International Trade Law News

U.S. Customs and Border Protection's Customs Rulings Online Search System (CROSS) was updated on October 26, 2004 with 220 ruling letters, bringing the total number of searchable rulings to 117,573. CROSS contains ruling letters on a number of customs-related issues, including classification, valuation and country-of-origin marking. The CROSS database can be found at the following link: rulings.customs.gov.

The U.S. Department of Commerce's Bureau of Industry and Security (BIS) today announced the settlement of two enforcement cases involving illegal exports.

In the first case, OSPECA Logistics Management, a Brownsville, Texas-based freight-forwarder and customs brokerage, agreed to pay a $60,000 civil penalty to settle charges that it exported certain chemicals that can be used as chemical weapons precursors to Mexico in violation of the Export Administration Regulations (EAR). BIS charged that, between November 30, 2001 and February 11, 2002, OSPECA exported 12 shipments of hydrogen fluoride to Mexico without the required Department of Commerce licenses in violation of the EAR. BIS also charged OSPECA with making false statements on Automated Export System (AES) records for the same 12 exports. Hydrogen fluoride is controlled under the EAR for chemical weapons reasons. As part of the settlement agreement, BIS agreed to suspend $15,000 of the penalty for a period of one year and waive that amount as long as OSPECA does not commit any further violations during the settlement period. BIS will also requires OSPECA to conduct an internal export compliance audit and submit the results of that audit to BIS for review. Honeywell International Incorporated, of Louisiana, had previously entered into a separate settlement agreement with BIS for its role in these unlicensed exports.

BIS also announced that Symmetricom, Inc., a San Jose, California-based supplier of network synchronization and timing products, agreed to pay a $35,500 civil penalty to settle charges that Datum, Inc., a company acquired by Symmetricom in 2002, exported cesium frequency standard equipment and an ovenized quartz crystal oscillator to Malayisa in violation of the EAR. Cesium frequency standard equipment is controlled by BIS for national security reasons and all exports of such items to Malaysia require Department of Commerce licenses. BIS also charged that Datum made a false statement on a Shipper’s Export Declaration (SED) in connection with this export. In addition, BIS alleged that, in May 1999, Datum exported an ovenized quartz crystal oscillator to an organization in India on BIS’s Entity List without the required Department of Commerce license. In addition, BIS charged that Datum forwarded the oscillator with knowledge that a violation of the EAR would occur and made a false statement on a SED.

The Government of Turkey has unveiled the design of the country's new currency two months before it goes into circulation. Starting on January 1, 2005, Turkey will remove six zeros from the current Turkish Lira (TL). As a result, one New Turkish Lira (Yeni Turk Lirasi or YTL) will be equal to one million TL. In addition, one YTL will be equal to 100 kurus (pronounced koo-roosh). The kurus disappeared from circulation in Turkey more than two decades ago. The YTL and the current TL will be in joint circulation during 2005 with the TL being phased out of circulation by the end of 2005.

The elimination of six zeros from the Turkish Lira comes as Turkey is beginning to rein in decades of chronic inflation that pushed the TL from 1.5 TL per U.S. dollar in the 1940s to 1,500,000 TL per U.S. dollar today. The annual inflation rate in Turkey, which exceeded 100% in the mid-1990s, now stands at 10%.

The YTL banknotes that will enter circulation will be in denominations of 1, 5, 10 and 2O YTL, which correspond to the current 1 million, 5 million, 10 million and 20 million notes, and will be almost identical in design to the current notes. There will also be two new banknotes: 50 YTL and 100 YTL, which, as is the case with the other notes, will carry portraits of Turkey's founding father Mustafa Kemal Ataturk on the front and pictures of Turkey's cultural and natural heritage on the reverse.

The largest coin denomination will be 1 YTL, while the smallest coin will be 1 kurus. The new coins will all have a crescent and a star -- the symbol on the Turkish flag -- on the front with a portrait of Ataturk on the back. Photos of the YTL notes and coins can be viewed at the Central Bank of Turkey's web site at the following link: www.tcmb.gov.tr/ytlkampanya/ytlbanknotlar.php (click the images to enlarge them).

The U.S. Trade and Development Agency (USTDA), along with the U.S. Commercial Service and the Mexican Trade Council (COMCE), will sponsor four one-day symposia on U.S.-Mexican supply-chain security and management. The events will be held in four different cities in Mexico later this year and in early 2005.

The symposium series is intended to bring together supply-chain decision-makers across the U.S.-Mexican border in an effort to improve supply chain security and integration. According to the USTDA, "the symposium series will focus on modernizing supply chains throughout the region and the benefits that will result from securing the avenues of international trade." In addition, "each symposium will outline solutions for successfully managing new import and export requirements, and present methods for achieving a higher level of security without disrupting trade."

Over 600 Mexican companies will be invited to participate in the symposia along with leading U.S. companies. Other organizations, such as the Customs-Trade Partnership Against Terrorism (C-TPAT) and the Business Anti-Smuggling Coalition (BASC), are also scheduled to attend.

