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March 13 2013 Issue

Wednesday, March 13, 2013
Sandler, Travis & Rosenberg Trade Report

U.S. Companies Asked to Submit Initial TPP Short Supply Requests by March 31

The Obama administration is giving U.S. interested parties until March 31 to submit any requests for short supply designations as part of the ongoing Trans-Pacific Partnership Agreement negotiations. The TPP short supply proposal put forward by U.S. negotiators includes separate short supply designations structured on a permanent and temporary basis. All short supply designations would be established as of the date negotiations are concluded, which means that no additional short supply requests would be allowed after the TPP takes effect.

Once the TPP enters into force, textile and apparel goods containing fibers, yarns or fabrics that are designated to be in short supply and meet all other requirements would qualify for preferential tariff treatment even though the input does not originate from a TPP country. If a fabric is designated in permanent short supply for a particular apparel product, that product could qualify for TPP preferences if it is cut and sewn in one or more TPP countries and meets any other additional requirements, such as assembly with TPP-origin sewing thread.

The TPP is a free trade agreement being negotiated between 11 countries: the United States, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Governments other than the U.S. may engage in their own internal short supply analyses with a different deadline. The participating countries have announced their intention to conclude the agreement by the APEC summit to be held in Bali on Oct. 1-8. 

CBP Unveils New C-TPAT System of Records

The U.S. Department of Homeland Security has unveiled a proposal to establish a new Customs-Trade Partnership Against Terrorism system of records, known as the DHS/CBP-018 C-TPAT System of Records. This new system of records collects and manages information, including personally identifiable information, about prospective, ineligible, current or former trade partners in C-TPAT and other entities and individuals in their supply chains. The system also collects and maintains information, including personally identifiable information, regarding members of a foreign government secure supply chain program that have been recognized by CBP through a mutual recognition arrangement or a comparable arrangement as being compatible with the program. The C-TPAT program provides a security link portal that allows partners and applicants to access and manage their information.

CBP notes that it is publishing this new system of records notice to notify the public about the system, permit trade partners access to the information they provide, and offer a description of how and where information is collected and maintained. The new system of records will be effective on April 12 unless comments are received that result in a contrary determination.

DHS has issued a separate notice in the Federal Register seeking input by April 12 on a related proposal that would exempt portions of this new system of records from one or more provisions of the Privacy Act because of criminal, civil and administrative enforcement requirements. CBP believes that these exemptions are needed to protect information relating to DHS activities from disclosure to subjects or others related to these activities. 

USTR Welcomes Progress on U.S.-Taiwan Trade and Investment Issues

The Office of the U.S. Trade Representative announced on March 10 that the recent discussions held by U.S. and Taiwanese officials in Taipei within the framework of the bilateral Trade and Investment Framework Agreement yielded “numerous results” and “positive outcomes.” Among other things, the USTR welcomed Taiwan’s agreement to conduct bilateral technical exchanges to facilitate the establishment of science-based maximum residue levels for pesticides in order to allow Taiwan to enjoy the benefits of new, safer and more environmentally-friendly products. The meetings also produced new joint statements on investment principles and information and communication technology services and saw the launch of new TIFA working groups on investment and technical barriers to trade.

The U.S. commended Taiwan for approving amendments to the Trade Secret Act in order to increase deterrent penalties for trade secret misappropriation and welcomed a two-year pilot program that will help create a more stable market for medicines in Taiwan’s health care system. In addition, Ambassador Demetrios Marantis asked his counterparts to ensure that Taiwan’s food safety measures, including those related to meat exports, are based on science and comply with international standards. 

FDA Extends Deadline for Comments on Draft Qualitative Risk Assessment of Low-Risk Activity/Food Combinations

The Food and Drug Administration has extended from Feb. 15 to May 16 the deadline for interested parties to submit comments on a document entitled “Draft Qualitative Risk Assessment of Risk of Activity/Food Combinations for Activities (Outside the Farm Definition) Conducted in a Facility Co-Located on a Farm” that the agency made available for public comment on Jan. 16. The purpose of this document is to provide a science-based risk analysis of those activity/food combinations that would be considered low risk. The FDA issued this document to satisfy the requirements of the FDA Food Safety Modernization Act to conduct a science-based risk analysis and used the results of that analysis to propose to exempt certain food facilities (i.e., those that are small or very small businesses that are engaged only in specific types of on-farm manufacturing, processing, packing or holding activities identified as low-risk activity/food combinations) from the proposed requirements for hazard analysis and risk-based preventive controls. 

