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June 6 2012 issue

Wednesday, June 06, 2012
Sandler, Travis & Rosenberg Trade Report

CBP Advancing Rail/Sea E-Manifest, Cargo Release, Export Initiatives

U.S. Customs and Border Protection has posted to its Web site an update on the functionality already implemented in the Automated Commercial Environment as well as near-term priorities for other ACE deliverables, including e-manifest for rail and sea, cargo release and export processing. ACE is currently in an operations and maintenance phase and CBP is using carry-over dollars for development work on these initiatives. However, CBP states that it is committed to working with ACE stakeholders to develop business cases for remaining functionality in order to secure the additional funding needed to implement it.

E-Manifest: Rail and Sea (M1). M1 provides a consolidated view of rail and sea shipment manifest and entry data at the bill of lading or container level to facilitate the identification of shipments that may pose a risk and will expedite the pre-arrival processing of legitimate cargo. New capabilities include enabling CBP to place and remove holds at the conveyance, container and master bill level, informing carriers which participating government agency (PGA) has held their merchandise, allowing carriers to create through the ACE Portal a list of trade partners authorized to use their in-bond authorization, providing 12 new reports for rail and sea carriers along with seven new reports for brokers and two for importers, and allowing filers to create and maintain rail line release entry banks through the ACE Portal.

M1 was to have been deployed at all CBP ports of entry by the end of May. CBP states that 88% of the carrier community impacted by M1 has sent rail and sea manifests to ACE, completed testing or is in the process of testing. As of Sept. 29 the Automated Manifest System for rail and sea will be decommissioned.

E-manifest for trucks was deployed in February 2007 and is used to process an average of 190,000 trucks nationally per week. E-manifest for air and integration of the multimodal manifest is anticipated at some point in the future but has not yet been planned.

Cargo Release. ACE Cargo Release will provide the trade community with a more automated and modern process that streamlines data requirements, removes paper and provides for expedited import decisions by federal agencies. The following components are in progress, and CBP is evaluating requirements and developing an analysis of alternatives to determine possible development options for the ultimate full delivery of Cargo Release.

Simplified entry is the first phase of Cargo Release. CBP has selected nine customs brokers to participate in a pilot test of simplified entry, which was launched May 29 at the ports of Indianapolis, Chicago and Atlanta. This pilot will eliminate the current CBP Form 3461 used to make entry and replace it with a streamlined set of data – 12 required and three optional data elements – submitted earlier in the process. This will give CBP an expanded window of opportunity to identify potential risks. Participants will also be able to update entry information for the first time, allowing them to provide the best available information at the time of filing and update it as needed all the way up to the arrival of the conveyance. CBP will thus have more accurate data, thereby enhancing cargo security.

CBP officials said recently that they intend the release message sent as part of the simplified entry pilot to be something traders can rely on to clear their goods once they arrive even though the release would be issued prior to the physical arrival of the goods. This will necessitate ensuring that both security and admissibility issues are addressed ahead of time. CBP will test this in the simplified entry pilot by requiring the air carrier to submit the manifest/Air Cargo Advance Screening security filing (as appropriate) and the importer to submit the simplified entry data set, both as soon as the relevant information is available. If CBP determines that additional information is needed, filers will be able to provide it before the plane leaves or during transit, resulting in fewer goods held at arrival.

CBP plans to build on this initial delivery of simplified entry with future deployments of additional functionality until Cargo Release is fully available in ACE. In the short term, information required by other government agencies is set to be incorporated in future deployments once the pilot gets underway. Also in the near term simplified entry will address linkages with the document imaging system (see below).

The document imaging system allows trade members to electronically supply documentation needed during the cargo release process to CBP and other federal agencies. In April CBP published a Federal Register notice authorizing the initiation of a pilot program allowing the trade to transmit scanned documents in XML format. For the purposes of PGA forms, invoices and packing lists that are associated to ACE entry summaries certified for cargo release, the required documentation may be submitted without a prior request by CBP or the PGA. In addition, 18 ocean carriers at eight ports are participating in a pilot program to evaluate the feasibility of processing email-based submissions of export manifests via the DIS.

