News
Print PDF

February 28 2013 Issue

Thursday, February 28, 2013
Sandler, Travis & Rosenberg Trade Report

“Significant Number” of Food Facility Registrations Being Suspended, CBP Says

U.S. Customs and Border Protection issued Feb. 27 a message warning importers that a significant number of foreign food facility registrations that were not renewed by the Jan. 31 deadline are currently in the process of being modified to an invalid status by the Food and Drug Administration. As a result, imported food shipments manufactured by such facilities may be held at the port or refused upon arrival in the U.S.

The 2002 Bioterrorism Act requires all domestic and foreign facilities that manufacture, process, pack or hold food, beverages, food ingredients, pet foods or dietary supplements for consumption in the United States to register as a food facility with the FDA. Section 102 of the FDA Food Safety Modernization Act updated that law to require such registrations to be renewed between Oct. 1 and Dec. 31 of each even-numbered year. The FDA may suspend the registration number of any facility that fails to comply, resulting in a prohibition on the importation, distribution or sale of food from the suspended facility.

The FDA is continuing to encourage import filers who file prior notices for food shipments to be proactive and contact clients with high-volume food shipments, inquire about the FSMA food facility registration renewal status of foreign manufacturing facilities associated with their shipments, and confirm any new registration numbers. CBP states that doing so could greatly mitigate any import food shipment delays related to food facility registration.

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, please visit our Web site or send us an e-mail

Obama Urged to Address Lack of Competition in Pending Freight Rail Plan

Sen. Al Franken, D-Minn., wrote to President Obama this week in an attempt to resolve a longstanding concern as part of a federal effort to develop a national freight policy. Franken said that the “lack of competition in our national freight rail transportation system and the resulting railroad monopoly power over a significant portion of annual railroad freight movement create significant problems for our state and national economies.” He asked the president to consider this issue as part of several ongoing executive branch activities regarding the U.S. transportation system.

“To really serve our nation,” Franken said, railroads, highways and other infrastructure “must be available to all prospective users on a competitive basis, and unfortunately that is not currently happening.” He pointed to recent analysis indicating that 78% of the stations in the continental U.S. where a major freight railroad picks up or delivers freight are served by a single railroad and that of the remaining 22% a significant number are served by a short line or regional rail carrier that is dominated by the major railroad serving the location.

The letter added that while the Surface Transportation Board is charged with ensuring that freight railroads do not exercise their market power to the detriment of their customers, the STB is a “small and under-funded agency” and that the 1980 law it enforces “presumes that the relationship between the railroad and its customers will be governed by market competition instead of by regulatory policy,” which “does not match current reality.”

Franken therefore called on the president to take or direct the following actions.

- The STB has several policy proceedings pending that address both the level of competition in the national freight rail system and the “discredited and burdensome” procedures by which rail customers without access to transportation competition can challenge their rail rates for being excessive. Other executive branch agencies that have identified the lack of rail competition as a problem should engage in these proceedings.

- The national freight strategic plan being developed by the Department of Transportation and the National Freight Advisory Committee (http://www.msgapp.com/c.aspx?l=CHZD0959880005949166YYY7AD) the DOT recently established must address the freight rail monopoly problem.

- An April 2010 report by the DOT and the Department of Agriculture that highlighted railroad monopoly problems that adversely affect agriculture input costs and the marketing of agricultural products needs to be updated.

- The Advisory Committee on Logistical Supply Chain Competitiveness established recently in the Department of Commerce needs to focus on the domestic freight rail monopoly and its impact on the competitiveness of U.S. industries and producers.

- The president should appoint a senior official to coordinate these efforts, analyze the freight rail monopoly problem and suggest appropriate federal policies.

Court Says Rejected Entry Doesn’t Qualify as Protestable Exclusion

The Court of International Trade’s Feb. 26 ruling in Sunshine International Trading Inc. v. U.S. addresses a rejected entry that was complicated by missteps on both sides.

On May 17, 2012, Sunshine attempted to enter a shipment of jeans and filed an “Entry/Immediate Delivery” form accompanied by an ocean bill of lading, a commercial invoice and a packing list. The invoice stated that Sunshine had bought 1,690 dozen pairs at a per unit price of $2.70. U.S. Customs and Border Protection subsequently issued an “Entry/Summary Rejection Sheet” dated May 1, 2012, rejecting Sunshine’s entry and indicating that the jeans had been reappraised at $6.14 or $6.33 per piece. Sunshine filed a protest, arguing that (1) CBP’s rejection of its entry was invalid as a matter of law because it was dated more than two weeks before the entry papers were filed, (2) the commercial invoices provided the identity of the seller and the identifying marks of the goods and (3) the value of the jeans set forth in its entry documents was correct because it was based on the transaction value.

The court notes that some of the documents filed by Sunshine with its protest confused the facts surrounding the entry, namely by indicating a different number of pairs of jeans ordered, identifying a different seller and suggesting a different per unit price. CBP contributed to the confusion by denying Sunshine’s protest in full but referencing an inapplicable regulatory provision and stating that the protest had been filed in error. (The CIT notes that in a 2009 decision it directed that when CBP receives a protest that does not raise a protestable issue within the meaning of 19 USC 1514 it should mark the protest “rejected as non-protestable” to send a clear signal that there has been no denial of the protest within the meaning of 19 USC 1515 and the protest cannot subsequently be contested in the CIT under 28 USC 1581(a).)

