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September 27 2012 Issue

Thursday, September 27, 2012
Sandler, Travis & Rosenberg Trade Report

Updated Lists of Products Associated with Forced or Child Labor      

The Department of Labor has published an updated list of foreign-made goods believed to be produced by child and/or forced labor in violation of international standards. The department is also proposing to update its list of products requiring federal contractor certification as to forced or indentured child labor. Finally, the DOL has issued its latest report on efforts to eliminate the worst forms of child labor in foreign countries. 

TVPRA List. The Trafficking Victims Protection Reauthorization Act of 2005 requires the DOL to publish a list of goods that it has reason to believe are produced by child labor (CL) or forced labor (FL). In this year’s report the department has updated this list to include the following products. 

- coal from Afghanistan (CL) 
- bricks from Bolivia and Vietnam (CL) 
- beef and cashews from Brazil (CL) 
- garments from Brazil (FL) and Vietnam (CL/FL) 
- fish from Cambodia, Ghana, Indonesia, Peru, the Philippines, Thailand and Uganda (CL) 
- baked goods from the Dominican Republic 
- thread/yarn from India (CL) 
- stones from Madagascar (CL) 
- cattle from Niger (FL) and South Sudan (CL/FL) 
- timber from North Korea (FL) 
- bricks and sugarcane from Paraguay (CL) 
- cocoa, coffee and palm oil from Sierra Leone (CL) 
- gold from Suriname (CL) 

This year’s report also adds a CL designation to corn from Bolivia, which already had a FL designation, and an FL designation to three goods already on the list under the CL category: dried fish from Bangladesh and gold and wolframite from the Democratic Republic of the Congo. In all, the TVPRA list now comprises 134 products from 74 countries. 

The DOL considered and rejected requests to remove the following goods from the TVPRA list: cotton from Azerbaijan (CL), salt from Cambodia (CL), garments from India (CL/FL), embellished textiles from India (CL/FL), tobacco from Kazakhstan (CL/FL), sugarcane from Thailand (CL) and cotton from Tajikistan (CL/FL). 

Under the TVPRA the Labor Department is required to take steps to ensure that the listed goods are not imported into the U.S. if they are made with forced or child labor, including working with producers to help set standards to eliminate the use of such labor. Importers and exporters of the listed goods should therefore take steps to ensure that their operations will pass muster, including through measures such as assessing and understanding risk levels, strengthening compliance programs, ensuring due diligence on monitoring enforcement, developing and documenting best practices, and effectively communicating efforts to appropriate audiences. 

Federal Contractor List. The DOL is proposing to update its list of products requiring federal contractor certification as to forced or indentured child labor. This update would add dried fish from Bangladesh, gold and wolframite from the Democratic Republic of Congo, cattle from South Sudan, garments from Vietnam and fish from Ghana. Comments on whether these and/or other products should be added to or removed from this list may be submitted through Nov. 27. 

Under Executive Order 13126 of June 1999, federal agencies may not acquire products produced by forced or indentured child labor. As a result, federal contractors who supply the products on the DOL list must certify that they have made a good faith effort to determine whether forced or indentured child labor was used to mine, produce or manufacture them and that, on the basis of those efforts, they are unaware of any such use of child labor. 

TDA ReportThis annual report describes the efforts of 144 countries and territories to meet their commitment to eliminate the worst forms of child labor, which is one of the criteria for eligibility for trade benefits under the Generalized System of Preferences, the Caribbean Basin Trade Partnership Act, the African Growth and Opportunity Act and the Andean Trade Promotion and Drug Eradication Act. The department states that this year’s report introduces a new tool to assess and clearly indicate the status of the efforts examined.

U.S. Claims Compliance with WTO Ruling on Aircraft Subsidies, EU Requests Talks      

The U.S. said this week that it has met the deadline for complying with a World Trade Organization ruling in the large civil aircraft case brought by the European Union against U.S. government subsidies to Boeing. The EU responded by rejecting the U.S. claims and asking for consultations to resolve the matter. 

In a Sept. 23 notification to the WTO the U.S. listed a number of actions taken over the past six months to withdraw the subsidies found to have caused adverse effects or to remove those effects. These steps include modifying, terminating or reducing funding under a number of NASA and Defense Department contracts as well as tax and bond changes at the state level. However, the EU says its review of the U.S. notification suggests that the U.S. “has not lived up to its obligations” because it “has neither withdrawn the illegal subsidies granted to Boeing nor removed their adverse effects.” In fact, the EU adds, there are “indications that the U.S. could have actually granted more illegal subsidies to Boeing in the meantime.” 

A press release from the Office of the U.S. Trade Representative argues that the WTO found $3-4 billion in subsidies to Boeing, “mostly in the form of funding for public research,” compared to “more than $18 billion in subsidized financing” to Boeing’s chief competitor, Airbus, in a parallel case. The EU counters that the WTO ruling found $5-6 billion in WTO-incompatible subsidies to Boeing between 1989 and 2006 and at least $3.1 billion in subsidies since then. Earlier this year the U.S. asserted that the EU has not complied with the WTO ruling against its subsidies, a claim currently being reviewed by a WTO panel. 

