up $11.3 billion to $200.3 billion. Services exports moved ahead $0.5 billion to $54.1 billion and imports gained $0.4 billion to $38.3 billion. A DOC press release states the export totals for goods and services were both all-time highs.
The bilateral trade deficit with China was up again after a sharp drop in February, rising 11.9% to $21.7 billion, while the deficit with Korea edged up to $0.6 billion as the U.S. free trade agreement with that country took effect. Virtually all other bilateral deficits saw increases as well, including 66.1% with the European Union (to $9.8 billion), 1.4% with Japan (to $7.1 billion), 5.2% with Mexico (to $6.1 billion), 52.8% with Germany (to $5.5 billion), 6.9% with Canada (to $3.1 billion), and 42.1% with Venezuela (to $2.7 billion).
The U.S. ran trade surpluses with Hong Kong (down 3.2% to $3.0 billion), Australia (up 17.6% to $2.0 billion), Singapore (up 28.6% to $0.9 billion) and Egypt (unchanged at $0.2 billion).
Click here for Census report on trade deficit
AD/CV Notices: Steel Wire, Thermal Paper, Garlic, Polyester Fiber, Hangers
Commodity: Galvanized steel wire.
Country: China and Mexico.
Nature of Notice: Final negative AD and CV injury determinations.
Details: AD/CV duty cash deposits collected will be returned and no AD or CV duty orders will be issued.
Commodity: Lightweight thermal paper.
Nature of Notice: Rescission of administrative review of AD duty order for the period Nov. 1, 2010, through Oct. 31, 2011, based on the petitioner’s withdrawal of its request for review.
Details: AD duties on imports of subject merchandise during this period will be assessed at rates equal to the AD cash deposit required at the time of entry or withdrawal from warehouse for consumption.
Commodity: Fresh garlic.
Nature of Notice: Continuation of AD duty order for five years, effective April 30.
Details: The products subject to this order are all grades of garlic, whole or separated into constituent cloves, whether or not peeled, fresh, chilled, frozen, provisionally preserved or packed in water or other neutral substance, but not prepared or preserved by the addition of other ingredients or heat processing. The subject garlic is currently classifiable under HTSUS 0703.20.0010, 0703.20.0020, 0703.20.0090, 0710.80.7060, 0710.80.9750, 0711.90.6500 and 2005.99.9700. The scope of the order does not include (a) garlic that has been mechanically harvested and that is primarily, but not exclusively, destined for non-fresh use, or (b) garlic that has been specially prepared and cultivated prior to planting and then harvested and otherwise prepared for use as seed.
Nature of Notice: Clarification that agencies have initiated sunset reviews of the AD duty order on polyester staple fiber, not activated carbon, from China.
Commodity: Steel wire garment hangers.
Country: Vietnam and Taiwan.
Nature of Notice: Postponement of preliminary AD duty determinations from June 6 to July 26.
Commodity: Steel wire garment hangers.
Nature of Notice: Extension from July 2 to Oct. 30 of time limit for preliminary results of administrative review of AD duty order for the period Oct. 1, 2010, through Sept. 30, 2011.
Foreign Regulatory Changes Could Affect Exports of Organic Products, Appliances, Paint, Cigarettes, Milk
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.
China – administrative measures on activities involving organic product certification, production, processing and marketing (comments due by May 30)
Ecuador – amended conformity assessment procedure on gas-fired domestic cooking appliances
Ecuador – draft technical regulations on paint and cast iron
Jamaica – standard specifying the information, the method of display of such information and the wording and presentation of health warnings to be included on the labels of retail packages of tobacco products (comments due by July 11)
Mexico – publication of revised official standards on milk, milk formula and combined milk products and maximum authorized weight and dimensions for road transport vehicles
FTZ Board Asked to Expand South Dakota Zone, Create New Subzone in Oregon
The Foreign-Trade Zones Board has received an application from the Sioux Falls Development Foundation, grantee of FTZ 220, requesting authority to reorganize and expand this zone under the alternative site framework. The proposed service area under the ASF would be Bon Homme, Brookings, Clay, Davison, Duel, Hamlin, Hanson, Hutchinson, Kingsbury, Lake, Lincoln, McCook, Miner, Minnehaha, Moody, Sanborn, Turner, Union and Yankton counties in South Dakota, within and adjacent to the Sioux Falls U.S. Customs and Border Protection port of entry. Comments on this application are due no later than July 10.
The FTZ Board has also received from the Port of Portland, grantee of FTZ 45, a request for subzone status along with a notification of proposed production activity at the Shimadzu USA Manufacturing Inc. facility in Canby, Ore. This facility is used for the production of chromatographs, mass spectrometers and related equipment such as liquid chromatograph pumps, fraction collectors, auto samplers, lab instruments, controllers and column ovens. Production under FTZ procedures could exempt Shimadzu from customs duty payments on the foreign status components used in export production and customs duties also could possibly be deferred or reduced on foreign status production equipment. The request indicates that certain of the bearings proposed to be used are subject to an antidumping/countervailing duty order. Comments are due no later than June 25.
