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December 12 2012 Issue

Wednesday, December 12, 2012
Sandler, Travis & Rosenberg Trade Report

CBP Looking to Accelerate Transition of Import and Export Processing to ACE

U.S. Customs and Border Protection has posted to its Web site its monthly update on the functionality already implemented in the Automated Commercial Environment as well as near-term priorities for other ACE deliverables, such as Cargo Release and export processing. In addition, the Advisory Committee on Commercial Operations of CBP (COAC) has made available its own materials on the current status of ACE. Highlights of this information include the following.

Accelerated Timetable. As stated previously, CBP is reorienting its development team and processes to produce smaller pieces of ACE functionality more frequently. CBP’s plans call for the completion of remaining core ACE functionality in approximately three years, with new functionality deployed every six months. Remaining core functionality is that which enables full and complete trade processing in ACE and complete decommissioning of the Automated Commercial System. This includes Cargo Release, entry summary (including edits), export, finance capabilities and critical fixes.

Cargo Release. ACE Cargo Release will provide the trade community with a more automated and modern process that streamlines data requirements, removes paper and provides for expedited import decisions by federal agencies. Simplified Entry is the first phase of Cargo Release and an ongoing pilot test of this functionality in the air transportation mode is now in operation at 16 airports: Indianapolis, Chicago, Atlanta, Seattle, San Francisco, Oakland, Los Angeles, Dallas/Ft. Worth, Houston, Miami, Newark, New York/JFK, Boston, Memphis, Detroit and Anchorage.

CBP recently added document imaging capability to this pilot, which allows trade participants to electronically provide the following documentation supporting their simplified entries to CBP and partner government agencies via email: packing list, commercial invoice, passport/driver’s license/government issued ID, CBP Form 3299 – Declaration for Free Entry of Unaccompanied Articles, CBP Form 4455 – Certificate of Registration, CBP Form 4457 – Certificate of Registration for Personal Effects Taken Abroad, CBP Form 3299 – Certificate of Origin, vehicle titles/certificates, and permits.

A total of 20 filers are participating in this pilot and as of Nov. 30 there had been over 40,000 simplified entries successfully filed (up 45.5% from the previous month) for more than 650 importers (up 8.3%). CBP is also working to add new functionality to the pilot, including expansion to the ocean mode of transportation and incorporation of the PGA message set, the SE transaction set, single transaction bonds, automated corrections and deletions, and remote location filing.

Transition from ACS to ACE. The COAC ACE Communications Strategy Work Group recently released a white paper on the considerations that CBP, customs brokers and self-filers must take into account to successfully transition the filing of formal (type 01), informal (type 11) and antidumping/countervailing duty (type 03) entries from ACS to ACE. The work group asserts that prior to the start of any transition period two pieces of functionality must be delivered, completely tested and stable: 24 agreed-upon edits, which are “so important to day-to-day operations [that] many brokers will not even consider moving to ACE until [they] are in place;” and full functionality cargo release (i.e., for all participating government agencies and all modes of transportation). Further, the work group states, the scope and requirements of the following functionality must be defined prior to transition, with implementation during the transition to be completed prior to any mandated cut-over: complete transition to PGA data sets, a functional Document Imaging System (noting that the DIS in its present form “is not functional and is not being used by the trade”), and electronic bonds. Finally, the work group recommends a minimum transition period of 24 months.

Exports. CBP is planning to establish ACE as the single processing platform for all export manifest and commodity transactions. Current plans call for the development of an automated export manifest system for all modes, which will involve coordination with the Census Bureau and other PGAs involved in export licensing and commodity transactions. A pilot test using the Document Image System capability, which allows for an emailed submission and automated processing of export manifests in the ocean mode of transportation, was launched in March and has now been expanded to all seaports and ocean carriers. Twenty-five carriers are currently participating and six others are engaged in the required testing process.

CBP now states that efforts are underway to migrate legacy Automated Export System functionality to a modernized, more cost-efficient platform by September 2013. The vision for the re-engineered AES project is to move the current AES off the mainframe and establish a single automated export processing platform in keeping with the provisions of the SAFE Port Act of 2006, the National Export Initiative and the Export Control Reform Initiative.

System Fixes. CBP has identified 225 priority ACE fixes based on input from users and will continue to implement these fixes in two-week cycles throughout fiscal year 2013.

