International Trade Law News

The U.S. Department of Commerce (DOC) today announced its final determination in the antidumping duty investigation of imports of certain crepe paper products from the People's Republic of China (PRC). DOC found that producers/exporters have sold certain crepe products from the PRC in the U.S. market at less than fair value, at margins of 266.83%.

The final dumping margin of 266.83% was based on adverse facts available, as none of the mandatory respondent companies participated in the Department’s investigation. DOC determined that three Chinese companies that voluntarily responded to the Section A questionnaire demonstrated an absence of government control with respect to their export activities and are eligible to receive "separate rate" status. However, because of the adverse facts available determination, the Section A respondents will be subject to the 266.83% rate.

The U.S. International Trade Commission (ITC) is scheduled to announce its final injury determination on or about January 13, 2005. If the ITC makes an affirmative determination that imports of crepe paper from the PRC are materially injuring, or threaten to materially injure, the domestic industry in the United States, the Department will issue an antidumping order and instruct U.S. Customs and Border Protection to collect antidumping duties on the subject imports. If the ITC makes a negative injury determination, the investigation will be terminated and no order will be issued.

The petition requesting this investigation was filed on February 17, 2004, by Seaman Paper Company of Massachusetts, Inc. (MA); American Crepe Corporation (PA); Eagle Tissue LLC (CT); Flower City Tissue Mills Co. (NY); Garlock Printing & Converting, Inc. (MA); Paper Service Ltd. (NH); Putney Paper Co., Ltd. (VT); and the Paper, Allied-Industrial, Chemical and Energy Workers International Union AFL-CIO, CLC.

DOC is also conducting an antidumping investigation on imports of tissue paper from the PRC and will issue its final determination in that case in February 2005.

Today, the U.S. Department of Commerce (DOC) announced the final determinations in the antidumping duty investigations on imports of certain frozen and canned warmwater shrimp from the People's Republic of China (PRC) and the Socialist Republic of Vietnam (Vietnam). With the exception of one Chinese producer, DOC found that Chinese and Vietnamese producers/exporters have sold frozen and canned warmwater shrimp in the U.S. market at less than fair value, with margins ranging from 27.89% to 112.81% for imports from the PRC and 4.13% to 25.76% for imports from Vietnam. While the final antidumping margins for Chinese companies were similar to those in the amended preliminary determination announced on August 24, 2004, the final margins applicable to Vietnamese exporters were significantly less than those in the amended preliminary determination.

DOC found that certain Chinese and Vietnamese companies that voluntarily responded to the Department's Section A questionnaire have demonstrated an absence of government control from their export activities and are eligible to receive "separate-rate" status. DOC will apply the weighted-average dumping margin of the mandatory respondents in each of the investigations to these companies for the purpose of the final determinations which, in this case, is 55.23% for China and 4.38% for Vietnam.

DOC is scheduled to make a final decision on shrimp imports from Brazil, Ecuador, India and Thailand in late December. The U.S. International Trade Commission (ITC) is scheduled to make its final injury determinations on or about January 12, 2005. If the ITC makes a final affirmative determination that imports are materially injuring, or threatening to materially injure, the domestic industry, DOC will issue an antidumping duty order and will instruct U.S. Customs and Border Protection (Customs) to collect cash deposits on imports of subject merchandise.

The products covered by these investigations include certain warmwater shrimp and prawns, whether frozen or canned, wild-caught (ocean harvested) or farm-raised (produced by aquaculture), head-on or head-off, shell-on or peeled, tail-on or tail-off, deveined or not deveined, cooked or raw, or otherwise processed in frozen or canned form.

The petitions requesting the initiation of these investigations were filed on December 31, 2003, by The Ad Hoc Shrimp Trade Action Committee, whose members are located in Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, and Texas.

The long-delayed regulation implementing the Security Assistance Act of 2002 (Public Law 107-228, 116 STAT. 1350), which requires all Shipper's Export Declarations (SEDs) to be filed electronically through the Automated Export System (AES) and increases penalties for delinquent SED filings, has been finalized by the Bureau of the Census (Census) and is being circulated to other agencies for review. Census expects the Notice of Proposed Rule Making (NPRM) to be published in the Federal Register in early 2005. The NPRM will provide the public with a 60 day comment period. Census expects the final rule to be published in late 2005. Census plans to give exporters an additional 90-day period to phase-out the filing of all paper SEDs. Census expects to phase out the paper version of the SED (Form 7525-V) in early 2006.

