International Trade Law News

As part of the Office of Foreign Assets Control's (OFAC) regulatory transparency and customer service initiative (what I call the "new and improved version" of the agency), OFAC has added an index to the Frequently Asked Questions (FAQs) contained on its website. The index, which is organized by topic and contains a brief summary of the 92 FAQs, makes the site much easier to navigate. The index can be found at the following link:
www.treas.gov/offices/enforcement/ofac/faq/index.shtml.

Labels: OFAC

The Lafayette, Indiana Journal and Courier reports that Purdue University is "distancing itself" from Noshir S. Gowadia, the former Northrop Aircraft Inc. B-2 engineer that was indicted last week for transmitting national defense information and exporting classified technical data related to defense articles to foreign persons. The article indicates that Gowadia was a visiting professor at Purdue last spring and was in talks with Purdue to collaborate on a portion of a $1.1 million Department of Defense grant. The article indicates that Gowadia also worked as a consultant for a number of other universities, including the University of Alabama at Tuscaloosa and Georgia Tech. Gowadia, who pleaded not guilty to the charges, is scheduled to be tried before a federal jury on January 10, 2006 in the U.S. District Court for the District of Hawaii.

Update: Thursday's strike by Canadian customs officers was short-lived. The customs agents returned to work early Friday after being advised that their actions were not permissible under Canadian labor law. The agents walked off their jobs at several border crossings in Ontario because they wanted to be armed or have other armed guards at the border crossings. The short work stoppage caused significant delays at several border crossings, including a five mile backup at Detroit's Ambassador Bridge and a seven-mile backup at the Blue Water Bridge.

The Federal Diary column in today's Washington Post indicates that the Department of Homeland Security's (DHS) Inspector General (IG) will issue a 160 page report this week (it is scheduled to be released on Tuesday) recommending the merger of Customs and Border Protection (CBP) and the Immigration and Customs Enforcement (ICE) to create "a stronger and more complete border security program." The report, based on 300 interviews involving more than 600 DHS employees in 10 cities and 63 field offices, will not mince words. Among other things the IG's report indicates "a high degree of frustration with the current structure" and the IG "observed antagonism between CPB and ICE that appears to be increasing and solidifying." The report apparently includes a 23 page rebuttal by DHS Deputy Secretary Michael Jackson which claims that the report "lacks analytical rigor" and "is tainted by factual errors." The IG will get the final word, however, as the report concludes with the IG's 18 page rebuttal of Jackson's criticisms.

Labels: Customs

On November 10, 2005, the U.S. wire rod industry filed antidumping duty petitions with the U.S. Department of Commerce and U.S. International Trade Commission alleging that wire rod products from the People's Republic of China (PRC), Germany and Turkey have been sold in the U.S. at less than fair value and are causing or threatening material injury to the U.S. wire rod sector. Carbon steel wire rod is an intermediate product that is ultimately used for the manufacture of wire and wire products such as coat hangers, fasteners, wire mesh, tire cord, and chain link fencing. The petition claims that wire rod imports from the three countries increased from 958,000 tons in 2002 to over 1.8 million tons in 2004 and have captured an increasing share of the U.S. market, jumping from 12% in 2002 to 28% of the domestic market in the first half of 2005. The petitioners are Connecticut Steel Corporation, Wallingford, CT; Gerdau Ameristeel, Tampa, FL; Keystone Consolidated Industries, Inc., Dallas, TX; Mittal Steel U.S.A.-Georgetown, Georgetown, SC; Rocky Mountain Steel Mills, Pueblo, CO. These same companies filed antidumping petitions in 2001 that led to the imposition of antidumping duties on wire rod from Brazil, Canada, Indonesia, Mexico, Moldova, Trinidad and Tobago and Ukraine.