Canada Launches Pilot Test to Speed Clearance at U.S Border for Trusted Traders

The Canada Border Services Agency announced Dec. 7 the launch of a pilot program at the Blue Water Bridge in Sarnia, Ontario, that aims to further speed the clearance of cargo at the U.S.-Canada border for trusted traders. Under this six-month test companies will be able to use the Free and Secure Trade (FAST) lanes and booths at this bridge if they are members of either the Partners in Protection or Customs Self-Assessment program, not both as previously required. The CBSA states that if this pilot is successful the change may be permanently implemented at all three ports where FAST is currently available.

Phaseout of Drawback Claims on Goods from Chile to Continue on Jan. 1

U.S. Customs and Border Protection has issued a reminder that Jan. 1, 2013, marks the next step in the gradual phase-out of drawback eligibility for goods subject to the U.S.-Chile Free Trade Agreement. Effective Jan. 1, 2013, and through Dec. 31, 2013, filers will only be able to claim 50% of eligible drawback, down from 75% for 2012. This figure will further decline to 25% as of Jan. 1, 2014, and zero as of Jan. 1, 2015.

The phase-out affects the following types of drawback: manufacturing, substitution unused merchandise, substitution of finished petroleum derivatives, and packaging material. Unused merchandise direct identification drawback remains available and is not subject to the FTA reductions.

CBP notes that drawback claims involving goods exported to Chile must be submitted separately from all other types of drawback claims and should be marked “Chile FTA” in conspicuous letters on the top of the first page or the front of the folder. ABI claims should be transmitted at the calculated amount (original duty amount prior to the reduction), and the total drawback claimed on the CBP Form 7551 should be the reduced duty/fee amount. In addition, the calculation worksheet must include a column representing the calculated duty/fees (amount before the duty reduction) and a column with the actual duty/fees claimed (amount after the duty/fee reduction). 

China WTO Case Against U.S. AD/CV Duty Orders Subject of USTR Inquiry

The Office of the U.S. Trade Representative is inviting comments through Dec. 30 on a World Trade Organization complaint filed by China against numerous U.S. antidumping and countervailing duty orders on Chinese products. Among other things China is challenging a recent U.S. law allowing CV duties to be assessed on imports from non-market economy countries. China requested the establishment of a WTO dispute settlement panel to review this issue on Nov. 19, and the panel’s decision is expected within nine months.

AD/CV Notices: Silica Bricks, Aluminum Extrusions, Pipe, Steel Plate, Paper, Shrimp, Ammonium Nitrate

Agency: International Trade Administration.
Commodity: Silica bricks and shapes.
Country: China.
Nature of Notice: Dec. 6 initiation of antidumping duty investigation.
Details: Products covered by the scope of this investigation are bricks and shapes, regardless of size, containing at least 90% silica (also known as silicon dioxide), regardless of other materials present. Covered products are currently classified under HTSUS 6902.20.1020 and 6902.20.5020 and may also be entered under HTSUS 6901.00.0000. Dumping margins alleged range from 118.47% to 290.12%.

Agency: International Trade Administration.
Commodity: Aluminum extrusions.
Country: China.
Nature of Notice: Recommendation to determine that curtain wall units and other parts of curtain wall systems are within the scope of the antidumping and countervailing duty orders on these products.
Details: A curtain wall is an aluminum extrusion framed non-weight bearing exterior wall that is secured to and supported by the structural frame of a building. Curtain wall systems are the outer cover of typically multi-level buildings designed to envelop an entire building and provide architectural and functional goals.

Agency: International Trade Commission.
Commodity: Circular welded carbon-quality steel pipe.
Country: India, Oman, United Arab Emirates and Vietnam.
Nature of Notice: Final negative antidumping and countervailing injury determinations.
Details: No AD or CV duty orders will be issued on this merchandise and all AD/CV cash deposits will be refunded.

Agency: International Trade Administration.
Commodity: Cut-to-length carbon steel plate.
Country: China.
Nature of Notice: Final results of administrative review of antidumping duty order for the period Nov. 1, 2010, through Oct. 31, 2011.
Details: Two respondents had no shipments during the period of review, and the AD cash deposit rate for them will remain unchanged from the rate assigned in the most recently completed review. Shipments from two other respondents will be liquidated at the China-wide rate of 128.59%, and AD cash deposits at this rate will be required for shipments of subject merchandise from these entities that are entered or withdrawn from warehouse on or after Dec. 11.

Agency: International Trade Administration.
Commodity: Circular welded non-alloy steel pipe.
Country: Mexico.
Nature of Notice: Preliminary results of administrative review of antidumping duty order for the period Nov. 1, 2010, through Oct. 31, 2011.
Details: Respondents had no reviewable sales, shipments or entries during the period of review. The review is being rescinded for ten companies.

