January 11 2013 Issue
HTS 9902 Duty Reductions Expire; Companies Advised to Heighten Recordkeeping Efforts as Congress Aims for Renewal
Hundreds of duty suspensions on imported products found under heading 9902 of the Harmonized Tariff Schedule expired Dec. 31, 2012, after Congress failed to approve the Miscellaneous Trade Bill. As a result, companies are once again being forced to pay millions of dollars in import tariffs on these goods. Affected companies should take steps to renew the tariff suspensions on their products and ensure their right to a possible refund of the duties they are currently paying.
A new MTB (H.R. 6727) was introduced in the House of Representatives Jan. 2. Upon enactment this bill would extend most of the recently-expired duty suspensions through Dec. 31, 2015, and create new duty breaks for some other goods. However, some products are not on the MTB renewal list and could thus remain subject to higher duties even if the bill is passed. Companies are therefore advised to review the MTB to determine if goods of interest to them are included.
Heading 9902 provisions have lapsed several times in the past, but Congress has always made the renewal of those provisions retroactive to Jan. 1 of the year following the date of expiration. While it is unclear if Congress will once again add retroactive language to the MTB, to prepare for this possibility importers of goods subject to expired tariff suspensions and their brokers should carefully document all entries of goods that would otherwise have received a special duty rate under heading 9902. The same intense recordkeeping goes for any new heading 9902 provisions that are on track to be added.
ST&R government relations and customs professionals have represented dozens of companies over the last decade to help them achieve the maximum duty savings available under the MTB. For more information about the MTB process, please contact David Olave or Nicole Bivens Collinson at 202-216-9307. For assistance with the customs documentation process please contact Larry Ordet at 305-894-1003.
CBP Focusing on Three ACE Capabilities, Hopes to Decommission Legacy AES by Year End
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. This month’s update focuses on a new pilot program to develop capabilities in three areas and work to decommission the legacy Automated Export System. Highlights of this information include the following.
Pilot Test of New Development Methodology. CBP is moving to implement an Agile development methodology to produce smaller pieces of ACE functionality more frequently. CBP’s plans call for the completion of remaining core ACE cargo processing capabilities in approximately three years. In early 2013 CBP will test its ability to work in an Agile environment with the initiation of a limited development pilot consisting of three teams working concurrently for four months. This pilot will focus on developing the following useable, deployable capabilities.
Cargo release/automated corrections and deletions – the capability to accept or deny corrections and/or deletions to an entry sent via electronic data interchange for simplified entries already on file with CBP
PGA message set – as part of an effort to develop a harmonized set of data to be collected electronically from international traders by CBP on behalf of participating government agencies, establishing the first phase of two-way system-to-system communications between PGAs and CBP
Entry summary edits – development work that will lay the foundation for the ability to process edits or checks that validate the quality and accuracy of incoming entry summary data so that CBP can properly assess duties, taxes and fees, with the first stage focusing on Harbor Maintenance Fee validations
Based on the success of this pilot CBP will begin to scale up the number of Agile development teams to between 9 and 12 by the end of 2013.
Re-engineering AES. In November 2012 CBP began work to move the legacy Automated Export System to a re-engineered system platform with the following goals.
- modernize the system design to lower operation, maintenance and development costs over the existing legacy system
- provide a single export processing platform for commodity data, manifest data and export control licensing data (this functionality does not overlap with USXPORTS licensing functionality)
- maintain existing legacy AES capabilities and provide for anticipated Census regulatory changes to include Option 3 filing functionality
CBP anticipates completion of the re-engineered AES by September and initial estimates call for the decommissioning of the legacy AES no later than Dec. 31.
Exports, AD/CV Proceedings, Voluntary Disclosures Among Topics of Forthcoming DOC Rules
The Department of Commerce recently issued its semiannual regulatory agenda. This document lists proposed and final regulations affecting international trade that could be issued within the next year, as well as rulemaking proceedings that have been in process for some time and are not as likely to see further progress in the near term.