In addition to requiring the mandatory filing of export-related data via AES, the NPRM will also implement several major changes to the Foreign Trade Statistics Regulations (FTSR) (15 CFR Part 30) that are required by law. First, the FTSR will be renamed the Foreign Trade Regulations (FTR). Second, because export data will be filed electronically, the term SED will be replaced by the term EEI (Electronic Export Information). Third, current SED filing options 2 and 4 will be renamed, Pre Departure filing and Post Departure filing, respectively. Current Option 4 filers will be grandfathered into the new system (a list of current AES Option 4 filers can be found at www.census.gov/foreign-trade/aes/approved-aes-opt4.html#W). There will be a number of changes to the current system for companies that are not, but would like to become, Post Departure filers.

One of the most significant changes that was required by the Security Assistance Act of 2002 and will be implemented by the new Census regulation is a significant increase in the penalty provisions associated with the filing of SEDs/EEIs. Because of the current emphasis on the SED/EEI as an export control document, Census will move from the current system of virtually no enforcement activity to a system where significant penalties can and will be imposed for late or inaccurate filings. Census has indicated that it is reasserting its authority over the enforcement of the FTRs and will have the authority to refer violations of the FTRs to the Bureau of Industry and Security's Office of Export Enforcement. CBP and Immigration and Customs Enforcement will have jurisdiction over violations discovered in the field. Under the new Census regulation, civil penalties for the late filing of SEDs/EEIs can be imposed on the U.S. Principal Party in Interest (USPPI), the USPPI's agent (i.e., freight forwarder) AND the carrier. Monetary penalties up to $1000 per each day for late filings can be imposed on exporters/forwarders/carriers, up to a maximum of $10,000 per violation. The Census regulation will set forth a number of mitigation and remission considerations.

Even though the mandatory filing of export data via AES for USML and CCL items went into effect in October 2003, some ports are still requiring exporters to provide a paper copy of the SED for exports of military and other controlled products. Census expects this practice to cease in the near future since Census and the State Department's Directorate of Defense Trade Controls (DDTC) have recently signed a Memorandum of Understanding whereby Census will supply export data directly to DDTC.

In anticipation of the forthcoming move towards mandatory AES and increased enforcement activity on export data, companies interested in performing an internal audit of their prior SED filings can request one year's worth of SED data from Census at no cost. Census will charge exporters $125 for each additional month's worth of data.

Labels: AES

President Bush today announced that he has selected Carlos M. Gutierrez, chairman and chief executive officer of Kellogg Co., to replace Donald Evans as the be the next Secretary of Commerce. Gutierrez, whose family left Cuba in 1960 when he was six, joined Kellogg in 1975 and was promoted to president and chief operating officer in 1998.

Guttierrez's complete biography can be found on Kellogg's Web site at investor.kelloggs.com/bios.cfm?bio=Gutierrez10.

On November 26, 2004, the World Trade Organization's (WTO) Dispute Settlement Body gave the European Union and several other countries formal approval to impose increased duties against U.S. products as a result of the failure of the U.S. to repeal the so-called "Byrd Amendment." The Byrd Amendment, formally known as the Continued Dumping and Subsidy Offset Act of 200, was held in January 2003 to be a non-permissible action that was contrary to several articles of the GATT 1994, the WTO Anti-Dumping Agreement and the WTO Agreement on Subsidies and Countervailing Measures.

Brazil, Canada, Chile, the EU, India, Japan, Mexico and South Korea have been authorized by the WTO to imposed retaliatory measures against U.S. products. However, only the EU, India, Japan and South Korea have so far submitted to the WTO lists of U.S. products that could be subject to sanctions. Canada has proposed two retaliatory options: tariffs against "certain imports" from the U.S., and easier imposition of anti-dumping and countervailing duties against U.S. goods. The EU has indicated that the sanctions could be applied early next year.

The following is a summary of the products included on the lists submitted by the EU, India, Japan and South Korea:

EU: Sweet corn, Paper facial tissues, Diaries with calendars, Blotting pads, Anoraks, Overcoats, Trousers, Dresses, Sweaters, Cotton rugs, Sneakers, Metal frames for eyeglasses, Hand drills, Crane trucks, Photocopiers, Plastic furniture, Mobile homes.

India: Fresh or dried unshelled almonds, Pistachios, Raisins, Soybean oil, Bulgur wheat.

Japan: Salmon, Lobster, Certain Chemicals, Vitamins, Cement, Plastic kitchenware,
Petroleum spirits, Blazers, Blouses, Pantyhose, Suits, Steel ingots, Flat-rolled iron and steel, Steel bars, Copper plates and sheets, Ball bearings, Drill heads, Piston engines, Vacuum pumps, Electric motors, Bicycles, Calculators, Televisions, Lens filters, Sunglasses, Microscopes, Mattresses.

South Korea: Cod, Monkfish, Glassware and Detergent.