The symposia are scheduled to take place as follows:

Tuesday, November 30, 2004: Mexico City, Mexico
Thursday, December 2nd, 2004: Monterrey, Mexico
Tuesday, January 25, 2005: Guadalajara, Mexico, and
Thursday, January 27, 2005: Tijuana, Mexico

Further information about these programs can be found at www.mexicotradesecurity.com.

The U.S. Treasury Department's Office of Foreign Assets Control (OFAC) today added serCUBA.com (www.sercuba.com) to its list of Specially Designated Nationals (SDN List). SerCuba.com is an online service that permits persons located abroad to remit U.S. dollars to persons in Cuba. SerCUBA has a call center in Havana and sixteen offices located in Cuba, along with two offices abroad -- one in Italy and one in Spain. The entity is organized under Cuban laws and is supported by Cimex, a Specially Designated National of Cuba.

As a result of OFAC's action, persons subject to U.S. jurisdiction may not engage in any transactions with serCUBA unless authorized by OFAC. In addition, all property of serCUBA that is in the possession of persons subject to U.S. jurisdiction is now blocked.

Scheduled Events at ITC for Week of October 25, 2004:

Monday: No events scheduled

Tuesday: No events scheduled.

Wednesday: No events scheduled.

Thursday: Commission Meeting and Vote:

Five-year (sunset) review: Natural Bristle Paintbrushes from China, Inv. No. 731-TA-244 (2nd Review)
1 p.m., October 28, 2004
Main Hearing Room, ITC Building (500 E Street SW)
Background: Federal Register notice; News Release (Commission's adequacy determination)

In a major steel industry development, Dutch steelmaker LNM Group announced today that it plans to merge its two main divisions, Ispat International NV and LNM Holdings NV, and will take over U.S.-based International Steel Group Inc. (ISG) in a deal that will make it one of the largest steel companies in the world. The combined company, which will be based in Rotterdam and called Mittal Steel Company NV, will have operations in 14 countries on four continents, generate revenue of more than $30 billion this year and employ 165,000 people. ISG was formed from the steel-making assets of some of America's best known steel companies, including LTV, Acme Steel, Bethlehem Steel and Weirton Steel.

The U.S. Committee for the Implementation of Textile Agreements ("CITA") has determined that the sock industry has been and continues to be "disrupted" as a result of imports of cotton, man-made fiber and wool socks from the People's Rebublic of China. Since 2001, sock imports from China have increased dramatically (from 985,619 pair in 2001 to 42,491,164 pair in 2004) and reduced U.S. producers' market share.

CITA has announced that it will seek consultations with China and, at the time of the request, impose quotas on imports of cotton, man-made fiber, and wool socks from China. The quotas will limit the growth of Chinese sock imports to 6% for wool socks and 7.5% for cotton and man-made fiber socks.

The consultations will be held within thirty days of the United States' request and should be concluded within ninety days. If the parties do not reach a mutually satisfactory agreement, the U.S. will maintain the quotas for a period of one-year from the date of the consultation requests.

The Treasury Department's Office of Foreign Assets Control (OFAC) has issued its second biennial report on the operation of the Trade Sanctions Reform Act (TSRA) during the period October 2002 through September 2004. The report notes that OFAC and the State Department have implemented specific measures in an effort to reduce license processing times from a high of 110 business days in the first quarter of 2003 to 27 business days in the third quarter of 2004. Despite this progress, OFAC still acknowledges that the "30-day extension of the nine-business day review period has become the rule rather than the exception as originally anticipated, and is taken for most cases."

OFAC's biennial TSRA report demonstrates the continued interest by U.S. exporters in obtaining TSRA licenses to export agricultural products, medicine and medical devices to embargoed countries. During the past two years, OFAC received 1480 license applications to export humanitarian products to Iran, Libya and Sudan (as of April 29, 2004, it is no longer necessary for exporters to obtain licenses under TSRA to export humanitarian products to Libya). The report indicates that between October 2002 and September 2004 OFAC received 731 license applications to export medical devices, 545 applications to export agricultural commodities and 204 applications to export medicines.

The report also states that 85 licenses were issued under the expedited review procedures for the export of agricultural commodities to authorized end-users that were implemented in 2003.

Finally, the report summarizes the comments that were submitted by the public concerning the effectiveness of the TSRA licensing procedures. The report notes that "OFAC will undertake a review of its licensing procedures to better meet the needs of license applicants" and that "all comments made will be considered in the process of this review."

The entire report can be viewed at the following site:
www.treas.gov/offices/enforcement/ofac/licensing/agmed/2ndbiennial.pdf

On October 21, 2004, the U.S. Department of Commerce (DOC) announced its preliminary determinations in the antidumping duty investigations on imports of bottle-grade polyethylene terephthalate (BG PET) resin from India, Indonesia, Taiwan and Thailand. DOC preliminarily found that Indian, Indonesian and Thai producers/exporters have sold subject merchandise from in the U.S. market at less than fair value, with margins ranging from 21.23 to 52.54% for India, 0.74 to 27.61% for Indonesia, and 26.03 to 41.28% for Thailand. DOC preliminarily found that Taiwanese producers/exporters have not sold subject merchandise in the U.S. market at less than fair value, as the preliminary margin for the sole respondent is de minimis.

The final determination in the investigation on Indonesian imports is scheduled to be announced in January 2005 and the final determinations the investigations on imports from India, Taiwan and Thailand will be announced in March 2005.

