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October 5 2012 Issue

Friday, October 05, 2012
Sandler, Travis & Rosenberg Trade Report

CBP Expanding Eligibility for Importer Self-Assessment Program      

U.S. Customs and Border Protection has issued a general notice making the Importer Self-Assessment program available to more participants. ST&R will be conducting a webinar on ISA Oct. 23 to review the requirements and benefits of this program, including the newly expanded eligibility. 

Effective immediately, a company that has successfully undergone a CBP Focused Assessment audit may be eligible to transition into ISA without further CBP review within 12 months from the date of the FA report wherein CBP has determined that the company represents an acceptable risk. Daryl Moore, director of customs audits and compliance for ST&R, points out that under this policy any interested company that has successfully completed an FA in the last 12 months (i.e., since October 2011) may apply to transition into ISA. 

To qualify for ISA the company must be a U.S. or Canadian resident importer (CBP sources confirmed that Canadian resident companies that import into the U.S. are included in this description), obtain membership in the Customs-Trade Partnership Against Terrorism, develop a risk-based self-testing plan, and agree to meet all ISA requirements. The application review meeting normally conducted for ISA applicants will not be required. 

ISA is a joint government-business initiative designed to build cooperative relationships that strengthen trade compliance. It is based on the premise that companies with strong internal controls achieve the highest level of compliance with customs laws and regulations. CBP states that benefits of participation in this program include removal from the audit pool established for Focused Assessment, expanded opportunity to file prior disclosures of certain violations, mitigation of civil penalties and liquidated damages, expedited cargo release, and priority consideration for applications to participate in the Centers of Excellence and Expertise tests. 

CBP is proposing the change outlined in this notice because the FA is a more rigorous and thorough method of examining a company’s internal systems for compliance with customs laws and regulations than the ISA review process. The notice sets forth the process that companies that have successfully completed an FA can use to apply to transition into ISA, the requirements they will have to meet after making that transition, and the reasons a company may be removed from ISA.

Egypt Proposes to Lower Israeli Content Required in QIZ-Made Goods      

According to multiple press reports, Minister of Industry and Foreign Trade Hatem Saleh said recently that Egypt wants to lower from 10.5% to 8% the value of Israeli content required in goods made in qualified industrial zones that receive duty-free treatment when shipped to the United States. Egypt’s economy is continuing to struggle in the wake of last year’s popular uprising and Saleh said amending the QIZ agreement would provide an economic benefit to Egypt’s raw materials sector. Press sources note that about 700 factories in Egypt are currently operating in 15 designated QIZs, employing some 100,000 workers, mostly in textile and apparel production.

APEC Sees Progress in Lowering Costs of Trading Across Borders      

The Asia-Pacific Economic Cooperation forum has released an annual report evaluating progress in the five priority areas set forth under its Ease of Doing Business Initiative, one of which is trading across borders. APEC leaders agreed in November 2009 to set a target of 25% improvement in these areas by 2015, with an interim 5% goal by 2011. The report finds that while APEC exceeded this objective with an 8.2% improvement overall, progress in individual areas was uneven. 

According to the report, between 2009 and 2011 APEC’s performance indicators on trading across borders fared better than those of the rest of the world. In 2011 APEC economies needed an average of one document less to export and import, had an average time to export that was nine days shorter and had an average time to import that was nearly 11 days shorter. The average cost to export a container was US$835, 44% cheaper than the rest of the world, and the average cost to import a container was US$896, or 49% cheaper. These costs decreased by 1.4% and 2.4%, respectively, in 2011, the best performance of any world region. 

The report points out that the introduction or upgrade of electronic trading platforms is one of the factors making it easier, faster and cheaper for APEC economies to trade across borders. Single-window systems have been established in Indonesia, Japan, Korea, New Zealand, Peru (in progress), Russia, Singapore and Thailand, and electronic customs forms are used by Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, Singapore, Taiwan and Thailand. Korea’s Customs Service has launched an electronic submission system that streamlines trade procedures and reduces traders’ logistical costs. In 2009 Australia streamlined several of its foreign investment screening thresholds and began indexing them to ensure they keep pace with inflation.

