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July 26 2012 Issue

Thursday, July 26, 2012
Sandler, Travis & Rosenberg Trade Report

Export Official Lays Out Priorities for Possible Second Obama Term

At the Bureau of Industry and Security’s recent Update conference in Washington, D.C., BIS head Eric Hirschhorn enumerated a number of “potential future projects” the agency might pursue if President Obama wins a second term this November. Hirschhorn indicated that “the end … is in sight” for a number of ongoing export control reform initiatives and that the following additional measures would be geared toward making the export control system “more rational and more user friendly.” However, he acknowledged that not all of these projects have been reviewed by other export control agencies. 

- finishing the effort to systematically review the Commerce Control List 

- completing the effort to harmonize the terms in the Export Administration Regulations, the International Traffic in Arms Regulations and other relevant export control regulations 

- making the encryption rules, which were streamlined somewhat in 2010, more clear and concise 

- revisiting the intra-company transfer proposal 

- discussing the deemed export rule 

- expediting the interagency review of license applications and perhaps doing more to harmonize or standardize license conditions 

- adjusting the levels of at least some license exception LVS thresholds to reflect inflation and market realities 

- updating rules governing recordkeeping, which do not reflect today’s widespread reliance on electronic databases 

- revising the General Prohibitions 

- helping revise the procedures of the international export control regimes “so that we can get more proposed changes through their systems” 

- reviewing, if only for clarification’s sake, the rules relating to cloud computing 

Assistant BIS chief Kevin Wolf said the biggest of these potential projects is the structural reorganization and redrafting of the EAR to make it more user friendly, particularly the encryption controls and the license exception provisions. Wolf noted that “many things have accreted on to the EAR” since such a review was last completed in 1996. 

Taiwan Move to Ease Beef Import Restrictions Could Lead to Resumption of U.S. Trade Talks

Taiwanese lawmakers approved this week a measure that will allow imports of beef containing a growth additive commonly used by U.S. producers. The move will allow the resumption of beef imports from the U.S., resolving an issue that had prevented the two sides from holding talks on further bilateral trade liberalization. 

According to press reports, Taiwan’s parliament agreed to amend its food safety law to allow imported beef to contain up to a certain amount of ractopamine, which is used to make beef more lean. One article cited a presidential spokesman as saying the government will specify the maximum residue limit in the next few weeks. He also said that if scientific evidence shows that ractopamine is harmful to human health the import ban will be reimposed. 

In protest of the existing ban the U.S. has refused for several years to continue talks under the two countries’ Trade and Investment Framework Agreement. TIFAs are often, but not always, a precursor to a bilateral free trade agreement, something businesses in both the U.S. and Taiwan support. Efforts to relax the beef additive standards in the past have met with a good bit of public opposition in Taiwan, but reports suggest that officials are now more concerned that the ban could hinder Taiwan’s ability to participate in the accelerating trend of bilateral and regional FTAs. 

CBP Wants Input on Small Business Impact of Proposed In-Bond Changes

U.S. Customs and Border Protection is accepting through Aug. 27 comments on its conclusion that a proposal to make various changes to the in-bond process may have a significant economic impact on a substantial number of small entities. CBP’s Feb. 22 proposed rule is designed to enhance its ability to regulate and track in-bond merchandise and ensure that it is properly entered and duties are paid or that it is exported. The comment period on this proposal closed April 23 but CBP inadvertently failed to post its complete initial regulatory flexibility analysis online. CBP has now published this analysis and is giving interested parties 30 days to comment. 

AD Notices: Xanthan Gum, Seamless Pipe

Agency: International Trade Commission. 
Commodity: Xanthan gum. 
Country: Austria and China. 
Nature of Notice: Preliminary affirmative antidumping injury determinations. 

Agency: International Trade Administration. 
Commodity: Seamless carbon and alloy steel standard, line and pressure pipe. 
Country: China. 
Nature of Notice: Rescission of administrative review of antidumping duty order for the period Nov.10, 2010, through Oct. 31, 2011, based on timely withdrawal of the request for review. 
Details: AD duties on entries of subject merchandise will be assessed at rates equal to the AD cash deposit or bond required at the time of entry or withdrawal from warehouse for consumption. 

Foreign Regulatory Changes Could Affect Exports of Gloves, Electronics, Cosmetics, Tobacco, Foods

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. 

Brazil – amended technical requirements and conformity assessment procedure for gloves 

Brazil – June 25 publication of second addendum to conformity assessment requirements for portable tanks used in land transport of hazardous goods 

Brazil – modified conformity assessment procedure for breast implants 

Brazil – criteria for grouping of in vitro diagnosis products into families for registration purposes (comments due by July 27) 

Chile – standby energy efficiency labeling certification procedure for electronic home theater products (comments due by Sept. 12) 

Finland – guidelines for increasing energy efficiency in renovation of buildings (comments due by Oct. 14) 

Hong Kong – Sept. 21 effective date of buildings energy efficiency ordinance 

Korea – proposed regulation on specification of cosmetic ingredients (comments due by Sept. 19) 

New Zealand – proposal to introduce plain packaging of tobacco products (comments due by Oct. 5) 

Qatar – draft technical regulations on bottled natural mineral water, butter, croissants, evaporated milk, packed mashed garlic, bakery products improvers, and tamarind concentrate (comments due by Sept. 19) 

BIS Makes Corrections to Commerce Control List

The Bureau of Industry and Security has issued a notice making the following corrections to the Commerce Control List revised as of Jan. 1, 2012. 

