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September 26 2012 Issue

Wednesday, September 26, 2012
Sandler, Travis & Rosenberg Trade Report

New Petroleum/Gas/Minerals Center of Excellence and Expertise Opens in Houston      

The Department of Commerce is accepting comments through Nov. 26 on the proposed extension of form BE-15, Annual Survey of Foreign Direct Investment in the United States. This form obtains sample data on the financial structure and operations of U.S. affiliates of foreign investors, which are needed to provide reliable, useful and timely measures of FDI in the United States, assess its impact on the U.S. economy and, based on this assessment, make informed policy decisions regarding FDI. The data are also used to update similar data for the universe of U.S. affiliates collected once every five years on the BE-12 benchmark survey.

Oct. 13 Effective Date for DR-CAFTA Rule of Origin Changes      

The Office of the U.S. Trade Representative has announced that technical corrections and modifications to the DR-CAFTA rules of origin for certain textile and apparel products set forth in a recently enacted law will apply to goods entered or withdrawn from warehouse for consumption on or after Oct. 13. These corrections include a change clarifying that certain monofilament sewing thread is required to be produced in the U.S. or the DR-CAFTA region in order for goods to qualify for preferential tariff treatment. The other modifications clarify or correct the language used in the text of the agreement and relate to the treatment of certain nightwear as well as several products under the short supply list, including elastomeric yarns, knit waistbands and knit-to-shape components.

$27 Million Penalty for Widespread Bribery Scheme

The Securities and Exchange Commission reports that a Swiss-based global manufacturer will pay over $27 million in penalties to settle charges that it violated the Foreign Corrupt Practices Act. The company’s subsidiaries allegedly operated 12 different schemes around the world that involved payments of fake commissions or the use of third-party agents to funnel money improperly to obtain lucrative contracts. The subsidiaries saw these schemes as “a typical way of doing business in some countries,” said an SEC official. 

The company will pay $10.6 million in disgorgement and $2.6 million in pre-judgment interest to the SEC. It has also entered into a non-prosecution agreement with the Department of Justice under which it will pay a $13.68 million penalty, report periodically concerning its FCPA compliance efforts, and continue to implement an enhanced compliance program and internal controls designed to prevent and detect FCPA violations. 

The SEC notes that in arriving at this settlement it considered the “significant, broad-spectrum remedial measures” the company took, including an FCPA review of 454 entities in 50 separate countries, active monitoring and evaluation of all the company’s agents and other relevant third-party relationships, quarterly ethics and compliance training by over 4,000 middle managers, FCPA-focused on-site reviews of higher risk entities, creation of a corporate ombudsman’s office and numerous segment-specific compliance counsel positions, the elimination of several business operations in high-risk areas, and the termination of over 90 employees, including supervisors, because of FCPA compliance concerns.

Interim Regulations on Colombia FTA Issued      

U.S. Customs and Border Protection has issued an interim rule, effective Sept. 26, that amends its regulations to implement the preferential tariff treatment and other customs-related provisions of the U.S.-Colombia Free Trade Agreement. This rule addresses issues such as the procedure for claiming preferential treatment under the FTA, rules of origin and recordkeeping. Written data, views or arguments on any aspect of these interim regulations are due by Nov. 26.

U.S. Recognizes Israel for Drug Patent Law Improvements      

U.S. Trade Representative Ron Kirk announced Sept. 24 that Israel is being moved from the Priority Watch List to the Watch List in USTR’s Special 301 report identifying countries that deny adequate and effective protection for intellectual property rights. According to a USTR press release, this step was required under a 2010 bilateral memorandum of understanding once Israel introduced three laws to improve its pharmaceutical patent regime. The MOU further provides that once Israel enacts those laws, which USTR says reflect Israel’s “commitment … to providing transparent, efficient and effective patent systems for innovative and generic medicine producers,” it will be removed from the Special 301 Watch List as well. 

While the placement of a country on the Priority Watch List or the Watch List indicates that particular problems exist in that country with respect to IPR protection, enforcement or market access, it has little practical effect beyond requiring USTR to engage more intensively with that country on improving its IPR regime.

AD/CV Notices: New Admin Reviews, Copper Pipe, Frozen Fish      

Agency: International Trade Administration. 
Nature of Notice: Initiation of administrative reviews of antidumping and/or countervailing duty orders on the following products, effective Sept. 26. The AD reviews cover the period Aug. 1, 2011, through July 31, 2012, and the CV reviews cover the period Jan. 1 through Dec. 31, 2011. Final results of these reviews are anticipated by Aug. 31, 2013. 
- granular polytetrafluoroethylene from Italy (AD) 
- brass sheet and strip from Japan (AD) 
- light-walled rectangular pipe and tube from Mexico (AD) 
- corrosion-resistant carbon steel flat products from Korea (AD/CV) 
- carbon and alloy seamless standard, line and pressure pipe from Romania (AD) 
- frozen fish fillets from Vietnam (AD) 
- polyethylene retail carrier bags from China and Thailand (AD) 
- steel nails from China (AD) 
- laminated woven sacks from China (AD) 
- pasta from Turkey (CV) 

