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December 28 2012 Issue

Friday, December 28, 2012
Sandler, Travis & Rosenberg Trade Report

CBP Instructions for Potential Trade Disruption at East and Gulf Coast Ports

U.S. Customs and Border Protection has issued the following general vessel, cargo and entry guidelines in the event of a trade disruption due to a workers’ strike at East and Gulf Coast vessel ports. CBP states that these instructions should assist the trade in developing contingency plans for the possible diversion of vessels and cargo scheduled for discharge at U.S. ports. CBP emphasizes that these procedures are only applicable during the disruptive event and that it will publish a notice when these interim procedures are terminated and normal processing resumes.

Vessel in Port with Cargo Destined for Subsequent U.S. Port(s) and Discharged or Vessel Diverted to Another U.S. Port and Discharged

- Vessel carriers will amend the diverted bills to indicate the new port of unlading.
* Vessel carriers may initiate in-bond movements for the foreign-origin cargo allowing for intermodal transport of the goods to the intended U.S. port(s) for processing by CBP. No change to the entry is required. CBP at the in-bond port of destination will manually post any pre-filed entries against the in-bond number to close out the in-bond movement.
* Entry filers have the option of deleting the pre-filed entry and filing a new entry reflecting the in-bond number or deleting the entry and re-filing an entry at the port of discharge.

- When a shipment receives a “Documents Required” message for merchandise requiring examination by the Food and Drug Administration, coordination with the FDA must be made to determine the examination location. In some instances the FDA may grant a conditional release to allow the movement to an importer’s premises, provided the location is permitted by the FDA.

- Carriers will receive electronic messages for entries including remote location filing entries.

- When a shipment covered by an entry (including RLF entry) is designated for a security or agriculture examination the exam will be performed at the U.S. port of vessel arrival and discharge. The entry filer will need to contact the examining CBP port and provide documentation requested to facilitate the examination and release of the cargo.

- When a shipment covered by an entry (including RLF entry) is designated for compliance examination it may be transferred under bond to the intended U.S. port for examination. The entry filer will need to contact the CBP port where the cargo was discharged to determine if the merchandise can be transported in-bond and the exam conducted at the CBP port of destination.

- In all instances in which an entry is filed at the intended U.S. port and the vessel diverts to another U.S. port, the entry summary must be filed at the intended U.S. port within 10 working days. This 10-day clock will begin once the vessel has arrived at a subsequent U.S. port of arrival, the shipment is discharged and entry is filed.

- CBP will work with its partner government agencies that have oversight responsibilities for import and export shipments to keep them informed of any port disruptions. CBP will distribute this plan to those agencies to generate dialog toward common sense solutions that address regulatory requirements for shipments affected by the disruption.

Vessel Diverted to Foreign Port, Cargo Discharged and Arriving in the U.S. by Other than Vessel
- All bills of lading, importer security filings (ISF) and entries filed against those bills need to be deleted (not cancelled) unless entry summary has been filed and monies paid, in which case the entries would need to be cancelled.

- New entries will be filed at the appropriate port of entry for merchandise entering the U.S.

- Entry filers for shipments subject to FDA requirements must request deletion and a new Bioterrorism Act submission should be transmitted along with the new entry for those shipments.

- A new prior notice will be transmitted to the FDA for shipments requiring prior notice.

- The entry filer should contact staff at the intended CBP entry filing port to obtain detailed instructions for submitting a deletion list.

- Entries should be removed from the statement.

Vessels Diverted to a Foreign Port, Discharged and Reloaded for Discharge to Original Destination Port by Vessel

- When a vessel is diverted to a foreign port and U.S. destination cargo is unladen and then reloaded for movement to the original destination port by vessel using the same bill of lading, no change to the bill of lading, entry or ISF will be needed. The original entry will be processed with the new arrival date.

- If the bill of lading number changes, the ISF filer will amend the ISF to add the new bill of lading number while retaining the original. CBP at the U.S. port of discharge will manually post the entry to the new bill of lading. Entry filers have the option of deleting the entry and filing a new entry reflecting the new bill of lading number.

Vessels Diverted to Foreign Port or Another U.S. Port and Not Discharged

- When the vessel is diverted to a foreign port of entry but not discharged no change is needed to the bill of lading, ISF or entries.

- The arrival date for the vessel will reflect the date the ship returns to the intended U.S. port to be offloaded.

