March 8 2013 Issue
DHS Notes Achievements in Implementing Supply Chain Security Strategy
The Department of Homeland Security issued recently an update on its implementation of the National Strategy for Global Supply Chain Security, which was released in January 2012. This strategy has two explicit goals: promoting the efficient and secure movement of legitimate goods and fostering a global supply chain system that is resilient to natural and manmade disruptions.
The DHS report summarizes the accomplishments achieved during the first year of implementation of the strategy as well as areas of focus in 2013.
Understanding Threats and Risks. The strategy establishes risk management as one of the key guiding principles of promoting a secure, safe, efficient and resilient supply chain system and states that the first step to effective risk management is to identify and understand risks across the system.
In December 2012, the Office of the Director of National Intelligence coordinated the development of the first-ever federal assessment of the range of known threats that could trigger national or network-level disruptions to the supply chain system and impact U.S. interests at home and abroad. This assessment is distinct from others that consider the threats associated with the supply chains of specific critical infrastructure sectors (such as manufacturing, transportation, energy, banking and finance, etc.) or the threats presented by the supply chain system itself (e.g., as a means to introduce illicit items such as weapons of mass destruction-related materials). DHS also conducted a radiological and nuclear terrorism risk assessment that addressed the balance of risk (a) across different transit modes and pathways within the global supply chain and (b) between supply chain and non-supply chain pathways.
In 2013, efforts will focus on (1) refining and utilizing risk assessments to inform the deployment of technical solutions and other capabilities, (2) advancing efforts to characterize likely radiological/nuclear material and devices and their potential transport pathways, (3) developing and institutionalizing a process to characterize and assess system-wide risk (e.g., analyzing the balance of different risks to the global supply chain and identifying triggers that could cause small or localized disruptions to escalate), (4) assessing cyber security-related risks to DHS systems used to collect, maintain and analyze commercial data as well as systems operated on behalf of DHS necessary to secure the exchange of this data among private and public stakeholders, and (5) maintaining a repository of global supply chain threat reporting and assessments to support future analysis.
Advancing Technology. In 2012, DHS coordinated the development of a government-wide baseline assessment of currently available cargo and supply chain-related technologies used or approved for use by the U.S. government. This assessment highlighted improved mobile detection capabilities to secure goods in transit, improved technologies to inspect rail cars and non-containerized cargo, the recent implementation of new technology to detect counterfeit and adulterated products, and enhancements to data management and automated targeting systems. DHS also developed a process to better coordinate federal efforts to advance applicable research and development projects (e.g., tracking and intrusion detection capabilities for goods, containers and conveyances) and increased international deployments of sensor systems and other detection equipment.
In 2013, the department will seek to develop a set of government-wide cargo and supply chain research and development priorities. It also plans to conduct a pilot program to assess the capability of promising prototype supply chain technologies (such as the “hybrid security shipping container”) in an appropriate trade route.
Building Resilient Infrastructures. Implementation activities in 2012 focused on enhancing the resilience of the global supply chain as a comprehensive and networked system, including developing global guidelines on information sharing for transportation system disruption and identifying transportation infrastructure projects where asset owners and operators are incorporating resilience best practices into their design and construction.
In 2013, the department will work to expand the Resilience STAR program (which provides measurable, industry-approved performance targets that owners and operators voluntarily can meet in order to receive a “STAR” certification) into the transportation sector, advance the development of resilience metrics and standards, conduct follow-on studies to identify and address critical infrastructure dependencies, and utilize lessons learned from Hurricane Sandy to inform new policies and programs that will enhance preparedness.
Legislation. In 2012, DHS worked to identify potential alternatives to the 100% maritime scanning requirement in the SAFE Port Act of 2006 that would focus threat mitigation efforts on high-risk shipments. DHS will use these potential alternatives to inform continued engagement with Congress on the issue.
