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August 22 2012 Issue

Wednesday, August 22, 2012
Sandler, Travis & Rosenberg Trade Report

Lawmakers Ask FDA to Overhaul Database on Premarket Notifications for Medical Devices  

Rep. Edward Markey, D-Mass., and Sen. Jeff Merkley, D-Ore., have asked the Food and Drug Administration to overhaul and streamline its databases on recalls and 510(k) premarket notifications “to provide publically available and easily searchable information regarding the safety of [medical] devices that rarely undergo clinical trials in humans prior to being sold on the market.” The lawmakers noted that the improvements they are recommending would enhance the transparency of the 510(k) process, help manufacturers avoid using recalled devices as predicates that may put their own devices at risk for future enforcement action, and enhance awareness among the public and medical professionals of the potential dangers of medical devices that are based on flawed predicates. They asked the FDA to respond no later than Sept. 19. 

According to the letter, the 510(k) process permits medical devices to be sold as long as the sponsor demonstrates that the product is similar, or substantially equivalent, to a legally marketed device (the predicate). As long as the sponsor shows that the new device is substantially equivalent in design, technology and intended use to the predicate, the FDA is generally required to clear it. Unfortunately, the letter states, this requirement applies “even in cases where the new product contains the same flaws as an earlier model that had to be recalled by the manufacturer due to a fundamental design flaw.” 

The two lawmakers said they believe the solution to this problem will require (a) enabling the FDA to reject clearance if a device repeats design flaws that have led to the voluntary recall of earlier products, as proposed in H.R. 3847, The Safety Of Untested and New Devices Act, and (b) providing device manufacturers, the public and medical professionals with better information about devices recalled for serious design flaws. They asserted that this greater transparency could be accomplished by the FDA updating its 510(k) database to reflect if the device was the subject of a recall because of a serious design flaw that negatively affected safety or effectiveness and whether the device was cleared on the basis of a predicate recalled for a serious design flaw that negatively affected safety or effectiveness. In these cases, the database entry for such a device should provide a link to information about the predicate's adverse event

STTAS of Brazil Wins General Motors Supplier Of The Year Award for Second Time  

Sandler and Travis Trade Advisory Services of Brazil has been recognized as General Motors’ Brazil Supplier of the Year, the second year the company has received this top award. STTAS of Brazil is a subsidiary of Detroit-headquartered Sandler & Travis Trade Advisory Services Inc., the largest provider of customs and international trade services worldwide. STTAS of Brazil manages General Motors’ customs-related processes in the region, including tariff classification of more than 65,000 automotive parts per year, free trade agreement management, drawback and import/export compliance. 

“We are thrilled to again receive this prestigious award,” said Claudio Marques, STTAS vice president of South American operations. “We are extremely proud of our dedicated staff and honored at GM’s recognition of our expertise in customs and international trade matters and our excellence in creating efficient processes and systems. “ 

Along with its work in the automotive industry, STTAS of Brazil provides expert customs and trade services to multinational corporations in industries as diverse as apparel/fashion, pharmaceuticals, mining, petroleum and consumer electronics, among others. STTAS’ South American footprint now stretches from its São Paulo headquarters to operations in the cities of Santos, São Caetano, Guarulhos, Campinas, Curitiba and Salvador. In addition, the company recently opened offices in Buenos Aires and Rosario, Argentina. 

About Sandler & Travis Trade Advisory Services Inc. 

Sandler & Travis Trade Advisory Services Inc. is recognized as the leading provider of customs, export and international trade advisory services in the public and private sectors. STTAS offers hands-on global import/export solutions for multinational companies eager to increase their ability to move merchandise across international borders in an efficient, seamless and compliant manner. STTAS also assists governments throughout the world in building customs agencies and procedures that expand import and export capabilities, reduce risk factors and comply with international standards 

About Sandler, Travis & Rosenberg P.A. 

Sandler, Travis & Rosenberg P.A., which is affiliated with STTAS, is a customs and international trade law firm concentrating its practice in assisting clients with the movement of goods, services and ideas across international borders. ST&R provides manufacturers, importers, exporters, retailers and governments the advice and counsel they require to succeed amid the constantly changing demands of global trade. 

Combined, ST&R and STTAS are currently the largest provider of customs and international trade services worldwide, with more than 600 global trade professionals located in 12 offices in 6 countries. 

Post-Complaint Actions by CBP Can’t Change Court’s Residual Jurisdiction  

In a ruling earlier this month in Ford Motor Company v. U.S., the Court of Appeals for the Federal Circuit ruled that post-complaint actions by U.S. Customs and Border Protection cannot negatively impact a plaintiff’s right to bring suit against the agency under the Court of International Trade’s residual jurisdiction in 28 USC 1581(i). 

