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August 28 2012 Issue

Tuesday, August 28, 2012
Sandler, Travis & Rosenberg Trade Report

CEE Concept to be Advanced with Test of Centralized Decision-making Authority  

U.S. Customs and Border Protection plans to conduct a general test to further develop its Centers of Excellence and Expertise, which will facilitate the entry of merchandise imported by companies within certain industries. Specifically, CBP will test how the CEEs for electronics; pharmaceuticals, health and chemicals; automotive and aerospace; and petroleum, natural gas and minerals will operate with broad decision-making authority. At the end of the test period, which is slated to begin Oct. 12 and last for three years, CBP will assess the effect that providing CEEs with this authority has on improving trade facilitation, lowering transaction costs for importers, and ensuring importers’ compliance with applicable import laws and CBP uniformity of actions. Click here for more information on CEEs. 

Functions Performed by CEEs. Under the forthcoming test, when participants file an entry in a port the required entry documents will be routed to the CEE assigned to that importer and certain revenue-related functions, including but not limited to those indicated below, will be performed by the applicable CEE director instead of the port director. 

- determinations, notifications and processing concerning duty refund claims based on 19 USC 1520(d) 
- requests for computed value information 
- waivers of invoice requirements 
- determinations concerning the time of submission for all entry summaries and estimated duties 
- issuances of all Requests for Information (CBP Form 28) 
- issuances of all Notices of Action (CBP Form 29) 
- notifications and processing concerning any commingling of merchandise 
- processing of requests for application of the computed value method 
- extensions and suspensions of liquidations 
- reviewing and correcting for errors in transactions 
- reviewing and acting on protests 

Participants will also be required to file any prior disclosures with their designated CEE rather than at the port of entry. 

In addition, the following determinations usually made by port directors will be made by CEE directors under this test, although a regulatory waiver will not be required to do so: performing all validation activities; reviewing and processing post-entry amendments and post-summary corrections; and fixing the final appraisement of merchandise as well as the classification and duty rate of such merchandise. 

Processes to be Changed for Test Participants. CBP states that the following are changes in processes that will apply to test participants. 

- requests for entry cancellations must be submitted electronically to the CEE 
- Census resolution processes will be handled by the CEE, so rejected ACS entry summaries must be electronically transmitted to the CEE’s email address unless other arrangements have been made with the CEE to resolve Census issues 
- timely responses to Requests for Information (CBP Form 28) and Notices of Action (CBP Form 29) must be sent directly to the CEE 
- requests for internal advice must be submitted electronically to the CEE for further coordination with the Office of International Trade, Regulations and Rulings 
- protests must be filed via the electronic protest module in ACS (including a note in the filing that designates the CEE team) or submitted electronically on a scanned copy of the CBP Form 19 with all supporting documents to the CEE via the ACE Portal or the CEE’s email address 

CBP emphasizes that the broad decision-making authority provided to the CEEs and the new processes for entry filers will apply only to test participants and that port directors will continue to make these decisions for all other importers. 

Processes to Remain Unchanged. The following processes will remain unchanged for test participants . 

- quota entry summaries will continue to be processed by the ports of entry
- the bulletin notice of liquidation (CBP Form 4333) will continue to be posted at the ports of entry 
- revenue collection and the resolution of discrepancies in the amount of monies presented will remain with the ports of entry 
- requests for further review and requests to void the denial of protests will continue to be issued by Regulations and Rulings, Office of International Trade 
- entry filers must continue to file Electronic Invoice Program and Remote Location Filing entry summaries as usual in ACE 
- entry filers must continue to submit entry summaries through ACS or ACE and will not be required to change the respective port of entry

Cotton Import Fee Increased Again  

The Department of Agriculture’s Agricultural Marketing Service has issued a final rule that, effective Sept. 27, will increase the assessments paid by importers of cotton and cotton-containing products under the Cotton Research and Promotion Order. These assessments are being raised from $0.012665 per kilogram to $0.014109 per kilogram, reflecting an increase in the average weighted price of upland cotton received by U.S. farmers during calendar year 2011. The revenues generated by these assessments are used to finance research and promotion programs designed to increase consumer demand for upland cotton in the U.S. and international markets. 

This rule also changes the Harmonized Tariff Schedule statistical reporting numbers on which such assessments are levied that were amended since the last assessment adjustment.

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

U.S. Customs and Border Protection has posted to its Web site an updateon 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 recognizes that additional functionality is necessary to achieve broad participation and is therefore 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. 

As of August M1 had been deployed to all CBP ports of entry and 97% of the affected carrier community had sent rail and sea manifests to ACE, completed testing or was in the process of testing. As of Sept. 29 the Automated Manifest System for rail and sea will be decommissioned. 

