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December 13 2012 Issue

Thursday, December 13, 2012
Sandler, Travis & Rosenberg Trade Report

U.S.-China Commerce and Trade Meeting Slated for Dec. 18-19 in Washington

The Office of the U.S. Trade Representative and the Commerce Department will host the U.S.-China Joint Commission on Commerce and Trade Dec. 18-19 in Washington, D.C. The JCCT was established in 1983 and is the main forum for addressing bilateral trade issues and promoting commercial opportunities. The JCCT holds annual high-level plenary meetings to review progress made by working groups that focus on a wide variety of issues, including intellectual property rights, agriculture, pharmaceuticals and medical devices, information technology, tourism, commercial law, the environment and statistics.

Acting Commerce Secretary Rebecca Blank said that “creating a healthy and balanced trade relationship with China is important to the United States” and that the upcoming talks “are an opportunity to set the future trajectory of U.S.-China economic relations.” USTR Ron Kirk added that the U.S. side will be focusing on “delivering meaningful results on issues including enforcement of intellectual property rights, combating pressures to transfer technology, eliminating trade-distortive industrial policies, and removing key obstacles to [U.S.] exports.” A USTR press release notes that China was the largest supplier of U.S. goods imports in 2011 and the third-largest market for U.S. exports after Canada and Mexico. 

Banks to Pay More than $2 Billion to Settle Sanctions Charges

The Treasury Department announced this week separate settlements in which two banks will pay more than $2 billion to settle charges that they violated U.S. economic sanctions. One was subject to the largest bank settlement in U.S. history, more than $1.9 billion in penalties that include $875 million assessed by Treasury, the largest collective settlement ever for this department. Both were found to have insufficient policies in place to prevent the violative conduct.

A Treasury press release states that since at least mid-2006 the first bank lacked an effective risk-based anti-money laundering program reasonably designed to manage the risks of money laundering or other illicit activity given the bank’s products, services, transaction volume, scope of business activities, geographic reach and customers. These compliance failures “meant that the bank did not and could not reliably detect and report suspicious activity and therefore deprived law enforcement and regulators of critical information used to combat money laundering, terrorist finance, transnational organized crime, and other domestic and global financial threats.” These breakdowns were “particularly egregious,” Treasury said, because they “allowed hundreds of millions of dollars from Mexican drug trafficking organizations to flow through accounts in the United States.”

Treasury also found that for a number of years the bank’s affiliates in Europe, the Middle East and Asia processed transactions through U.S. financial institutions that involved countries, entities or individuals subject to U.S. sanctions, including Iran, Burma, Sudan, Cuba and Libya. Payment practices included the use of Society for Worldwide Interbank Financial Telecommunication payment messages in a manner that obscured references implicating U.S. sanctions, the removal of information from SWIFT messages, and the forwarding of payment messages to U.S. financial institutions that falsely referenced an affiliate of the bank as the ordering institution. As a result, payments totaling approximately $430 million were routed through U.S. banks for or on behalf of sanctioned parties.

The second bank has entered into a settlement with federal and local government partners for “intentionally manipulating transactions to remove references to Iran, Sudan and other sanctioned entities and then further concealing these transactions through misrepresentations to U.S. regulators,” according to a Justice Department official. Under the settlement agreement, which includes a $132 million penalty from OFAC and the forfeiture of $227 million to the DOJ, this bank is required to put in place and maintain policies and procedures to minimize the risk of the recurrence of such conduct. It is also required to provide OFAC with copies of submissions to the Board of Governors of the Federal Reserve System relating to the OFAC compliance review that it will be conducting as part of its settlement with that agency. 

Annual Customs Broker User Fee Due by Feb. 15

U.S. Customs and Border Protection is requiring payment of the $138 annual customs broker user fee by Feb. 15, 2013. This fee is assessed for each permit held by a broker, whether it be an individual, partnership, association or corporation. It is payable for each calendar year in each broker district where the broker was issued a permit to do business.

CBP anticipates that for subsequent years this fee will be due on the first business day following Jan. 19. 

