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August 1 2012 Issue

Wednesday, August 01, 2012
Sandler, Travis & Rosenberg Trade Report

Report Calls Dependence on Global Supply Chains a National Security Vulnerability 

report released recently by the Alliance for American Manufacturing asserts that the U.S. “is at risk of being dangerously unprepared for serious emergencies because of the offshoring of critical manufacturing sectors and a reliance on foreign suppliers for products needed in the wake of catastrophic events.” To reduce this vulnerability, which the AAM says is increasing along with the frequency of natural and manmade disasters, the report calls on the federal government to revitalize domestic manufacturing capacity and tighten enforcement of trade laws. The report is the latest addition to a politically divisive debate on trade and jobs that is likely to grow louder ahead of this November’s presidential and congressional elections. 

According to an AAM press release, the report highlights U.S. reliance on foreign suppliers for items ranging from steel, cement and batteries to high-tech components and medical supplies such as antibiotics and penicillin. The risks of this reliance include not having access to needed materials and products as well as delayed delivery times. The report explains that some global suppliers “may not have the best interests of the United States at heart in a time of crisis” or could be unable to meet demand quickly in times of emergency. More generally, the report asserts, problems associated with “America’s growing dependence on off-shore manufacturing” include quality, design and performance problems; a lack of reliable product specifications and standards; the “drain of high tech innovation, basic research and advanced development;” and the possibility of a “deliberate introduction of design flaws, vulnerabilities or cyber ‘bugs’ into products and technologies key to U.S. national security.” 

The report also warns of “the structural fragility of [U.S.] infrastructure nodes and systems, many of which are at or near the end of their projected operational life spans and in need of a thorough overhaul.” An attack on this infrastructure could not only have “a widespread, devastating impact” in and of itself, the report states, but could significantly hinder the ability to transport needed supplies to affected areas. 

To address these vulnerabilities, the report makes a number of recommendations designed to build “reliable domestic supply chains.” Most of these involve additional government expenditures on efforts such as strengthening domestic infrastructure, providing incentives for increasing manufacturing employment in the U.S. (e.g., through “Buy American”-type policies) and funding worker retraining programs. The report also calls for the enforcement of trade laws against “unfair foreign competition” in the form of government subsidies, currency manipulation, dumping, high tariffs and non-tariff barriers. However, the report makes no specific recommendations that would illustrate how the AAM thinks existing efforts in this area should be improved. 

Of Note: EU Protectionism, Venezuela Joins Mercosur 

Creeping protectionism in EU trade policy 
Venezuela joins trade bloc big on politics, protectionism

Customs Broker Licenses and Permits Canceled 

U.S. Customs and Border Protection has canceled the following customs broker licenses and all associated permits. Readers are reminded that customs broker licenses may be canceled for a variety of reasons and that the cancellation of a license does not necessarily indicate that the associated customs broker is no longer in business. 

- license #11930: Ferrara International Logistics, New York 
- license #06461: J.B. Fong & Co. Inc., San Francisco 
- license #23081: Air 7 Seas Transport Logistics Inc., San Francisco 
- license #20911: Liberty Port Broker Inc., New York 
- license #13261: Sky Sea Forwarding Corp., New York 
- license #13467: Contact Customs Clearance Inc., New York 
- license #22827: Legacy Worldwide Logistics Inc., New York 
- license #05289: Hellmuth Dieterle, New York 

CBP has also canceled the following broker licenses and any and all permits due to the death of the broker. 

- license #09873: David D. Combs, Chicago 
- license #05914: Ubaldo Diaz, New York 
- license #03631: Achille D’Anca, New York 
- license #05462: Brian J. Rodgers, New York 
- license #02500: Leonard M. Shayne, New York 
- license #02482: John S. Ross, New York 
- license #20824: Mary Beth LaPenna, New York 
- license #04360: Frederick Matalevich, New York 
- license #21146: Samuel Felicano, Miami 

$5.1 Million Criminal Fine for Price Fixing on Automobile Parts 

The Department of Justice announced July 31 that a Germany-based subsidiary of a U.S. automotive company has agreed to pay a $5.1 million criminal fine for its involvement in a conspiracy to fix the prices of seatbelts, airbags and steering wheels sold to two German automobile manufacturers and installed in cars sold in the U.S. This brings to seven the number of companies, along with 10 individuals, that have been charged in the DOJ’s ongoing antitrust investigation into the auto parts industry. Six companies have already pleaded guilty and been sentenced to pay a total of more than $785 million in criminal fines. In addition, seven individuals have been sentenced to criminal fines and jail sentences ranging from a year and a day to two years each.

