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October 2 2012 Issue

Tuesday, October 02, 2012
Sandler, Travis & Rosenberg Trade Report

FTC Amends “Green Guides” on Environment Claims for Consumer Goods      

The Federal Trade Commission released Oct. 1 its revised “Green Guides,”which are designed to help marketers ensure that the claims they make about the environmental attributes of their products are truthful and non-deceptive. The guidance provided in these guides includes general principles that apply to all environmental marketing claims, how consumers are likely to interpret particular claims and how marketers can substantiate these claims, and how marketers can qualify their claims to avoid deceiving consumers. The FTC notes that it has brought several actions in recent years related to deceptive recyclability, biodegradable, bamboo and environmental certification claims as part of its overall effort to ensure that environmental marketing is truthful and substantiated. 

According to an FTC press release, the amended Green Guides: 

- caution marketers not to make broad, unqualified claims that a product is “environmentally friendly” or “eco-friendly” because very few products, if any, have all the attributes consumers seem to perceive from such claims, making them nearly impossible to substantiate; 

- advise marketers not to make an unqualified degradable claim for a solid waste product unless they can prove that the entire product or package will completely break down and return to nature within one year after customary disposal; 

- caution that items destined for landfills, incinerators or recycling facilities will not degrade within a year so marketers should not make unqualified degradable claims for these items; and 

- clarify guidance on compostable, ozone, recyclable, recycled content and source reduction claims. 

The Guides also contain new sections on certifications and seals of approval, carbon offsets, “free of” claims, “non-toxic” claims, “made with renewable energy” claims, and “made with renewable materials” claims. For example, the new section on certifications and seals of approval emphasizes that they may be considered endorsements that are covered by the FTC’s Endorsement Guides and includes examples that illustrate how marketers could disclose a material connection that might affect the weight or credibility of an endorsement. In addition, the Guides caution marketers not to use environmental certifications or seals that don’t clearly convey the basis for the certification. 

In addition, because the FTC either lacks a sufficient basis to provide meaningful guidance or wants to avoid proposing guidance that duplicates or contradicts rules or guidance of other agencies, the Guides do not address use of the terms “sustainable,” “natural” and “organic.” Organic claims made for textiles and other products derived from agricultural products are covered by the U.S. Department of Agriculture’s National Organic Program.

State Department Outlines Expanded Sanctions on Iran      

The State Department’s Bureau of Economic and Business Affairs released Sept. 28 a fact sheet detailing the expanded economic sanctions against Iran set forth by the Iran Threat Reduction and Syria Human Rights Act of 2012, which President Obama signed into law Aug. 10. The fact sheet states that this law provides for sanctions on activities related to Iran’s energy and financial sectors, proliferation of weapons of mass destruction, support for terrorism and human rights abuses. The law also amends portions of the Iran Sanctions Act of 1996, the Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 and section 1245 of the FY 2012 National Defense Authorization Act in an effort to “greatly increase the pressure on Iran to comply with its full range of international nuclear obligations and engage in constructive negotiations with the international community.” 

New categories of sanctionable commercial activities with Iran including knowingly doing the following. 

- participating in a joint venture established on or after Jan. 1, 2002, with respect to the development of petroleum resources outside of Iran if the government of Iran is a substantial partner or investor in the joint venture or if Iran could receive technological knowledge or equipment not previously available to it that could directly and significantly contribute to the enhancement of its ability to develop its petroleum resources 

- owning, operating, controlling or insuring a vessel that on or after 90 days from the law’s enactment was used to transport crude oil from Iran to another country (this does not apply to vessels used to transport crude oil from Iran to a country given a “significant reduction” exception under section 1245 of the NDAA) 

- owning, operating or controlling a vessel that on or after 90 days from enactment is used in a manner that conceals the Iranian origin of crude oil or refined petroleum products transported on the vessel, including by permitting the vessel’s operator to suspend the operation of the vessel’s satellite tracking device or obscuring the ownership, operation or control of the vessel 

- providing underwriting services, insurance or reinsurance on or after enactment for the National Iranian Oil Company, the National Iranian Tanker Company or a successor entity to either 

- purchasing, subscribing to or facilitating the issuance of sovereign debt of the government of Iran or debt of any entity owned or controlled by the government of Iran, including bonds, issued on or after enactment 

State was previously required to impose at least three out of nine available sanctions once it determined that sanctionable activity had occurred. The new law expands the list of potential sanctions to include prohibitions on the following activities and requires State to impose at least five. 