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 full scope of Cargo Release. 

Simplified entry is the first phase of Cargo Release. CBP launched a pilot test of simplified entry in May at the ports of Indianapolis, Chicago and Atlanta, and as of Aug. 10 there had been 7,914 simplified entries successfully filed for 338 importers at these ports. 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. 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 is expanding the pilot test as follows: Seattle, San Francisco and Oakland the week of Aug. 14; Los Angeles the week of Aug. 20; south/southeast airports including Dallas/Ft. Worth, Houston and Miami the week of Sept. 10; and northeast airports including Newark, JFK and Boston the week of Sept. 17. 

CBP is also working to add new functionality to the pilot including incorporation of the PGA message set and the use of the Document Image System. Remote location filing is not available for the pilot at the present time but CBP is working to incorporate it in the future. 

PGA Interoperability. This initiative 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 and the Food Safety and Inspection Service are successfully receiving automated production entry and entry summary data directly from CBP. CBP began successfully transmitting production manifest and passenger data to the Coast Guard on July 20 and the Coast Guard system itself will be deployed to production in September. 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 Alcohol and Tobacco Tax and Trade Bureau and the Census Bureau. 

Exports. CBP is planning to establish ACE as the single processing platform for all export manifest, commodity, licensing and export control transactions. Current plans call for the development of an automated export manifest system for all modes, which will involve coordination with the Census Bureau and other PGAs involved in export licensing and commodity transactions. 

CBP has completed the concept of operations and operational requirements document, which detail both the enhanced electronic commodity processing and the pre-departure electronic export manifest processing for all modes of transport. An automated export manifest pilot test using the DIS capability is underway 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. CBP is in the process of expanding this pilot to additional participants and ports. 

Entry Summary Edits. CBP is planning new edits in ACE that will provide safeguards to facilitate the filing of accurate data based on the edits available in the legacy environment. 

Critical Fixes. CBP is also planning critical fixes for deployed ACE functionality in the areas of e-manifest for trucks, reports, forms and other entry summary-related fixes, CBP/ACE inbox and validation activities.

Of Note: Mexico Challenges Argentina, U.S.-Pakistan Investment Pact, Venezuela in Mercosur  

Mexico fights "protectionist" Argentina at WTO 
Pakistan, U.S. to seal bilateral investment treaty next month 

Paraguay rejects Venezuela's entry into Mercosur

FMC Raises Amount of Optional NVOCC Bond Rider for China  

The Federal Maritime Commission has issued a final rule that, effective Nov. 23, will amend its regulations regarding the amount of bond coverage required in the optional China bond rider for non-vessel-operating common carriers. This rule is intended to provide NVOCCs with the ability to post a bond that satisfies the equivalent of 800,000 yuan, for which the equivalent dollar amount has fluctuated since the China bond rider regulation was first adopted. 

Pursuant to a 2003 bilateral maritime agreement, China does not require U.S. NVOCCs to make a cash deposit in a Chinese bank as would otherwise be required by Chinese regulations as long as the NVOCC is a legal person registered by U.S. authorities, obtains an FMC license as an NVOCC and provides evidence of financial responsibility in the total amount of 800,000 yuan, or $96,000. An FMC-licensed U.S. NVOCC that voluntarily provides an additional surety bond in the amount of $21,000 (denominated in dollars or yuan), which is available for potential claims of the Chinese Ministry of Transport (as well as other Chinese agencies) for violations of the Chinese Regulations on International Maritime Transportation, is able to register in China without paying the cash deposit otherwise required by Chinese law and regulation. In 2004 the FMC amended its regulations to allow an optional rider to be filed with a licensed NVOCC’s proof of financial responsibility to provide additional proof of financial responsibility for such carriers serving in the U.S. oceanborne trade with China. 

The MOT asserts that because the exchange rate between the dollar and the yuan has risen approximately 21% since 2003 the amount of $96,000 no longer corresponds with 800,000 yuan. The FMC states that while the 2003 agreement did not provide for adjustment in exchange rates it is adjusting the optional China bond rider so that total NVOCC financial responsibility will equal 800,000 yuan under current exchange rates. 

Specifically, the FMC is amending the regulation on group bonds to increase the amount specified from $21,000 to $50,000. It is also amending the regulation on individual NVOCC bonds to remove pre-specified rider amounts to account for variances in NVOCCs’ combined total surety levels maintained to meet the FMC’s other financial responsibility requirements, including $10,000 in bond coverage that NVOCCs maintain for each of their branch offices. This recognition means that NVOCCs with branch offices may have rider amounts that vary to satisfy the level of coverage requested by China so long as their total coverage equals $125,000. The FMC intends to review the value of the total coverage provided by the China bond rider periodically.

