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December 14 2012 Issue

Friday, December 14, 2012
Sandler, Travis & Rosenberg Trade Report

FDA Extends Deadline for Food Facility Registrations Until Jan. 31

Foreign and domestic food facilities are getting a little more time to make sure they are properly registered with the Food and Drug Administration. FDA had previously set a Dec. 31 deadline for facilities that manufacture, process, pack or hold food for human or animal consumption to register or renew their existing registrations, which must be done every other year. However, FDA is now extending that deadline for a month in light of delays in this year’s registration process and the substantive changes to this process that were included in the Food Safety Modernization Act.

Specifically, FDA intends to exercise until Jan. 31 enforcement discretion with respect to registration renewals submitted after Dec. 31. As a result, FDA will not suspend the registration number for facilities that submit a registration or renewal during this one-month period. Nevertheless, the agency is encouraging facilities to renew their registrations as early as possible.

FDA has also issued two new guidance documents to further assist facilities that must comply with this registration requirement. “What You Need to Know About the Registration of Food Facilities – Small Entity Compliance Guide” contains information regarding who is required to register and who may be exempt, how often facilities must register and renew registrations, when FDA may suspend a registration, and how facilities may submit their registrations and registration renewals to FDA. Among other things this guidance highlights the additional information that must be provided in a facility’s registration pursuant to the Food Safety Modernization Act, which includes the email address of the U.S. agent for the foreign facility and an assurance that FDA will be permitted to inspect the facility at the times and in the manner permitted by the Federal Food, Drug and Cosmetic Act. “Questions and Answers Regarding Food Facility Registration (Fifth Edition)” contains updated answers to questions regarding food facility registration that are based on the FSMA amendments.

Those affected by the new registration requirements are reminded that FSMA also imposes new burdens and potential liabilities on entities designated as U.S. agents to foreign food facilities. One of these liabilities stems from FSMA §107 concerning re-inspection fees. It is believed that in 2013 FDA will begin charging $289 per hour for the time it devotes to re-inspecting foreign food facilities, resulting in the potential for invoices to reach several thousands of dollars per re-inspection. The party that FDA will hold responsible for paying these invoices is the U.S. agent. Accordingly, brokers, forwarders and importers of record will likely want to find alternatives to becoming U.S. agents themselves and foreign food facilities will need to seek out entities to become U.S. agents.

FDA Solutions Group LLC, a consulting company affiliated with the customs and international trade law firm Sandler, Travis & Rosenberg, assists foreign and domestic clients with the registration and compliance requirements affecting FDA-regulated industry. FDA Solutions Group makes it easy for food facilities to protect against suspension and costly business interruptions through its turn-key registration and U.S. agent services. To learn more about these services or submit your registration renewal today, please visit our Web site or send us an e-mail

U.S., China Renew Agreement on Food and Feed Safety Cooperation

The Food and Drug Administration has renewed for five years an agreement with China’s General Administration of Quality Supervision, Inspection and Quarantine on bilateral cooperation on food and feed safety. An agency press release states that this agreement aims to enhance FDA’s ability to identify high-risk food products entering the U.S. from China, improve collaboration on inspections of facilities that process and produce food, allow the two sides to focus on high-risk foods frequently exported from China to the U.S., and create processes for FDA to accept relevant, verified information from AQSIQ regarding registration and certification. FDA states that since the agreement was signed in 2007 there has been significant progress in numerous areas, including the following.

- By establishing a permanent inspection presence in China, FDA has increased its overall number of facility inspections from zero in 2007 to 85 in 2011.

- In conjunction with AQSIQ, FDA experts have conducted workshops for members of the Chinese industry on FDA requirements for several categories of high-risk foods, including low-acid canned foods and farm-raised fish. As a result, Chinese regulators have implemented
more stringent oversight of canneries shipping products to the U.S. FDA and AQSIQ have also worked jointly to identify strategic ways to address problems associated with the use of unsafe drugs in growing ponds at Chinese fish farms.

- FDA has significantly deepened its understanding of China’s food safety system, developed key relationships with Chinese regulators, and now meets regularly with Chinese food safety officials in face-to-face talks on matters of mutual concern. FDA frequently holds joint workshops with Chinese food regulators to provide training, build regulatory capacity and specify FDA standards and requirements for industry.

- Since the enactment of the Food Safety Modernization Act in 2011, FDA has worked with AQSIQ to conduct multiple outreach events for Chinese food safety officials and regulated industry on the impact this law will have on Chinese food exports to the U.S.

- In the aftermath of problems associated with melamine in dairy products in China, FDA worked directly with AQSIQ to enhance FDA’s understanding of and confidence in China’s laboratory system for testing food. This work laid the groundwork for future scientific collaboration in this area.

Dates and Deadlines: Export Licenses, China Meeting, Digital Photo Frames

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

Dec. 17 – comments on international telecommunication agreements

Dec. 17
Comments on information collection concerning export license transfers and duplicate export license services

Dec. 18
Meeting of U.S.-China Joint Commission on Commerce and Trade

Dec. 21
Comments on potential remedies in patent infringement probe of digital photo frames

Dec. 21
Comments on CBP information collection requirements on IPR recordation and enforcement

Commodity Jurisdiction Request Form Under Review

The State Department’s Directorate of Defense Trade Controls is accepting through Jan. 14, 2013, comments on the proposed extension of form DS-4076, Request for Commodity Jurisdiction Determination. The information submitted on this form is used to evaluate whether a particular defense article or defense service is covered by the U.S. Munitions List and is therefore subject to State’s export licensing jurisdiction. This form may also be used to request a change in USML category designation, the removal a defense article from the USML or the reconsideration of a previous CJ determination.