AD/CV Notices: Washers, Request Reviews, Steel, Pasta, Bearings, Lemon Juice 

Agency: International Trade Administration. 
Commodity: Large residential washers. 
Country: Mexico and Korea. 
Nature of Notice: Preliminary affirmative dumping determinations. Dumping margins of 33.30% to 72.41% for Mexico and 9.62% to 82.41% for Korea. AD cash deposits based on these rates will now be required. 
Details: All large residential washers and certain subassemblies thereof are covered. “Large residential washers” denotes all automatic clothes washing machines, regardless of the orientation of the rotational axis, with a cabinet width (measured from its widest point) of at least 24.5 inches (62.23 cm) and no more than 32.0 inches (81.28 cm). Subject merchandise is classified under HTSUS 8450.11.0040, 8450.11.0080, 8450.20.0090, 8450.90.2000 and 8450.90.6000. Stacked washer-dryers, commercial washers designed for the “pay per use” market, and automatic clothes washing machines with a vertical rotational axis and a rated capacity of less than 3.70 cubic feet are excluded. 

Agency: International Trade Administration. 
Nature of Notice: Opportunity to request administrative review of antidumping and countervailing duty orders on the following products. Requests are due by Aug. 31. 
- corrosion-resistant carbon steel flat products from Germany (AD) and Korea (AD/CV) 
- seamless line and pressure pipe from Germany (AD) 
- sodium nitrite from Germany (AD) and China (AD/CV) 
- granular polytetrafluoroethylene resin from Italy (AD) 
- brass sheet and strip from Japan (AD) 
- tin mill products from Japan (AD) 
- polyethylene retail carrier bags from Malaysia, Thailand and China (AD) 
- light-walled rectangular pipe and tube from Mexico (AD), Korea (AD) and China (AD/CV) 
- carbon and alloy seamless standard line and pressure pipe (under 4.5”) from Romania (AD) 
- floor-standing, metal top ironing tables and parts thereof from China (AD) 
- laminated woven sacks from China (AD/CV) 
- petroleum wax candles from China (AD) 
- sulfanilic acid from China (AD) 
- steel nails from China (AD) 
- tetrahydrofurfuryl alcohol from China (AD) 
- tow-behind lawn groomers and parts thereof from China (AD/CV) 
- woven electric blankets from China (AD) 
- silicomanganese from Ukraine (AD) 
- frozen fish fillets from Vietnam (AD) 
- stainless steel sheet and strip in coils from Korea (CV) 

Agency: International Trade Administration. 
Commodity: Hot-rolled carbon steel flat products. 
Country: China. 
Nature of Notice: Preliminary results of administrative review of antidumping duty order for the period Nov. 1, 2010, through Oct. 31, 2011. 
Details: Weighted average dumping margin of 90.83% for the China-wide entity. Intent to rescind review with respect to two companies that did not have shipments of subject merchandise to the U.S. during the period of review. 

Agency: International Trade Administration. 
Commodity: Pasta. 
Country: Italy. 
Nature of Notice: Preliminary results of administrative review of countervailing duty order for the period Jan. 1 through Dec. 31, 2010. 
Details: Preliminary weighted average dumping margin of 2.49% for sole reviewed producer/exporter. Review rescinded for one other company pursuant to withdrawal of its request for review. CV duties on imports of subject merchandise from this company during the period of review will be assessed at rates equal to the CV cash deposit required at the time of entry or withdrawal from warehouse for consumption. 

Agency: International Trade Administration. 
Commodity: Tapered roller bearings and parts thereof, finished and unfinished. 
Country: China. 
Nature of Notice: Initiation of new shipper review of antidumping duty order for the period June 1, 2011, through May 31, 2012. 

Agency: International Trade Administration/International Trade Commission. 
Commodity: Lemon juice. 
Country: Argentina and Mexico. 
Nature of Notice: Initiation of sunset reviews of antidumping duty orders. 

