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March 1 2013 Issue

Friday, March 01, 2013
Sandler, Travis & Rosenberg Trade Report

CBP Revises Rulings on Toys, Dry Suits, Chemical Products, Diagnostic Kits, Steel Items

In the Feb. 27, 2013, Customs Bulletin and Decisions, U.S. Customs and Border Protection proposed to revoke or modify classification and marking rulings on the following products. Comments are due by March 29.

Product: Children’s plastic toy blocks.
Proposed action: Revocation of NY N132564.
Current determination: The phrase “components made in Canada and China” should appear, legibly and permanently, in close proximity and in at least a comparable size to the Belgium address and the CE mark.
Proposed determination: The containers in which the blocks are packaged are properly marked with the country of origin.
Explanation: Given the country of origin markings on the front of the boxes and the way the Belgian address and CE symbol are printed on the back, a reasonable ultimate purchaser would not be misled or deceived as to the blocks’ provenance of manufacture and production.

Product: Wetted spherical aluminum powder product used in paints, rocket fuel and electronics.
Proposed action: Revocation of NY N117455.
Current classification: HTSUS 3824.90.92, other chemical products and preparations not elsewhere specified.
Proposed classification: HTSUS 7603.10.00, aluminum powders of a non-lamellar structure (5% duty).
Explanation: The powder is a composite product whose essential character is imparted by the aluminum.

Product: Unisex coverall garment (dry suit) designed for over-water and waterborne tactical operation teams.
Proposed action: Modification of NY N068477.
Current classification: HTSUS 6211.43.0010, other women’s garments of manmade fibers (16% duty). Garment does not qualify for NAFTA duty-free treatment.
Proposed classification: HTSUS 6210.50.50, other women’s or girls’ garments of manmade fibers, made up of fabrics of heading 5602, 5603, 5903, 5906 or 5907 (7.1% duty). Garment qualifies for NAFTA duty-free treatment.
Explanation: The change in classification means the garment now meets the applicable tariff shift rule.

Product: Solution composed of 25% Bitrex (an aromatic, cyclic amide indicated for use as a denaturant and bittering agent) and 75% propylene glycol.
Proposed action: Revocation of HQ 968018 and NY L85332.
Current classification: HTSUS 3824.90.91, other chemical products not elsewhere specified or included (5% duty).
Proposed classification: HTSUS 3824.90.28, other mixtures containing 5% or more by weight of one or more aromatic or modified aromatic substances (6.5% duty).

Product: Reagent kit used for in vitro diagnostics.
Proposed action: Modification of NY N019762.
Current classification: HTSUS 3002.10.01, other antisera and other blood fractions and modified immunological products (duty-free).
Proposed classification: HTSUS 2844.40.00, mixture containing a compound of a radioactive isotope (duty-free).
Explanation: The item that imparts the essential character of the kit is the iodine-labeled monoclonal antibody, which is included in HTSUS Chapter 28.

Also in the Feb. 27, 2013, Customs Bulletin and Decisions, CBP revoked or modified classification rulings on the following products, effective April 29.

Product: Insulating mineral materials used in gas turbine engines.
Action: Revocation of NY N125656.
New ruling: HQ H146056.
New classification: HTSUS 6806.90.00, other forms of mineral wools (duty-free).
Explanation: The mineral insulating fibers (mineral wool) predominate in the article and are indispensable to its primary use and purpose.

Product: Ultralube D-806, which is incorporated in aqueous coatings such as water-based printing inks to improve the surface qualities of the coating, ink and lacquers.
Action: Revocation of NY N063739.
New ruling: HQ H080820.
New classification: HTSUS 3901.20.10, polyethylene having a specific gravity of 0.94 or more and a relative viscosity of 1.44 or more (6.5% duty).

Product: Perforating gun assemblies used in connection with onshore oil well drilling and oil production.
Action: Revocation of NY N012463, NY C83105 and NY C82398.
New ruling: HQ H053672, HQ H102845 and HQ H102847.
New classification: HTSUS 7326.90.85, other articles of iron or steel (2.9% duty).
Explanation: The subject merchandise relies on other articles to function and has no independent or individual functions or capabilities. 

