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March 19 2013 Issue

Tuesday, March 19, 2013
Sandler, Travis & Rosenberg Trade Report

New Foreign Trade Regs Include Changes to Post-Departure Filing, Exclusions, Exemptions

The Census Bureau has posted on its Global Reach blog the following information identifying highlights of a recent final rule revising the export reporting requirements in the Foreign Trade Regulations.

Post-departure filing. The post-departure filing timeframe has changed from 10 calendar days to five, but the moratorium on accepting new applications for post-departure filing is still in place.

Household goods. This term now refers to usual and reasonable kinds and quantities of personal property necessary and appropriate for use by the U.S. principal party in interest in the USPPI’s dwelling in a foreign country that are shipped under a bill of lading or an air waybill and are not intended for sale. As such, the household goods export code can only be used for shipments in which the USPPI is the ultimate consignee.

Vehicles. Exports of used self-propelled vehicles must be filed in the Automated Export System 72 hours prior to export regardless of value or country of destination.

Port of export. The port of export for shipments by overland transportation is where the goods cross the U.S. border into Canada or Mexico, including transshipments through Canada or Mexico to other countries.

Split shipment. This term now refers to a shipment booked for export that is divided by the carrier into more than one conveyance and sent on two or more conveyances of the same carrier from the same port within 24 hours. This provision now applies to all modes of transportation, not just air.

Exclusions. AES filing is not required for licensed goods where the country of ultimate destination is the U.S. or for goods destined to international waters where the person(s) or entity assuming control of the item(s) is a U.S. citizen or permanent resident alien of the United States. The exclusion legend is required to be reported on the bill of lading, air waybill, export shipping instructions or other commercial loading documents.

Exemptions. The following exemptions have been added: (a) exports of technical data and defense service exemptions as defined in 22 CFR 123.22 (b)(3)(iii) are exempt from the EEI filing requirements, (b) reporting vessels, aircraft, cargo vans, and other carriers and containers when shipping as tools of international trade, (c) shipments to Army Post Office, Diplomatic Post Office or Fleet Post Office, (d) shipments exported under license exception BAG, and (e) specific types of shipments destined for a country deemed to support acts of international terrorism (i.e., Cuba, Iran, North Korea, Sudan and Syria).

The following exemptions have been removed: (a) temporary shipments of goods valued over $2,500 per Schedule B number or that fall under 30.2(a)(1)(iv) must be filed in AES (when reporting temporary exports the appropriate export information code for temporary goods, such as “TE” export intended for return and “TP” domestic merchandise, should be reported); and (b) in-bond (in-transit) shipments, which is covered under the current exclusion (30.2(d)(1)).

International waters. This term now refers to waters located outside the U.S. territorial sea, which extends 12 nautical miles measured from the baselines of the United States, and outside the territory of any foreign country, including the territorial water thereof. Vessels, platforms, buoys, undersea systems and other similar structures that are located in international waters but are attached permanently or temporarily to a country’s continental shelf are considered to be within the territory of that country.

For licensed shipments to international waters, the person designated on the export license must be reported as the ultimate consignee.

For Bureau of Industry and Security license exceptions and non-licensed shipments to international waters, the filer will be required to report the nationality of the person(s) or entity assuming control of the item(s) subject to the EAR.

Data elements. Two data elements were added: (a) license value (report the value indicated on the license), and (b) ultimate consignee (four types: direct consumer, government entity, reseller, and other/unknown).

White House Invites Input on Federal Laws on Economic Espionage and Trade Secret Theft

As part of its strategy released Feb. 20 for mitigating the theft of U.S. trade secrets, the White House is reviewing existing laws related to enforcement against economic espionage and trade secret theft. The U.S. Intellectual Property Enforcement Coordinator is therefore soliciting through April 22 recommendations for legislative changes that may be needed to enhance enforcement against, or reduce the risk of, the misappropriation of trade secrets for the benefit of foreign competitors or foreign governments. All comments should be submitted electronically using docket number IPEC-2013-XXXX and the term “Trade Secret Theft Strategy Legislative Review.”

Cote d’Ivoire Now Eligible for AGOA Textile and Apparel Benefits

The Office of the U.S. Trade Representative has determined that Cote d’Ivoire has adopted an effective visa system and related procedures to prevent the unlawful transshipment of textile and apparel articles and the use of counterfeit documents in connection with the shipment of such articles. This country has also implemented and follows, or is making substantial progress toward implementing and following, the customs procedures required by the African Growth and Opportunity Act to assist U.S. Customs and Border Protection in verifying the origin of textile and apparel products.

As a result, effective with respect to articles entered or withdrawn from warehouse for consumption on or after March 19, imports of eligible products from Cote d’Ivoire qualify for the textile and apparel benefits provided for under AGOA. Importers claiming such treatment should ensure that their entries meet the applicable visa requirements. 

BIS Allows Deemed Exports to Certain Foreign Nationals Residing in Canada

The Bureau of Industry and Security has issued an advisory opinion on licensing requirements in the Export Administration Regulations for deemed reexports to third-country national and certain dual national (Canadian citizens with second citizenships acquired later in time) regular employees residing in Canada with a Canadian employment history that includes a positive security assessment under the Canadian government’s Controlled Goods Program’s Enhanced Security Strategy. Based on the facts presented, BIS has deemed such individuals to be Canadian nationals for purposes of Section 734.2(b)(5) of the EAR. As a result, technology or source code subject to the EAR may be released to these foreign nationals.