Next Customs Broker License Exam Scheduled for Oct. 3; STR/STTAS Offer Prep Courses  

U.S. Customs and Border Protection will conduct its next customs broker license examination Oct. 3. Sandler, Travis & Rosenberg and Sandler & Travis Trade Advisory Services continue to offer comprehensive training courses for those preparing to take the broker exam. 

Details on Broker Exam. Exam applications and the accompanying $200 fee must be submitted no later than 12:00 p.m. EST on Sept. 10. The application and fee are now submitted electronically and any applications or fees submitted directly to the service port or CBP headquarters will be returned to the applicant. However, any applicant who files an application and subsequently wishes to withdraw from the exam must submit a written notice to the CBP service port noted on the application by close of business Sept. 28. 

The broker license exam consists of 80 multiple-choice questions and a score of 75% is required to pass. Exam topics typically include entry, classification, country of origin, trade agreements, antidumping and countervailing duties, value, broker responsibilities, fines, penalties and forfeitures, protests, marking, prohibited and restricted merchandise, drawback, intellectual property rights and other subjects pertinent to a broker’s duties. 

To take the broker license exam, applicants must be a U.S. citizen and at least 18 years old as of the date of the exam. To apply for a license once the exam is passed, applicants must be a U.S. citizen and at least 21 years old as of the date the application is filed. In neither case may the applicant be an officer or employee of the U.S. government. 

Exam Prep Course. STTAS will conduct a three-day broker exam preparation course at its Detroit office Sept. 19-21. Click here for more information. 

In addition, STR offers several webinar-style courses that comprise nearly 15 hours of on-demand content that can be accessed at your convenience and as often as necessary. A tariff classification review is currently available on our Web site and other courses will be posted within the next several days. 

C-TPAT/FAST Seminar to be Held in El Paso on Aug. 30  

U.S. Customs and Border Protection will host a Customs-Trade Partnership Against Terrorism and Free and Secure Trade seminar for importers, manufacturers, carriers and other interested trade partners Aug. 30 at the Ysleta commercial cargo facility in El Paso, Texas. Advance registration is required and anyone interested in attending should notify CBP via email with their name, company and type of business. Topics to be addressed include supply chain security as well as C-TPAT and FAST eligibility, including tips on how to apply, what is required and what to expect. 

Foreign Regulatory Changes Could Affect Exports of Computers, Food, Vehicles, Appliances  

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. 

Canada – proposed draft of improved food inspection model (comments due by Oct. 31) 

China – national standard on safety of small and medium-size rotating electrical machines (comments due by Oct. 24) 

Korea – draft amendment to enforcement regulations on motor vehicle safety (comments due by Oct. 8) 

Korea – clarification of pharmaceutical items exempt from reporting requirement (comments due by Oct. 24) 

New Zealand – delay to April 2013 of proposed introduction date for minimum energy performance standards for computers and computer monitors 

Turkey – regulation on energy efficiency labeling of household combined washer-dryers (comments due by Oct. 24) 

Uganda – draft standards on pre-packaged and prepared foods, fish and fishery products (comments due by Oct. 24) 

United Arab Emirates – conformity assessment procedure on road vehicle tires (comments due by Oct. 24) 

Ex-Im Bank Asked to Finance Aircraft Exports  

The Export-Import Bank of the United States is inviting public comments through Sept. 24 on three separate applications for final commitment for long-term loans or financial guarantees in excess of $100 million. These transactions would support the export of Boeing 737 aircraft to (a) Dubai for use in commercial passenger air service between the United Arab Emirates and other countries, and (b) Ireland, where they will be sub-leased for short- and medium-haul passenger air service in East Asia, South Asia and /or Europe as well as in India and between India and regional destinations. 

Shipping Committee Meeting to Consider Energy Efficiency, Reducing Emissions  

The State Department’s Shipping Coordinating Committee will hold an open meeting Sept. 21 in Washington, D.C., to prepare for the 64th session of the International Maritime Organization’s Marine Environment Protection Committee, which will be held Oct. 1-5 in London. The primary matters to be considered at the Sept. 21 meeting include the following. 

- harmful aquatic organisms in ballast water 
- recycling of ships 
- air pollution and energy efficiency 
- reducing greenhouse gas emissions from ships 
- technical cooperation activities for the protection of the marine environment 
- noise from commercial shipping and its adverse impacts on marine life 


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