Of Note: FCPA Guidance, EU Targets China, Guatemala Customs Reform      

DOJ Guidance on FCPA Expected in Next Two Weeks 
EU investigates whether Chinese bicycles evade import duties 
European Solar Group Seeks Wider China Trade Inquiry 
Entirely new customs law planned for Guatemala

CPSC to Meet Oct. 3 on Third-Party Testing Costs, Bassinets, Swings      

The Consumer Product Safety Commission will hold a public meeting Oct. 3 at its headquarters in Bethesda, Md., at which it will consider the following matters. Interested parties can attend the meeting in person or view it via live webcast ( 

proposed rule that would amend the new mandatory play yard standard to address the hazards associated with the use of bassinet accessories that can be assembled with missing key structural elements (comments on this proposal are due no later than Nov. 13) 

- ways to reduce the costs of third-party testing of the compliance of children’s products with applicable safety rules 

- final rule establishing safety standard for infant swings

AD Notices: Hexametaphosphate, Pipe, Ammonium Nitrate      

Agency: International Trade Administration. 
Commodity: Sodium hexametaphosphate. 
Country: China. 
Nature of Notice: Final results of administrative review of antidumping duty order for the period March 1, 2010, through Feb. 28, 2011. 
Details: Dumping margin of 91.23% for Hubei Xingfa Chemical Group Co. Ltd. Importer-specific AD duties 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 subject merchandise entered or withdrawn from warehouse for consumption on or after Sept. 27. 

Agency: International Trade Administration. 
Commodity: Small diameter carbon and alloy seamless standard, line and pressure pipe (under 4.5”). 
Country: Japan. 
Nature of Notice: Rescission of administrative review of antidumping duty order for the period June 1, 2011, through May 31, 2012, due to withdrawal of request for review. 
Details: AD duties on subject merchandise from Canadian Natural Resources Ltd. will be assessed at rates equal to the cash deposit rate in effect on the date of entry or withdrawal from warehouse for consumption. 

Agency: International Trade Administration. 
Commodity: Solid agricultural grade ammonium nitrate. 
Country: Ukraine. 
Nature of Notice: Sunset review determination that revocation of this antidumping duty order would be likely to lead to continuation or recurrence of dumping at the rate of 156.29%.

New IPR Infringement Petition on Optoelectronic Devices      

The International Trade Commission received Sept. 25 a petition requesting that it institute a Section 337 investigation regarding certain optoelectronic devices for fiber optic communications, components thereof and products containing same. This petition was filed on behalf of Avago Technologies Fibers IP (Singapore) PTE Ltd., Avago Technologies General IP (Singapore) PTE Ltd. and Avago Technologies U.S. Inc. The proposed respondents are located in Denmark, Germany, Israel 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.

Indiana Foreign-Trade Zone Seeks to Expand, Nevada Application Withdrawn      

Expansion Sought for Indiana FTZ. The Foreign-Trade Zones Board has received an application from the Indianapolis Airport Authority, grantee of FTZ 72, requesting authority to reorganize this zone under the alternative site framework. This zone currently has a service area that includes Bartholomew, Benton, Boone, Carroll, Cass, Clay, Clinton, Decatur, Delaware, Fayette, Fountain, Franklin, Grant, Greene, Hamilton, Hancock, Hendricks, Henry, Howard, Jennings, Johnson, Lawrence, Madison, Marion, Miami, Monroe, Montgomery, Morgan, Owen, Parke, Putnam, Rush, Shelby, Tippecanoe, Tipton, Vigo, Warren, Wayne and White counties in Indiana, and the applicant seeks to expand this area to include Union and Vermillion counties. Comments on this request are due no later than Nov. 26. 

Application for Nevada Cell Phone Facility Withdrawn. The Foreign-Trade Zones Board has announced the withdrawal of a notification of proposed production activity at the cell phone kitting, warehousing and distribution facility of Brightpoint North America L.P. in Reno, Nev. This case has been closed without prejudice. 

No Change in Quarterly IRS Interest Rates Relating to Customs Duties      

U.S. Customs and Border Protection has updated its list of the quarterly Internal Revenue Service interest rates used to calculate interest on overdue accounts (underpayments) and refunds (overpayments) of customs duties. For the quarter beginning Oct. 1, 2012, the interest rates for overpayments will be 2% for corporations and 3% for non-corporations, and the interest rate for all underpayments will be 3%. These rates are unchanged from the previous quarter.   

Foreign Regulatory Changes Could Affect Exports of Gloves, Pre-Packaged Goods      

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 conformity assessment procedures for gloves 

Costa Rica/Guatemala/Honduras/Nicaragua – amended Central American Technical Regulation on quantity of product in pre-packages 

Ex-Im Bank Asked to Aid Export of Aircraft to Indonesia      

The Export-Import Bank of the United States is accepting comments through Oct. 22 on an application for final commitment for a long-term loan or financial guarantee in excess of $100 million. This transaction would support the export of U.S.-manufactured Boeing 737 aircraft being leased to an airline in Indonesia to provide airline service between Indonesia and other countries. To the extent that Ex-Im Bank is reasonably aware, the item(s) being exported are not expected to produce exports or provide services in competition with the exportation of goods or provision of services by a U.S. industry.  

Emerging Technology and Research Committee to Meet Oct. 11      

The Bureau of Industry and Security’s Emerging Technology and Research Advisory Committee will meet Oct. 11 at Department of Commerce headquarters in Washington, D.C. This committee advises BIS on emerging technology and research activities, including those related to deemed exports. 

The open session of the upcoming meeting will include an update and discussions with BIS on plans for fiscal year 2013, a presentation from the State Department on the redefinition of “use” under the Wassenaar Arrangement, a discussion of deemed export language to address this redefinition, and dual-use research of concern and implications for the deemed export rule. 

The open session will be accessible via teleconference to 20 participants on a first come, first served basis. Those interested in participating in this manner should notify BIS no later than Oct. 4. In addition, a limited number of seats will be available at the public session, but reservations are not accepted. 

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