AD/CV Notices: Citric Acid, Garlic, Pipe, Magnesium Metal, Honey, Lined Paper, Steel Rod

Agency: International Trade Administration.
Commodity: Citric acid and certain citrate salts.
Country: China.
Nature of Notice: Final results of administrative review of antidumping duty order for the period May 1, 2010, through April 30, 2011.
Details: Weighted average dumping margin of zero for RZBC Co. Ltd./RZBC Import and Export Co. Ltd./RZBC (Juxian) Co. Ltd. AD duties based on this rate will be assessed on entries of subject merchandise made during the period of review but no AD cash deposits will be required for shipments of subject merchandise entered or withdrawn from warehouse for consumption on or after Dec. 13.

Agency: International Trade Administration.
Commodity: Fresh garlic.
Country: China.
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 margins ranging from $1.65/kg to $4.71/kg.

Agency: International Trade Administration.
Commodity: Light-walled rectangular pipe and tube.
Country: Mexico.
Nature of Notice: NAFTA binational panel decision in review of final results of 2008/2009 administrative review of antidumping duty order.
Details: Panel remanded the matter to the ITA to provide a thorough explanation of why it is a reasonable interpretation of the statute to engage in zeroing in administrative reviews but not in AD duty investigations.

Agency: International Trade Administration.
Commodity: Magnesium metal.
Country: Russia.
Nature of Notice: Reinstated final results of administrative review of antidumping duty order for the period April 1, 2006, through March 31, 2007, pursuant to court decision, effective March 11, 2011.
Details: Weighted average dumping margin for VSMPO-AVISMA is 15.77%.

Agency: International Trade Administration.
Commodity: Honey.
Country: Argentina.
Nature of Notice: Continuation of antidumping duty order.
Details: The products covered by this order are natural honey, artificial honey containing more than 50% natural honey by weight, preparations of natural honey containing more than 50% natural honey by weight and flavored honey. The subject merchandise includes all grades and colors of honey whether in liquid, creamed, comb, cut comb or chunk form and whether packaged for retail or in bulk form. Subject honey is currently classifiable under HTSUS 0409.00.00, 1702.90.90, 2106.90.99, 0409.00.0010, 0409.00.0035, 0409.00.0005, 0409.00.0045, 0409.00.0056 and 0409.00.0065

Agency: International Trade Administration.
Commodity: Lined paper.
Country: India.
Nature of Notice: Partial rescission of administrative review of countervailing duty order for the period Jan. 1 through Dec. 31, 2011.

Agency: International Trade Administration.
Commodity: Carbon and certain alloy steel wire rod.
Country: Canada.

Nature of Notice: Completion of NAFTA panel review affirming ITA’s final AD duty determination. 

FTZ Board Reorganizes N.C. Zone, Authorizes New Activity in Iowa

The Foreign-Trade Zones Board has approved the reorganization of FTZ 93 under the alternative site framework to encompass a service area of Chatham, Durham, Franklin, Granville, Harnett, Johnston, Lee, Moore, Orange, Person, Vance, Wake and Warren counties in North Carolina, within and adjacent to the Raleigh-Durham U.S. Customs and Border Protection port of entry.

The FTZB has also authorized the cutting, sewing, upholstering and warehousing of wet coagulation process 100% polyurethane coated fabric for use as upholstery in motor homes at the Winnebago Industries Inc. facilities in Forest City and Charles City, Iowa, within subzone 107A. 

IPR Enforcement Actions on Digital Photo Frames, Integrated Circuits, DRAMS

Remedial Orders Considered for Imports of Digital Photo Frames. In patent infringement investigation 337-TA-807 of certain digital photo frames and image display devices and components thereof, the International Trade Commission is considering a recommendation to issue a limited exclusion order and cease and desist order against a respondent found in default. The ITC is therefore requesting comments no later than Dec. 21 on the form of remedy, if any, that should be ordered; the effects of that remedy on public health and welfare, competitive conditions in the U.S. economy, U.S. production of articles that are like or directly competitive with those that are subject to investigation, and U.S. consumers; and the amount of the bond (recommended at 100%) under which infringing articles could enter the U.S. during the 60-day period the president has to approve or disapprove any ITC-ordered remedy.