- in ECCN 3A001, remove the second entry for c.1.b.1 
- in ECCN 3A002, remove the second paragraph “CIV” 
- in ECCN 3C001, under “Items:” remove “a. Silicon;” 
- in ECCN 4A994, in the heading correct “therefore” to read “therefor” 
- in ECCN 4E993, remove paragraph c 
- in ECCN 5A001, add “or antennae” after “Unit: Equipment” 
- in ECCN 5A991, remove the note following paragraph c.2 
- in ECCN 5A003, in the table for “License Requirements,” remove the entry for EI and place it below the table as an indented paragraph 
- above ECCN 5D002, add the headings “C. MATERIALS – [RESERVED]” and “D. SOFTWARE” 
- in ECCN 5D002, in the table for “License Requirements,” remove the entry for EI and place it below the table as an indented paragraph 
- in ECCN 5E002, in the License Requirement Note, remove “5D002.a or 5D002.c” and insert “5D002” in its place 
- in ECCN 5E002, after the License Requirement Note, remove “Refer to §742.15 of the EAR” 
- in ECCN 5E002, after “Related Controls” and before “Items” add “Related Definitions: N/A” 

IPR Enforcement Actions on Mobile Phones, Wireless Electronic Devices

No Import Restrictions in IPR Probe of Mobile Telephones with Digital Cameras. The International Trade Commission has determined that the importation, sale for importation and sale within the U.S. after importation of certain mobile telephones and wireless communication devices featuring digital cameras, and components thereof, are not violating specified patents owned by Eastman Kodak Company. As a result, the ITC has terminated this investigation without the imposition of any restrictions on the importation of the products at issue. 

New IPR Infringement Petition on Wireless Electronic Devices. The International Trade Commission received July 24 a petition filed on behalf of Technology Properties Limited LLC, Phoenix Digital Solutions LLC and Patriot Scientific Corporation requesting that it institute a Section 337 investigation regarding certain wireless consumer electronics devices and components thereof. The proposed respondents are located in Taiwan, Switzerland, China, Japan, Korea, Canada and the U.S. 

Section 337 investigations primarily involve claims regarding intellectual property rights violations by imported goods, including the infringement of patents, trademarks and copyrights. Other forms of unfair competition involving imported products, such as misappropriation of trade secrets or trade dress and false advertising, may also be asserted. The primary remedy available in Section 337 investigations is an exclusion order that directs U.S. Customs and Border Protection to stop infringing imports from entering the U.S. In addition, the ITC may issue cease and desist orders against named importers and other persons engaged in unfair acts that violate Section 337, including selling infringing imported articles out of U.S. inventory. 

Atlanta FTZ Seeks to Expand Under Alternative Site Framework

The Foreign-Trade Zones Board has received an application from the Georgia Foreign-Trade Zone Inc., grantee of FTZ 26, requesting authority to expand its service area under the alternative site framework to include a portion of Columbia County, Ga., adjacent to the Columbia, S.C. U.S. Customs and Border Protection port of entry. Comments on this application are due no later than Sept. 24. 

OFAC Reviewing Reporting, Procedures and Penalties Regulations

The Treasury Department’s Office of Foreign Assets Control is accepting comments through Sept. 24 on the proposed extension without change of information collection requirements contained within its Reporting, Procedures and Penalties Regulations. These collections pertain to the operation of various economic sanctions programs administered by OFAC. 

- section 501.603 imposes reporting requirements pertaining to blocked property and retained funds 

- section 501.604 requires the filing of reports for compliance purposes by financial institutions where a funds transfer is not required to be blocked but where processing the transfer would nonetheless violate, or facilitate a transaction that is prohibited under, other provisions in 31 CFR chapter V 

- section 501.605 requires reporting of information pertaining to litigation, arbitration and other binding alternative dispute resolution proceedings in the United States to prevent the intentional or inadvertent transfer through such proceedings of blocked property or retained funds 

- sections 501.801, 501.804 and 501.805 relate, respectively, to license requests, rulemakings and records requests 

- section 501.806 sets forth the procedures to be followed by a person seeking to have funds released at a financial institution if the person believes that the funds were blocked due to mistaken identity 

- section 501.807 sets forth the procedures to be followed by those seeking administrative reconsideration of their designation or of a vessel as blocked or who wish to assert that the circumstances resulting in the designation or blocking no longer apply

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