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June 18 2012 issue

Monday, June 18, 2012
Sandler, Travis & Rosenberg Trade Report

Improvements Needed in C-TPAT Validation Process, Report Finds

The Department of Homeland Security’s Office of Inspector General issued recently a report identifying the need for certain improvements to U.S. Customs and Border Protection’s administration of the Customs-Trade Partnership Against Terrorism.

C-TPAT requires participants to document and demonstrate their supply chain security procedures according to applicable security requirements. The Security and Accountability for Every (SAFE) Port Act of 2006 required CBP to review and certify security profiles within 90 days of submission, complete C-TPAT validations within one year of certification and revalidate within four years of the initial validation. To help implement this requirement CBP established standard operating procedures for its supply chain security specialists, who travel around the world to visit partners and their facilities to validate that supply chain security practices and procedures meet the program’s minimum security criteria and agreed-upon security standards.

The report finds, however, that the documentation maintained by SCSSs for the initial C-TPAT validation process for highway carriers did not always confirm the accuracy and effectiveness of security measures declared in a carrier's security profile. In addition, SCSSs did not always follow the SOPs and did not include adequate details in the validation worksheet explaining how they verified evidence of implementation for critical business partner and conveyance security procedures. OIG also determined that SCSSs did not always conduct secondary vetting procedures to confirm that no significant customs violations had taken place, complete the initial validation within one year of certification, or obtain signed certification letters.

According to the report, these conditions occurred because the SOPs did not indicate what evidence should be maintained to support conclusions made by SCSSs or where this evidence should be included in the Security Link Portal that is used as a records management system for C-TPAT. In addition, the evidence-of-implementation training provided to SCSSs did not contain specific details of what should be obtained to support tests conducted for critical business partner and conveyance security requirements.

To remedy these shortcomings, the report recommends that CBP (1) update its SOPs to explain what specific details should be included in the validation worksheet and how SCSSs should verify evidence of implementation for critical minimum security requirements, (2) revise its evidence-of-implementation in a similar manner, and (3) ensure that SCSSs follow SOPs when conducting initial validations of highway carriers or document reasons for deviations.

CBP officials responded that they (1) are in the process of incorporating specific instructions into existing or new SOPs regarding the details and supporting documentation that must be included in the validation worksheet, (2) have provided an enhanced version of the evidence-of-implementation training to all C-TPAT staff and advised field office managers that it is critical to ensure that SCSSs are gathering the appropriate evidence during the validation process, and (3) will provide webinar training to C-TPAT staff on a regular and recurring basis as SOPs are updated, approved and issued to the field. CBP added that once the Security Link Portal upgrade is operational the SOPs will be linked to its related process, minimizing the opportunities for misinterpretation of procedures.

Second Detroit-Area Bridge Could Open in Five Years

The Canadian government and the Michigan governor’s office announced June 15 plans to build a second cross-border bridge in the Detroit area. The bridge will be located about two miles south of the Ambassador Bridge and could take up to five years to build. Canada will pay for virtually all of the construction costs and recoup the expense through tolls imposed on its side of the border.

The existing 83-year-old bridge is the busiest border crossing in North America and carries about 25% of all goods shipped between the U.S. and Canada each year, valued at around $125 billion. However, businesses have complained for years of congestion and backups that result in delayed deliveries and production slowdowns that cost them billions. They worry that the problem will continue to worsen, with the 2.7 million trucks crossing the bridge each year likely to double by 2035. A second bridge, with updated customs facilities and improved connections to highways, is expected to make transportation easier and thus aid automakers and other industries with production facilities on both sides of the border.

AD Notices: Garlic, Honey, Steel, Rebar, Pasta, PTFE Resin, Pipe

Agency: ITA.
Commodity: Fresh garlic.
Country: China.
Nature of Notice: Amended final results of administrative review of AD duty order for the period Nov. 1, 2001, through Oct. 31, 2002, pursuant to court decision.
Details: Revised weighted average dumping margins of 1.77% for Jinan Yipin Corporation Ltd. and 40.66% for Shandong Heze International Trade And Developing Company. These rates will be used to determine AD duties assessed on entries of subject merchandise during the period of review.

Agency: ITA.
Commodity: Honey.
Country: Argentina.
Nature of Notice: Final results of administrative review of AD duty order for the period Dec. 1, 2009, through Nov. 30, 2010.
Details: Weighted average dumping margins ranging from zero to 0.77%. These rates will be used to calculate importer-specific AD duties for subject merchandise imported during the period of review. Because all of the rates are de minimis, no AD duty deposits will be required for entries of subject merchandise entered or withdrawn from warehouse for consumption on or after June 18.

Agency: ITA.
Nature of Notice: Recalculation of AD cash deposit rates for certain companies subject to the AD duty orders on the following products.
- stainless steel plate in coils from Belgium
- steel concrete reinforcing bars from Latvia
- purified carboxymethylcellulose from Finland and the Netherlands
- pasta from Italy
- stainless steel wire rod from Spain
- granular polytetrafluoroethylene resin from Italy
- stainless steel sheet and strip in coils from Japan

Agency: ITA.
Commodity: Circular welded carbon quality steel pipe.
Country: India.
Nature of Notice: Postponement of final AD duty determination from Aug. 6 to Oct. 14.

Foreign Regulatory Changes Could Affect Exports of Foods, Tobacco Products, Appliances, Drugs, Lights

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.

Argentina – revision of Argentine Food Code concerning genuineness parameters for olive oil

Argentina – design standard establishing content and format of health warnings required for tobacco advertising and tobacco product packaging

Argentina – construction and operating characteristics and testing and marking procedures for spherical fast acting latch valves for medium-pressure gas installations

Argentina – amended standard on ignition devices and devices for automatic shutdown in gas appliances

Chile – technical specifications for the isologotype to be included on labels of packaging of pharmaceutical products (comments due by July 15)

Mexico – May 16 publication of amended official standard on limits, test method and labeling concerning the energy efficiency of household electric washing machines

Mexico – draft official standard on energy efficiency of light-emitting diode lighting components for use on roads and highways (comments due by July 16)

Paraguay – technical regulation on monomers, other starting substances and polymers authorized for the manufacture of plastic packaging and equipment that comes into contact with food

Paraguay – decrees establishing rules for renewal of registration of household sanitary products, personal hygiene products, cosmetics and perfumes

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