International Trade Law News
June 26, 2004
Lockheed Martin Terminates Merger Agreement With The Titan Corporation
Lockheed Martin Corporation announced on June 26, 2004 that it has terminated the merger agreement with The Titan Corporation (Titan) because Titan did not satisfy all the closing conditions on or before the June 25, 2004 deadline specified in the amended merger agreement.
Under the terms of the amended merger agreement, either party could terminate the merger agreement if Titan either (i) had not obtained written confirmation from the Department of Justice that the investigation of alleged Foreign Corrupt Practices Act (FCPA) violations was resolved as to Titan and the Department did not intend to pursue any claims against Titan; or (ii) Titan had not entered into a plea agreement on or prior to June 25, 2004, provided that the terminating party had not contributed to the failure to consummate the merger through a breach of its obligations in any material respect. Titan did not satisfy either requirement.
The original merger agreement was entered into on September 15, 2003 and was amended twice to provide additional time for Titan to resolve FCPA concerns with the U.S. Government. Lockheed Martin declined Titan's request for a further extension.
June 25, 2004
U.S. Closer to Passing Equipment Financing Treaty
The Convention on International Interests in Mobile Equipment, also known as the Cape Town Treaty, is moving closer to being ratified by the United States. The treaty, negotiated in Cape Town, South Africa, in 2001, establishes an international legal framework intended to reduce the risk assumed by creditors in financing purchase and lease transactions for high-value transportation equipment.
The Senate Foreign Relations Committee approved the Cape Town Treaty on June 22, 2004 and on the same day the House of Representatives on the same day approved H.R. 4226, implementing legislation that would make technical changes to current law to make it consistent with the convention. For the treaty to become law, both chambers of Congress need to pass implementation legislation and the Senate must approve treaty's ratification.
Only technical changes to United States law and regulations are required since the asset-based financing and leasing concepts embodied in the Cape Town Treaty are already reflected in the United States in the Uniform Commercial Code.
The treaty, which went into force on April 1, 2004, applies to equipment only in conjunction with type-specific protocols. For example, the aircraft protocol, which covers aircraft, aircraft engines and helicopters, is expected to come into force late in 2004. Protocols on railroad and space equipment are in different stages of negotiations.
Senate Passes African Growth and Opportunity Act
By a voice vote, the Senate yesterday passed H.R. 4103, legislation that would renew The African Growth and Opportunity Act (AGOA) until 2015. The measure, identical to the bill that passed the House of Representatives on June 14, 2004, is expected to soon be signed into law by President Bush.
The Act's main provision lets sub-Saharan African nations to sell to the United States, duty-free, textiles that are made from yarn and fabrics coming from third countries. That provision was set to expire on September 30, 2004 and was extended for three years.
Thirty seven of the 48 countries of sub-Saharan Africa qualify for the AGOA's benefits. In December 2003, the Bush Administration added Angola to the list of eligible countries, while removing the Central African Republic and Eritrea for failing to meet eligibility criteria.
The Office of the U.S. Trade Representative says imports covered by AGOA increased to $14 billion in 2003, a 55% increase from 2002.
June 24, 2004
Commerce Issues Preliminary Antidumping Determinations on Carbazole Violet Pigment 23
Today the Commerce Department published the preliminary results of the antidumping duty investigations on Carbazole Violet Pigment 23 from India and China in the Federal Register. In both cases, the products were found to sold at less than fair value and high preliminary dumping margins were imposed.
With respect to India, the weighted-average dumping margins are as follows:
Alpanil Industries Ltd............................................ 27.61%
Pidilite Industries Ltd........................................... 66.69%
All Others ....................................................... 45.06%
However, because the products from India are also subject to a concurrent
countervailing duty investigation, the actual amount of duties that must be posted will be decreased by the amount of the countervailing duty. Therefore, the cash deposit rates will be 9.70% for Alpanil, 47.68% for Pidilite and 27.14% for All Others.
