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May 16 2012 issue

Wednesday, May 16, 2012
Sandler, Travis & Rosenberg Trade Report

CBP Planning to Have Nine Industry Processing Centers Running by End of 2013

U.S. Customs and Border Protection officials announced at the agency’s May 10 West Coast Symposium that they expect to have nine Centers of Excellence and Expertise covering the full range of imported goods operational by the end of 2013. Officials said the CEEs are a “game changer” with respect to the way CBP processes trade transactions and interacts with the trade community and should yield benefits for both sides.

Industries. CBP currently has CEEs in operation for electronics in Los Angeles and pharmaceuticals, health and chemicals in New York. The New York CEE is operational with respect to pharmaceuticals and chemicals and will expand to include the health equipment industry in the near future. The Los Angeles CEE is now handling all commodities within the information technology and consumer electronics industries.

On May 10 CBP announced two additional CEEs: one for the automotive, aerospace and transportation-related industries in Detroit, and one for the petroleum, natural gas and minerals industries in Houston. CEEs for the remaining five sectors – base metals and machinery, consumer products and mass merchandising, industrial and manufacturing materials, and textiles, wearing apparel and footwear – are expected to be up and running by the end of 2013. Officials said they are trying to determine the appropriate physical locations for each of these CEEs, which may be more difficult than for those already established because the geographical footprint of the industries involved is not as concentrated.

Activities. CEEs initially will serve as a single point of processing for trusted traders, which at this point is defined as businesses that are Customs-Trade Partnership Against Terrorism certified (tier 2 or 3) and members of the Importer Self-Assessment program. CBP will consider expanding the definition of “trusted trader” in the future but as of yet has not suggested specific possibilities. Officials noted that they see a role for customs brokers in helping CBP get importers into trusted trader programs. CEEs are also envisioned as a resource for the entire trade community, including small and medium-sized importers who may not have large compliance departments, as well as CBP’s U.S. government partners.

CBP has said that CEEs will perform all validation activities, protests, post-entry amendment/post-summary correction reviews and prior disclosure validations for the trusted partners within their industries. They can also be contacted for technical guidance on covered imports, clarification of CBP policies and procedures, assistance with CBP requests for information/action (CF-28s, CF-29s, etc.), assistance with lengthy cargo holds, and information regarding counterfeit/substandard imports. Revenue collection will continue to be carried out at ports of entry for the time being but CBP anticipates eventually moving this function to the CEEs as well. Officials say the agency’s intent is for CEEs to serve as a “one-stop shop” for the full range of CBP services.

CBP officials said an internal review of the skill sets needed to successfully run CEEs showed that most of the skills needed are already present within the agency, with the rest to be gained through “bidirectional training” with industry. The review also found that those skill sets are widely distributed, both geographically and among various positions, so CEEs will bring together supply chain specialists, national account managers and others to integrate those skills in one place.

Benefits. In a recent presentation CBP outlined a number of benefits associated with the CEEs. On the trade community side, compliant importers will see unnecessary transactional work eliminated, resulting in fewer cargo delays, reduced costs and greater predictability. Traders will also have a single point of contact for a given industry, which should help improve uniformity in CBP decision making and consistency in administering agency policies and procedures among ports. Officials added at the May 10 symposium that CEEs will help trusted partners receive expedited treatment in obtaining rulings from the Office of Regulations and Rulings.

For CBP, CEEs will allow port of entry personnel to shift their focus more toward high-risk shipments, resulting in improved import safety, increased revenue protection and reduced economic loss due to theft of intellectual property rights. CBP personnel will also be able to develop cross-functional expertise in each industry, allowing them to be better resources for trade and government partners and leading to improved enforcement. CBP officials said recently that CEEs will allow the agency to take action in a coordinated fashion toward its goals of facilitating legitimate trade, improving the United States’ economic competitiveness, strengthening enforcement to ensure a level playing field for U.S. businesses, and adding knowledge about how trade operates now and in the future to complement CBP’s existing expertise on commodities and regulatory processes.

In response to concerns about how CBP will handle inquiries about problems that turn out to be a violation, officials say they are more interested in determining the cause of the noncompliance and working with the company to resolve that problem than in imposing fines and penalties.

OGAs. CEEs will be working to partner with other government agencies whose regulations affect trade to promote the adoption of risk management and segmentation practices that will result in even greater facilitation of legitimate trade and enhanced enforcement activities. However, discussions on these issues are ongoing.