The merchandise covered by each of these investigations is BG PET resin. BG PET resin is commonly used to manufacture bottles, sheet, and strapping, whose applications include packaging for consumer goods such as soft drinks, water, juice, fresh fruit, as well as cosmetics and household cleaners. The merchandise subject to these investigations is classified under subheading 3907.60.0010 of the Harmonized Tariff Schedule of the United States (HTSUS). However, merchandise classified under HTSUS subheading 3907.60.0050 that otherwise meets the written description of the scope is also subject to these investigations.

The petition requesting these investigations was filed on March 24, 2004, by the United States PET Resin Producers Coalition, an ad hoc association of domestic producers of BG PET resin.

Washington State's Tri-City Herald newspaper contains a feature story on Congressman George Nethercutt (R-WA), who has been a leading figure in the effort to remove sanctions on the sale of humanitarian products to embargoed countries. The so-called "Nethercutt Amendment" led to the passage of the Trade Sanctions Reform and Export Enhancement Act of 2000 and allowed U.S. companies to sell food and agriculutural products to Cuba. Congressman Nethercutt is currently running for U.S. Senateagainst two-term incumbent Patty Murray. The article can be viewed at the following link: www.tri-cityherald.com/tch/local/story/5691103p-5624024c.html.

U.S. Court of International Trade (CIT) Chief Judge Restani has issued a recent opinion clarifying the duration of preliminary injunctions obtained by importers in order to stay liquidation of entries pending litigation in appeals of antidumping and countervailing duty proceedings. In Corus Staal BV v. United States, Slip Op. 04-132 (Oct. 19, 2004), Corus requested that the duration of an injunction issued by the CIT extend until all appeals have been exhausted. The U.S. Government argued that the duration of any injunction staying liquidation should only extend to the end of litigation in the CIT.

Judge Restani agreed with Corus and held that "given the recent difficulties in this court with liquidation in violation of court orders . . . it seems prudent to attempt to avoid creating any opportunities for error and to bar any liquidation until all litigation is complete." Judge Restani noted that while plaintiffs may seek an injunction pending an appeal "that would entail further use of attorney and judicial resources." Therefore, Judge Restani granted Corus' proposed order providing for an "injunction of liquidation until a final and conclusive court decision is reached."

The opinion can be found at the following link: www.cit.uscourts.gov/slip_op/Slip_op04/04-132.pdf.

Customs and Border Protection (CBP) has published the October edition of its modernization newsletter. The newsletter contains articles on the launch of e-manifest, CBP's automated truck manifest program, at the port of Blaine, Washington. The e-manifest program is part of the fourth phase of the CBP's Automated Commercial Environment (ACE). The newsletter also contains a profile of Louis Samenfink, the newly appointed executive director of CBP's Modernization Office. The newsletter can be found at the following link:
www.cbp.gov/linkhandler/cgov/toolbox/about/modernization/finalnews1004.ctt/finalnews_1004.pdf.

U.S. Customs and Border Protection (CBP) has announced that the agency's 5th annual Trade Symposium scheduled to be held on December 8-9, 2004 has been rescheduled to January 12-14, 2005. The event will be held at the Ronald Reagan Building and International Trade Center in Washington, DC.

The them of this year's symposium is "Security and Facilitation of Trade: The Way Forward." The event will include discussions between senior CBP managers and representatives of the international trade and transportation community. Panels for the symposium will include a Department of Homeland Security/Border and Transportation Security Executive roundtable, Trade Act of 2002 implementation, Bioterrorism Act of 2002, the Container Security Initiative (CSI), and the Automated Commercial Environment (ACE).

Registration for the symposium will open on November 1st and must be made online at www.cbp.gov. The registration fee is $150.

On August 18, 2004, President George W. Bush signed into law H.R. 4567, the FY 2005 Homeland Security Appropriations Act (HSAA), which provides $28.9 billion in net discretionary spending for the Department of Homeland Security (DHS). This is $1.8 billion more than the FY 2004 enacted level - reflecting a 6.6% increase in funding for the Department over the previous year. Including Project BioShield, mandatory and fee-funded programs, a total of $40.7 billion will be available to DHS in FY 2005.

The following is a summary of the major provisions included in the HSAA:

*Includes $419.2 million in new funding to enhance border and port security activities, including the expansion of pre-screening cargo containers in high-risk areas and the detection of individuals attempting to illegally enter the United States.

*Container Security Initiative (CSI) - Includes an increase of $25 million over the current program funding of $101 million to continue both Phases I and II, as well as to begin the final phase of CSI.

*The United States Visitor and Immigrant Status Indicator Technology (US -VISIT) program's first phase was deployed at 115 airports and 14 seaports. The HSAA provides $340 million in 2005, an increase of $12 million over the FY 2004 funding, to continue expansion of the US VISIT system.

*Includes $64.2 million for Customs and Border Protection (CBP) to enhance land-based detection and monitoring of movement between the ports. The act also includes $28 million for CBP to increase the flight hours of P-3 aircraft and $12.5 million for long range radar operations.

*Includes $80 million for the next generation of Radiation Detection Monitors to screen passengers and cargo coming into the United States.