Regulations Possible in 2013
- a final rule addressing issues faced by government and industry in the transition period during which the Export Control Reform Initiative will be implemented (February)
- a final rule concerning the certification of factual information submitted during antidumping and countervailing duty proceedings (March)
- a proposed rule that (a) clarifies the parties’ responsibilities under the Export Administration Regulations in a routed export transaction and (b) details when and how a U.S. principal party in interest may delegate to the foreign PPI its responsibilities to determine license requirements and apply for a license (March)
- a proposed rule strengthening the Unverified List by adding it to the EAR and limiting the availability of license exceptions in transactions involving listed parties when the Bureau of Industry and Security is unable to conduct end-use checks or unable to verify the existence or authenticity of a foreign transaction party (May)
- a final rule that (a) imposes a 180-day time limit from the date of the initial notification for submitting the comprehensive narrative account of violations when voluntarily disclosing EAR violations and (b) authorizes the use of delivery services other than registered or certified mail for service of charging letters in administrative enforcement proceedings (July)
Regulations in Process
- a proposed rule revising procedures to monitor international trade in certain fishery products to meet requirements of the SAFE Ports Act, the Magnuson-Stevens Act, other applicable statutes and obligations that arise from U.S. participation in regional fishery management organizations
- an advance notice of proposed rulemaking on whether BIS should require paragraph designations to be included in the export control classification number field in the Automated Export System
- a proposed rule revising the Commerce Control List to apply crime control license requirements to certain devices, software and technology based on the roles those items play in crime control and law enforcement activities
- a proposed rule making the following revisions to the section of the EAR that specifies what changes may be made to export and reexport licenses: (a) expanding the scope of non-material changes that exporters and reexporters may self-determine are non-material, provided the changes are within the scope of specified parameters; (b) adding a new subset of changes that may be made to an export or reexport license, provided the exporter or reexporter submits notification to BIS and BIS approves the change in writing as a non-material change; and (c) adding provisions to clarify that any changes not specified in this section are treated by BIS with a presumption of being material changes
Dates and Deadlines: CJ Requests, Using FTZs, Import Basics, Exports, IPR
Following are highlights of regulatory effective dates and deadlines and federal agency meetings coming up in the next week.
Jan. 14 – deadline for comments on USDA dairy export certificate request form
Jan. 14 – deadline for comments on form DS-4076, Request for Commodity Jurisdiction Determination
Jan. 15 – ST&R webinar on using foreign-trade zones for textile, apparel and footwear distribution
Jan. 15 – deadline for comments on public interest issues in IPR infringement investigation of wireless devices with 3G and/or 4G capabilities
Jan. 16 – ST&R webinar on fundamentals of importing
Jan. 17 – ST&R webinar on apparel classification under the Harmonized Tariff Schedule
Jan. 18 – effective date of USDA final rule allowing imports of sand pears from China
Jan. 18 – deadline for comments on proposed import restrictions on chemical used in ink colorant
Jan. 18 – effective date of BIS final rule making two changes to regulations on license authorization VEU
Jan. 18 – deadline for comments on public interest issues raised in Section 337 petition on robotic toy
AD/CV Notices: Pencils, Polyester Fiber, PET Film, Pasta
Agency: International Trade Administration.
Commodity: Cased pencils.
Nature of Notice: Preliminary results of administrative review of antidumping duty order for the period Dec. 1, 2010, through Nov. 30, 2011.
Details: Weighted average dumping margin for Beijing Fila Dixon Stationery Company Ltd. of 92.46%. Review has been rescinded for three companies due to withdrawal of request for review.
Agency: International Trade Administration.
Commodity: Polyester staple fiber.
Nature of Notice: Final results of 2010/2011 administrative review of antidumping duty order.
Details: Weighted average dumping margins of 9.98% for Zhaoqing Tifo New Fiber Co. Ltd. and 44.30% for the China-wide entity. AD duties based on these rates will be assessed on entries of subject merchandise made during the period of review, and AD cash deposits at these rates will be required for shipments of subject merchandise entered or withdrawn from warehouse on or after Jan. 11.