Trade Deficit Up 4.7% as Exports, Imports Both Fall

Trade statistics released Dec. 11 by the Department of Commerce show that the monthly U.S. trade deficit in goods and services rose 4.7% in October to $42.2 billion after hitting a two-year low in September. Exports tumbled $6.8 billion, their biggest decline in almost four years, and imports slumped $4.9 billion. Compared to a year earlier, the October trade deficit was down $3.5 billion as exports gained $1.8 billion (1.0%) and imports fell $1.7 billion (0.8%).

According to the DOC, the deficit in goods trade rose $1.8 billion in October to $59.2 billion. Exports of goods fell $6.5 billion from a record high of $134.0 billion in September while imports declined by $4.6 billion to $186.6 billion. The DOC notes that merchandise exports to China, Mexico and Brazil hit record levels and that the goods trade surplus with South and Central America was also the highest on record. The services surplus inched down by $0.1 billion to $16.9 billion as exports fell $0.3 billion to $53.0 billion and imports lost $0.2 billion to $36.1 billion.

The bilateral trade deficit with China continued to climb but gained only 1.4% to $29.5 billion. The U.S. also ran deficits with the European Union (up 23.3% to $10.6 billion), Japan (up 45.8% to $7.0 billion), Germany (up 3.8% to $5.4 billion), Mexico (down 8.3% to $4.4 billion), Canada (unchanged at $1.9 billion), Ireland (up 12.5% to $1.8 billion), Nigeria (up 50% to $1.8 billion), Venezuela (up 63.6% to $1.8 billion), Korea (up 23.1% to $1.6 billion) and Taiwan (up 7.7% to $1.4 billion). The U.S. continued to run surpluses with several trade partners in October, including Hong Kong (down 13.7% to $1.9 billion), Australia (down 5.2% to $1.8 billion), Singapore (down 28.6% to $0.5 billion) and Egypt (down 50% to $0.2 billion). 

AD/CV Notices: Aluminum Extrusions, Folding Gift Boxes

Agency: International Trade Administration.
Commodity: Aluminum extrusions.
Country: China.
Nature of Notice: Amended final affirmative countervailing duty determination pursuant to court decision.
Details: Revised “all others” net subsidy rate of 137.65%, which will be the new CV cash deposit rate for all covered companies.

Agency: International Trade Commission.
Commodity: Folding gift boxes.
Country: China.
Nature of Notice: Sunset review determination that revocation of antidumping duty order would be likely to lead to continuation or recurrence of material injury to an industry in the U.S. within a reasonably foreseeable time.
Details: This AD duty order will soon be extended for another five years. 

FTZ Board Receives Applications to Expand, Create, Amend Existing Zones

The Foreign-Trade Zones Board is inviting public comments on the following applications.

- the Puerto Rico Industrial Development Company, grantee of FTZ 7, is requesting special-purpose subzone status for the Pepsi Cola Puerto Rico Distributing LLC facility in Toa Baja, P.R. (comments due by Jan. 22)

- the Port of Houston Authority, grantee of FTZ 84, has submitted a notification of proposed production activity at the Mitsubishi Caterpillar Forklift America Inc. facilities in Houston, Texas, which are used for the production of forklift trucks powered by gasoline, propane or electric motors (comments due by Jan. 22)

- the City of Phoenix, grantee of FTZ 75, is requesting authority to expand its zone under the alternative site framework to include a new magnet site in Phoenix, Ariz. (comments due by Feb. 12)

Separately, the FTZ Board is accepting public comments through Jan. 11, 2013, on new evidence submitted in response to its staff’s preliminary recommendation not to authorize Toho Tenax America Inc. to manufacture carbon fiber for the U.S. market under zone procedures within subzone 148C in Rockwood, Tenn. Rebuttal comments may be submitted through Jan. 28. 

Export Privileges Suspended for Illegal Shipments to India

The Bureau of Industry and Security has suspended for ten years the export privileges of a company with addresses in California and India that was found to have committed 16 violations of the Export Administration Regulations. This company defaulted on charges concerning its unlicensed exportation of ceramic cloth to India and shipments of various electronic components to a company in India that is on the Entity List. BIS notes that the presiding administrative law judge in this case cited the company’s “evasive and knowing misconduct,” which included “deliberate efforts to evade” the EAR.

As a result, until Dec. 14, 2022, neither this company nor anyone on its behalf may directly or indirectly participate in any way in any transaction involving any commodity, software or technology exported or to be exported from the U.S. that is subject to the EAR. However, this order does not prohibit any export, reexport or other transaction subject to the EAR where the only items involved that are subject to the EAR are the foreign-produced direct product of U.S.-origin technology. 

No IPR Import Restrictions on Image Sensors

The International Trade Commission has terminated without the imposition of import restrictions patent infringement investigation 337-TA-846 of certain CMOS image sensors and products containing same, such as camera phones. This termination is based on a settlement agreement between complainant California Institute of Technology and respondents located in Finland, Canada and the U.S.

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