Agency: International Trade Commission. 
Commodity: Stainless steel bar. 
Country: Brazil, India, Japan and Spain. 
Nature of Notice: Sunset review determination that revocation of antidumping duty orders would be likely to lead to continuation or recurrence of material injury to an industry in the U.S. within a reasonably foreseeable time. As a result, these orders will be continued for another five years.

Foreign Regulatory Changes Could Affect Exports of Strollers, Ladders, Instruments, Etc.

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 – July 10 publication of conformity assessment requirements for baby carriages and solar water heaters 

Brazil – conformity assessment procedures for metal ladders (comments due by Sept. 8) 

Colombia – Jan. 31, 2012, effective date of amended technical regulation on physiochemical and microbiological requirements for fish, mollusks and crustaceans for human consumption 

Dominican Republic – hygiene recommendations for low-acid and acidified low-acid canned foods 

Paraguay – draft conditions and requirements for feeding bottles and similar items (comments due by Sept. 24) 

Saudi Arabia – regulations on weights, chromatographs, spectrometers, dosimetry systems, vehicle weighing instruments, leather measuring instruments, thermographic instruments, pre-packaged goods, sound calibrators, fiber insulating board, steel castings, steel, thermal insulation, roof insulation, steel tubes used in the food industry, sealants, steel tubes for water and sewage, structural steel and steel tubing (comments due by Sept. 27) 

Turkey – revised regulation on organic, organimineral fertilizers, soil amendment products, microbial and enzyme-based products, and other products (comments due by Sept. 27) 

Uganda – final draft standard on toilet soap, liquid detergent for household dishwashing, and synthetic laundry detergents for household use (comments due by Sept. 27) 

United Arab Emirates – draft technical regulation on processed tomato concentrates (comments due by Sept. 27) 

Ocean Transportation Intermediary 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. 

- Access Supply Chain Services LLC, San Mateo, Calif. 
- All Boat Shipping Inc., Aventura, Fla. 
- Aequus Worldwide Logistics Inc., Elmhurst, Ill. 
- C.R.C. Universal Inc., Miami, Fla. 
- Cima Cargo Corp., Doral, Fla. 
- FGN Global Logistics Inc., Meggett, S.C. 
- Green Shipping Inc., Gardena, Calif. 
- Luzviminda Cargo Express LLC, Seattle, Wash. 
- Montgomery International Inc., Essington, Pa. 
- Pacific Crossing Logistics Inc., Los Angeles, Calif. 
- Pacific Global Logistics Inc., Auburn, Ala. 
- Walmay Logistics Inc., Yorba Linda, Calif. 

Carbon Fiber Producer Seeks Indefinite Foreign-Trade Zone Authority

The Foreign-Trade Zones Board has received an application from Grafil Inc., operator of subzone 143D, requesting to extend production authority at its facilities in Sacramento, Calif. Activity at these facilities includes the production, warehousing and distribution of carbon fiber using polyacrylonitrile precursor. Grafil’s subzone and production authority are currently approved until May 7, 2014, and the company is now seeking to extend that authority indefinitely. Comments on this request are due no later than Oct. 1. 

Production under FTZ procedures could exempt Grafil from customs duty payments on the foreign PAN precursor used in export production, and the company anticipates that some 45% of the plant's shipments will be exported. On its domestic sales Grafil would be able to choose the duty rate that applies to carbon fiber (zero) for the foreign PAN precursor. Customs duties also could possibly be deferred or reduced on foreign status production equipment.

CBP Corrects Notice on Extended Import Restrictions on Materials from Cyprus

U.S. Customs and Border Protection is correcting a July 13 final rule that extended import restrictions on certain archaeological and ethnological materials from Cyprus and revised the list of materials covered by these restrictions. Specifically, CBP is clarifying that ecclesiastical and ritual ethnological materials from Cyprus representing the Byzantine and post-Byzantine periods, dating from approximately the 4th century A.D. to 1850 A.D., are subject to the import restrictions.

Amended Maritime Agreement Filed

The Federal Maritime Commission has issued notice that the following amended agreement has been filed. Interested parties may submit comments by Aug. 13. 

Maersk/Evergreen Slot Exchange Agreement – The amendment adds China to the geographic scope of the agreement.

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