*Includes an increase of $20.6 million for staffing and technology acquisition to support CBP's National Targeting Center, trend analysis and the Automated Targeting Systems to aid in identifying high-risk cargo and passengers.

*Provides increase of $15.2 million over current funding for the Customs Trade Partnership Against Terrorism (C-TPAT) program.

*Increases the U.S. Coast Guard's budget by 9 percent -- from $5.8 billion in FY 2004 to $6.3 billion in FY 2005. In addition to maintaining its ongoing mission, the budget provides over $100 million to support the implementation of the Maritime Transportation Security Act, which will increase the Coast Guard's ability to develop, review and approve vessel and port security plans, improve underwater detection capabilities and increase the intelligence program. The HSAA also provides for the Coast Guard's ongoing Integrated Deepwater System initiative, funding the program at $724 million, an increase of $56 million over the FY 2004 funding level.

The U.S. Department of Commerce's Bureau of Industry and Security today announced the settlement of two enforcement cases involving unlicensed exports to Iran.

In the first case, GE Ultrasound and Primary Care Diagnostics, LLC (GE Ultrasound), of Waukeasha, WI, agreed to pay a $32,000 civil fine to settle charges that Lunar Europe N.V. (Lunar Europe), a company acquired by GE Ultrasound, exported bone densitometer equipment to Iran in violation of the Export Administration Regulations (EAR).

BIS alleged that between May 20, 1998, and March 22, 2000, Lunar Europe exported bone densitometer equipment without prior authorization from the Office of Foreign Asset Control (OFAC) as required by the EAR. All of the unlicensed exports were committed by Lunar Europe prior to its acquisition by GE Ultrasound in 2000. This case is another applicationi by BIS of the doctrine of successor liability, whereby corporations may be held liable for violations of export control laws committed by businesses that they acquire.

In the second case, the U.S. Department of Commerce today announced that 3-G Mermet Corporation (3-G Mermet) of Cincinnati, Ohio, has agreed to pay a $17,500 civil penalty and implement an export management system to settle charges that it violated the EAR in connection with an attempted export to Iran through France. Specifically, BIS charged that on January 13, 2003 3-G Mermet attempted to ship interior window shade fabric through its parent company, Mermet S.A. of France, to Iran without obtaining an export license. BIS also charged that 3-G Mermet sold the interior window shade fabric with knowledge that its ultimate destination was Iran and that the required U.S. government authorization would not be obtained.

The U.S. maintains a comprehensive embargo on trade. Under the terms of the embargo, most exports to Iran are prohibited unless they are authorized in advance by OFAC. Generally, OFAC will only approve the sale to Iran of U.S. origin humanitarian products, such as medicine, medical devices , food and agricultural products The export of items to Iran without OFAC approval is a violation of the EAR and is subject to criminal penalties and administrative sanctions.

The U.S. International Trade Commission has scheduled the following events during the coming week (October 18-22, 2004):

Monday, October 18, 2004 at 11 a.m.: Vote on sunset reviews involving Certain Preserved Mushrooms from Chile, China, India, and Indonesia, Inv. Nos. 731-TA-776-779 (Review).

Tuesday, October 19, 2004: Release of report to USTR entitled"Certain Textile Articles: Effect of Modification of NAFTA Rules of Origin for Goods of Canada and Mexico (Inv. No. NAFTA-103-7) and Certain Textile Artilces: Effect of Modifications of NAFTA Rules of Origin for Goods of Canada (Inv. No. NAFTA 103-8)."

Thursday, October 21, 2004 at 2 p.m.: Preliminary injury determination vote in antidumping investigation on Polyvinyl Alcohol from Taiwan, Inv. No. 731-TA-1088 (Preliminary).

The U.S. Coast Guard has announced that U.S.-bound ships registered in Singapore will no longer be subject to the increased scrutiny introduced after the International Maritime Organization's (IMO) international port and ship security standards went into effect on July 1, 2004. Singapore-registered vessels have been targeted for boarding and additional scrutiny on arrival to the United States because of below-average compliance with the new standards. Also released from increased scrutiny are ships that have visited in their last five port calls Lebanon, Guinea, Mozambique and Nigeria.

The list of targeted flag countries can be found at: www.uscg.mil/hq/g-m/pscweb/FlagSecurity.htm.

The list of countries whose ports have not complied with the International Ship and Port Facility Security Code reporting requirements can be viewed at: www.uscg.mil/hq/g-m/pscweb/last_ports_of_call_isps.htm.

The U.S. Office of Foreign Assets Control (OFAC) today added the network of Jordanian terrorist Abu Musab al-Zarqawi to OFAC's list of Specially Designated Nationals (SDN List). See the following Reuters article for more information on this designation:
story.news.yahoo.com/news?tmpl=story&e=3&u=/nm/20041015/ts_nm/security_treasury_zarqawi_dc.