PGA Interoperability introduces a comprehensive set of technical services that enables CBP to share trade data, documents and events of interest in an automated manner with PGAs in an effort to significantly enhance the interagency collaboration required during the cargo importation, review and release process. The Consumer Product Safety Commission has been receiving automated production entry and entry summary data directly from CBP since September 2011, and several more PGAs are in the process of being brought into the interoperability environment, including the Animal and Plant Health Inspection Service, the Department of Transportation, the Environmental Protection Agency, the Food Safety and Inspection Service, the National Marine Fisheries Service and the Coast Guard.

PGA Message Set introduces a well-defined, harmonized set of data to be collected electronically from international traders by CBP on behalf of PGAs. This effort will replace the myriad of paper forms currently required by federal agencies during the cargo importation process. The PGA Message Set is planned to be delivered as part of the simplified entry phase II/cargo release capability.

Exports. CBP is planning to establish ACE as the single processing platform for all export manifest, commodity, licensing and export control transactions. CBP plans to establish an interface between the Automated Export System and the ACE platform to allow CBP and PGA access to export control and licensing information required for processing and releasing export shipments, with the initial focus on the primary export control and licensing agencies. The automated export processing system will also focus on developing a standard data set document for export transactions, developing the capability to accept document images to support manifest, commodity or licensed export filings, and developing functionality for an interoperable Web-based system among CBP and PGAs.

The concept of operations and operational requirements document are scheduled for completion by Oct. 1. In addition, an automated export manifest pilot test using the DIS capability began in late March at the ports of Norfolk, Newport News, Wilmington, Beaufort-Morehead City, Georgetown, Charleston, Savannah and Brunswick. Eighteen pilot test carriers, representing 56% of the total containerized U.S. export volume and including the top three U.S. export carriers, have volunteered to participate.

Click here for CBP notice

Faster Approvals Being Given for New FTZ Activity

The Foreign-Trade Zones Board has begun implementing an important change included in the recent overhaul of its regulations that should make it easier and quicker for companies to obtain approval for new production authority within FTZs.

FTZs may be used to warehouse imported and domestic products, and with specific authority from the FTZ Board companies may also use zones for manufacturing (incorporating foreign and/or domestic components into different, finished products). Products warehoused or manufactured in FTZs may ultimately be exported or shipped to the U.S. market. There are currently more than 500 FTZs and subzones nationwide, and companies in FTZs employ nearly 330,000 U.S. workers and export about $30 billion a year in merchandise.

One of the provisions of the new FTZ Board regulations replaced the previous manufacturing approval procedures, which required a complex application that took up to 12 months to process, with a simpler standard notification process that will reduce the ordinary processing time to 120 days. Under the new regulations, companies seeking to utilize zone benefits for any manufacture, assembly or activity resulting in a tariff shift (now referred to under the single term “production”) that goes beyond the existing authority of the zone must submit a written notification to the FTZ Board. This notification identifies the user and its location, the domestic and foreign materials, components and finished products to be involved in the production (at the six-digit tariff number level, and with associated duty rates), and information as to whether the products at issue are subject to trade-related proceedings such as antidumping or countervailing duty orders. Unlike the applications required under the previous regulations, notifications do not have to include projections of annual production capacity or shipments to domestic and export markets or an analysis of international competition and the economic impact of the proposed production activity in the local area. The FTZ Board is providing a 40-day public comment period on these notifications (down from 60 under the previous regulations) and has a much shorter 120-day deadline for making a final decision, with an even faster interim approval possible in some circumstances.

Lesley Couch, director of duty deferral and foreign-trade zones for Sandler & Travis Trade Advisory Services, notes that notifications may be approved in their entirety or in part. If the FTZ Board determines that there is a need for additional review of certain components, approval of the proposed activity regarding those parts will be withheld (i.e., they cannot be admitted into the zone in zone status) while all other parts can be admitted and used as set forth in the notification. The applicant can then file a full application with respect to the denied parts (which will be subject to the existing 60-day comment period and 12-month processing time) or clear them through customs and admit them into the FTZ in domestic rather than foreign status. However, Couch points out, such situations “will place an administrative burden on users to be sure that the parts that weren’t approved are on separate invoices and/or bills of lading.” If unapproved parts “are commingled on shipments with parts that ARE approved,” she says, “then the entire conveyance may require a clearance, which reduces the benefit of the FTZ in the first place.”