No IPR Import Restrictions on Integrated Circuit Packages, DRAMS. The ITC has terminated in its entirety, without the imposition of import restrictions, patent infringement investigation 337-TA-851 of certain integrated circuit packages provided with multiple heat-conducting paths and products containing same. The ITC took this step after Industrial Technology Research Institute and ITRI International withdrew their complaint.

The ITC has also terminated as to all remaining respondents patent infringement investigation 337-TA-803 of certain dynamic random access memory and NAND flash memory devices and products containing same. This action is based on settlement and license agreements between complainants Intellectual Ventures Management LLC, Invention Investment Fund I L.P., Invention Investment Fund II LLC, Intellectual Ventures I LLC and Intellectual Ventures II LLC and numerous respondents.

Ocean Transportation Intermediary License Reissuances, Applicants

OTI Licenses Reissued. The Federal Maritime Commission has given notice that the following ocean transportation intermediary licenses have been reissued.

- license #021628F: A & S Shipping Company Inc., Miami, Fla.
- license #022988N: World Class Solutions LLC, Doral, Fla.

OTI License Applicants. The Federal Maritime Commission has provided notice that the following applicants have filed applications for licenses as non-vessel-operating common carrier and/or ocean freight forwarder ocean transportation intermediaries. Persons knowing of any reason why any of these applicants should not receive a license are requested to contact the FMC.

- Bisac Logistics Inc., Medley, Fla.
- Carlos A. Lastra Customhouse Broker Inc., Miami, Fla.
- CMK Freight Forwarders LLC, Lakeland, Fla.
- Global Wide Logistics Inc., San Leandro, Calif.
- ILE Global LLC, Valley Stream, N.Y.
- Matson Logistics Warehousing Inc., Concord, Calif.
- Miami Freight Forwarders LLC, Miami, Fla.
- Ocean Cargo Express Lines LLC, Hardeeville, S.C.
- PAI Logis Inc., College Park, Ga.
- Pim Global Logistics Inc., Carson, Calif.
- Sea Star Line Caribbean LLC, Jacksonville, Fla.
- Sky Express World Courier Inc., Los Angeles, Calif.
- Unigroup Worldwide Inc. d/b/a Brewster Lines, Fenton, Mo.
- United Van Lines International Inc., Fenton, Mo.
- Zoom Ocean Freight LLC, Miami, Fla. 

Ex-Im Bank Asked to Support Export of Aircraft to UAE

The Export-Import Bank of the United States has received an application for final commitment for a long-term loan or financial guarantee to support the export of commercial aircraft to the United Arab Emirates. These aircraft will be used for long-haul passenger air service between Abu Dhabi and destinations in the Middle East, Africa, Europe, Asia and North America. Comments on this application are due no later than Jan. 7, 2013.

USDA Reviewing Dairy Export Certificate Request Forms

The Department of Agriculture is inviting comments through Jan. 14, 2013, on its export certificate request forms. USDA notes that importing countries are requiring certification as to production methods and sources of raw ingredients for dairy products. The information required on these certificates varies from country to country and includes the identity of the importer and exporter, consignment specifics, and border entry point at the country of destination. The information collected on the request forms is necessary for USDA’s Dairy Grading Branch to be able to properly complete the required certificate.

New and Amended Maritime Agreements Filed

The Federal Maritime Commission has issued notice that the following new or amended agreements have been filed. Interested parties may submit comments by Dec. 26.

Caribbean Shipowners Association – The amendment would add Tropical Shipping and Construction Company Limited as a party to the agreement.

The 360 Quality Association Agreement – The amendment would add Diamond State Port Corporation and Gloucester Terminals LLC as parties to the agreement.

HSDG-CCNI USWC Space Charter Agreement – The agreement authorizes Hamburg Sud to charter space to CCNI in the trade between ports in California and ports in Mexico, Guatemala, Panama, Ecuador and Peru. 

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