- export assistance from the Export-Import Bank of the United States 
- licenses for export of U.S. military, dual use or nuclear-related goods or technology 
- private U.S. bank loans exceeding $10 million in any 12-month period 
- if the sanctioned person is a financial institution, designation as a primary dealer in U.S. government debt instruments or service as a repository of USG funds 
- USG procurement contracts 
- foreign exchange transactions subject to U.S. jurisdiction 
- financial transactions subject to U.S. jurisdiction 
- transactions with respect to property and interests in property subject to U.S. jurisdiction 
- imports into the United States from the sanctioned person 
- investment in equity or debt of the sanctioned person 
- visas for corporate officers of sanctioned entities 

The new law also requires State to impose at least five of these sanctions on persons that: 

- materially assist, sponsor or provide financial, material or technological support for, or goods or services in support of, or engage in significant transactions with, the Iran Republican Guard Corps or its officials, agents or affiliates; 

- engage in significant transactions with a person subject to, or a person acting on behalf of or at the direction of a person subject to, financial sanctions pursuant to an Iran-related U.N. Security Council resolution; 

- export, transfer, permit or otherwise facilitate the transshipment of any goods, services, technology or other items to any other person while the person knew or should have known that such shipment would likely result in another person exporting, transferring, transshipping or otherwise providing the goods, services, technology or other items to Iran and that the items would contribute materially to the ability of Iran to acquire or develop chemical, biological or nuclear weapons or related technologies or destabilizing numbers and types of advanced conventional weapons; or 

• participate in a joint venture established on or after Feb. 2, 2012, with the government of Iran, an entity incorporated in Iran or subject to the jurisdiction of the government of Iran, or a person acting on behalf of or at the direction of the government or Iran or such an entity that involves any activity relating to the mining, production or transportation of uranium.

Court Denies Duty-Free Classification for Decorative Paper Punches      

The Court of International Trade ruled Sept. 27 in Wilton Industries Inc. v. U.S. that certain decorative paper punches are properly classified as perforating punches under HTSUS 8203.40.60 (3.3% duty). These punches cut shapes or designs out of or in paper and are used in scrapbooking and craft projects involving the creation or decoration of invitations, cards and other decorative items. The court found that the common meaning of “perforating punch” is a hand-operated device for cutting or making holes in or through paper or cardboard and that the items at issue fit that description. 

The plaintiff had argued for classification as cutting machines under HTSUS 8441.10.00 (duty-free). Customs acknowledged that the punches are simple cutting machines but argued that this heading is designed to cover “more complex” machines, an assertion the court rejected. However, the court did find that the punches are not classifiable in this heading because they are not cutting machines “for making up paper pulp, paper or paperboard.”

AD/CV Notices: Steel Sinks, Honey      

Agency: International Trade Administration. 
Commodity: Drawn stainless steel sinks. 
Country: China. 
Nature of Notice: Preliminary affirmative dumping determination. 
Details: Dumping margins range from 54.25% to 76.53%. AD cash deposits based on these rates will be required. 

Agency: International Trade Administration. 
Commodity: Honey. 
Country: Argentina. 
Nature of Notice: Initiation of changed circumstances reviews due to lack of interest in continuing antidumping and countervailing duty orders on the part of producers accounting for substantially all of the production of the domestic like product.