In 2013, federal departments and agencies will work engage Congress to (1) identify opportunities to enhance alignment between legislative requirements associated with the use of sensor-based radiological and nuclear technologies abroad and the goals and approach established by the strategy, the Global Nuclear Detection Architecture International Implementation Plan, and other relevant programs and policies, (2) expand DHS authority to share information with rights holders to ascertain whether imported and exported goods violated intellectual property laws, and (3) consider options for authorizing agencies to disclose confidential business information to federal, state and local law enforcement authorities under certain circumstances.
Supply Chain Standards. Global standards, best practices and guidelines provide a common framework by reducing compliance burdens for industry, allowing governments to realize efficiencies and maintaining acceptable levels of security. In 2012, federal agencies worked with (1) supply chain-related multilateral organizations to develop new reporting requirements associated with the transport of certain improvised explosive device precursor materials as well as a common definition for high-risk cargo between customs and law enforcement agencies, (2) foreign government and private sector stakeholders to assess the feasibility and benefits of industry submission of key data associated with goods prior to an aircraft’s departure from a foreign location, and (3) the World Customs Organization and the International Civil Aviation Organization to develop guidelines for advance information requirements that would meet both customs and law enforcement needs.
In 2013, the government will work to evaluate the pros and cons of a formalized process to coordinate U.S. positions during engagements with standards development or other intergovernmental organizations. In addition, DHS will initiate a rulemaking for air cargo advance information requirements that will be informed by ongoing pilot operations.
Information Analysis and Sharing. The federal government relies on the collection, analysis and sharing of commercial and associated supply chain information with industry stakeholders to enforce compliance with laws and regulations and to identify shipments that warrant additional scrutiny. Efforts in 2012 sought to advance both critical ongoing initiatives such as the International Trade Data System (in which 47 federal agencies are now involved) as well as more recent efforts to refine advance data requirements. The priority in 2013 will be to advance ITDS by (1) finalizing a long-term schedule of ITDS capability development and availability, (2) establishing a task force to accelerate implementation of key components of ITDS, (3) revising regulations to allow for the collection and sharing of electronic (rather than paper-based) data, (4) developing and deploying between one and three pilot programs to test the feasibility and benefits of enhanced technical interfaces and other exchanges between federal data collection systems and existing commercial targeting systems (such as the Automated Targeting System) and (5) formalizing information-sharing arrangements between federal agencies focused on cargo arriving and departing the U.S. and those focused on cargo moving between foreign ports.
Customized Solutions. Strategy implementation efforts in 2012 included conducting a comprehensive assessment of ways to simplify and streamline existing programs, which concluded that harmonization of federal requirements could improve those programs focused on both supply chain security and efficiency (such as the Customs-Trade Partnership Against Terrorism and Importer Self-Assessment). DHS also advanced efforts to consolidate compliance functions through the Simplified Entry concept and the establishment of Centers of Excellence and Expertise.
In 2013, efforts will include (1) developing a “U.S. Government Supply Chain Partnership Program Framework” to inform federal agencies as they work to develop new supply chain partnership programs or refine existing ones to improve harmonization or achieve mutual recognition of requirements and (2) developing and testing centralized processing for applications and eligibility requirements for all U.S. global supply chain-related partnership programs.
Trade Deficit Reverses Downward Slide, Jumps 16.5% in January
Trade statistics released March 7 by the Department of Commerce show that the monthly U.S. trade deficit saw a 16.5% gain in January after a 20.8% plunge in December. Monthly exports fell 1.1% to $184.5 billion while imports rose 1.8% to $228.9 billion. Press reports state that these figures largely reflect an increase in crude oil imports and a decrease in exports of fuel oil. Compared to a year earlier, however, the January trade deficit was down $7.8 billion as exports increased by 3.3% ($5.8 billion) and imports declined by 0.9% ($2.0 billion).
The monthly deficit in goods trade saw a 10.2% rise in January to $61.8 billion. Exports of goods dropped 1.5% to $130.8 billion but imports were up 1.9% to $192.5 billion. The services surplus fell 3.4% to $17.3 billion as exports edged down to $53.7 billion and imports rose slightly to $36.4 billion.