Agency: International Trade Administration.
Commodity: Lightweight thermal paper.
Country: Germany.
Nature of Notice: Preliminary results of administrative review of antidumping duty order for the period Nov. 1, 2010, through Oct. 31, 2011.
Details: Weighted average dumping margin of 75.36% for manufacturer/exporter Papierfabrik August Koehler AG.

Agency: International Trade Administration.
Commodity: Frozen warmwater shrimp.
Country: India.
Nature of Notice: Final results of changed circumstances review of antidumping duty order.
Details: Apex Frozen Foods Private Limited is the successor-in-interest to Apex Exports and will receive its AD cash deposit rate of 2.51%.

Agency: International Trade Commission.
Commodity: Ammonium nitrate.
Country: Ukraine.
Nature of Notice: Revised schedule of sunset review of antidumping duty order.
Details: Pre-hearing briefs due March 20, 2013; pre-hearing conference on April 1; hearing on April 4; and post-hearing briefs de by April 15. 

CPSC Seeks to Force Recall of Infant Products

The Consumer Product Safety Commission has filed an administrative complaint alleging that infant recliners imported, distributed and sold by a Pennsylvania company contain defects in the design, warnings and instructions that pose a substantial risk of injury and death to infants. The complaint seeks an order requiring that the company notify the public of the defect, offer consumers a full refund, cease any remaining distribution of the product, report monthly on the progress of these activities, and keep related records for five years.

In July 2010 the company executed a corrective action plan in cooperation with the CPSC in which it extended a coupon to owners of the original model of the recliner toward the purchase of a newer model and improved its instructions and warnings to consumers who owned the second generation model. However, the complaint alleges that these steps have not been sufficient because parents and caregivers are still using this product in cribs and other traditional sleep environments and continue to use the product improperly. Nevertheless, discussions with the company have failed to result in an adequate voluntary recall plan that would address these hazards. 

Declaration for Free Entry of Returned Goods, Yacht Duty Deferral Under Review

U.S. Customs and Border Protection is extending through Jan. 10, 2013, the period for public comments on the proposed extension without change of the following information collections.

CBP Form 3311, Declaration for Free Entry of Returned American Products – This form is used by importers and their agents when duty-free entry is claimed for a shipment of returned American products under the Harmonized Tariff Schedule of the United States. It serves as a declaration that the goods are U.S.-made and that (a) they have not been advanced in value or improved in condition while abroad, (b) they were not previously entered under a temporary importation under bond provision, and (c) drawback was never claimed and/or paid.

Foreign Regulatory Changes Could Affect Exports of Foods, Liquor, Drugs

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.

Costa Rica – technical regulations on dairy terms and pasteurized milk (comments due by Jan. 27, 2013)

Mexico – Nov. 14 publication of resolution amending official standard on yogurt

Mexico – draft official standard on specifications for tequila

Peru – amended regulations on pharmaceutical products (comments due by Feb. 24, 2013) 

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 it is imported with the intention to offer for sale at a boat show in the U.S. The law provides for the deferral of payment of duty until the yacht is sold but specifies that the duty deferral period may not exceed six months. This collection of information is provided for by CBP regulations that require the submission of information such as the name and address of the owner of the yacht, the dates of cruising in U.S. waters, information about the yacht and the ports of arrival and departure. 

USDA Reviewing Information Collections on Genetically Altered Products, Horse Facilities

The Department of Agriculture’s Animal and Plant Health Inspection Service is accepting comments through Feb. 11, 2013, on the following information collections.

Genetically Modified Products – A permit must be obtained or a notification acknowledged before organisms and products altered or produced through genetic engineering may be introduced (imported, moved interstate or released into the environment). APHIS regulations set forth the permit application requirements and the notification procedures. They also necessitate certain information and recordkeeping requirements, including APHIS-issued permits, applicants’ field testing records, and the submission of protocols to ensure compliance.

Horse Quarantine Facilities - APHIS regulations require that certain animals, as a condition of entry, be quarantined upon arrival in the U.S. APHIS operates animal quarantine facilities and also authorizes the use of quarantine facilities that are privately owned and operated for certain animal importations. For permanent, privately owned horse quarantine facilities these requirements entail certain information collection activities, including environmental certification, application for facility approval, service agreements, requests to APHIS concerning withdrawal of approval, notification to APHIS of facility closure, compliance agreements, security procedures, alarm notification, lists of personnel, signed statements, daily logs, and requests for variance. 

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