The actual lists submitted by the EU, India, Japan and South Korea, which contain the Harmonized Tariffs Schedule codes of the affected products, can be found at the following link: www.djacobsonlaw.com/documents/Byrdamendmentlists.pdf.

U.S. exporters are encouraged to check these lists to determine whether their products are included or not.

Page A3 of today's Wall Street Journal contains an article noting that U.S. high-tech exporters are "alarmed" by the recent decision by the U.S. Court of Appeals for the First Circuit in United States v. Lachman, et al., 387 F.3d 42, 2004 U.S. App. LEXIS 2004 22152, regarding the scope of the term "specially designed" in the Export Administration Regulations. The article indicates that the Industry Coalition on Technology Transfer believes that the broad definition of the term found by by the First Circuit could lead to a dramatic increase -- from 15,000 to 80,000 per year -- in the number of export license applications that must be obtained from the Bureau of Industry and Security before certain high-tech products are exported.

There are reports that the Office of Foreign Assets Control (OFAC) is considering issuing an interpretive ruling or other guidance related to the requirement in the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA) and the Cuban Assets Control Regulations that goods exported to Cuba must be paid for with cash in advance. Some speculate that OFAC will hold that the phrase "payment of cash in advance" means that the payment must be made before the shipment leaves the United States. Many U.S. exporters say that such a clarification is not necessary to serve the legislative intent and would be contrary to common business practices for cash transactions. Since TSRA was enacted, the general understanding of the agricultural trade community has been that payment in advance means payment before releasing the goods to the Cuban buyer.

Several members of Congress have already written a letter to Treasury Secretary Snow protesting any changes in the manner in which payments from Cuba are handled. The letter, signed by Representative Jo Ann Emerson (R-MO), one of the original sponsors of TSRA, and several other members of Congress, stated that "though there is not a need for tightening requirements on these U.S. sales to Cuba, it is certain that requiring payment prior to shipments, a prepayment, will end all U.S. agriculture sales to Cuba. . . . Even if Cuba would be willing to continue to buy U.S. goods, a change from the current practice would increase costs, create tremendous logistical problems, negatively impact the price for agricultural products and generally make U.S. exports less competitive."

Meanwhile, there are press reports indicating that some U.S. companies that recently sold food and agricultural products to Cuba have not had the funds associated with the sale credited to their bank accounts in the United States. Apparently, the Cuban authorities authorized the payment and the U.S. banks received the funds from Cuba, but the U.S. banks have not credited the accounts of exporters per instructions from the U.S. Government.

The House Rules Committee has posted the hand-marked text and statement of conferees of the Conference Report to H.R. 4818, the Consolidated Appropriations Act, 2005 on its Web site at www.house.gov/rules/h4818crfulltext.htm. The $388 billion omnibus spending bill for FY 2005 was passed by the House and Senate on November 20, 2004. H.R. 4818 makes appropriations for the Departments of Agriculture, Commerce/Justice/State; Energy & Water; Foreign Operations; Interior; Labor/HHS/Education; Legislative Branch; Transportation/Treasury; and VA/HUD. OFAC and BIS received a slight increase in their FY 2005 appropriations. The final version of the spending bill did not include provisions that would have liberalized trade with Cuba and repealed mandatory country of origin labels on imported food products. Both of these provisions were included in the original conference report passed earlier by the House and Senate but were struck at the last minute from the final version.

The U.S. International Trade Commission (ITC) has announced that the ITC Commissioners will hold their vote on the final injury phase of the antidumping investigation on Wooden Bedroom Furniture from China (Inv. No. 731-TA-1058 (Final)) at 11 a.m. on December 10, 2004. After that vote is completed, the ITC will vote on the final injury phase of the countervailing and antidumping duty investigations on Carbazole Violet Pigment 23 from China and India (Inv. Nos. 701-TA-437 and 731-TA-1060-1061 (Final)).

U.S. Customs and Border Protection has recently announced a number of changes to the Continuous Transaction Bond (CTB) program. The CTB program will be centralized at the National Finance Center (NFC) in Indianapolis, Indiana. The bond centralization effort will include the filing, approval and maintenance of all CTBs. According to CBP, the major objectives of the program are: (1) Uniformity; (2) Bond Sufficiency; and (3) Fair and consistent application of regulations and policies.

The NFC has established a voice mailbox (317-614-4880) for all inquiries concerning pilot bond centralization. This includes inquiries into the status of new bond applications submitted through the pilot ports. CBP has advised importers that they should leave a brief message and include their name, phone number and an email address. A CBP represetative is supposed to respond to the call no later than the next business day. The NFC has stated that it will not respond to status inquiries if the application has been on file with the NFC for less than 3 business days. The fax number for submitting bonds to the NFC is 317-614-4517 and the email address is cbp.bondquestions@dhs.gov. CBP has stated that it is "imperative" that each bond application includes: (1) a point of contact; (2) telephone number; (3) fax number; and (4) an email address, if available.