FDA Issues Plan to Help Foreign Countries Improve Food Safety Systems

The Food and Drug Administration has made available a plan that provides a strategic framework for its efforts to expand the technical, scientific and regulatory food safety capacity of foreign governments and their respective food industries in countries that export foods to the U.S. The FDA states that this plan meets the requirements of Section 305 of the Food Safety Modernization Act and does so by incorporating FSMA’s principles of comprehensive prevention, risk-based resource allocation and partnering. Among other things, the FDA will use enhanced intelligence of food safety risks on a country-by-country, commodity-by-commodity basis to determine the best candidates for technical assistance and capacity-building programs.

According to the FDA, the key goals and objectives of this plan are as follows.

- ensure efficiency across the FDA Foods and Veterinary Medicine Program, including by maximizing coordination within the agency

- increase effectiveness through evidence-based decision making by enhancing intelligence regarding food safety risks and utilizing food safety assessments

- support the exchange of information between the FDA and foreign government agencies or other entities by exploring the appropriateness of relying on mutual recognition of inspection reports, establishing new or identifying existing mechanisms to support secure electronic data sharing, and supporting bilateral or multilateral agreements that provide for the responsibility of exporting countries to ensure food safety

- enhance technical assistance and capacity-building by developing and delivering food safety training programs focused on best practices and global food safety principles, training foreign governments and food producers on U.S. requirements for safe food, and supporting provisions for the multilateral acceptance of laboratory methods and testing and detection techniques 

Dates and Deadlines: Letters of Credit, Customs, Digital Trade, Medical Devices

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

March 4 – deadline for comments on proposed Paper and Paper-Based Packaging Promotion, Research and Information Order

March 4 – deadline for comments on proposed production activity within FTZ 117 at the Signal International Texas GP LLC facility in Orange, Texas

March 5 – ST&R webinar on basics of letters of credit for importers and exporters

March 5 – deadline for comments on proposed extension of information collection requirements associated with open flame flammability standard for mattresses

March 6 – ST&R webinar on medical device excise tax and establishment registration

March 6 – deadline for comments on CBP application for allowance in duties, CBP application for permit to unlade imported merchandise, and EPA form on notification of chemical exports

March 6 – meeting of Advisory Committee on Commercial Operations of U.S. Customs and Border Protection

March 7 – ST&R webinar on CBP’s Importer Self-Assessment program

March 7 – ITC hearing on role of digital trade in the U.S. and global economies

March 7 – meeting of BIS Transportation and Related Equipment Technical Advisory Committee 

In the News: Japan Seen Moving Toward TPP, Intermodal Network for Ag Exports

Japan's Abe to advance reforms with free trade decision

Rail, steamship lines in talks to build intermodal network to expand agricultural export

AD/CV Notices: Request Reviews, Plywood, Persulfates, Activated Carbon

Agency: International Trade Administration.
Nature of Notice: Opportunity to request administrative reviews of the antidumping and/or countervailing duty orders on the following products for the period March 1, 2012, through Feb. 28, 2013 (AD) or Jan. 1 through Dec. 31, 2012 (CV). Requests are due no later than April 1.
- iron construction castings from Canada (AD)
- brass sheet and strip from France, Germany and Italy (AD)
- sulfanilic acid from India (AD/CV)
- silicon metal from Russia (AD)
- stainless steel bar from Spain (AD)
- light-walled rectangular carbon steel pipe and tube from Taiwan (AD)
- polyvinyl alcohol from Taiwan (AD)
- circular welded carbon steel pipes and tubes from Thailand (AD) and Turkey (CV)
- chloropicrin from China (AD)
- circular welded austenitic stainless pressure pipe from China (AD/CV)
- drill pipe from China (AD/CV)
- glycine from China (AD)
- sodium hexametaphosphate from China (AD)
- tissue paper products from China (AD)
- in-shell pistachio nuts from Iran (CV)

Agency: International Trade Administration.
Commodity: Hardwood and decorative plywood.
Country: China.
Nature of Notice: Preliminary affirmative countervailing duty determination.
Details: Countervailable subsidies range from 0.22% (de minimis) to 27.16%. The ITA will instruct U.S. Customs and Border Protection to begin collecting CV cash deposits based on these rates, except those that are de minimis.
Link: http://ia.ita.doc.gov/download/factsheets/factsheet-prc-hdplywood-cvd-prelim-20130227.pdf

Agency: International Trade Administration.
Nature of Notice: Sunset reviews of the antidumping and/or countervailing duty orders on the following products are scheduled for initiation in April.
- light-walled rectangular pipe and tube from China (AD/CV), Korea (AD), Mexico (AD) and Turkey (AD)
- polyethylene terephthalate film from India (AD/CV) and Taiwan (AD)

Agency: International Trade Administration/International Trade Commission.
Commodity: Persulfates.
Country: China.
Nature of Notice: Initiation of sunset review of antidumping duty order.