On October 14, 2004, the U.S. Census Bureau issued a report entitled "A Profile of U.S. Exporting Companies, 2001 - 2002." This report is the seventh in a series of reports profiling the U.S. exporting community. The report notes that in 2002 more than 223,000 U.S. companies exported goods valued at more than $600 billion from the U.S. The report indicates that more U.S. companies exported to Canada than any other country (92,814), followed by Mexico (38,807), the United Kingdom (37,648), Japan (27,213), and Germany (25,430). The top five U.S. export markets in 2002, based on total export value, were Canada, Mexico, Japan, the United Kingdom, and Germany. The top five export markets are unchanged since 1999. The top five exporting states based on total number of exporters in 2002 were California, Florida, New York, Texas and Illinois.

The full report and prior years’ reports can be downloaded from the Census Bureau’s Web
site at www.census.gov/foreign-trade/aip/index.html#profile.

U.S. Customs and Border Protection (CBP) has proposed changes to the layout of CBP Forms 7501 and 7501A, the entry summary and entry summary continuation sheet, and is requesting comments on the changes. The changes to the forms include the following:

1. Larger font size;
2. Block for broker filer code;
3. Block for other fee summary;
4. Block for total entered value;
5. Block for broker information.

As you will note, there are several typographical errors on the proposed form that need to be corrected (i.e., the word "ascertained" is not spelled correctly in certain places). Comments on the proposed Form 7501 and 7501A should be send to Mr. Bruce Coulliette at BRUCE.COULLIETTE@DHS.GOV by October 22, 2004.

The forms can be viewed at the following link: www.cbp.gov/xp/cgov/toolbox/forms/.

Today, October 13, 2004, Cambodia became the 148th member of the World Trade Organization (WTO). Although Cambodia's WTO membership agreement was approved at the Cancun Ministerial in September 2003, Cambodia's ratification of the agreement was delayed due to internal political issues. The Cambodian Parliament finally ratified the agreement in September 2004 and Cambodia became a member one month after it informed the WTO. Cambodia submitted its application to join the WTO in December 1994.

While a great deal of attention this past weekend was paid to final passage by Congress of the legislation terminating the Foreign Sales Corporation program, the U.S. House of Representatives on October 8, 2004 passed the conference report on H.R. 1047, the long-delayed Miscellaneous Trade and Technical Corrections Act of 2004, which makes a number of significant changes to U.S. trade laws. However, the conference report must be passed by the Senate when it returns from the election recess on November 17, 2004 in order in order to be enacted into law.

Most of the 299 page bill comprises hundreds of tariff suspensions on imports of chemicals and other products that are not produced domestically and traded in small volumes. Significantly, however, the bill contains language repealing the antidumping provision of the Revenue Act of 1916, which was deemed to be illegal by the World Trade Organization (WTO) in 2000. Language repealing the 1916 antidumping law was added to the conference report by the Conferees even though neither the House or Senate had passed such a provision in prior versions of the bill.

Although the antidumping law of 1916 law was never used until the 1990s, the European Union and Japan successfully argued that it allows U.S. private parties to seek damages from foreign prouducers for dumping that significantly exceed antidumping duties under current WTO rules. To date no plaintiff has ever collected damages under the 1916 antidumping law. However, in May 2004 a U.S. federal court upheld a jury verdict ordering a Japanese newspaper press manufacturer to pay its U.S. rival more than $30 million, triple the damages from dumping as calculated by the jury. That case is being appealed. The provision in the conference report to H.R. 1047 would repeal the 1916 antidumping law but would not overturn any case already decided or currently pending.

The Conference Report on the Miscellaneous Trade and Techical Corrections Act of 2004 also includes the following provisions:

--Grants permanent normal trade relations (NTR) to Armenia.

--Grants normal trade relations to Laos (Laos is one of only four countries and the only least-developed country to which the U.S. does not now extend NTR).

--Grants a large number of requests for reliquidation of entries for a number of products, ranging from subway cars to tomato sauce. The Conference Committee's joint explanatory statement noted the Conferees' "great concern" over the large number of requests for reliquidation of imported entries. While the Conferees accepted the proposed reliquidation requests, they noted that "in future legislation" Congress should "authorize reliquidation of import entries only when there is clear government error" . . . and that the "Conferees intend that the test for 'clear government error' for future reliquidations be strictly construed."

--Modifies provisions related to the making of drawback claims.

--Corrects a mistake in the Trade Act of 2002 that inadvertently raised duties on Andean handbags, luggage, flat goods, work gloves and leather wearing apparel under the Andean Trade Preferences Act (ATPA).

--Prohibits U.S. imports of archaeological, cultural and other rare items from Iraq to prevent illegal shipment of such antiquities.

--Requires U.S. Customs and Border Protection (CBP) to establish integrated border inspection areas along the U.S.-Canadian border so that U.S. customs officers could inspect vehicles before they entered the United States from Canada, and Canadian customs officials could inspect vehicles before they entered Canada from the United States.

The entire text of the conference report on H.R. 1047, as passed by the House on October 8th, can be found at the following link:
waysandmeans.house.gov/media/pdf/hr1047/HR1047confreptlegtext.pdf.

Last Wednesday, October 6, 2004, the European Commission issued a 186 page report examining Turkey's progress towards European Union accession. The European Commission found that in view of the overall progress of reforms attained and provided that Turkey brings into force certain outstanding legislation, the Commission considers that "Turkey sufficiently fulfils the political criteria and recommends that accession negotiations be opened. "

The Commission suggests a three pillar strategy to approach the negotiations: (1) strengthened cooperation to reinforce and support the reform process in Turkey; (2) negotiations adapted to the specific challenges related to Turkey's accession, and finally; and (3) a substantially strengthened political and cultural dialogue bringing people together from EU Member States and Turkey.