On November 19, 2004, the U.S. Senate voted to pass 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. The measure was passed by voice vote after the Senate earlier voted 88-5 to limit debate on the bill, which had been opposed by the Wisconsin delegation over allegations of Laotian human rights abuses. President Bush is expected to sign H.R. 1047 into law in the near future.

The version passed by the Senate was identical to the version passed by the House on October 8, 2004. 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. However, the bill also 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.

H.R. 1047 includes the following provisions:

--Grants permanent normal trade relations (NTR) to Armenia, which has had temporary NTR approved on an annual basis by the president.

--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 in the Conference Report 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 duty 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 H.R. 1047can be found at the following link:
waysandmeans.house.gov/media/pdf/hr1047/HR1047confreptlegtext.pdf.

The Department of Defense's Office of International Technology Security has launched a new Web site at www.acq.osd.mil/its/ to provide a resource to promote understanding of the scope of this effort in the U.S. Government. K. Eileen Giglio, the Director of Special Projects for the DoD's Acquisition, Technology and Logistics unit, is seeking stories about DoD/Industry partnership to post on the "outreach to industry" page of the site. You can reach Ms. Giglio via e-mail at itsosd@osd.mil or by telephone at (703) 693-0031.

On November 16, 2004, U.S. Customs and Border Protection Commissioner Robert C. Bonner announced new measures that have been agreed to by the E.U. and the U.S. to strengthen the security of maritime container transport.

The measures will facilitate legitimate trade through mutually acceptable security standards and industry partnership programs. The measures have been adopted in the framework of the signed agreement to extend the E.U./U.S. Customs Agreement to include trade security co-operation.

Among the measures being adopted are: the creation of an information exchange network; the agreement on minimum requirements applicable for European ports that wish to participate in the U.S. Container Security Initiative (CSI); identification of best practices concerning security controls of international trade. The measures also include a pilot project that focuses on shipments transiting through both the U.S. and the E.U. in view of testing the feasibility of exchanging cargo information on transshipments and freight remaining on board to enable customs authorities to identify, monitor and assess the risk associated with transshipments.

At the invitation of the U.S., the E.U. will post liaison officers at the Customs and Border Protection (CBP) National Targeting Center, which will further improve the exchange of information, the sharing of best practices and the refinement of common risk indicators with regard to terrorist threats.

In view of facilitating legitimate trade while securing the supply chain, E.U. and U.S. experts will study the industry partnership programs applied in the E.U. and the U.S. The outcome of the study will support further cooperation towards the development of mutually acceptable industry partnership programs, such as the Customs-Trade Partnership Against Terrorism (C-TPAT).

Recognizing that emerging technologies can promote greater efficiency and can improve security in the international supply chain, the U.S. and the E.U. are establishing a joint group of experts to explore innovative developments and their application.

These measures are a result of the implementation of the E.U.-U.S. Agreement on CSI signed in April 2004 and will be followed by further measures aimed at improving security for both the E.U. and the U.S.

The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) has adopted a policy to issue specific licenses, on a case-by-case basis, authorizing U.S. suppliers to engage in certain transactions with Colombian government-controlled entities, which have been designated by OFAC as Specially Designated Narcotics Traffickers (SDNTs) pursuant to 31 CFR Part 536. In accordance with this policy, on November 16, 2004 OFAC announced that the following three business are eligible for licenses:

-- Cooperativa Multiactiva de Empleados de Distribuidores de Drogas Copservir Ltda. (COPSERVIR), NIT #830011670-3, which manages the Drogas La Rebaja establishments in Colombia;

-- Cooperativa Multiactiva de Comercializacion y Servicios Farmacoop (FARMACOOP) NIT #830010878-3;

-- Cooperativa de Cosmeticos y Populares Cosmepop (COSMEPOP) NIT #800251322-5.

The government of Colombia took control of these companies in September 2004. By establishing a licensing policy for these entities, OFAC is attempting to ensure that these companies continue to operate in a legitimate manner under the control of the Government of Colombia.

U.S. suppliers seeking a license to sell products to COPSERVIR, FARMACOOP or COSMEPOP should submit a written license application in accordance with 31 CFR § 501.801(b) to OFAC. In addition to the information required by 31 CFR § 501.801(b)(3), the application must include a detailed description of the proposed transactions, the source and method of payment and a copy of a signed purchase request from any of the aforementioned cooperatives.