Agency: International Trade Administration. 
Commodity: Seamless refined copper pipe and tube. 
Country: Mexico. 
Nature of Notice: Final results of new shipper review of antidumping duty order for the period Nov. 22, 2010, through April 30, 2011. 
Details: Weighted average dumping margin of 5.53% for GD Affiliates S. de R.L. de C.V. (Golden Dragon). Importer-specific AD duty rates based on this margin will be assessed on entries of subject merchandise during the period of review, and AD cash deposits at this rate will be required for shipments of subject merchandise entered or withdrawn from warehouse for consumption on or after Sept. 26. 

Agency: International Trade Administration. 
Commodity: Frozen fish fillets. 
Country: Vietnam. 
Nature of Notice: Request to revoke antidumping duty order in part.

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. 

- AB Group Shipping Corp., Miami, Fla. 
- Allmia International Corporation, Medley, Fla. 
- Automobile Export Loaders of America Inc., Miami, Fla. 
- Bring Logistics US Inc., Houston, Texas 
- Central Oceans USA LLC, Charlotte, N.C. 
- Contract Logistics LLC, Oklahoma City, Okla. 
- Crescent Line Inc. d/b/a Globe Express Services, Dallas, Texas 
- CTS Global Logistics (Georgia) Inc. d/b/a CTS Global Supply Chain Solutions, Atlanta, Ga. 
- DCI Transport LLC, Cumming, Ga. 
- Dynasty CHB Inc., East Boston, Mass. 
- JJB Trucking Services & Shipping LLC, Paterson, N.J. 
- Hydra Logistics Inc. d/b/a Globe Express Services, Houston, Texas 
- I.T.N. Consolidators Inc. d/b/a International Transportation Network, Miami, Fla. 
- I.T.N. of Miami Inc., Miami, Fla. 
- IP Logistics Inc., Azusa, Calif. 
- ISI Express (N.Y.) Inc., Jamaica, N.Y. 
- M. V. P. International Freight Systems Inc., Miami, Fla. 
- Madkem Logistics Inc., Brooklyn, N.Y. 
- MTS Transportation Inc., Rosemead, Calif. 
- Quasar Logistics Inc., Hollis, N.Y. 
- RR Donnelley Logistics Services Worldwide Inc. d/b/a DLS Worldwide, Bolingbrook, Ill. 
- Seastar International Group Inc., Bridgewater, N.J. 
- Seven Seas Spirit Inc., North Miami, Fla. 
- US Com Express LLC, Torrance, Calif. 
- Walmay Logistics Inc., Yorba Linda, Calif.

CBP Reviewing Foreign Assembler’s Declaration      

U.S. Customs and Border Protection is accepting through Nov. 26 comments on the proposed extension of the Foreign Assembler’s Declaration (with Endorsement by Importer). This declaration, which includes information such as the quantity, value and description of the imported merchandise, must be made in connection with the entry of assembled articles under HTSUS 9802.00.80. It is made by the person who performed the assembly operations abroad and includes an endorsement by the importer. The importer/assembler must maintain records for five years from the date of the related entry and make these records readily available to CBP for audit, inspection, copying, and reproduction.

ITC Asked to Evaluate Competitiveness of U.S. Olive Oil Industry      

The House Ways and Means Committee has requested that the International Trade Commission conduct a general fact-finding investigation to evaluate the global competitiveness of the U.S. commercial olive oil industry. The committee asked for information and analysis regarding the major suppliers of olive oil, particularly Spain, Italy and North African countries, with a special effort to collect data about those that have little published historical data. Specifically, the committee said, the ITC’s report should contain the following, focusing on the period 2008-2012. 

- an overview of the commercial olive oil industry in the United States and major supplier countries, including production of olives for olive oil processing, planted acreage and new plantings, processing volumes, processing capacity, carry-over inventory and consumption 

- information on the international market for olive oil, including U.S. and foreign supplier imports and exports of olive oil in its various forms, olive oil trade between the European Union and North African countries, and a history of the tariff treatment and classification of olive oil in the U.S. and major supplier countries 

- a qualitative and, to the extent possible, quantitative assessment of the role of imports, standards and grading, prices, and other factors on olive oil consumption in the U.S. market 

- a comparison of the competitive strengths and weaknesses of the commercial olive production and olive oil processing industries in the major producing countries and the U.S., including factors such as industry structure, input production costs and availability, processing technology, product innovation, government support and other government intervention, exchange rates, and pricing and marketing regimes, plus the steps each respective industry is taking to increase its competitiveness 

The committee requested that the ITC submit its report, which it intends to make public, within 11 months.

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 Oct. 8. 

Maersk Line/New World Alliance Slot Exchange Agreement – The amendment authorizes an additional slot sale among the parties.

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