The preliminary weighted-average dumping margins on Carbazole Violet Pigment 23 are as follows:
GoldLink Industries Co., Ltd............................... 76.50%
Nantong Haidi Chemical Co., Ltd............................ 124.71%
Trust Chem Co., Ltd........................................ 168.01%
Tianjin Hanchem Int'l Trading Co........................... 53.22%
PRC-Wide Rate.............................................. 370.06%
The preliminary antidumping determination on Carbozole Violet Pigment 23 from India can be viewed here.
The preliminary antidumping determination on Carbozole Violet Pigment 23 from China can be viewed here.
June 23, 2004
New International Maritime Security Regulations To Take Effect On July 1st
The pirate-infested waters flowing through the Strait of Malacca in Southeast Asia carry up to a quarter of the world’s annual maritime trade and nearly half of the oil shipments on which the East Asian economies sorely depend. If a cargo freighter was to unexpectedly sink as a result of a bomb being placed in a shipping container, the resulting impact on global trade could be devastating, particularly in this era of just-in-time delivery. This is to say nothing of the danger posed by a hijacked vessel being used as a floating missile to crash into a major U.S. port or oil refinery.
In light of the increased threat posed to global shipping and trade by such acts of terrorism, the United States Coast Guard has spearheaded an international effort to codify and standardize a comprehensive and consistent approach to international maritime security. After a year of intensive negotiation and searching for the most practical solutions, the Intersessional Working Group of the Maritime Safety Committee of the International Maritime Organization (IMO) unveiled the International Ship and Port Facility Security Code (ISPS Code) in December 2002. The goals of the ISPS Code are to enable the detection and prevention of maritime shipping threats within an international framework by combining flexible, multi-national best practices with standard international requirements. The ISPS Code, now recognized as the only internationally accepted blueprint for maritime security infrastructure, will go into effect on July 1, 2004.
The ISPS Code is in large part the result of legislation passed by the U.S. Congress in the aftermath of the events of September 11, 2001. The Maritime Transportation Security Act of 2002 (MTSA) (Public Law 107-295, 116 STAT. 2064) required the Secretary of the Department of Homeland Security to assess the security measures in place at foreign ports that are served by vessels that also call upon the U.S. States and to see that measures are implemented at such ports to deter terrorism and to safeguard international shipping.
In order to implement this Congressional mandate, the Coast Guard developed the International Port Security Program (IPSP), to encourage bilateral and multilateral discussions with trading nations around the world in an effort to exchange information and share best practices that align implementation requirements of the MTSA with the ISPS Code and other international maritime security standards. During the past year, members of the Coast Guard visited various nations that export goods to the U.S. by vessel in order to share ideas and information on how best to construct and implement the ISPS Code. International Port Security Program Liaison Officers were established to facilitate close cooperation with foreign governments. The Coast Guard plans to visit many more foreign ports in the future in order to review and assess port security measures.
By July 1, 2004, all shipping companies must have a designated company security officer for the company and a security officer for each ship in its fleet. The security officers are responsible for the performance of the Ship Security Assessment and the approval of the Ship Security Plans. All ships must carry an International Ship Security Certificate indicating ISPS Code compliance. Port facilities carry similar responsibilities in ensuring the completion of the Port Facility Security Assessment, which determines whether a port security officer and security plan is needed. Ships are subject to port security inspections and requests for information regarding cargo and passengers. Entry into a port can be denied under certain circumstances, resulting in adverse financial consequences to shipping companies and importers.
Recently, Department of Homeland Security Secretary Ridge announced that the United States was in compliance with the ISPS Code. The U.S. implementation strategy includes screening containers, using tamper-proof containers, requiring complete cargo manifests to be provided 24 hours before sailing and installing silent alarms on ships. Vessels must also provide 96 hours advance notice to the Coast Guard before entering a U.S. port. Additional measures that will take effect after July 1, 2004 include the offshore boarding of vessels that pose a higher security risk. The determination as to which vessels to board will be based on the cargo, size of the ship, voyage, security history and special intelligence. All vessels will be boarded on their first visit to the U.S. after July 1, 2004 in order to ensure they adhere to the ISPS Code. Large scale gamma and X-ray technologies will be deployed as well.
