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October 29 2012 Issue

Monday, October 29, 2012
Sandler, Travis & Rosenberg Trade Report

CBP Trade Symposium Postponed Due to Approaching Storm

U.S. Customs and Border Protection has postponed its 2012 Trade Symposium due to concerns over “participant safety and potential travel disruptions” related to an approaching hurricane. The symposium had been scheduled to take place in Washington, D.C., Oct. 29-30. CBP said a new date and location within the D.C. metro area will be announced as soon as possible.

Prior to announcing this delay CBP released an agenda for the symposium indicating that it will feature general and breakout sessions on the following issues.

- Automated Commercial Environment: first phase of Cargo Release/Simplified Entry, plans for expansion and future development, plans for exports

- U.S.-Canada Beyond the Border Action Plan: goals and achievements of the single window and the harmonization of advance data requirements and what impact these initiatives will have on the importing public

- Role of the Broker: continuing education for brokers, establishing bona fides and broker permitting

- One U.S. Government at the Border: progress of the Border Interagency Executive Council and how the Commercial Operations Advisory Committee is working on harmonizing trade facilitation efforts among federal agencies for an efficient border

- Trusted trader programs: efforts to enhance CBP’s trusted trader programs, integrate them with similar programs of other government agencies, and achieve harmonization with the international community

- Trade intelligence: lessons learned from CBP’s piloting of the Trade Intelligence concept within the Centers of Excellence and Expertise and in other areas, including insights on addressing enforcement issues related to intellectual property rights, antidumping and countervailing duties and trade preferences

- Centers of Excellence and Expertise: what every member of the private sector needs to know about how the CEEs operate, current CEE policies and procedures, and areas of focus for future CEE operations

- Supply chain security partnerships: the importance that authorized economic operator programs and mutual recognition arrangements have toward achieving a secure global supply chain

- Resetting the trade agenda: how three ongoing initiatives – One U.S. Government at the Border, Simplified Entry and Air Cargo Advance Screening – incorporate the concept of co-creation with the private sector

- Shared border initiatives: the increased level of collaboration, coordination and cooperation among U.S. Customs and Border Protection, the Canada Border Services Agency and the Mexico Revenue and Customs Service

- CBP Senior Leadership Town Hall: a question and answer session with Deputy Commissioner David Aguilar and other CBP leaders on current trade initiatives and priorities

Registration to attend the symposium in person had already filled but interested parties can still sign up to view the proceedings via live webcast. 

Paper Company, Executives Face Millions in Penalties for Scheme to Avoid AD Duties

The U.S. Attorney’s Office for the Northern District of Georgia reports that a Georgia-based paper company, its chief executive officer and its chief financial officer have been indicted in a scheme to avoid over $20 million in antidumping duties on Chinese paper products. Three Chinese paper manufacturers, a Taiwanese company and their respective CEOs were also charged. Authorities say those involved shipped stationery made in China through Taiwan, bribed Taiwanese customs officials, falsely relabeled the goods as “made in Taiwan” and then exported the goods to the U.S., where they used fraudulent invoices and bills of lading to circumvent AD duties ranging from 76.70% to 258.21%.

According to a press release, the transshipment scheme “began to unravel” after U.S. container security officers based in a Taiwanese port noticed shipments of U.S.-bound stationery with suspicious documentation and alerted other customs officials in the U.S. and Taiwan. The full extent of the conspiracy was discovered after the company fired the CEO’s executive assistant, who then delivered a copy of the hard drive from her company laptop to the Department of Homeland Security.

The maximum penalty for the conspiracy charge is five years in prison, a $1 million fine for a corporation, a $250,000 fine for an individual and three years of supervised release. The maximum penalty for the fraudulent importation charges is two years in prison, a $1 million fine for a corporation, a $250,000 fine for an individual and one year of supervised release for each count. 

FWS Exempts Certain Importers and Exporters of Wildlife from Inspection Fee

The Fish and Wildlife Service has issued an interim rule that, effective Oct. 26, exempts as many as 1,000 businesses that exclusively trade in small volumes of low-value, non-federally protected wildlife parts and products from the fee charged for the inspection of imports and exports of wildlife. The FWS is taking this step because the new user fee system implemented in 2009 to recover the costs of the compliance portion of its wildlife inspection program may have placed an undue economic burden on these businesses. The FWS notes that this is an interim measure while it works on a new economic analysis and determines any changes needed to the current user fee structure.

The user fee at issue (currently set at a minimum of $93) applies primarily to commercial importers and exporters whose shipments of wildlife are declared to, and inspected and cleared by, FWS inspectors to ensure compliance with wildlife protection laws. The Service notes that the inspection and clearance of wildlife imports and exports is a special service provided to importers and exporters who are authorized to engage in activities not otherwise authorized for the general public and that its ability to effectively provide these services and the related support depends on inspection fees.

With this rule, businesses that possess a valid FWS import/export license may request to participate in this fee exemption program through the eDecs electronic filing system. To be approved the licensed business will need to certify that it will exclusively import or export non-living wildlife that is not listed as injurious under 50 CFR part 16 and does not require a permit or certificate under 50 CFR parts 15 (Wild Bird Conservation Act), 17 (Endangered Species Act), 18 (Marine Mammal Protection Act), 20 or 21 (Migratory Bird Treaty Act), 22 (Bald and Golden Eagle Protection Act), or 23 (the Convention on International Trade in Endangered Species of Wild Fauna and Flora). The requesting business will also need to certify that it will exclusively import or export the above type of wildlife shipments where the quantity in each shipment of wildlife parts or products is 25 or fewer and the total value of each shipment is $5,000 or less.