For more information on how you can use FTZs in your business or the new, streamlined notification process, please contact Lesley Couch.

Import Declaration for Plants and Plant Products Under Review

The Department of Agriculture’s Animal and Plant Health Inspection Service is soliciting comments through Aug. 6 on the proposed three-year extension of the import declaration required for certain plants and plant products under the Lacey Act. This declaration must contain, among other things, the scientific name of the plant, the value of the importation, the quantity of the plant, and the name of the country from which the plant was harvested. For paper and paperboard products with recycled plant content, the importer is not required to specify the species or country of harvest with respect to the recycled plant product component but will be required to provide the average percentage of recycled content. If the product also contains non-recycled plant materials the basic declaration requirements still apply to that component of the product imported.

Comments should focus on (a) whether this declaration is necessary for the proper performance of APHIS’ functions, including whether the information has practical utility; (b) how to enhance the quality, utility and clarity of the information collected; (c) the accuracy of APHIS’ estimate of the burden of this declaration, including the validity of the methodology and assumptions used; and (d) ways to minimize that burden through the use of automated, electronic, mechanical and other collection technologies (e.g., permitting electronic submission of responses).

Industry sources believe Congress may act soon on legislation that would make various changes to the Lacey Act amendments of 2008, including the import declaration requirement. The Retailers and Entertainers Lacey Implementation and Enforcement Fairness (RELIEF) Act (H.R. 3210) would exempt any plant product imported or manufactured before May 22, 2008, from the requirements of the Lacey Act amendments and limit the import declaration requirement to solid wood and items imported only for commerce. Witnesses at recent congressional hearings have testified of the difficulty of providing the information required on the import declaration, and key lawmakers have said they are interested in advancing reforms this year. Others, however, have expressed opposition to what they see as an effort to water down the 2008 amendments.

Of Note: Supply Chain Security Efforts, India Export Plan

DHS Announces Northern Border Strategy

CBP and World BASC Organization Sign Joint Statement

Amid economic concerns, Indian government unveils plan to boost exports

AD/CV Notices: Electrodes, Bearings, Citric Acid, Rectangular Pipe, Magnesium, Carbon

Agency: ITA.
Commodity: Small diameter graphite electrodes.
Country: China.
Nature of Notice: Affirmative preliminary determination of circumvention of AD duty order.
Details: ITA preliminarily determines that a United Kingdom company is importing artificial graphite rods and unfinished electrode components from China to the U.K., performing minor completion and assembly operations, and exporting finished electrodes to the U.S. as products of U.K. origin. Final determination due by July 31.

Agency: ITA.
Commodity: Ball bearings and parts thereof.
Country: France, Germany and Italy.
Nature of Notice: Preliminary results of administrative review of AD duty order for the period May 1, 2010, through April 30, 2011.
Details: No dumping found for any reviewed companies during the period of review. Preliminary rescission of review with respect to various companies due to withdrawal of requests for review.

Agency: ITA.
Commodity: Citric acid and certain citrate salts.
Country: China.
Nature of Notice: Preliminary results of administrative review of CV duty order for the period Jan. 1 through Dec. 31, 2010.
Details: Net countervailable subsidy rate of 5.27% for sole reviewed producer/exporter.

Agency: ITA.
Commodity: Citric acid and certain citrate salts.
Country: China.
Nature of Notice: Preliminary results of administrative review of AD duty order for the period May 1, 2010, through April 30, 2011.
Details: Weighted average dumping margin of zero for exporter RZBC Co., Ltd./RZBC Imp. & Exp. Co. Ltd./RZBC (Juxian) Co. Ltd.. Rescission of review with respect to Huangshi Xinghua Biochemical Co. Ltd. due to withdrawal of its request for review.

Agency: ITA.
Commodity: Light-walled rectangular pipe and tube.
Country: Turkey.
Nature of Notice: Preliminary results of administrative review of AD duty order for the period May 1, 2010, through April 30, 2011.
Details: Weighted average dumping margin of zero for manufacturer/exporter Noksel.

Agency: ITA.
Commodity: Pure magnesium in granular form.
Country: China.
Nature of Notice: Sunset review determination that revocation of AD duty order would be likely to lead to continuation or recurrence of dumping at margins of 24.67% for one company and 305.56% for the China-wide entity.