This case deals with nine reconciliation entries Ford filed with CBP seeking a refund of $6.2 million in excess duties paid on cars imported from the United Kingdom. At the time Ford’s lawsuit was filed CBP had not affirmatively liquidated any of these entries, the general one-year time period imposed by Congress for liquidating such entries had long since expired, and Ford had received no notice from CBP of any extension or suspension of that period. Ford therefore sought declaratory judgment deeming the reconciliation entries liquidated by operation of law and ordering CBP to pay the claimed refunds. After the lawsuit was filed CBP reliquidated five of the entries. 

The government argued that Ford has the ability to protest the five reliquidations administratively and then bring suit under 28 USC 1581(a) (which confers jurisdiction over lawsuits contesting protest denials). Such a holding would defeat Ford’s assertion of residual jurisdiction, which may not be used if jurisdiction is available under any of the other paragraphs of that section. However, the CAFC points out that at the time Ford initiated its lawsuit none of the reliquidations had yet occurred and that numerous Supreme Court decisions have held that subject matter jurisdiction is determined at the time of the complaint and does not depend on subsequent events. “Where the jurisdictional question is really a question of exhaustion,” the court says, “a defendant cannot defeat jurisdiction by simply creating a new avenue for exhaustion of administrative remedies that had not been available at the time of the original filing.” The court adds that for the protest provisions of 19 USC 1514 to be invoked CBP must engage in some sort of decision-making process, whereas in this case Ford alleged that CBP has unlawfully failed to make such a decision. 

$2 Million Penalty for Anti-Bribery Violations in India 

The Securities and Exchange Commission reports that a California-based enterprise systems firm has agreed to pay a $2 million penalty to settle charges that it violated the Foreign Corrupt Practices Act. The SEC alleged that certain employees of the company’s India subsidiary structured transactions with India's government on more than a dozen occasions in a way that enabled the subsidiary’s distributors to hold approximately $2.2 million of the proceeds in unauthorized side funds. Those employees then directed the distributors to make payments out of these side funds to purported local vendors, several of which were merely storefronts that did not provide any services. In addition, the subsidiary documented certain payments with fake invoices. 

The SEC charged the company with violating the FCPA's books and records provisions and internal controls provisions by failing to accurately record the side funds that its subsidiary maintained with its distributors. The company also failed to devise and maintain a system of effective internal controls that would have prevented the improper use of company funds. However, the settlement takes into account the company’s voluntary disclosure of the conduct in India, its cooperation with the SEC's investigation, and the remedial measures it has taken, including firing the employees involved in the misconduct and making significant enhancements to its FCPA compliance program. 

CBP Seeking Volunteers for Cut Flower Pilot in Miami  

U.S. Customs and Border Protection is looking for importers and their filers to participate in an upcoming pilot program that will combine the Simplified Entry filing with selected data elements from the participating government agency message set. The focus will be cut flowers imported by air through Miami International Airport. CBP states that by using the UNSPSC code numbers to identify the specific flowers imported it hopes to shorten the time its agricultural specialists need to examine these shipments, allowing for faster overall release of the flowers. Applications to participate in Simplified Entry and the cut flower pilot must be sent via email and are due by Sept. 4.  

AD/CV Notices: Hangers, Wind Towers, Bearings  

Agency: International Trade Commission. 
Commodity: Steel wire garment hangers. 
Country: Taiwan and Vietnam. 
Nature of Notice: Scheduling of final phase of antidumping and countervailing injury investigations. 
Details: Staff report placed on non-public record Oct. 9 and public version issued thereafter, hearing to be held Oct. 24, requests to appear at hearing due Oct. 16, prehearing briefs due by Oct. 16, post-hearing briefs due by Oct. 31, final comments due by Nov. 13. 

Agency: International Trade Commission. 
Commodity: Utility scale wind towers. 
Country: China and Vietnam. 
Nature of Notice: Scheduling of final phase of antidumping and countervailing injury investigations. 
Details: Staff report placed on non-public record Nov. 29 and public version issued thereafter, hearing scheduled for Dec. 13, requests to appear at hearing due Dec. 6, pre-hearing briefs due Dec. 6, post-hearing briefs due Dec. 20, final comments due Jan. 15, 2013. 

Agency: International Trade Commission. 
Commodity: Tapered roller bearings. 
Country: China. 
Nature of Notice: Sunset review determination that revocation of antidumping duty order would be likely to lead to continuation or recurrence of material injury to an industry in the U.S. within a reasonably foreseeable time.

IPR Infringement Actions on Magnets, Circuit Boards, Communication Devices, Food Disposals  

New Petitions on Magnets, Circuit Boards, Communication Devices. The International Trade Commission has received petitions requesting the initiation of Section 337 intellectual property rights violation investigations on the following products. 

- certain wireless satellite communication devices, systems and components thereof (petition filed on behalf of BriarTekIP Inc.; proposed respondents located in the United Kingdom and the U.S.) 

- certain sintered rare earth magnets, methods of making same and products containing same (petition filed on behalf of Hitachi Metals Ltd. and Hitachi Metals North Carolina Ltd.; proposed respondents located in China, Hong Kong, Austria, Germany and the U.S.) 