19 USC 1514(a)(4), the provision underlying the jurisdiction that Sunshine claims the CIT has over this case, allows for the filing of protests to challenge the wrongful exclusion of merchandise from entry or delivery. However, the CIT ruled that CBP’s rejection, which was based on its determination that Sunshine’s papers fell short of the regulatory requirements and accompanied by an invitation to resubmit corrected entry paperwork, “simply does not rise to the level” of a protestable exclusion. The court also rejected Sunshine’s argument that even if its jeans were not excluded from entry they were excluded from delivery, stating that to be so characterized the jeans would have had to be either already entered or covered by immediate delivery, neither of which was the case. The CIT further stated that although there is conflicting information as to the proper valuation of the jeans, disputed appraisals are protested not under 19 USC 1514(a)(4) but under 19 USC 1514(a)(1) and can only be filed after the merchandise is liquidated, which was not the case here.

Finally, the CIT states that CBP issuing an incorrectly dated form is not one of the protestable events listed in 19 USC 1514(a) and that Sunshine made no claim that it relied on the erroneous date to its detriment. 

New AD/CV Administrative Reviews Initiated

The International Trade Administration has initiated administrative reviews of the antidumping and/or countervailing duty orders on the following products.

- cased pencils from China (AD; Dec, 1, 2011, through Nov. 30, 2012)
- multilayered wood flooring from China (AD; May 26, 2011, through Nov. 30, 2012)
- oil country tubular goods from China (CV; Jan. 1 through Dec. 31, 2012)
- cut-to-length carbon steel plate from Russia (AD; Dec. 1, 2011, through Nov. 30, 2012)
- wooden bedroom furniture from China (AD; Jan. 1 through Dec. 31, 2012) 

Colombia FTA Short Supply Request on Corduroy Fabric

The Committee for the Implementation of Textile Agreements received Feb. 22 a short supply request alleging that a certain cotton corduroy fabric classified under HTSUS 5801.22.1000 and 5801.22.9000 is not available in commercial quantities in a timely manner from a supplier in Colombia or the U.S. The petitioner is requesting that this fabric, which will be used in a line of children’s clothing to be cut and sewn in Colombia, be added to the short supply list in Annex 3-B of the U.S.-Colombia Trade Promotion Agreement. Responses with an offer to supply this fabric are due no later than March 8. 

CBP Expands Geographical Limits of Port of Green Bay

U.S. Customs and Border Protection has issued a final rule that, effective April 1, will expand and revise the geographical limits of the port of Green Bay, Wis. The port limits will be revised to refer to identifiable roadways and waterways rather than townships (whose boundaries are not easy to locate) and will be extended to include the entire Austin Straubel Airport (part of which is currently outside of port limits due to an error). CBP has said that this rule will not alter the service provided to the public by the port nor will it require a change in the staffing or workload at the port.

Committees on Export Administration, Exports of Materials Processing Equipment to Meet

The President’s Export Council Subcommittee on Export Administration will hold a partially open meeting March 14 at Commerce Department headquarters in Washington, D.C. This committee provides advice on matters pertinent to those portions of the Export Administration Act that deal with U.S. policies of encouraging trade with all countries with which the U.S. has diplomatic or trading relations and of controlling trade for national security and foreign policy reasons. The open session of this meeting will include remarks by Bureau of Industry and Security officials and the presentation of papers or comments by the public.

The BIS Materials Processing Equipment Technical Advisory Committee will hold a partially open meeting March 26 at the same location. This committee advises BIS with respect to technical questions that affect the level of export controls applicable to materials processing equipment and related technology. The open session of the upcoming meeting will include a discussion on results from the last, and proposals for the next, Wassenaar Arrangement meeting as well as a report on proposed and recently issued changes to the Export Administration Regulations.

For both meetings, the open sessions will be accessible via teleconference to 20 participants on a first come, first served basis. Requests to participate in this manner are due no later than March 7 (PECSEA) and March 19 (MPETAC), respectively. In addition, a limited number of seats will be available at each public session but reservations are not accepted. 

Ex-Im Bank Asked to Support Hong Kong Company’s Purchase of Satellites

The Export-Import Bank of the United States has received an application for a direct loan to a Hong Kong-based company to finance the construction and launch of two U.S.-manufactured satellites and related ground facility equipment, data and services, U.S. launch services and launch insurance. The satellites are expected to provide additional capacity to broadcasting and telecommunications companies in the company’s existing customer base in North East Asia, the Middle East and North Africa, South Asia, Australia and ASEAN as well as potential growth in other markets such as India and Australasia. Comments on this application are due no later than March 25.

Foreign Regulatory Changes Could Affect Exports of Foods, Washers, Radios

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.

Argentina – amended resolution on sugar content of wine

Chile – efficiency certification procedure for domestic washing machines with or without heating devices and with a hot and/or cold water supply (comments due by April 1)

Colombia – June 13, 2013, effective date of technical regulation on metallic materials, objects, containers and equipment intended to come into contact with food and beverages

Colombia – draft resolution on good laboratory practices for pharmaceutical quality control laboratories (comments due by April 29)

France – amended regulations on continuity of fire and rescue service radio communications

Mexico – Nov. 29, 2012, publication of official standard on electrical installations (effective approximately May 29, 2013)

Morocco – draft decree establishing labeling requirements for food products 

To get news like this in your inbox daily, subscribe to the Sandler, Travis & Rosenberg Trade Report.

Customs & International Headlines