Agency: ITA.
Commodity: Activated carbon.
Country: China.
Nature of Notice: Sunset review determination that revocation of AD duty order would be likely to lead to continuation or recurrence of dumping at margins ranging from 61.95% to 228.11%.

Foreign Regulatory Changes Could Affect Exports of Measuring Devices, Foods, Cement, Blood Products, Narcotics, Electronics

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.

Czech Republic – draft measures establishing metrological and technical requirements for certain thermometers (comments due by July 30)

Israel – revised mandatory standard on honey (comments due by July 30)

Israel – conversion from mandatory to voluntary of standards on asbestos-cement corrugated sheets, flat cement sheets reinforced with asbestos fibers, and flat cement sheets reinforced with asbestos and cellulose fibers (comments due by July 30)

Japan – revised standard on blood products (comments due by June 19)

Japan – designation of new substances as narcotics (comments due by June 20)

Japan – new technical regulations on driving safety support systems using 700 MHz bands and radio equipment for mobile communications systems using 700 MHz bands (comments due by June 12)

Japan – amended technical standards on specified radio and digital radio microphones and broadband mobile wireless access systems (comments due by June 12)

Kenya – general requirements for warehousing of dangerous goods (comments due by June 12)

Kenya – rules and procedures for safe operation and handling of road vehicles used for transport of dangerous goods (comments due by June 12)

Kenya – requirements and methods of test for butanone suitable for industrial use (comments due by June 12)

Kenya – requirements for safe handling, transfer and use of genetically modified organisms and derived products (comments due by Jun 19)

Kenya – guidelines for labeling of GMOs and derived products intended for use as food, feed or ingredients (comments due by June 19)

Korea – proposed amendment of rules on measuring instruments and pre-packaged products (comments due by July 30)

Oman – draft technical regulation on portland cement (comments due by July 30)

IPR Enforcement Actions on Electronic Devices, Circuit Packages

New Patent Infringement Investigation of Electronic Devices. The International Trade Commission has instituted investigation 337-TA-847 to determine whether imports of certain electronic devices, including mobile phones and table computers, and components thereof are violating Section 337 of the 1930 Tariff Act by reason of patent infringement. The complainants, Nokia Corporation, Nokia Inc. and Intelllisync Corporation, request 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 China and the U.S.

Potential IPR Probe of Integrated Circuit Packages Evaluated for Public Interest Issues. The International Trade Commission is requesting comments no later than June 14 on any public interest issues raised by a Section 337 intellectual property rights infringement complaint filed on behalf of Industrial Technology Research Institute and ITRI International against certain integrated circuit packages provided with multiple heat-conducting paths and products containing same. 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.

April 13 Effective Date of Arms Export Regulations Change for U.K. Defense Trade Treaty

The State Department has announced that April 13, 2012, is the effective date of a final rule amending the International Traffic in Arms Regulations to implement the Defense Trade Cooperation Treaty between the United States and the United Kingdom. This rule also (a) identifies in a new supplement the defense articles and defense services that may not be exported pursuant to this treaty, (b) amends the section pertaining to the Canadian exemption to reference the new supplement, and (c) with regard to congressional certification, adds Israel to the list of countries and entities that have a shorter certification time period and a higher dollar value reporting threshold.

Notice of 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 June 18.

Australia and New Zealand-United States Discussion Agreement – The amendment would adjust the minimum service level set forth in the agreement to reflect the resignation of Maersk Line.

Maersk Line/HLAG West Med Slot Exchange Agreement – The amendment would add Morocco to the geographic scope of the agreement, adjust the amount of space to be exchanged and delete obsolete language.

Southern Africa Agreement – The amendment would add a new article 5.1(b) authorizing the parties to introduce additional vessels into the services covered by the agreement and to share the cost of same.

Hyundai/MOL/APL Asia/Latin America/U.S. East Coast Slot Charter Agreement – The agreement authorizes Hyundai to charter space to MOL and APL in the relevant trade and to authorize the parties to enter into cooperative arrangements with respect to the chartering of such space.

Hoegh/Liberty Middle East Space Charter Agreement – The agreement would authorize the parties to charter space to/from one another on an as needed, as available basis in the trade from ports on the U.S. East and Gulf coasts to ports in countries bordering the Red Sea and Arabian Gulf.

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