Labels: Antidumping

Canadian customs officers at the ports of Windsor and Sarnia, Ontario today refused to report to work citing dangerous working conditions. At this time, the following border operations are affected:

-Windsor Tunnel
-Windsor's Ambassador Bridge
-Sarnia's Blue Water Bridge Traveller Operations
-Sarnia's Blue Water Bridge Commercial Operation

According to a press release issued by the Canadian Customs Excise (CEUDA) union, the customs officers took this action to protest the lack of an armed border presence.

The Bureau of Industry and Security (BIS) is expected to issue in the near future a new license exception, license exception USPL, permitting the export of low-level controlled items for use by U.S. persons in Libya.

The Honolulu Star-Bulletin reported today that a federal grand jury in Honolulu, Hawaii has indicted Noshir S. Gowadia, a former Northrop Aircraft Inc. engineer currently residing in Maui, on three counts of communication, delivery and transmission of national defense information and three counts of violating the Arms Export Control Act. If convicted, Gowadia, who was employed from 1968 to 1986 with Northrop Corp., faces a maximum 60 years' imprisonment and fines of up to $1.5 million. While at Northrop, Gowadia helped develop an infrared suppression system for the propulsion system of the B-2 stealth bomber.

According to the indictment, Gowadia faxed a foreign official in an unidentified country a proposal to develop infrared suppression technology for a foreign military aircraft and containing top secret level information concerning a U.S. defense system. He is also accused of submitting various proposals to persons in third countries to develop classified infrared suppression technology for foreign commercial aircraft.

A federal grand jury in Los Angeles has indicted Chao Tung Wu, 51, of La Puente, California, and Yi Qing Chen, 41, of Rosemead, California, for allegedly conspiring to import surface-to-air missiles into the U.S. that were intended to be exported for use abroad.

According to the press release issued by the U.S. Attorney for the Central District of California, the indictment alleges that Wu and Chen met with an undercover FBI agent and agreed to arrange the importation of several QW-2 shoulder-fired missiles, as well as the missiles' launch and operation hardware, from another country. Wu and Chen told the undercover agent that a third country would pretend to order the missiles from the manufacturer, but the missiles would, instead, be shipped to the U.S. in containers. According to the indictment, the missiles would have been fraudulently manifested as civilian equipment, such as machine components. The indictment claims that Wu, Chen and unindicted co-conspirators were to pay bribes to customs officials in other countries to ensure the shipment. One payment was to be a $2 million bribe to an official in a foreign country.

According to the U.S. Attorney's office, the pair were the first in the nation to be charged with conspiracy to import missile systems designed to destroy aircraft under the Prevention of Terrorist Access to Destructive Weapons Act of 2004. This statute, which was enacted in December 2004 as part of the Intelligence Reform and Terrorism Prevention Act of 2004 (see subtitle J), carries a mandatory minimum penalty of 25 years and the possibility of life without parole in federal prison.

The U.S. and China today signed a comprehensive bilateral textile agreement that will impose quotas on 34 categories of textile products starting on January 1, 2006 and ending on December 31, 2008. The text of the comprehensive textile agreement and related fact sheet is available at the USTR Web site.

The Bureau of Industry and Security (BIS) today published in the Federal Register a Final Rule amending certain provisions of the Export Administration Regulations (EAR) that affect Bulgaria, Czech Republic, Estonia, Hungary, Iceland, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia. These amendments provide consistent treatment to all NATO member states with respect to national security-based license requirements, national security licensing policy, availability of certain License Exceptions and certain in-transit transactions.

The following speakers will be featured at the National Council on International Trade and Development's (NCITD) monthly Trade Compliance Committee meeting on Thursday, November 10th:

[Updated agenda]

--Hillary Hess, Director of the Bureau of Industry and Security's Regulatory Policy Division.

--Special Agent Christopher Malone, Immigration and Customs Enforcement (ICE).

--Meet and Greet with Harvey Monk, outgoing chief of U.S. Census Bureau's Foreign Trade Division and Bill Bostic, the newly appointed director of the Foreign Trade Division.