The bilateral trade deficit with China reversed a two-month decline and jumped 13.5% to $27.8 billion. The U.S. also saw bigger deficits with Japan (up 7% to $6.1 billion), Canada (up 19.4% to $4.9 billion), Korea (up 90.9% to $2.1 billion), Venezuela (up 53.8% to $2.0 billion), Ireland (up 26.7% to $1.9 billion), Saudi Arabia (up 11.8% to $1.9 billion) and India (up 200% to $1.5 billion). Deficits declined with the European Union (down 1.1% to $8.6 billion) and Germany (down 22.2% to $4.2 billion).
The U.S. continued to run surpluses with several trade partners, including Hong Kong (down 32.5% to $2.7 billion), Australia (down 29.4% to $1.2 billion), Singapore (down 36.3% to $0.7 billion) and Brazil (down 30.8% to $0.9 billion).
Dates and Deadlines: Trade Priorities, Services, Export Council, E-Commerce, Customs Law
Following are highlights of regulatory effective dates and deadlines and federal agency meetings coming up in the next week.
March 11 – effective date of revocation of rulings on certain goods reimported for repair, upgrade or exchange
March 12 – ST&R webinar on trade priorities in Obama’s second term
March 12 – USTR hearing on International Services Agreement
March 12 – meeting of President’s Export Council
March 13 – ST&R webinar on e-commerce and export control compliance
March 13 – effective date of USDA final rule on imports of horses
March 13 – deadline for comments on CBP information collection on holders or containers that enter duty-free
March 14 – ST&R webinar on understanding U.S. customs law and import requirements
March 14 – meeting of President’s Export Council Subcommittee on Export Administration
March 14 – ITC hearing on effects of U.S.-Korea FTA on small and medium-sized enterprise exports
March 14 – deadline for comments on issues raised in WTO dispute against Indonesian import restrictions on horticultural products, animals and animal products
March 15 – deadline for comments on proposal to expand importer eligibility to serve on Watermelon Promotion Board
March 15 – deadline for comments on FWS Form 3-177, Declaration for Importation or Exportation of Fish or Wildlife
March 15 – meeting of Advisory Committee on Supply Chain Competitiveness
In the News: Japan in TPP, EU-Thailand FTA, Wildlife Trade
Textile and Apparel Imports Up in January, Led by Big Gains from Caribbean and SE Asia
The Department of Commerce’s Office of Textiles and Apparel reports that monthly U.S. textile and apparel imports saw a 3.7% increase in January compared to a year earlier. Imports of cotton, wool, manmade fiber, silk blend and non-cotton vegetable fiber textile and apparel products totaled 4.61 billion square meter equivalents for the month, with textile imports up 3.3% to 2.54 billion SME and apparel imports up 4.3% to 2.07 billion SME.
For the 12-month period ending in January total imports of textiles and apparel were 1.0% higher at 54.2 billion SME. Textile imports gained 2.1% to 30.4 billion SME while apparel imports fell 0.4% to 23.8 billion SME.
With respect to specific sources, imports of textile and apparel products (except cotton and silk blend textiles) saw a year-on-year increase in January from China (0.8% to 2.17 billion SME), Vietnam (22.7% to 315.3 billion SME), Hong Kong (25.5% to 7.5 billion SME), South Korea (3.8% to 112.2 billion SME), Mexico (2.8% to 184.4 billion SME), Caribbean Basin Initiative partners (59.6% to 18.0 billion SME), Association of Southeast Asian Nations partners (14.8% to 684.6 billion SME), South Asia (4.4% to 727.9 billion SME), Turkey (18.6% to 49.2 billion SME) and Israel (17.3% to 40.2 billion SME). Imports declined from Taiwan (8.9% to 69.3 billion SME), Canada (3.5% to 96.8 billion SME) and the DR-CAFTA region (8.7% to 170.0 billion SME).
AD/CV Notices: Ribbons, Electrodes, Tomatoes, Pasta
Agency: International Trade Administration.
Commodity: Narrow woven ribbons with woven selvedge.
Nature of Notice: Rescission of administrative review of antidumping duty order for the period Sept. 1, 2011, through Aug. 31, 2012, with respect to Apex Ribbon, Apex Trimmings Inc., Hubschercorp, Multicolor, Shienq Huong Enterprise Co. Ltd./Hsien Chan Enterprise Co. Ltd./Novelty Handicrafts Co. Ltd., and Supreme Laces Inc.