The U.S. Department of Commerce (DOC) today announced the final determinations in the antidumping investigations involving Carbazole Violet Pigment-23 (CVP-23) from India and China. DOC found that producers/exporters of CVP-23 from India and China sold their products in the U.S. at less than fair value, with margins ranging from 27.23 to 69.23% for India, and 5.51 to 217.94% for China. In addition, DOC found that countervailable subsidies exist with regard to exports from India with net subsidy rates ranging from 17.33 to 33.61%.

The United States International Trade Commission (ITC) is scheduled to announce its final injury determinations in these antidumping investigations on or before December 23. If the ITC affirmatively determines that imports of CVP-23 are materially injuring, or threatening material injury to, the domestic industry, then the Department will issue antidumping and countervailing duty orders in January 2005. If the ITC makes negative injury determinations, the investigations will be terminated and no antidumping and countervailing duty orders will be issued.

The final antidumping margins announced by DOC were as follows:

INDIA

Alpanil Industries = 27.23%

Pidilite Industries Ltd. = 69.23%

All Others = 45.98%

CHINA

Tianjin Hanchem International Trading Co., Ltd. = 217.94%

Trust Chem Co., Ltd. = 27.19%

GoldLink Industries Co., Ltd. = 5.51%

Nantong Haidi Chemical Co., Ltd. = 44.50%

PRC-Wide Rate = 217.94%

The petitions requesting these investigations were filed on November 21, 2003, by Sun Chemical Corporation (Cincinnati, Ohio) and Nation Ford Chemical Company (Fort Mill, South Carolina), domestic producers of CVP-23.

Today the U.S. Department of Commerce (DOC) announced the final determination in the antidumping duty investigation on wooden bedroom furniture from China. DOC found that Chinese producers/exporters sold wooden bedroom furniture to their U.S. customers at less than fair value, with margins ranging from de minimis to 198.08% for the seven individually investigated mandatory respondents (see rates below), 8.64% for the 115 companies qualifying for a “separate rate” (down from 12.91% in the second amended preliminary determination) and a PRC-wide rate of 198.08% applicable to "all other" importers. In most cases, these rates were lower than the rates found in the preliminary and amended preliminary determinations announced in June and July.

The rates for the seven mandatory respondents (comprising 35% of all imports) were as follows:

• Rui Feng Woodwork Co., Ltd., Rui Feng Lumber Development Co., Ltd., and Dorbest Limited (collectively, Dorbest Group) = 16.70% (up from 11.85% in the amended preliminary)
  
• Starcorp Furniture (Shanghai) Co., Ltd., Orin Furniture (Shanghai) Co., Ltd., and Shanghai Starcorp Furniture Co., Ltd. (collectively, Starcorp) = 15.24% (down from 30.52% in the amended preliminary)
  
• Tech Lane Wood Mfg. and Kee Jia Wood Mfg. (collectively, TechLane) = 198.08% (up from 29.72% in the amended preliminary)
  
• Dongguan Lung Dong Furniture Co., Ltd. and Dongguan Dong He Furniture Co., Ltd (Dongguan Lung Dong) = 2.22% (down from 7.04% in the preliminary)
  
• Lacquer Craft Manufacturing Company, Ltd. (Lacquer Craft) = 6.95% (up fro 4.90% in the preliminary)
  
• Markor International Furniture (Tianjin) Manufacture Co., Ltd.(Markor Tianjin) = 0.79% (de minimis) (down from 8.38% in the preliminary)
  
• Shing Mark Enterprise Co., Ltd., Carven Industries Limited (BVI), Carven Industries Limited (HK), Dongguan Zhenzin Furniture Co.,Ltd., and Dongguan Yongpeng Furniture Co., Ltd. (Shing Mark) = 5.07% (down from 6.59% in the preliminary)
  

The U.S. International Trade Commission (ITC) is scheduled to issue its final injury determination on December 23, 2004. If the ITC finds that a U.S. industry is injured or threatened with material injury as a result of imports of wooden bedroom furniture from the PRC, the Department will issue an antidumping order and will instruct U.S. Customs and Border Protection to collect cash deposits on entries of subject merchandise at the applicable dumping duty rate.

Today the ITC held a hearing in the final phase antidumping investigation on wooden bedroom furniture from China. The list of witnesses testifying at today's hearing can be found at the following link: www.usitc.gov/er/wl/wl1_1108.pdf. Company executives from major U.S. retailing businesses, including Rooms To Go, Havertys and JCPenney told the ITC of how wooden bedroom imports -- based on quality, style and price -- have actually expanded the furniture market. They also discussed how the antidumping petition will not bring back any U.S. jobs, as petitioners have suggested.