Potential IPR Probe of Electronic Device Cases Evaluated for Public Interest Issues      

The International Trade Commission is requesting comments no later than Oct. 10 on any public interest issues raised by a Section 337 intellectual property rights infringement complaint filed on behalf of Speculative Product Design LLC against certain cases for portable electronic devices. Comments should address whether the issuance of exclusion orders and/or cease and desist orders pursuant to this complaint would affect the public health and welfare in the U.S., competitive conditions in the U.S. economy, the production of like or directly competitive articles in the U.S., or U.S. consumers. In particular, the ITC is interested in comments that: 

- explain how the articles potentially subject to the orders are used in the U.S.; 

- identify any public health, safety or welfare concerns in the U.S. relating to the potential orders; 

- identify like or directly competitive articles that the complainant, its licensees or third parties make in the U.S. that could replace the subject articles if they were to be excluded; 

- indicate whether the complainant, the complainant’s licensees and/or third-party suppliers have the capacity to replace the volume of articles potentially subject to the requested orders within a commercially reasonable time; and 

- explain how the requested orders would impact U.S. consumers.

FTZ Subzone Approved in Texas      

The Foreign-Trade Zones Board has approved the establishment of subzone 12A at the TST NA TRIM, LLC, facility in Hidalgo, Texas. Activity at this facility involves the lamination and cutting of automotive upholstery material for export.

Foreign Regulatory Changes Could Affect Exports of Toys, Batteries, Medicines, Foods, 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. 

Jordan – draft technical regulations on product safety, fungicides, packaging, materials and articles in contact with food, protection against dangerous goods, toys and batteries (comments due by Nov. 26) 

Kenya – mandatory standards on plastic pipes, liquid toilet cleansers, hazardous chemicals, ambulances, soap starch, swimming pool water, hand wash and packaging materials (comments due by Nov. 28) 

Korea – standards on veterinary medical devices, herbal medicines and herbal medicine preparations (comments due by Nov. 28) 

Switzerland – partial revision of decree on radio equipment and telecommunication terminal equipment (comments due by Dec. 1) 

Taiwan – regulations on country of origin labeling for pre-packaged foods, beef and edible cattle offals, and bulk foods 

United Arab Emirates – control regulation on surface active agents (comments due by Nov. 28)

New Entry Summary Filing Option for Merchandise Transported by Pipeline      

U.S. Customs and Border Protection announced Oct. 1 recent enhancements to the Automated Commercial System concerning filing options for merchandise transported via pipelines. These enhancements allow filers to file monthly consolidated entry summaries using the electronic invoice program and remote location filing on merchandise imported by pipeline that is free or conditionally free of duty under NAFTA. In addition, merchandise transported via pipeline that does not qualify for NAFTA may now be entered using the monthly consolidated entry procedures using RLF and EIP. Filers must use code 70 (pipeline) for the mode of transport on the monthly entry summary. CBP notes that existing RLF and EIP program requirements remain unchanged.

CBP Reviewing Information Collections on Yachts, Used Vehicle Exports      

U.S. Customs and Border Protection is accepting comments through Dec. 3 on the proposed extension of the following information collections. 

Deferral of Duty on Large Yachts Imported for Sale – An otherwise dutiable yacht that exceeds 79 feet in length, is used primarily for recreation or pleasure and had been previously sold by a manufacturer or dealer to a retail customer may be imported without the payment of duty if intended to be offered for sale at a boat show in the U.S. Payment of duty may be deferred until the yacht is sold but the duty deferral period may not exceed six months. This collection of information requires the name and address of the owner of the yacht, the dates of cruising in the waters of the United States, information about the yacht, and the ports of arrival and departure. 

Exportation of Used Self-Propelled Vehicles – Individuals attempting to export a used self-propelled vehicle must furnish documentation to CBP at the port of export, including a certificate of title or a salvage title, the vehicle identification number, a manufacturer’s statement of origin, etc. CBP will accept originals or certified copies of the certificate of title.

Florida Company Becomes Accredited Gauger/Approved Lab      

U.S. Customs and Border Protection has announced that as of June 21, 2012, Amspec Services LLC of Davie, Fla., has been approved to gauge and accredited to test petroleum and petroleum products, organic chemicals and vegetable oils for customs purposes.

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