Under Section 126.18 of the International Traffic in Arms Regulations, a foreign employer who is itself an authorized consignee or end-user may allow a dual or third-country national who is a bona fide regular employee to have access to unclassified defense articles (including technical data) without prior written approval if the employer (a) has in place a process to screen its employees for substantive contacts with restricted or prohibited countries and to have its employees execute a non-disclosure agreement providing assurances that they will not transfer any defense articles to persons or entities unless specifically authorized by the employer, and (b) determines through that process that the employee does not have substantive contacts with a restricted or prohibited country. The petitioner noted that, based on public statements by U.S . and Canadian government officials, a Canadian company registered under the CGP can meet this screening requirement if a regular employee residing in Canada receives a positive security assessment evaluation through the ESS. 

AD/CV Duty Orders on Corrosion-Resistant Steel from Germany and Korea Revoked

The International Trade Administration has revoked the antidumping duty order on corrosion-resistant carbon steel flat products from Germany and the antidumping and countervailing duty orders on such merchandise from Korea, effective Feb. 14, 2012. In its most recent sunset review of these orders the ITA determined that revocation would be likely to lead to the continuation or recurrence of dumping and countervailable subsidies, but the International Trade Commission subsequently determined that revocation would not be likely to lead to the continuation or recurrence of material injury to an industry in the U.S.

The ITA will notify U.S. Customs and Border Protection within 15 days to terminate the suspension of liquidation and discontinue the collection of AD/CV cash deposits on entries of subject merchandise that were entered or withdrawn from warehouse on or after Feb. 14, 2012. The ITA will further instruct CBP to refund with interest all cash deposits on entries made on or after that date. Entries of subject merchandise prior to this date will continue to be subject to suspension of liquidation and AD/CV duty deposit requirements and assessments. The ITA will complete any pending or requested administrative reviews of these orders covering entries prior to Feb. 14, 2012.

The products that were subject to these orders included flat-rolled carbon steel products, of rectangular shape, either clad, plated or coated with corrosion-resistant metals such as zinc, aluminum or zinc-, aluminum-, nickel- or iron-based alloys, whether or not corrugated or painted, varnished or coated with plastics or other nonmetallic substances in addition to the metallic coating, in coils (whether or not in successively superimposed layers) and of a width of 0.5 inch or greater, or in straight lengths that, if of a thickness less than 4.75 mm, are of a width of 0.5 inch or greater and that measures at least 10 times the thickness, or if of a thickness of 4.75 mm or more, are of a width which exceeds 150 mm and measures at least twice the thickness.

Subject products were classified under HTSUS 7210.30.0030, 7210.30.0060, 7210.41.0000, 7210.49.0030, 7210.49.0090, 7210.61.0000, 7210.69.0000, 7210.70.6030, 7210.70.6060, 7210.70.6090, 7210.90.1000, 7210.90.6000, 7210.90.9000, 7212.20.0000, 7212.30.1030, 7212.30.1090, 7212.30.3000, 7212.30.5000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7212.60.0000, 7215.90.1000, 7215.90.3000, 7215.90.5000, 7217.20.1500, 7217.30.1530, 7217.30.1560, 7217.90.1000, 7217.90.5030, 7217.90.5060 and 7217.90.5090. 

CBP Deactivates Six New York Port Codes

U.S. Customs and Border Protection has announced that effective March 18 New York port codes 4770, 4775, 4776, 4777, 4779 and 4755 are formally in inactive status. As a result, no CBP transactions, including export, import, report or other transaction types or activity, may be performed using these codes.

ITC Considers Potential Effects of Barring Imports of Infringing Wireless Devices

The International Trade Commission has extended through May 31 the target date for completing patent infringement investigation 337-TA-794 of certain electronic devices, including wireless communication devices, portable music and data processing devices, and tablet computers.

The ITC is also seeking additional information on the potential effect on the public interest if it were to order remedies against articles alleged by complainants Samsung Electronics Co. Ltd. and Samsung Telecommunications America LLC to be infringing the patents at issue. As a result, parties to the investigation, interested government agencies, the Office of Unfair Import Investigations and any other interested persons are encouraged to file by April 3 written submissions on the following issues.

- how remedial orders barring the entry and further distribution of the allegedly infringing articles would affect the public interest, particularly (a) the percentage of the total number of imported mobile telephone handsets that would be affected by such orders, (b) the percentage of the total number of imported cellular-network-enabled tablets that would be affected by such orders, and (c) the qualitative impact of the exclusion of such handsets and tablets

- what third, fourth and later generation products (if any) are currently available in the U.S. market that are authorized by Samsung to utilize the technology covered by the asserted patent claims and whether these products are, and are widely viewed to be, acceptable substitutes for the accused products

- in what ways, if any, a remedy with respect to infringement of one patent should be specifically tailored to avoid harm to the public interest 

New Requirement to Report Weekly Export Sales of Pork

The Department of Agriculture has issued a final rule that, effective March 19, will require all exporters of U.S. pork to report to USDA’s Foreign Agricultural Service their weekly export sales of fresh, chilled or frozen muscle cuts of pork, whether or not boxed. This rule does not implement a June 2012 proposal to also require reports of weekly export sales of distillers dried grain in light of concerns about the potential negative impact of such a change on the domestic DDG market. Instead, USDA has provided through April 18 an additional comment period on this issue.

Ex-Im Bank Asked to Finance Aircraft Exports to China

The Export-Import Bank of the United States has received an application for final commitment for a long-term loan or financial guarantee that would support the export of U.S.-manufactured Boeing 777 aircraft to China. These aircraft would be used to provide long-haul airline service between China and various international destinations. Comments on this application are due no later than April 12.

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