Dates and Deadlines: Export Controls, DR-CAFTA, Customs Valuation, AGOA      

Following are highlights of regulatory effective dates and deadlines and federal agency meetings coming up in the next week. 

Oct. 9 – comments on effectiveness of BIS licensing procedures for exports of agricultural commodities to Cuba 

Oct. 9 – comments on modification, rescission or extension of foreign policy-based export controls 

Oct. 9 – ST&R webinar on DR-CAFTA technical fixes and recordkeeping updates 

Oct. 10 – comments on proposed extension of CBP Form 5106, the Importer ID Input Record 

Oct. 10 – DOT meeting on transport of dangerous goods by air 

Oct. 10 – ST&R webinar on mastering export classification issues 

Oct. 11 – meeting of Bureau of Industry and Security’s Emerging Technology and Research Advisory Committee 

Oct. 11 – ST&R webinar on customs valuation 

Oct. 12 – comments on annual AGOA eligibility review 

Oct. 13 – effective date for DR-CAFTA rule of origin changes

Of Note: Brazil Tax Breaks for Automakers, Laos to Join WTO      

Brazil unveils tax breaks to boost auto industry 
Economic minnow Laos set to join WTO club

Trade Advisory Committee on Small and Minority Business to Meet Oct. 15      

The Office of the U.S. Trade Representative has announced that the Industry Trade Advisory Committee on Small and Minority Business (ITAC-11) will hold a partially open meeting Oct. 15 in Washington, D.C. Topics to be discussed include top challenges facing SME exporters, a preview of the Oct. 16 National District Export Council Forum, the U.S. and Foreign Commercial Service’s user fee proposal, and a proposed reorganization of the “ITA” (presumably the International Trade Administration).

Possible Violation of Import Restrictions on Circuit Boards      

The International Trade Commission has instituted a formal enforcement proceeding to determine whether an April 2009 consent order in patent infringement investigation 337-TA-659 of certain prepregs, laminates and finished circuit boards is being violated. Complainant Isola USA Corp. alleges that the respondent named in that consent order has violated it by importing or causing to be imported articles that infringe the patents at issue. The ITC will now investigate this claim and determine what, if any, enforcement measures are appropriate. 

Advance Notice Required for Imports of 78 Chemical Substances      

The Environmental Protection Agency has issued a direct final ruleimposing new import restrictions on 78 chemical substances that were the subject of premanufacture notices. Under this rule, persons who intend to import, manufacture or process any of these substances for an activity that is designated as a significant new use by this rule must notify EPA at least 90 days before commencing that activity. This notification will provide EPA with the opportunity to evaluate the intended use and, if necessary, to prohibit or limit that activity before it occurs. 

This rule will be effective as of Dec. 4. Written adverse or critical comments, or notice of intent to submit adverse or critical comments, must be received on or before Nov. 5.

Foreign Regulatory Changes: Multimedia Equipment, Medical Devices, Cosmetics, Matches      

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. 

Estonia – design of revenue stamp on tobacco products to be changed as of Jan. 1, 2013 

Korea – draft amendment to technical criteria for multimedia equipment (comments due by Dec. 1) 

Korea – proposed amendment of safety criteria for household chemical products and consumer products subject to child-resistant packaging (comments due by Dec. 1) 

Korea – proposed revision of regulation on approval of medical devices (comments due by Dec. 1) 

Mexico – Sept. 19 publication of official standard on health and commercial labeling of pre-packaged cosmetic products (effective 90 days after publication) 

Sweden – proposed requirements concerning communication, navigation and surveillance services (comments due by Nov. 30) 

Trinidad and Tobago – standard on safety matches (comments due by Nov. 8)

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