As a result of a number of requests from U.S. exporters and trade associations, BIS has extended the comment period on the proposed "knowledge" rule for an additional 30 days. The new deadline for submitting comments on the proposed rule to BIS is December 15, 2004.
(a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/04-25309.htm)

The proposed rule, which was published in the Federal Register on October 13, 2004, would make a number of changes to the Export Administration Regulations (EAR) including modifying the "knowledge" standard to incorporate a "reasonable person'' standard. The proposed rule would also increase the number of "red flags" to look for in export transactions from 12 to 23. The provision of the proposed rule that has generated the most controversy in the exporting community is the proposal to provide exporters with an optional "safe harbor" from liability arising from "knowledge-based license requirements, knowledge-based restrictions on use of license exceptions, and other knowledge provisions in the EAR." Under the proposal, exporters can submit a request to BIS asking for safe harbor and BIS is supposed to respond to the exporter within 45 days as to whether the agency agrees that all red flags have been removed, disagreeing or stating that more time is needed to review the case. U.S. exporters are very concerned about the delays that will result under the "safe harbor" proposal.

The Directorate of Defense Trade Controls (DDTC) has posted on its Web site (www.pmdtc.org) a document containing guidance for export license applications for products subject to the ITAR destined for Operation Iraqi Freedom and Operation Enduring Freedom in Afghanistan.

In addition to providing specific licensing instructions for license applications submitted via hard copy and by D-Trade and EllieNet, the guidance contains specific instructions regarding the supporting documents that must be submitted with the license applications. Specifically, the guidance requests exporters to:

--Include a complete copy of the contract or purchase order applicable to the proposed export and the contract number assigned by the U.S. Army Project and Contracting Office (PCO). For exports to coalition partners, a letter should be included from the partner government confirming the transaction and that it is in support of OIF or OEF.

--Include a copy of product specifications/descriptive literature that details the commodities requested for export.

The guidance issued by DDTC notes that "for the time being, the applicant need not supply a DSP-83 (Nontransfer and Use Certificate) for cases where the Iraqi Interim Government (IIG) is the proposed end-user." In order to satisfy the requirements of the Arms Export Control Act and International Traffic in Arms Regulations (ITAR), however, DDTC notes that the IIG has supplied the U.S. with blanket end-use assurances, which will be used for the near future, without an accompanying DSP-83, for approved exports to the IIG. However, for all exports to the IIG, the license application must have a cover letter explaining that the DSP-83 has not been submitted based on this understanding.

DSP-83s are still required for Significant Military Equipment (SME) exports to the Interim Government of Afghanistan and for exports to "private" end-users in Iraq (e.g., international organizations and private contractors).

The guidance concludes by noting that companies should pay "keen attention" to the brokering requirements under Part 129 of the ITAR and that such brokering activities may not begin until the appropriate approvals on registration and licensing are in place.

Labels: DDTC

On November 4, 2004, the WTO's Committee on Subsidies and Countervailing Measures extended by one year (until end 2005) the transition period for the elimination of export subsidy programmes of 19 developing countries under the implementation decision adopted at the Doha Ministerial Conference. The developing countries are: Antigua and Barbuda, Barbados, Belize, Costa Rica, Dominica, Dominican Republic, El Salvador, Fiji, Grenada, Guatemala, Jamaica, Jordan, Mauritius, Panama, Papua New Guinea, St. Lucia, St. Kitts and Nevis, St. Vincent and the Grenadines and Uruguay.

The WTO Subsidies Agreement provides for an eight-year transition period (until end 2002) for most developing countries to eliminate export subsidies. Under the “fast-track” procedures agreed at Doha, the Subsidies Committee may grant annual extension to these countries until end 2007, subject to annual review of transparency and standstill obligations.

The Committee on Subsidies and Countervailing Measures also reviewed status reports of Barbados, Colombia, El Salvador, Panama and Thailand regarding their subsidy programs whose transition periods were extended in 2003 last year under the regular procedures.

At the start of the meeting, the Committee elected Mr. Mehmet Tan of Turkey as its new Vice Chairman. The next regular meeting of the Committee is scheduled for April 14-15 2005.

On November 5, 2004, the Treasury Department's Office of Foreign Assets Control (OFAC) issued its monthly list of civil penalties imposed against companies and individuals for violating the sanctions programs administered by OFAC. During October 2004, OFAC imposed more than $80,000 in civil penalties to settle 8 separate enforcement actions for violations of the current or former embargoes imposed by the U.S. on Cuba, Iran and Yugoslovia. During the same period OFAC imposed nearly $27,000 in penalities to settle 23 cases involving violations of the Cuban sanctions regulations.