With less than two weeks to go before the July 1compliance deadline, the IMO reports that 83.6% of gross tonnage and 67.4% of cargo ships are already registered or in compliance with the ISPS Code.
More information on the ISPS Code and the IPSP can be found at the following Web sites: www.imo.org/home.asp, www.dhs.gov/dhspublic/ and www.uscg.mil/hq/g-m/mp/mtsa.shtml.
June 22, 2004
Juster Confirms "Dramatic and Continuing Increase" In Exports of High-Tech and Dual-Use Items to India
Speaking today at the India-United States Conference on Space Science, Applications and Commerce in Bangalore, India, Under Secretary of Commerce Kenneth Juster said the easing of trade sanctions on India and the establishment of a high-technology cooperation group have led to "a dramatic and continuing increase" in the number of exports of high-technology and dual-use items to India.
Juster attributed this increase to two major recent events. First, as a result of the removal of the U.S. sanctions imposed on India in 1998 as a response to India's nuclear testing "only a very small percentage of our total trade with India is even subject to controls. The vast majority of dual-use items simply do not require a license for shipment to India." The second important event was the creation of the U.S.-India High Technology Cooperation Group in November 2002, a group that has provided a standing framework for discussing high-technology issues of mutual concern.
Juster stated that recent trade statistics with regard to dual-use items "clearly demonstrate" the steps that the U.S. Government has taken to grant India, including the Indian Space Research Organization (ISRO), expanded access to U.S. technology.
For example, he stated that in fiscal year 2002, the U.S. Government approved 423 license applications for dual-use exports to India, valued at almost $27 million. By contrast, in fiscal year 2003 -- after the High Technology Cooperation Group was established -- the U.S. approved 90% of all dual-use licensing applications for India, with the value of such approvals more than doubling to $57 million.
Juster noted that this trend has continued through the first half of fiscal year 2004. For the first half of fiscal year 2004, the U.S. approved license applications involving almost $51 million of dual-use items, which represents a year-on-year increase of nearly 80%.
Juster indicated that these same trends are occurring with regard to U.S. licensing decisions for sophisticated exports to ISRO and its subordinate entities. For example, he said that during the last year and a half, the number of licensing decisions for ISRO and its subordinates increased by 75%, with the license approval rate now running at approximately 93%, an approval rate that is even higher than for dual-use exports in general. In addition, he noted that the total value of the ISRO license approvals has risen by 55% since fiscal year 2002 to an annualized value of over $14 million for fiscal year 2004.
Finally, Juster announced that the Bush administration had recently approved a license authorizing Boeing Satellite Systems to "engage in discussions and share data with" the Indian Space Research Organization on the division of responsibilities for possible joint cooperation in the development and marketing of communication satellites.
Report Examines Current State of U.S. Steel Sector
A briefing paper issued today by the Cato Institute's Center for Trade Policy Studies examines the current state of the U.S. steel industry following the December 2003 lifting of the section 201 quotas on imported steel products. The briefing paper concludes that many U.S. steel producers are earning record profits due to very high steel prices. However, the report also notes that such high steel prices have led to many other problems, and many domestic steel-consuming industries are facing large losses due to high raw material costs.
The report states that policymakers should move to mitigate the adverse consequences of restrictions on trade and endeavor to restore greater competition to the U.S. steel market before skyrocketing steel prices damage the U.S. economy. Specifically, the report advocates that the President, through the Secretary of Commerce, should exercise his authority to undertake "changed circumstances" reviews of all outstanding antidumping and countervailing duty orders on steel products and should terminate those orders that no longer make sense. The report also advocates the lifting, even on a temporary basis, of some of the 188 antidumping and countervailing duty orders now in effect in order to alleviate some of the burden on U.S. companies that use steel to manufacture their products.
The report can be viewed at the following Web site: www.freetrade.org/pubs/briefs/tbp-020es.html