FTC Seeks Public Input on Used Auto Parts Guides

The Federal Trade Commission is seeking public comment no later than Aug. 3 on 22 specific questions concerning the costs, benefits, need for, and regulatory and economic impact of its Used Auto Parts Guides. The FTC states that these guides, formally known as the “Guides for the Rebuilt, Reconditioned and Other Used Automobile Parts Industry,” are designed to prevent the unfair or deceptive marketing of used motor vehicle parts and assemblies, such as engines and transmissions, containing used parts. The last revision of the guides in 2002 included an update to the list of commonly rebuilt or reused parts for cars, trucks, motorcycles, tractors and similar self-propelled vehicles.

According to an FTC press release, the guides prohibit misrepresentations that a part is new or about the condition, extent of previous use, reconstruction or repair of a part. Previously used parts must be clearly and conspicuously identified as such in advertising and packaging and, if the part appears new, on the part itself. The guides describe the treatment a part must receive before it can be described as “rebuilt” or “remanufactured” and limit use of the term “factory rebuilt” to parts built “at a factory generally engaged in the rebuilding of such products.” The guides also prohibit misrepresenting a part rebuilder’s identity.

Click here for FTC notice

STTAS Growth, Services Highlighted in Miami Today

Sandler & Travis Trade Advisory Services was recently featured in the Miami Today newspaper. The article recognizes the significant growth of STTAS, which now has offices in the U.S., Mexico, Brazil, Argentina and Poland, and highlights the wide range of customs and international trade management services the firm provides to both the public and private sectors. The article cites STTAS’ Lee Sandler as pointing out that the trend toward increased regulation of imports and exports has also increased the “need for companies to reach out to consulting firms to avoid encountering surprises in the middle of intricate transactions.” For more information on STTAS’ products and services, click here. (

Leadership of New Interagency Trade Enforcement Center Named

Press reports indicate that the Obama administration named the director and deputy director of the new Interagency Trade Enforcement Center on May 14. Brad Ward, who serves as assistant U.S. trade representative for monitoring and enforcement, will serve as director and Constance Handley of the International Trade Administration’s manufacturing and services unit was named deputy director.

The ITEC has three objectives according to the February 28 executive order establishing it. One is to coordinate among USTR, the Office of the Director of National Intelligence, and the departments of State, Justice, Agriculture, Commerce, Homeland Security and the Treasury on the enforcement of U.S. trade rights under international trade agreements and the enforcement of domestic trade laws (e.g., safeguards, antidumping/countervailing duties, intellectual property rights). The second is to coordinate among USTR, other agencies with trade-related responsibilities and the U.S. intelligence community the exchange of information related to potential violations of international trade agreements by foreign trade partners. The third is to conduct outreach to U.S. workers, businesses and other interested persons to foster greater participation in the identification and reduction or elimination of foreign trade barriers and unfair foreign trade practices.

Of Note: FTA Negotiations, Brazil-Argentina Spat Deepens, Country of Origin Rethink

China, Colombia Initiate Free Trade Talks

China Plans Talks With Japan, Korea on Free-Trade Area

Brazil targets Argentina with trade licenses

WTO Is One Step Closer To Eliminating Country-Of-Origin Labels

Export Transaction Information Collections Under Review

The Bureau of Industry and Security is accepting comments through June 15 on the proposed extension of the various information collections, notifications, reports and information exchanges needed by the Office of Export Enforcement and U.S. Customs and Border Protection to enforce the Export Administration Regulations and maintain U.S. national security. Most of these activities do not involve the submission of documents to BIS but instead involve the exchange of documents among parties in the export transaction to ensure that each understands its obligations under U.S. law. Other activities involve writing certain export control statements on shipping documents or reporting unforeseen changes in shipping and disposition of exported commodities.

FTZ Procedures Sought for Cell Phone Facility in Nevada

The Foreign-Trade Zones Board has received from the Economic Development Authority of Western Nevada, grantee of FTZ 126, a notification of proposed production activity at the cell phone kitting, warehousing and distribution facility of Brightpoint North America L.P. in Reno, Nev. Production under FTZ procedures could exempt Brightpoint 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. On its domestic sales, Brightpoint would be able to choose the duty rate that applies to cell phone kits (zero) for its foreign status inputs. Comments on this notification are due no later than June 25.

Ocean Transportation Intermediary License Revocation, Applicants

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

- license #16661NF: H.L.M. Cargo Corp. d/b/a Sea Line Express, 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.