The European Commission's report on Turkey can be viewed at the following link:
www.americanturkishcouncil.org/files/reports/04.10.06.regular.report.on.turkey.progress.towards.accession.2004.pdf.

The National Summit on Cuba, cosponsored by the Alliance for Responsible Cuba Policy Foundation, Americans for Humanitarian Trade with Cuba, the Florida-Cuba Business Council and the World Policy Institute at New School University, was held today in Tampa, Florida.

More than 30 speakers made presentations during the Summit, including U.S. Senator Larry Craig (R-Idaho), U.S. Representatives William Delahunt (D-MA), Jeff Flake (R-AZ) and Butch Otter (R-ID), (Ret) General John Sheehan and Ambassador Pete Peterson.

Dr. Tim Lynch, director of the Center for Economic Forecasting and Analysis at Florida State University, indicated that free trade with Cuba could generate $50 billion and 900,000 jobs for the United States over a twenty year period. Lynch stated that Florida would stand to benefit more than any state for three reasons -- a historic linkage to Cuba, Florida's proximity to Cuba
and large and growing Hispanic population. According to Lynch, Florida's benefit from trade with Cuba over a period of 20 years would generate more than 100,000 jobs and $3.8 billion in output in the following sectors: services and tourism, agriculture, waterborne transport, information technology and telecommunications, railroads and manufacturing.

On October 6, 2004, Bill Reinsch, President of the National Foreign Trade Council and Co-Chair of USA*Engage, gave a speech to the Middle East Institute entitled "Why Sanctions Don't Work." The speech discusses the costs and ineffectiveness of unilateral sanctions and notes that during the last half of the 1990s, the U.S. put into place over 70 sanctions laws and executive orders on 35 countries. The complete text of the speech can be found at the following link:
www.usaengage.org/literature/2004/20041006%20mei%20sanctions%20speech%20Reinsch.html.

The U.S. Department of Commerce (DOC) today announced its final affirmative determination in the antidumping duty investigation on imports of hand trucks and certain parts thereof from the People's Republic of China. DOC determined that Chinese producers and/or exporters have sold hand trucks in the U.S. market at less than fair value, with margins ranging from 24.90 to 386.75%.

Based on the voluntary responses to the Department's Section A questionnaire submitted by certain Chinese companies in this investigation, the Department has determined that two companies, Qingdao Future Tool Inc. and Shandong Machinery Import & Export Group Corp., have demonstrated an absence of government control that is required to be eligible to receive "separate-rate" status. As a result, imports produced/exported by these companies will be subject to a dumping margin of 30.56%, the weighted-average of the mandatory respondents' individual margins.

The U.S. International Trade Commission (ITC) is scheduled to issue its final injury determination on or about November 22. If the ITC makes a final affirmative determination that such imports were materially injuring, or threaten to materially injure, the domestic industry, the Department will issue an antidumping order and instruct the U.S. Customs and Border Protection to collect cash deposits for antidumping duties at the specified rates.

The petition requesting this investigation was filed by Gleason Industrial Products, Inc. (Los Angeles, CA) and Precision Products, Inc. (Lincoln, IL) and covers hand trucks manufactured from any material, whether assembled or unassembled, complete or incomplete, suitable for any use, and specific parts thereof, namely the vertical frame, the handling area and the projecting edges or toe plate, and any combination thereof. The subject hand trucks are commonly referred to as a hand truck, convertible hand truck, appliance hand truck, cylinder hand truck, bag truck, dolly, or hand trolley and are classified in the Harmonized Tariff Schedule of the United States (HTSUS) under subheading 8716.80.50.10, although they may also be imported under subheading 8716.80.50.90.

Customs and Border Protection has issued an administrative message reminding the trade community that only licensed Customs Brokers may engage in "customs business" and giving those that are engaged in illegal activity 30 days to cease and desist. The entire notice is reprinted below:

ADMINISTRATIVE MESSAGE 04-2167 10/06/2004
TITLE: ABI-BROKER COMPLIANCE

CUSTOMS AND BORDER PROTECTION (CBP) ISSUES CUSTOMS BROKER LICENSES
TO PERSONS (I.E., INDIVIDUALS, PARTNERSHIPS, ASSOCIATIONS, AND
CORPORATIONS) WHO HAVE SUCCESSFULLY SATISFIED THE REGULATORY AND
STATUTORY REQUIREMENTS. RECENTLY, CBP HAS IDENTIFIED ACTIVITIES IN
THE BROKERAGE COMMUNITY THAT WARRANT IMMEDIATE CORRECTIVE ACTION.

A CUSTOMS BROKER LICENSE MAY NOT BE TRANSFERRED AMONG PERSONS.
FOR EXAMPLE, AN INDIVIDUALLY LICENSED CUSTOMS BROKER MAY NOT SOLICIT
AND/OR ENGAGE IN "CUSTOMS BUSINESS" AS A CORPORATE CUSTOMS BROKER
WITHOUT A CORPORATE CUSTOMS BROKER'S LICENSE.