The following is a summary of some of the settlements announced by OFAC:

• OFAC imposed a $32,500 penalty on DaimlerChrylsler's North America Holding Co. as a result of one of its Mexican subsidiaries exporting goods to Cuba.
• A $11,000 penalty was imposed on BEF Corporation, a supplier of photographic processing equipment, for exporing goods to Iran.
• OFAC imposed a $26,956 penalty on Fort Dodge Animal Health, a manufacturer and distributor of prescription and over-the-counter animal health care products, for exporting goods to Yugoslavia during 2000.
• OFAC settled five other cases involving the exportation of goods and services to Yugoslavia during 1999 to 2001.
• OFAC imposed a $1,125 penalty on an individual for the importation of Cuban-origin goods.
• OFAC imposed a total of $21,250 in penalties to settle 18 cases involving travel-related transactions with Cuba.

The American Furniture Manufacturers Association (AFMA) voted at its annual meeting last week to expand its membership criteria to include U.S. companies that import home furnishings for wholesale distribution and to change its name to the American Home Furnishings Alliance. Previously, AFMA member companies were required to have a manufacturing facility in the U.S.

According to AFMA's chief executive officer the change was made to recognize the switch by more companies from manufacturing to importing. Under the old rules, "in the future, an increasing number of longtime AFMA members . . . would have no longer qualified for membership.''

The American Home Furnishings Alliance is the largest association of home furnishings companies in the world and represents more than 250 U.S. furniture manufacturers and distributors.

In an unusual development in the antidumping investigation on imported shrimp, American soybean growers have warned the U.S. government against imposing antidumping duties on shrimp imports from Asia, citing a threat from the region to retaliate by boycotting soybean imports.

In a recent letter to Secretary of Commerce Donald Evans, the president of the American Soybean Association (ASA) said the outcome of the antidumping investigation on shrimp from Thailand, China, Vietnam and India could have "a direct and serious impact" on the U.S. soybean industry. Specifically, the ASA is concerned over a threat by nine private trade groups in Thailand, representing virtually all business consumers of U.S. soybean exports, that "have agreed to ban imports of soybeans and soybean meal" if the Commerce Department imposed antidumping duties on Thai shrimp. The ASA's letter also warned that the antidumping duties could lead to lost business by soybean farmers and exports of U.S. soybean products to other countries in Asia, including China.

The Southern Shrimp Alliance, comprised of U.S. shrimp producers, has called the boycott threat "economic terrorism" and advised the U.S. Government to ignore the demands of the U.S. soybean industry.

Labels: Boycotts

The U.S. International Trade Commission (ITC) is beta testing a new Web site that is scheduled to go online on November 15, 2004. The ITC is now seeking feedback and comments on the prototype Web site which can be viewed at http://prototype.usitc.gov.

U.S. Customs and Border Protection (CBP) has announced that registration for the January 2005 Trade Symposium is proceeding at a quick pace and nearing capacity. CBP has indicated that it has received nearly 400 confirmed registrants since it opened registration on November 1st. Registration information can be found at the following site:
www.customs.gov/xp/cgov/import/communications_to_industry/trade2004.xml.

FDA has published a revised Compliance Policy Guide for prior notice of imported food. That document is available at WWW.CFSAN.FDA.GOV/~PN/CPGPN4.HTML. The following provides information on new prior notice (PN) edits/rejects and other system changes that will take effect on November 8, 2004.

MANUFACTURER REGISTRATION INFORMATION:

Customs and Border Protection (CBP) will continue to reject PN submissions unless a manufacturer registration number is provided for the manufacturer using the "PFR"
Affirmation of compliance (AOFC) or the FME" AOFC code and reason code is transmitted.

FDA will reject PN submissions made under the Prior Notice System Interface (PNSI) that contain a manufacturer registration number that is invalid (not on file or mismatched). FDA will also reject PN submissions received that contain a "FME" AOFC code if the reason code qualifier is invalid. Six new reason codes have been added to indicate why a registration number has not been transmitted. The new codes are I-M and O. Code N (NO) has been eliminated and use of this code or any other code not listed below will cause and FDA reject. With the addition of these new reason codes, zero-fill of the AOFC "PFR" qualifier field is no longer allowed and submission will cause an FDA reject.