- Data Freight LLC d/b/a Bright Express International, Inglewood, Calif.
- Lone Star Integrated Distribution LLC d/b/a H.B. Shipping, Houston, Texas
- NC Freight & Logistics LLC, Miami, Fla.
- Pacific Global Logistics Inc., Auburn, Ala.
- Rockin Boxes Global Inc., Valencia, Calif.
- The Camelot Company d/b/a Purple Star Line, Schiller Park, Ill.
- Unit International Inc., Jacksonville, Fla.

Ex-Im Bank to Facilitate Financing of Business Aircraft Exports

The U.S. Export-Import Bank announced May 14 a new process under which it will work with qualified industry experts to perform due diligence and credit analysis to facilitate its support for U.S. business aircraft exports. An agency press release states that this new process is designed to provide the Ex-Im Bank with additional resources to address the increased demand for export credits for business aircraft and helicopters arising from the growing percentage of U.S.-manufactured aircraft that are sold to foreign buyers. The intended result is a more complete and comprehensive transaction package being submitted to Ex-Im Bank, the press release states, which in turn will expedite the application, approval and closing process for foreign borrowers. The Bank notes that this process will be available immediately through any advisor that has demonstrated the requisite knowledge, experience and expertise with business aircraft financing.

Self-Assessment Risk Tool for Maritime Facilities and Vessels Discontinued

The Transportation Security Administration has announced that it will no longer support the TSA Maritime Self-Assessment Risk Module. This tool was developed to support a requirement in the Maritime Transportation Security Act of 2002 for any facility or vessel that might be involved in a transportation security incident to conduct a vulnerability assessment and submit a security plan to the U.S. Coast Guard. While hundreds of maritime owner/operators have used this tool to support their vulnerability assessments, TSA states, usage has fallen off significantly, due in part to the fact that other tools have become available.

New and Amended Maritime Agreements Filed

The Federal Maritime Commission has issued notice that the following new or amended agreements have been filed. Interested parties may submit comments by May 28.

WWL/Hoegh Middle East Space Charter Agreement – The amendment would add the U.S. Gulf Coast, Mediterranean Sea, Persian Gulf, Gulf of Aden, Black Sea, Gulf of Oman and Indian Ocean to the geographic scope of the agreement.

Crowley/SC Line Space Charter and Sailing Agreement – The agreement authorizes SC Line to charter space to Crowley in the trade between the U.S. Atlantic Coast and ports in Panama.

Foreign Regulatory Changes Could Affect Exports of A/V Equipment, Household Appliances

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 country. For information on how these restrictions may affect your business, contact ST&R.

Botswana – safety standards on audio, video and similar electronic apparatus; floor treatment machines and wet scrubbing machines; storage water heaters; electric sewing machines; clothes dryers and towel rails; electric irons; electric oral hygiene appliances; and surface cleaning appliances for household use employing liquids or steam (comments due by July 14)

Revised Energy Rules for Air Conditioners, Heat Pumps and Microwave Ovens

Amended Energy Conservation Standards for Large A/C Units, Heat Pumps. The Department of Energy has issued a final rule amending its energy conservation standards for small, large and very large water-cooled and evaporatively-cooled commercial package air conditioners and variable refrigerant flow water-source heat pumps less than 17,000 Btu/h. This rule also updates the current federal test procedures or, for certain equipment, adopts new test procedures to incorporate by reference the most current versions of the relevant industry test procedures specified in ASHRAE Standard 90.1-2010. Furthermore, DOE is adopting additional test procedure provisions to include with modification certain instructions from Air-Conditioning, Heating and Refrigeration Institute operations manuals in that organization’s test procedures that would clarify the application of the DOE test procedures and harmonize DOE testing with the testing performed by industry. Manufacturers will be required to use these amended procedures to certify compliance with energy conservation standards.

This rule will be effective as of July 16. For most covered products, compliance with the new test procedures will be required as of May 13, 2013, and all representations of energy use and energy efficiency must be made using the amended test procedures on or after that date. Compliance with the new or amended standards, as appropriate, will be required on dates ranging from Oct. 29, 2012, to June 1, 2014.

More Proposed Changes to Energy Testing of Microwave Ovens. The DOE has made additional changes to its proposal to amend the test procedures for microwave ovens. Specifically, DOE is proposing that for products combining a microwave oven with other appliance functionality, the compartment incorporating microwave cooking would be considered a covered product under the definition of a microwave oven at 10 CFR 430.2. DOE is therefore proposing provisions that would apportion the overall standby mode and off mode power in such combined products among the microwave oven component and other components and would thus determine the portion of the standby mode and off mode power associated specifically with the microwave oven component. DOE is also proposing minor technical clarifications. Comments, data and information on these changes are due no later than June 15.

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