Company Agrees to Pay $400,000 Penalty for Failure to Report Defective Play Yards

The Consumer Product Safety Commission has provisionally accepted an agreement under which an Illinois company would pay a $400,000 penalty to settle charges related to defective play yards. Any interested person may ask the CPSC not to accept this agreement or otherwise comment on its contents within 15 days after its publication in the Federal Register.

The CPSC states that the play yards at issue are defective because their side rail can fail to latch properly and can unlatch unexpectedly when a child pushes against it, posing a fall hazard to children. From about January 2000 through July 2009 the company received approximately 350 reports of the play yard collapsing, resulting in 21 injuries to young children. The company did not report that information to the CPSC until January 2009 and a recall of about one million play yards was finally conducted in July of that year.

Federal law requires manufacturers, distributors, and retailers to report to CPSC immediately (within 24 hours) after obtaining information reasonably supporting the conclusion that a product contains a defect which could create a substantial product hazard, creates an unreasonable risk of serious injury or death, or fails to comply with any consumer product safety rule or any other rule, regulation, standard or ban enforced by CPSC.

In agreeing to the settlement the company denies the CPSC’s allegations that its play yards contained a defect that could create a substantial product hazard, or that it knowingly violated the reporting requirements of the Consumer Product Safety Act. Pursuant to the CPSA, the CPSC must consider the appropriateness of the penalty in relation to the size of the business of the person charged, including how to address undue adverse economic impacts on small businesses. The company at hand is a small business as set forth in the Small Business Administration guidelines regarding size of business. 

APHIS Meeting to Explore Strategic Priorities, Budgetary Issues and Pending Program Restructuring

The Department of Agriculture’s Animal and Plant Health Inspection Service will hold a public meeting on April 11 to share information about the agency’s budget, pending program restructuring and potential impacts, and cross-agency strategic priorities. APHIS is seeking to continue to improve its business strategy and program delivery methods to enhance the agency’s overall effectiveness in the face of a number of new and evolving challenges, including decreasing budgets, fewer available resources, and the continued need to successfully balance science, policy and public opinion. The agency notes that it wants to engage its stakeholders in a dialog early in the process as it begins to consider new opportunities and rethink current business practices.

APHIS is especially interested in stakeholder perspectives regarding (i) public and private partnerships, such as disease management and eradication programs that benefit from state and industry contributions; (ii) non-regulatory solutions, such as compliance and education programs that can be used, when appropriate, to achieve results without the need for rulemaking; (iii) new technology that encourages commerce or enhances APHIS’ ability to protect American agriculture; and (iv) customer service improvements that make it easier for stakeholders to do business with APHIS.

APHIS will accept input on these and other related matters by May 13. 

New Section 337 Investigation on Certain Integrated Circuit Devices

The International Trade Commission has initiated a Section 337 investigation of certain integrated circuit devices and products containing the same made in Finland, South Korea and Taiwan. The scope of this proceeding includes mobile smartphones containing certain types of integrated circuits. The complainant alleges that the respondents have infringed certain U.S. patents and is requesting the ITC to issue exclusion and cease and desist orders on subject merchandise. 

State Dept. Seeks Input on Shrimp Exporter’s/Importer’s Declaration

The State Department is seeking comments by May 13 on the extension without change of the shrimp exporter’s/importer’s declaration (Form DS-2031). This information collection is necessary to document shrimp imports pursuant to the State Department’s implementation of Section 609 of Public Law 101-162, which prohibits the entry into the United States of shrimp harvested in ways that are harmful to sea turtles. Respondents are shrimp exporters and government officials in countries that export shrimp to the United States. The DS-2031 form is to be retained by the importer for a period of three years subsequent to entry, and during that time is to be made available to CBP or the State Department upon request. 

New Maritime Agreements Filed, Input Sought on Another Agreement

The Federal Maritime Commission has issued notice that the following new agreements has been filed. Interested parties may submit comments by March 25.