Details: The ITA will instruct U.S. Customs and Border Protection to assess AD duties on entries of subject merchandise from these companies at rates equal to the cash deposit of estimated AD duties required at the time of entry or withdrawal from warehouse for consumption.
Agency: Small diameter graphite electrodes.
Country: Preliminary results of administrative review of antidumping duty order for the period Feb. 1, 2011, through Jan. 31, 2012.
Nature of Notice: Dumping margins of zero for seven reviewed companies and 159.64% for the China-wide entity. The review is being rescinded with respect to 19 companies based on the withdrawal of the requests for review and because these companies previously established their entitlement to a separate rate.
Agency: International Trade Administration.
Commodity: Fresh tomatoes.
Nature of Notice: Suspension of antidumping duty investigation, effective March 4.
Agency: International Trade Commission.
Country: Italy and Turkey.
Nature of Notice: Revised schedule for sunset reviews of antidumping and countervailing duty orders.
Details: Hearing to be held July 11 and post-hearing briefs and non-party written statements are due on July 22.
Russian Company Added to List of Entities Restricted from Receiving Dual-Use Exports
The Bureau of Industry and Security has issued a final rule that, effective March 8, adds to the Entity List one company headquartered in Russia under three entries in Germany, Russia and Taiwan. BIS states that there is reason to believe that this company has been listed as the ultimate consignee on multiple Automated Export System records filed for the export of dual-use items controlled for national security reasons but shipped without the required licenses. There is also reason to believe that this company is associated with military procurement activities, including the development of computer systems for military end-users and the production of computers for nuclear research.
Certain exports, reexports and transfers (in-country) of items subject to the EAR to entities identified on the Entity List require licenses from BIS but are usually subject to a policy of denial because BIS considers such entities to present significant risks of diversion to weapons of mass destruction programs, terrorism or other activities that are contrary to U.S. national security or foreign policy interests. This license requirement applies to any transaction in which items are to be exported, reexported or transferred (in-country) to an entity on the Entity List or in which such entity acts as purchaser, intermediate consignee, ultimate consignee or end-user. In addition, license exceptions are unavailable for such transactions in most instances.
Shipments of items removed from eligibility for a license exception or export or reexport without a license (NLR) as a result of this final rule that were en route aboard a carrier to a port of export or reexport on March 8 pursuant to actual orders for export or reexport to a foreign destination may proceed to that destination under the previous eligibility.
FTZ Actions for Auto Factory, Medical Device Facility, California Zone
The Foreign-Trade Zones Board has recently taken the following actions.
- terminated as a result of changed circumstances its review of a June 2011 application requesting that the scope of FTZ manufacturing authority at the BMW Manufacturing Co. LLC facility within subzone 38A in Greer, S.C., be expanded to include up to an additional 131,000 vehicles per year, which would have brought the total authorized output to 350,000 vehicles per year
- received an amendment to the application submitted by the San Francisco Port Commission, grantee of FTZ 3 in San Francisco, Calif., for authority to expand its service area under the alternative site framework to reduce the portions of Napa and Sonoma counties proposed for inclusion in the expanded service area
- authorized production activity under zone procedures at the Zimmer Manufacturing BV facility within subzone 163A in Ponce, Puerto Rico, which is used for the production, warehousing and distribution of orthopedic implants for knee and hip reconstruction as well as trauma devices
CBP Reviewing Andean Trade Preference Forms
U.S. Customs and Border Protection is accepting through May 7 comments on the proposed extension of CBP Form 449, the Andean Trade Promotion and Drug Eradication Act Certificate of Origin, and CBP Form 17, the Andean Trade Preference Act Declaration. CBP Form 17 may be used when claiming preferential treatment under the ATPA and claims under the ATPDEA are submitted using CBP Form 449. The type of information collected includes the processing operations performed on articles, the material produced in a beneficiary country or in the U.S., and a description of those processing operations.