UNLICENSED PERSONS MAY NOT USE A CUSTOMS BROKER'S FILER CODE, PERMIT
AND/OR LICENSE FOR THE PURPOSE OF SOLICITING AND/OR ENGAGING IN
"CUSTOMS BUSINES." [sic] FOR EXAMPLE, AN UNLICENSED FREIGHT FORWARDER
WHO EMPLOYS AND UTILIZES A CUSTOMS BROKER'S LICENSE, PERMIT, AND/OR
FILER CODE MAY NOT ENGAGE IN "CUSTOMS BUSINESS" OR PRESENT ITSELF AS A
CUSTOMS BROKER.

PURSUANT TO 19 U.S.C. 1641(B)(6), UNLICENSED PERSONS WHO TRANSACT
"CUSTOMS BUSINESS" WITHOUT HOLDING A VALID BROKER"S LICENSE ARE LIABLE
FOR A MONETARY PENALTY NOT TO EXCEED $10,000 FOR EACH SUCH TRANSACTION.
IN ADDITION, A LICENSED CUSTOMS BROKER WHO ALLOWS AN UNLICENSES PERSON
TO USE HIS OR HER CUSTOMS BROKER'S LICENSE OR FILER CODE FOR PURPOSES
OF ENGAGING IN "CUSTOMS BUSINESS" SUBJECTS THE CUSTOMS BROKER TO
MONETARY PENALTIES AND REFUSAL BY THE PORT DIRECTOR OF THE CUSTOM'S
BROKER'S USE OF HIS OR HER ASSIGNED ENTRY FILER CODE.

MEMBERS OF THE TRADE COMMUNITY (E.G., LICENSED AND UNLICENSED PERSONS)
WHO ARE ENGAGING IN THE ABOVE IDENTIFIED ILLEGAL ACTIVITIES HAVE 30DAYS
TO CEASE AND DESIST SUCH ACTIVITY. IF YOU HAVE ANY QUESTION PER THE
CONTENT OFOF THIS MESSAGE, CONTACT ALFRED S. MORAWSKI, CHIEF, BROKER
MANAGEMENT BRANCH AT(202) 344-2580.

On October 5, 2004, the Treasury Department published in the Federal Register its quarterly list of lcountries that may require participation in, or cooperation with, an international boycott, as defined by section 999(b)(3) of the Internal Revenue Code of 1986.

Treasury has advised that the following countries may require participation in, or cooperation with, an international boycott: Bahrain, Kuwait, Lebanon, Libya, Oman, Qatar, Saudi Arabia, Syria, United Arab Emirates and Republic of Yemen.

While Iraq was removed from the list of boycotting countries in mid-2003, given that Iraq's sovereignty has been restored and reports of boycott requests being included in Iraqi Government tenders it is possible that Iraq will be returned to this list in the future. Thus, all transactions with Iraq and the other countries named above should be carefully reviewed for prohibited boycott language.

The Treasury Department's notice can be viewed at the following link:
a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/04-22366.htm.

For a primer on dealing with boycott requests, see the following article that was published in the Export Practitioner: www.djacobsonlaw.com/documents/June02ExPrac.pdf.

Labels: Boycotts

The Miami Herald published an article on October 3, 2004 discussing the advocacy clauses that are frequently included in many contracts for the sale of food, medical and agricultural products to Cuba. This issue recently gained widespread attention after Sysco Corporation announced in August that it was rescinding an agreement it signed to sell food products to Cuba since the agreement contained an advocacy clause that violated company policy.

The article notes that Alimport, the Cuban Government's food-importing agency, has placed increased pressure on U.S. companies to be "more public" and "more forceful" about their opposition to U.S. policy on Cuba. The article indicates that representatives of Alimport have decreased purchases from U.S. companies whose commitment to a change in United States policy is suspect. The article names several members of Congress, state government officials and other organizations that have signed contracts with Alimport that contains advocacy clauses and includes examples of the specific advocacy clauses included in Alimport contracts.

The article can be viewed at the following link: www.cubanet.org/CNews/y04/oct04/04e6.htm.

On October 1, 2004, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) announced that Xinjian Yi and his daughter, Yu (Judy) Yi, of Wuhan, People’s Republic of China (PRC), have each been ordered to pay to a $22,000 civil penalty, the maximum fine for the two violations committed, and denied export privileges for 10 years for committing violations of the Export Administration Regulations (EAR).

The Treasury Department's Office of Foreign Assets Control (OFAC) today issued it monthly list of civil penalties imposed on companies and individuals for violating the sanctions regimes that are enforced by OFAC. The settlements include:

• A $58,944 penalty imposed by Fleet National Bank (on behalf of Bank of Boston and Sure Trade) for the 1995-2001 operation of Iran accounts and a 2000 funds transfer.
• Ebara International Corp., based in Sparks, Nevada, was fined $44,000 for facilitating trade with an Iranian entity in 2002 and 2003, attempting to export goods to Iran in 2002 and 2003 and "attempted evasion of the applicable regulations." (Ebara International recently agreed to a $121,000 civil penalty and a $6.3 million criminal finefor its role in illegal sales and exports of pumps to Iran).
• A $12,500 penalty was imposed on Medtronic MiniMed, Inc. for the exportation of goods to Yugoslavia in 1999 and 2000.
• Beau Rivage Resorts, Inc. of Biloxi, Mississippi was fined $5,625 for engaging in Cuba travel-related transactions.
  