Vessel Arrives at First U.S. Port and Rests at Anchorage

- Carriers must continue to provide advance notification to local CBP ports of their pending arrival (CBP Form 3171).

- When a vessel arrives at a U.S. port (within CBP territory) and comes to rest, whether at anchor, a dock or harbor, carriers must notify local CBP vessel processing personnel.

- Carriers and vessel agents should maintain close communication with the local CBP port vessel processing office or the designated point of contact for sharing information, updates, instructions and port specific guidance.

- While a vessel rests at anchor, the entry summary must be filed within 10 working days at the port where the entry was filed. CBP will work with carriers on a case-by-case basis to “reset” the ACE M1 conveyance arrival date and time at the first U.S. port to push back the entry summary date to more closely reflect the actual date/time the vessel begins to unlade and lade cargo.

- To alleviate the backlog of vessels at anchorage within port limits, CBP ports will initiate formal vessel entry and clearance processing in order to facilitate docking as terminals are re-opened. 

U.S.-Russia Action Plan Targets Improvement of IPR Protection and Enforcement

The Office of the U.S. Trade Representative has announced an agreement between the U.S. and Russia on an action plan to improve the protection and enforcement of intellectual property rights. A USTR press release states that this action plan addresses the following priority areas.

- combating copyright piracy over the Internet, including actions such as takedowns of infringing content, action against persons responsible for IPR crimes, coordination with rights holders, cooperation and information exchange between IPR enforcement officials, and devotion of resources and personnel to law enforcement agencies to combat piracy over the Internet

- enhancing IPR enforcement, including actions against counterfeiting, piracy and circumventing technological protection measures; imposing deterrent penalties and sentences; conducting raids; seizing and, where appropriate, destroying IPR infringing products and the equipment and materials used to produce them; and promoting transparency and public awareness of IPR enforcement actions

- coordinating on legislation and other issues, including on Russia’s draft legislation on liability for Internet service providers to combat Internet piracy, consulting on implementation of Russia’s WTO pharmaceutical test data protection commitments, administrative penalties, and exchanging information on enforcement mechanisms and best practices for judges

USTR states that in 2013 the work of the U.S.-Russia Intellectual Property Working Group will focus systematically on Russia taking actions identified in this action plan. 

ITC Launches Probe on Modifying HTSUS for Film, Game Controllers and Chemicals

The International Trade Commission has instituted investigation 1205-10 for the purpose of making recommendations to the president with respect to modifying provisions of HTSUS chapters 29, 30, 37 and 85 with respect to certain sensitized photographic film, video game console controllers and chemical compounds. Written views on the ITC’s proposed recommendations are due by Feb. 22, 2013, and the Commission’s final recommendations will be sent to the president no later than April 24.

The ITC states that the modifications being considered fall into two categories. The first involves (a) inserting three new six-digit subheadings for sensitized, unexposed photographic film in rolls from HTSUS chapter 37 and (b) providing specifically for cordless video game console controllers that use infrared transmissions to operate or access the various functions and capabilities of the console in a duty-free tariff rate line in chapter 85 following the insertion of a new legal note in chapter 95 that excludes these goods from that chapter. The second category involves certain chemical products that are either incorrectly named or incompletely described in terms of the chemicals nomenclature of the HS as well as others that are specified under HTSUS rate lines that do not cover such products. According to the ITC, information currently available indicates that the duty rates for the goods involved in this investigation would not be affected by the proposed modifications. 

Dates and Deadlines: Medical Device Excise Tax, Cradle Safety Standard

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

Dec. 31 – deadline for comments on CBP Form 6043, Delivery Ticket

Dec. 31 – deadline for comments on USDA information collections on pork, poultry, oranges and irradiation of fruits and vegetables

Jan. 1 – effective date of new excise tax on sales of taxable medical devices

Jan. 2 – deadline for comments on proposed safety standard for bassinets and cradles 

Significant U.S. Import Restraints Subject of ITC Review

The International Trade Commission has announced the following schedule for preparing its eighth update report on the economic effects of significant U.S. import restraints.

March 6 – deadline for requests to appear at the public hearing
March 11 – deadline for pre-hearing briefs and statements
March 19 – public hearing
March 26 – deadline for post-hearing briefs and statements
April 12 – deadline for all other written submissions
Nov. 15 – transmittal of report to Office of the U.S. Trade Representative

As in previous reports in this series, this update will continue to assess the economic effects of significant import restraints on U.S. consumers and firms, the income and employment of U.S. workers, and the net economic welfare of the United States. It will not, however, assess import restraints resulting from antidumping or countervailing duty investigations, section 337 and 406 investigations, or section 301 actions.