Any licensed business that has more than two wildlife shipments that were refused clearance in the five years prior to its request is not eligible for the program. In addition, any licensees that have been assessed a civil penalty, issued a notice of violation or convicted of a misdemeanor or felony violation involving wildlife import or export will not be eligible to participate. If an approved business fails to meet these criteria while participating in the program it will be removed from the program. While such a business would still be able to import or export wildlife, it would need to pay the applicable designated port base inspection fees for its shipments. 

IPR Enforcement Actions on Synthetic Hormone, LCD Displays,Wireless Devices

Potential IPR Probe of Consumer Electronics Evaluated for Public Interest Issues. The International Trade Commission is requesting comments no later than Nov. 6 on any public interest issues raised by a Section 337 intellectual property rights infringement complaint filed on behalf of K-V Pharmaceutical Company against certain hydroxyprogesterone caproate and products containing same. 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.

Import Restrictions Considered on LCD Displays. In patent infringement investigation 337-TA-805 of certain devices for improving uniformity used in a backlight module and components thereof and products containing same, the presiding administrative law judge has recommended the issuance of a limited exclusion order against subject items (which comprise several families of LCD displays) imported by respondents LG Electronics Inc. and LG Display Co. Ltd. as well as cease and desist orders against those companies. The International Trade Commission is therefore soliciting public comments through Nov. 21 on whether the issuance of these orders 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 items at issue are used in the U.S.;

- identify any public health, safety or welfare concerns in the U.S. relating to the recommended 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, its licensees and/or third-party suppliers have the capacity to replace the volume of articles potentially subject to the recommended exclusion order and/or a cease and desist order within a commercially reasonable time; and

- explain how the limited exclusion order and cease and desist orders would impact consumers in the U.S.

Wireless Device Probe Terminated with No Import Restrictions. The International Trade Commission has terminated patent infringement investigation 337-TA-856 of certain wireless communication devices, portable music and data processing devices, computers and components thereof based on the withdrawal of the complaint filed by Motorola Mobility LLC, Motorola Mobility Ireland and Motorola Mobility International. As a result, no import restrictions will be imposed on the items subject to this investigation. 

Two Foreign-Trade Zones Expanded, New Subzone Authorized

The Foreign-Trade Zones Board has recently announced the following actions.

- granted authority for subzone status for activity related to the manufacturing of centrifugal and submersible pumps and related controllers at the Xylem Water Systems U.S.A. LLC facilities in Auburn, N.Y. (subzone 37D)

- received from the Metroplex International Trade Development Corporation, grantee of FTZ 168, a notification of proposed production activity under zone procedures at the Richemont North America Inc. (d/b/a Cartier) facility in Grand Prairie, Texas , which is used for the assembly and kitting of eyewear products (comments due by Dec. 5)

- approved the reorganization and expansion of FTZ 36 under the alternative site framework, with a service area of Galveston County, Texas, within and adjacent to the Houston U.S. Customs and Border Protection port of entry

- approved the expansion of site 8 in FTZ 158 to include additional acreage in Senatobia, Miss., adjacent to the Memphis CBP port of entry

AD Notice: Ammonium Nitrate from Russia

Agency: International Trade Administration.
Commodity: Solid fertilizer grade ammonium nitrate.
Country: Russia.
Nature of Notice: Rescission of administrative review of antidumping duty order for the period May 2, 2011, through March 31, 2012, because neither respondent had an entry of subject merchandise into the U.S. during this period. 

Government Procurement, Sugar Policies Revised to Reflect Panama FTA

The Office of the U.S. Trade Representative will waive discriminatory purchasing requirements for eligible products and suppliers from Panama beginning Oct. 31, the date the United States’ free trade agreement with that country takes effect. Specifically, having determined that Panama will provide appropriate reciprocal competitive government procurement opportunities to U.S. products and services and suppliers of such products and services, beginning Oct. 31 the U.S. will waive the application of any law, regulation, procedure or practice regarding government procurement that would, if applied to eligible products of Panama and suppliers of such products, result in treatment less favorable than that accorded to (a) U.S. products and suppliers of such products or (b) eligible products of another foreign country or instrumentality that is a party to the World Trade Organization Government Procurement Agreement and suppliers of such products.

USTR has also provided notice that the tariff-rate quotas for sugar established by the U.S.-Panama FTA will be administered using certificates. Effective Oct. 31, when this FTA takes effect, no sugar that is the product of Panama may be permitted entry under the in-quota tariff rate established for imports of raw sugar or the in-quota tariff rate established for imports of sugar and sugar-containing products from Panama unless at the time of entry the person entering such sugar presents a valid and properly executed certificate of quota eligibility for such sugar. In addition, no specialty sugar that is the product of Panama may be permitted entry under the in-quota tariff rate established for imports of specialty sugar from Panama unless at the time of entry the person entering such sugar presents to a valid and properly executed specialty sugar certificate for such sugar. The Department of Agriculture will issue both CQEs and specialty sugar certificates. 

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