Simple Assembly Not Enough to Confer Origin on Flashlights, CBP Says
U.S. Customs and Border Protection has issued a final determination concerning the country of origin of two flashlights and an LED blank assembly that may be offered to the U.S. government under an undesignated government procurement contract. CBP concluded that the country of origin of the LED blank assemblies is India, that the blank assemblies provide the essential character to the finished flashlights, and that the assembly of the other components within the blank assemblies to make the finished flashlights constitutes a simple assembly operation. As a result, these flashlights are products of India for purposes of U.S. government procurement.
CBP issues country of origin advisory rulings and final determinations as to whether an article is or would be a product of a designated country or instrumentality for the purposes of granting waivers of certain “Buy American” restrictions in U.S. law or practice for products offered for sale to the U.S. government.
CBP’s final determination was issued May 7. Any party-at-interest may seek judicial review of this determination by June 13.
Three More Carriers Approved for Mexican Truck Pilot
The Department of Transportation’s Federal Motor Carrier Safety Administration is requesting 24 public comment no later than May on data and information concerning pre-authorization safety audits conducted for three motor carriers that have applied to participate in the pilot program to test and demonstrate the ability of Mexico-domiciled motor carriers to operate safely in the U.S. beyond specified border zones. According to FMCSA, these carriers successfully completed their PASAs earlier this year and the results of these audits are available here (http://www.fmcsa.dot.gov/intl-programs/trucking/Trucking-Program.aspx). A list of the carrier’s vehicles approved for use in the pilot program is also available on this Web site.
While the law only requires the publication of data for carriers receiving operating authority, FMCSA will also publish this information to show motor carriers that failed to meet U.S. safety standards. To date, however, no carriers have failed the PASA.
Click here for FMCSA notice
Mod Act Recordkeeping Requirements, Motor Carrier Reports, Export Health Certificate Under Review
Comments on the proposed extension of the following information collections are due no later than June 13. Comments should address whether these collections are necessary for the agencies to perform their functions, how the quality, usefulness and clarity of the collected information could be enhanced, the accuracy of the estimated burden associated with these collections and ways that burden could be minimized.
Customs Modernization Act Recordkeeping Requirements - The Mod Act expanded the list of parties subject to CBP recordkeeping requirements, distinguished between records that pertain to the entry of merchandise and financial records needed to substantiate the correctness of information contained in entry documentation, and identified a list of records that must be maintained and produced upon request by CBP. The information and records are used by CBP to verify the accuracy of claims made on entry documents regarding the tariff status of imported merchandise, admissibility, classification/nomenclature, and value and rate of duty applicable to the entered goods.
Motor Carrier Identification Forms – Form MCS-150 (Motor Carrier Identification Report) is filed by all motor carriers conducting operations in interstate or international commerce before beginning operations. It asks the respondent to provide the name of the business entity that owns and controls the motor carrier operation, the address and telephone number of the principal place of business, the assigned identification number(s), the type of operation, the types of cargo usually transported, the number of vehicles owned, term leased and trip leased, driver information, and a certification statement signed by an individual authorized to sign documents on behalf of the business entity.
All hazardous materials carriers complete and file form MCS-150B (Combined Motor Carrier Identification Report and HM Permit Application) to obtain a safety permit to transport hazardous materials. All hazmat permitted carriers must also complete this form in place of the current form MCS-150 to renew both their permit and their DOT numbers.
All intermodal equipment providers must complete form MCS-150C (Intermodal Equipment Provider Identification Report) to register with the FMCSA and receive a DOT number. In addition, intermodal equipment providers must complete form MCS-150C to update their DOT number record.
Export Health Certificate – The Department of Agriculture’s Animal and Plant Health Inspection Service requires U.S. exporters to complete an export health certificate before exporting any live crustaceans, finfish or mollusks or their gametes if requested by the importing country. The certificate will be completed by an accredited veterinarian with assistance from the producer and must be signed by the accredited veterinarian and endorsed by APHIS. The certificate identifies the names of the species being exported, their ages and weights, whether they are cultured stock or wild stock, their place of origin, their country of destination, and the date and method of transport.
State Dept. Allows Imports/Exports of Rough Diamonds from/to Swaziland
The State Department has issued a revised list of all countries eligible for trade in rough diamonds under the Clean Diamond Trade Act of 2003 and their respective importing and exporting authorities. The CDTA requires the president to prohibit U.S. imports and exports of any rough diamond from whatever source that has not been controlled through the Kimberley Process Certification Scheme, which seeks to prevent trade in diamonds from funding civil wars and terrorist activities. The revised list reflects the addition of Swaziland and now includes a total of 49 countries and political entities.