Agency: International Trade Administration.
Commodity: Polyethylene terephthalate film, sheet and strip.
Nature of Notice: Rescission of administrative reviews of (a) antidumping duty order for the period July 1, 2011, through June 30, 2012, with respect to Ester Industries Limited and Garware Polyester Ltd. and (b) countervailing duty order for the period Jan. 1 through Dec. 31, 2011, with respect to Ester, Garware, Polyplex Corporation Ltd. and Jindal Poly Films Limited of India.
Agency: International Trade Administration.
Country: Italy and Turkey.
Nature of Notice: Sunset review determinations that revocation of antidumping duty orders would be likely to lead to continuation or recurrence of dumping at rates ranging from 12.14% to 20.84% for Italy and 60.87% to 63.29% for Turkey.
Potential IPR Probe of Electronic Device Cases Evaluated for Public Interest Issues
The International Trade Commission is requesting comments no later than Jan. 21 on any public interest issues raised by a Section 337 intellectual property rights infringement complaint filed on behalf of Speculative Product Design LLC against certain cases for portable electronic devices. 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.
Foreign Regulatory Changes Could Affect Exports of Vehicles, Drugs, Appliances
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.
Canada – proposed amendment to passenger automobile and light truck greenhouse gas emission regulations (comments due by Feb. 21)
Canada – proposed amendment to regulations on prescription status of medicinal ingredients for human use (comments due by Feb. 28)
China – national standards on connections in fire hoses, variable speed room air conditioners, three-phase distribution transformers, household electric washing machines, range hoods, heat pump water heaters, lithium bromide absorption chillers, natural gas, refrigerated trailers for transportation of perishable foods and biological products, and motor vehicle lamps (comments due by March 8)
Uganda – final draft standards on plastic pipes (comments due by March 8)
Blending and Packaging Operations Insufficient to Convey Origin for Pain Medication
U.S. Customs and Border Protection has issued a final determination concerning the country of origin of certain Rybix® (tramadol hydrochloride) tablets used for the management of moderate to moderately severe pain in adults that may be offered to the U.S. government under an undesignated government procurement contract.
This determination addresses a process in which tramadol hydrochloride from India is blended with excipients and packaged into dosage form in France. CBP states that the processing in France does not result in a change in the medicinal use of the finished product and that the active ingredient retains its chemical and physical properties and is merely put into a dosage form and packaged. CBP has generally held that the processing of pharmaceutical products from bulk form into measured doses, filtering and packaging does not result in a substantial transformation of the product. As a result, India is the country of origin of the finished tablets for purposes of U.S. government procurement.
CBP issues country of origin advisory rulings and final determinations as to whether an article is or would be a product of a designated country or instrumentality for the purposes of granting waivers of certain “Buy American” restrictions in U.S. law or practice for products offered for sale to the U.S. government.
CBP’s final determination was issued Dec. 26, 2012. Any party-at-interest may seek judicial review of this determination by Feb. 11.
Applications to Establish CES, Register as Munitions Importer Under Review
U.S. Customs and Border Protection is inviting through March 12 public comments on the proposed extension without change of the application to establish a centralized examination station. The information contained in this application is used to determine the suitability of an applicant's facility, the fairness of the fee structure and the applicant’s knowledge of cargo handling operations and CBP procedures. The names of all corporate officers and all employees who will come in contact with uncleared cargo is provided so that CBP may perform background investigations.
Separately, the Department of Justice’s Bureau of Alcohol, Tobacco, Firearms and Explosives is extending through Feb. 11 the period for public comments on the proposed extension of form ATF F 4587, Application to Register as an Importer of U.S. Munitions Import List Articles. The purpose of this collection is to allow ATF to determine if the registrant qualifies to engage in the business of importing a firearm or firearms, ammunition, and the implements of war and to facilitate the collection of registration fees.
In both cases comments should address whether the information collection is necessary for the proper performance of the agency’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 the collection and ways to minimize that burden, including the use of automated collection techniques or other forms of information technology.