West Coast of South America Discussion Agreement – The amendment excludes Peru from the membership of four of the parties.

U.S. Pacific Coast-Oceania Agreement – The amendment (i) deletes A.P. Moller-Maersk A/S as a party to the agreement; (ii) adjusts the vessel provision and allocation provision of the agreement; (iii) adjusts the scope of the two service strings operated under the agreement; (iv) adjusts the maximum size of the vessels which can be deployed by the parties; and (v) restates the agreement.

MSC/CSAV Ecuador – North Europe Vessel Sharing Agreement – The agreement authorizes CSAV and MSC to cross-charter space to each other in the trade from ports in North Europe to ports on the U.S. East Coast on the one hand, and from ports on the U.S. East Coast to Panama and Ecuador on the other hand.

The FMC has also formally requested that the parties to the below listed agreement provide additional information by March 28.

Consolidated Chassis Management Pool Agreement – The Ocean Carrier Equipment Management Association and its member lines; the Association’s subsidiary Consolidated Chassis Management LLC and its affiliates; CCM Holdings LLC; CCM Pools LLC and its subsidiaries; Matson Navigation Co.; and Westwood Shipping Lines. 

Ex-Im Bank Asked to Finance Exports of Commercial Aircraft

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 commercial aircraft to the Philippines. These aircraft will be used for long-haul passenger air service between the Philippines and destinations in Asia, Canada and other routes. Comments on this application are due no later than April 8. 

Foreign Regulatory Changes Could Affect Exports of Various Products

According to the National Institute of Standards and Technology, the WTO 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 – register of medical technology producers and products – procedures for registration applications

Argentina – approval of draft resolution amending Chapter XV, Article 1194, of the Argentine Food Code

Chile – draft technical regulation relating to the Food Health Regulations, Supreme Decree No. 977/96 (comments due by April 21)

Chile – draft regulation establishing national quality specifications for Grade B diesel (comments due by April 1)

China – interim provisions on regulating the registration of repackaged IVD products and notice regarding the issuance of classification sub-catalog of IVD products (comments due by May 11)

Colombia – draft resolution of the Ministry of the Environment and Sustainable Development prohibiting the manufacture in and importation into Colombia of household refrigerators, freezers and refrigerator/freezer combinations containing or requiring for their production or operation the hydrochlorofluorocarbons listed in Group I of Annex C to the Montreal Protocol

Costa Rica – technical regulations establishing labeling requirements for footwear and parts thereof when sold separately in the territory of Central American countries (comments due by May 1)

France – order approving certain provisions supplementing and amending the safety regulations governing fire and panic hazards in buildings open to the public (comments due by April 30)

France – draft order implementing Article L. 5232-1 of the Public Health Code relating to personal stereos (April 30)

Guatemala and Honduras – technical regulations establishing labeling requirements for footwear and parts thereof when sold separately in the territory of Central American countries (comments due by April 25)

Lithuania – order of the Minister of Environment on the list of construction products subject to regulation

Mexico – implementation of amendment to Mexican Official Standard NOM-005-SCFI-2011 establishing specifications and test and verification methods for systems for measuring and dispensing petrol and other liquid fuels

Mexico – draft Mexican Official Standard PROY-NOM-163-SEMARNAT-ENER-SCFI-2012 on carbon dioxide emissions for new light-duty vehicles (comments due by April 22)

Nicaragua – partial amendment of Nicaraguan Mandatory Technical Standard No. 03 023-12 Second Revision on slaughtered, ready-to-cook chickens (raw), whole or cut in pieces, and chicken offal

Saudi Arabia – draft technical regulations for barley malt, fried potato, food packages (Part 2: plastic package – general requirements), black tea, sunflower seeds, coriander whole or ground, dates syrup (dibs altamr), pumpkin seeds (white pulp), frozen liver, maamol and chilled marinated meats (comments for food packages were due by March 8; comments for all other products are due by May 8)

Saudi Arabia – GCC draft technical regulations for general requirements for bakery products

Uganda – final draft standards for fortified food grade salt, fortified edible oils and fats, fortified sugar, fresh sweet potatoes and dried sweet potato chips (comments due by May 5, May 6 or May 8, depending on the product) 

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