In addition, this year’s report will include an overview of the contributions of services (both U.S. and global) to U.S. manufacturing. USTR has asked that the report describe recent trends in U.S. and global sourcing of services and their contribution to manufacturing output and productivity and identify sectors that have experienced the greatest changes. USTR has also asked that the report include a discussion of services' indirect contribution to merchandise exports as well as a review of available literature on this issue. 

Proposed FTZ Production Activity at ATV Facilities in Georgia

The Foreign-Trade Zones Board has received from Georgia Foreign-Trade Zone Inc., grantee of FTZ 26, a notification of proposed production activity at the Suzuki Mfg. of America Corp. facilities in Rome, Jonesboro and Cartersville, Ga., which are used for the production of all-terrain vehicles and related components. Comments on this notification are due no later than Feb. 4.

Production under FTZ procedures could exempt SMAC from customs duty payments on the foreign status components and materials used in export production. On its domestic sales SMAC would be able to choose the duty rates that apply to ATVs and related components (zero to 2.5%) for the following foreign status inputs: articles of rubber, hoses, gaskets, washers, fasteners, springs, sign plates/labels, brackets, plates, braces, fittings, body parts, engines and related parts, pumps, fans, valves, hose/pipe assemblies, guides, electrical components, coils, sensors and related assemblies, resistors, horns, relays, switches, lighting equipment, radiators, electronic control units, stampings, other parts of ATVs, brake parts, axles, gauges, and wheels (duty rates from zero to 8.6%). Customs duties also could possibly be deferred or reduced on foreign status production equipment. 

Whitetail, Mont., Port of Entry Closing as of Jan. 25

U.S. Customs and Border Protection has issued a final rule that, effective Jan. 25, 2013, will amend its regulations to reflect the closure of the Whitetail, Mont., port of entry. The primary reason for this closure is the Canada Border Services Agency’s closure of its adjacent port of entry of Big Beaver, Saskatchewan, on April 1, 2011. Other factors included the limited usage of the port (which handled only 24 commercial vehicles in all of fiscal year 2011, down from the annual average of about 60), the locations of the alternative ports of entry of Raymond and Scobey, Mont., and an analysis of the net benefit of the port closure, including the cost of necessary renovations were the port to remain open.

Declaration for Free Entry of Unaccompanied Articles Under Review

U.S. Customs and Border Protection is accepting through Feb. 25 comments on the proposed extension of CBP Form 3299, Declaration for Free Entry of Unaccompanied Articles. The information on this form is needed to support claims for duty-free entry of personal and household effects that enter the U.S. but do not accompany the owner or importer on his/her arrival in the country. Comments should address whether this form is necessary for the proper performance of CBP’s functions, including whether the information has practical utility; ways to enhance the quality, utility and clarity of the information collected; and the accuracy of the estimate of the burden of this form and ways to minimize that burden, including the use of automated collection techniques or other forms of information technology.

CPSC Reviewing Info Collections Associated with Safety Standards

The Consumer Product Safety Commission is accepting comments through Jan. 25 on the proposed extension of information collections associated with safety standards for the following products.

- automatic residential garage door operators

- omnidirectional CB base station antennas

- children’s sleepwear

- electrically operated toys and children’s articles

- walk-behind power lawn mowers

Certification regulations implementing these standards require manufacturers, importers and private labelers of these products to test them for compliance with the standards and maintain records of that testing. The CPSC uses this information to determine whether these products comply with the requirements of their respective standards. The CPSC also uses this information to obtain corrective actions if the products fail to comply with their respective standards in a manner that creates a substantial risk of injury to the public. 

Iran Transactions and Sanctions Regulations Updated

The Treasury Department’s Office of Foreign Assets Control has issued a final rule that, effective Dec. 26, amended the Iranian Transactions and Sanctions Regulations to implement several recent changes. These amendments add a new section to the ITSR to prohibit certain transactions by entities owned or controlled by a U.S. person and established or maintained outside the U.S. They also expand the categories of persons whose property and interests in property are blocked to include any person determined by Treasury, in consultation with the State Department, to have provided material support for certain government of Iran-related entities or certain activities by the government of Iran.

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