- certain prepregs, laminates and finished circuit boards (petition filed on behalf of Isola USA Corp.; proposed respondent located in Taiwan) 

- certain wireless communication devices, portable music and data processing devices, computers, and components thereof (petition filed on behalf of Motorola Mobility LLC, Motorola Mobility Ireland and Motorola Mobility International Limited; proposed respondent located in U.S.) 

Section 337 investigations primarily involve claims regarding IPR 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. 

New IPR Infringement Investigation of Wireless Consumer Electronic Devices. The International Trade Commission has instituted investigation 337-TA-853 to determine whether imports of certain wireless consumer electronics devices and components thereof are violating Section 337 of the 1930 Tariff Act by reason of patent infringement. The complainants, Technology Properties Limited LLC, Phoenix Digital Solutions LLC and Patriot Scientific 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 Taiwan, Switzerland, China, Japan, Korea, Canada and the U.S. 

Food Disposal Investigation Widened. The International Trade Commission has approved the addition of Jiangsu Mega Motors and Zhejiang Zhongda Technical Export Co. Ltd. of China as respondents in investigation 337-TA-838 of certain food waste disposers and components and packaging thereof. Complainant Emerson Electric Co. has alleged that the importation, sale for importation and sale within the U.S. after importation of these products is violating Section 337 of the 1930 Tariff Act by reason of patent and trademark infringement, unfair competition by passing off, trademark dilution and trade dress infringement. The ITC notes that Emerson first learned that Mega was involved in the production and manufacturing of the accused products in interrogatory responses and first learned that Zhongda was involved in the distribution, transportation and importation of the accused products during discovery.

Foreign Regulatory Changes Could Affect Exports of Fertilizers, Organic Products, Water  

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. 

Albania – draft rules on fertilizers (comments due by Oct. 15) 

El Salvador – regulation on production, processing, marketing and certification of organic products (comments due by Oct. 14) 

Thailand – import quota for HCFCs 

United Arab Emirates – draft technical regulation on drinking water (comments due by Oct. 17)

Ocean Transportation Intermediary License Reissuances, Applicants  

OTI Licenses Reissued. The Federal Maritime Commission has given notice that the following ocean transportation intermediary licenses have been reissued. 

- license #015255N: Triways Shipping Lines Inc., Hawthorne, Calif. 
- license #022773N: WLI (USA) Inc., Jamaica, N.Y. 

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. 

- Anselm K. Nwankwo d/b/a Anze Global Logistics, Roslindale, Mass. 
- Armada AVS Corp., Carson, Calif. 
- Horizon Lines of Guam LLC, Charlotte, N.C. 
- Interlink Forwarding Corporation, Santa Ana, Calif. 
- Ocean Wide Logistics Inc., Bronx, N.Y. 
- Panalpina FMS Inc., Sterling, Va. 
- Nippon Express U.S.A. Inc., New York, N.Y. 
- Nippon Express U.S.A. (Illinois) Inc. d/b/a Arrow International GNS d/b/a Arrow Pacific d/b/a Arrow Atlantic, Des Plaines, Ill. 
- Transera International Logistics, Houston, Texas 
- Vilkon N.A. Inc., Seatac, Wash. 
- USTC Global Inc., Torrance, Calif.

New Restrictions on Tomato Imports to Prevent Introduction of Moth  

The Department of Agriculture’s Animal and Plant Health Inspection Service has issued a revised federal import quarantine order for host materials of the tomato leafminer (Tuta absoluta), a small moth. Effective Sept. 13, this order will update the trapping requirements for tomato leafminer detection and surveillance and establish new requirements for tomato imports. Specifically, APHIS is reducing the minimum trapping rate of five traps per hectare to two because new research indicates that this lower number is sufficient to detect the tomato leafminer in the pest exclusionary structures. APHIS is also requiring that tomatoes imported under a systems approach from tomato leafminer-infested countries not contain vines, stems or calyces. 

This federal order applies to tomato fruit (green, pink or red) from Algeria, Belgium, Chile, Cyprus, France, Greece, Israel, Italy, Morocco, Netherlands, Poland, Portugal (including the Azores), Spain (including the Canary Islands and Balearic Islands), United Kingdom (including Bermuda, Cayman Islands, Montserrat, regions of England, Orkney Islands, Scotland, Wales and the Channel Islands), and Panama. 

APHIS states that it will continue to prohibit the entry of plants for planting of Solanum spp., Datura spp. and Nicotiana spp., which are also hosts of the tomato leafminer, from countries where this pest is known to occur pending the completion of a pest risk analysis and the implementation of appropriate mitigation measures.

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 Sept. 4. 

HLAG/Maersk Line Gulf-South America Slot Charter Agreement – The amendment would increase the amount of space to be chartered, provide for a new initial term of the agreement, and restate the agreement to correct a pagination error.

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