FME QUALIFIER REASON CODES:

A. FACILITY IS OUT OF BUSINESS
B. FACILITY IS PRIVATE RESIDENCE
C. FACILITY IS A RESTAURANT
D. FACILITY IS RETAIL FOOD ESTABLISHMENT
E. FACILITY IS NON­PROCESSING FISHING VESSEL
F. FACILITY IS NON­BOTTLED DRINKING WATER COLLECTION AND DISTRIBUTION
ESTABLISHMENT
G. INDIVIDUAL GIFT ­ LABEL NAME/ADDRESS IN LIEU OF REGISTRATION NUMBER
H. GROWER ­ SATISFIES FARM EXEMPTION (21 CFR 1.226(B); 1.227(B)(3))
I. SAMPLES - QUALITY ASSURANCE, RESEARCH OR ANALYSIS PURPOSES ONLY
J. U.S. MANUFACTURING FACILITY THAT IS NOT REQUIRED TO REGISTER
K. UNABLE TO DETERMINE THE REGISTRATION NUMBER OF THE MANUFACTURER.
L. UNABLE TO DETERMINE IDENTITY OF MANUFACTURER - PROVIDING IDENTITY OF
MANUFACTURERS HEADQUARTERS
M. UNABLE TO DETERMINE IDENTITY OF MANUFACTURER OR HEADQUARTERS -
- PROVIDING INVOICING FIRMS IDENTITY
O. GIFT PACK FOR NON-BUSINESS PURPOSES PROVIDING SINGLE PRIOR NOTICE
AND IDENTITY OF PACKER

BILL OF LADING/AIRWAY BILL INFORMATION:

FDA will reject prior notice submissions for rail and sea modes of transportation unless the bill of lading number is provided using the "BOL" AOFC code and qualifier and submissions for air mode of the transportation unless the air waybill is submitted using the "AWB" AOFC code and qualifier.

The PNSI version 1.5 release notes describing system modifications made to reflect changes made in the in the Compliance Policy Guide are available at WWW.CFSAN.FDA.GOV/~PN/PNSIREV.HTML and also referenced and linked at WWW.CFSAN.FDA.GOV/~PN/PNOVIEW.HTML/.

HOLDING FACILITY INFORMATION:

PNSI has been modified to allow submission of holding facility information in the case where FDA has refused a food article. If FDA or CBP direct an article to a holding facility, a party with the knowledge of the holding facility location date available at the location, and a contact at the location associated with the prior notice must submit the information to the FDA. PNSI must be used to submit the holding facility information for PNSI initially submitted either through the Automated Commercial System (ACS) or through PNSI. PNSI now allows any party to submit the holding facility information, regardless of whether or not they transmitted the original prior notice. PN transmitters can search for PNS submitted via their account to submit holding facility information. If the PN was submitted through ACS or was submitted via PNSI by a PN transmitter using a different account, the identifying information for the article can be used to allow another transmitter to submit the holding facility information. Once holding facility information has been submitted, the transmitter can view the status of the holding facility information submission to determine if it was matched to a prior notice that was originally submitted.

On November 1, 2004, OFAC revised the suggested application form for persons seeking a specific license to visit immediate family members in Cuba. All previous versions of the suggested application form are superceded, and all applicants are encouraged to use the suggested application form to facilitate the processing of their applications.

The head of Alimport, Cuba's food buying agency, has stated that the Cuban government's announcement last week that it was eliminating U.S. dollars from general circulation on the island will have no impact on Cuba's ability to purchase food, medicine and medical devices from U.S. producers. U.S. firms are expected to close deals to sell more than $150 million worth of corn, wheat, cattle and other U.S. products to Cuba at the Havana International Fair taking place this week. More than 125 U.S. companies have registered to participate in the trade show.

The value of U.S. agricultural goods exported to Cuba in 2004 has already reached $298 million and could exceed $400 million, more than double the value of 2003 exports, according to Dr. Parr Rosson, Extension economist and director of the Center for North American Studies at Texas A&M University. Cuba is now the U.S.'s 25th largest market for agricultural products and is the third largest market for U.S. rice behind Japan and Mexico. Corn, wheat, milk, powder, soy flour and soybeans are among the other top exports. Wheat exports to Cuba are 100 percent above 2003, while corn exports are up 87 percent and soybeans are up 60 percent.

The Secretariat of the World Trade Organization (WTO) reported today that in the first half of 2004 52 new final antidumping measures were imposed against exports from 24 countries, a significant decline from the 114 measures imposed during the first half of 2003. The European Union, India and the United States imposed the most new final measures, 6 each, during the first half of 2004. Canada imposed five final antidumping measures during the period and China, Peru and Turkey each imposed four final antidumping measures.

Exports from China were once more the subject of the largest number of new final measures (16) during the first half 2004, down slightly from the 18 measures imposed against Chinese exports during the same period in 2003.

The largest number of new final measures were imposed on products classified in the base metals sector of the Harmonized System of Tariff Classification, which includes iron, steel and aluminium products, with 19 new final measures imposed on products in that sector. Chemicals was the second most affected sector, with 12 new measures imposed.

Registration is now open for U.S. Customs and Border Protection's Trade Symposium that will be held on January 13 and 14, 2005 in Washington, DC. More information on the program and a link to the online registration form can be found at the following site:
www.customs.gov/xp/cgov/import/communications_to_industry/trade2004.xml.