Agency: International Trade Commission.
Commodity: Activated carbon.
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. 

Treasury Recognizes Cachaça as Distinctive Product of Brazil

The Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau has issued a final rule that, effective April 11, will recognize cachaça as a type of rum that is a distinctive product of Brazil, manufactured in Brazil in compliance with the laws of Brazil regulating the manufacture of cachaça for consumption in that country. The U.S. agreed to this step, which was first requested in April 2001, last year in return for Brazil implementing similar restrictions with respect to Tennessee whiskey and Bourbon whiskey.

This final rule will have the following effects.

- Labels for distilled spirits for which corn or corn syrup has been used in the fermentation process that include the term “cachaça” will be revoked by operation of regulation.

- The use of the term “cachaça” as additional information on labels of products that are currently designated as rum or Brazilian rum will continue to be allowed as long as these products meet the new regulatory standards for designation as cachaça. As of April 11 such products may be designated as cachaça without the use of the designation “rum” on the label.

- Labels containing the term “cachaça” that do not comply with the new regulatory language will be revoked by operation of regulation. TTB will not individually notify all holders of certificates of label approval that their approvals have been revoked if the revocation occurs by operation of regulation. In such cases it is the responsibility of the certificate holder to voluntarily surrender all certificates that are no longer in compliance.

- Previously approved cachaça labels may continue to be used through Aug. 26 and noncompliant labels will not be revoked by operation of regulation until that date. 

IPR Enforcement Actions on Lamps, RFID Products, Consumer Electronics

New IPR Infringement Investigation of Compact Fluorescent Reflector Lamps. The International Trade Commission has instituted investigation 337-TA-872 to determine whether imports of certain compact fluorescent reflector lamps, products containing same and components thereof are violating Section 337 of the 1930 Tariff Act by reason of patent infringement. The products at issue are reflector lamps that utilize a fluorescent light source.

Complainants Andrzej Bobel and Neptun Light Inc. request that after this investigation the ITC issue an exclusion order, which would direct U.S. Customs and Border Protection to prohibit the entry of the infringing products into the U.S., and cease and desist orders, which would require the named respondents to cease actions that violate Section 337, including selling infringing imported articles out of U.S. inventory. The respondents in this investigation are located in the U.S.

Potential IPR Probe of RFID Products Evaluated for Public Interest Issues. The International Trade Commission is requesting comments no later than March 11 on any public interest issues raised by a Section 337 intellectual property rights infringement complaint filed on behalf of Neology Inc. against certain radio frequency identification products and components thereof. 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.

No IPR Import Restrictions in Consumer Electronics Probe. The International Trade Commission has terminated without the imposition of import restrictions patent infringement investigation 337-TA-839 of certain consumer electronics, including mobile phones and tablets. Complainant Pragmatus AV LLC has reached settlement agreements with all respondents named in this investigation. 

FTZ Board Approves New Puerto Rico Subzone, Expanded Cosmetic Plant Activity

The Foreign-Trade Zones Board has recently approved the following.

- the establishment of subzone 61M at the Sea World Inc. facility in Guaynabo, Puerto Rico

- the production under zone procedures of hair coloring products with foreign-status oleic acid at the Revlon Consumer Products Corporation facility in subzone 93G in Oxford, N.C. 

Editorial Corrections to Export Administration Regulations

The Bureau of Industry and Security has issued a final rule that corrects a number of reference and typographical errors in the Export Administration Regulations. BIS states that these corrections are editorial in nature and do not affect export license requirements.

Ex-Im Bank Asked to Finance Exports of Helicopters

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 U.S.-manufactured Sikorsky S-92 helicopters to Brazil, Norway, the United Kingdom and/or other acceptable countries. These helicopters will be sub-leased for use to transport passengers and equipment to offshore oil platforms. Comments on this application are due no later than March 26.

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