• The law firm of Healy and Baillie LLP in New York was assessed a $1,000 penalty for "failing to respond to requirements to furnish information."
• An unamed individual was fined $33,000 for facilitating trade with an Iranian entity, attempting to export goods to Iran and attempted evasion of the applicable regulations (OFAC does not release the names of individuals that are assessed civil penalties).
  

On September 30, 2004 the U.S. Senate failed to pass an amendment to the intelligence reform bill (S.2845) that was introduced by Senator Lautenberg (D-NJ). The proposed amendment, which was tabled by a vote of 47 to 41, would have expanded the reach of U.S. trade and investment sanctions programs administered by the Treasury Department's Office of Foreign Assets Control (OFAC) to foreign subsidiaries or affiliates of U.S. companies, including any "controlled in fact" (defined as 50% ownership) permanent foreign establishments of U.S. companies.

This is the second time that the Senate has failed to pass this amendment. On May 19, 2004, Senator Lautenberg introduced the amendment in connection with consideration of the Fiscal Year Defense Authorization Act (S.2400) . The amendment failed to pass by a yea-nay vote of 49 to 50.

The text of the Lautenberg amendment to S.2845 can be found at the following link:
thomas.loc.gov/cgi-bin/query/F?r108:1:./temp/~r108R4X3Jd:e22205.

China New Era Group and China Xinshidai Company have issued a statement protesting the sanctions recently imposed on the companies by the United States for providing material and technical expertise to a country for use in programs capable of delivering weapons of mass destruction. The companies claim that the accusations are "totally groundless."

The complete text of the statement can be found at the following link: news.xinhuanet.com/english/2004-10/01/content_2043637.htm.

The chairman of the Indian Space Research Organization (ISRO) expects that India will double or triple the volume of imports of U.S. origin equipment for India's space-related projects as a result of the Bureau of Industry and Security's recently enacted changes to the Entity List. For more information see the article at the following link: news.newkerala.com/india-news/?action=fullnews&id=34132.

On September 30, 2004, the U.S. Department of Commerce's Bureau of Indutry and Security (BIS) announced the settlement of two cases involving violations of the antiboycott provisions of the Export Administration Regulations (EAR).

In the first case, St. Jude Medical Export GmbH, an Austrian subsidiary of a Minnesota-based U.S. exporter of medical equipment, agreed to pay a $30,000 civil penalty to settle charges that it violated the antiboycott provisions of the EAR by failing to report in a timely manner its receipt of three requests from an Iraqi government agency to adhere to the rules of the Israeli boycott during the 2000-2001 reporting period. BIS also charged that, on four occasions, St. Jude violated the antiboycott provisions by agreeing to refuse to do business with blacklisted persons.

In the second case, Arab Bank Plc., of New York, agreed to pay a $9,000 civil penalty to settle charges that it violated the antiboycott provisions of the Export Administration Regulations (EAR) by furnishing prohibited information about another company’s business relationships in connection with a transaction involving the sale of goods to Oman. BIS also charged that Arab Bank failed to maintain records relating to a reportable boycott request.

The antiboycott provisions of the EAR prohibit U.S. persons from complying with certain requirements of unsanctioned foreign boycotts, including providing information about business relationships with another person who is known or believed to be restricted from having a business relationship with or in a boycotting country. In addition, the EAR requires that U.S. persons report their receipt of certain boycott requests to the Department of Commerce. Under the antiboycott provisions of the EAR, a controlled-in-fact foreign subsidiary of a domestic U.S. company is considered a U.S. person.

Labels: Boycotts

The U.S. Department of Commerce's Bureau of Industry and Security (BIS) announced on September 30, 2004 that Midway Arms, Inc. (doing business as Midway USA), a Columbia, Missouri-based distributor of shooting and reloading supplies and equipment, agreed to pay a $222,000 civil penalty to settle charges that it exported firearm scopes and mounts in violation of the Export Administration Regulations (EAR). BIS agreed to suspend $88,800 of the penalty for a period of one year and thereafter waive that amount contingent upon Midway not committing further violations during the suspension period.

BIS charged that, on 275 occasions between April 1999 and July 2001, Midway exported firearm scopes and mounts to Canada without the required export licenses. BIS also charged that, on 93 occasions between May 1999 and September 2002, Midway exported firearm scopes and mounts to Argentina, Barbados, Bolivia, Brazil, Finland, Mexico, the Philippines, South Africa, Sweden, Switzerland, and Uruguay without the required export licenses.

Today the U.S. Department of Commerce (DOC) published in the Federal Register a notice revoking the antidumping duty order on Aspirin from Turkey. The antidumping duty order on aspirin from Turkey, which was imposed by DOC in 1987, was revoked because DOC determined that no domestic party intended to participate in the sunset review that was being conducted on this antidumping duty order. The text of the Federal Register notice can be found at the following link:
a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/E4-2459.htm.