The NCITD meeting will be held from 9:00 a.m. to 12 noon at the University Club of Washington, DC. Contact the NCITD Secretariat (202-872-9280 or cu@ncitd.org) to RSVP for this meeting or for more information about NCITD. The non-member fee to attend this meeting is $45.

Representative Joe Knollenberg (R-MI), along with 18 co-sponsors, today introduced H.R. 4217, the "American Manufacturing Competitiveness Act". If enacted, the measure would permit U.S. industrial users of imported products to be "interested parties", thus having legal standing in antidumping and countervailing duty cases conducted by the U.S. International Trade Commission (ITC) and Department of Commerce (DOC). The bill would require the ITC and DOC to allow full participation by industrial users in AD/CVD cases when making an initial injury determination, when conducting changed circumstances reviews and when conducting five-year sunset reviews.

H.R. 4217 would also require the ITC to conduct an economic impact test to determine the net effect on American manufacturers of AD/CVD decisions. In order for an affirmative injury determination to be made the ITC would have to consider the economic impact on industrial users in addition to those of the petitioning parties.

This legislation is supported by a number of trade associations, including the Auto Trade Policy Council, the Motor and Equipment Manufacturing Association, the Precision Metalforming Association, the CITAC Steel Task Force and several major manufacturing firms.

Labels: Antidumping

Yesterday, the U.S. filed a complaint against Turkey at the World Trade Organization (WTO) challenging Turkey's tariff-rate quota on imported rice.

According to the complaint filed by the U.S. Trade Representative, Turkey has imposed a domestic purchase requirement allowing limited imports of rice at reduced duty rates, but only if an importer also purchases significant quantities of domestic rice. Specifically, Turkey permits the importation of 300,000 metric tons of milled rice equivalent at preferential tariff levels (20 percent for paddy rice, 25 percent for brown rice, and 43 percent for milled rice) below the over quota rate of 45 percent, provided that importers purchase significant quantities of domestic rice from the Turkish Grain Board or Turkish producers or producer associations. The amount of domestic rice that must be purchased varies according to the type of rice being imported and the source of the domestic rice. Turkey does not permit the import of rice at the over-quota rate. Thus, when the domestic purchase requirement is not in effect, such as during the Turkish rice harvest, no imports are permitted. As a result of these restrictions, the U.S. contends that Turkish imports of U.S. rice of all types have declined dramatically over the past three years.

The U.S. contends that the domestic purchase requirement is inconsistent with several WTO agreements, including the Agreement on Trade-Related Investment Measures, the General Agreement on Tariffs and Trade 1994, the Agreement on Agriculture and the Agreement on Import Licensing Procedures.

Under WTO procedures, the U.S. and Turkey will enter into consultations. If the parties do not resolve the issue through consultations, they may refer the matter to a WTO dispute settlement panel.

The most recent edition of the Washington Diplomat newspaper contains a story on Kazakhstan's efforts to dispose of the nation's 1,410 nuclear warheads that it inherited after the fall of the Soviet Union.

In a rare vote involving a changed circumstance review, the six commissioners of the U.S. International Trade Commission (ITC) today unanimously found that revoking the existing antidumping duty orders on certain frozen warmwater shrimp and prawns from India and Thailand would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time. As a result of today's vote, the existing antidumping orders on imports of shrimp from India and Thailand will remain in place. The ITC self-initiated the changed circumstances review to assess concerns about the possible adverse impact of the December 2004 tsunami on the shrimping industries of Thailand and India.

Labels: Antidumping

Customs and Border Protection has issued the answer key for the October 3, 2005 Customs Broker License Exam. The exam and answer key (in Word format) can be found here.

Labels: Customs

In another sign of the escalating tensions between the U.S. and Venezuela, Venezuelan President Hugo Chavez has threatened to transfer its fleet of 21 F-16 fighter jets to Cuba or China and replace them with Chinese or Russian aircraft. Chavez has accused the U.S. of blocking the sale of spare parts for Venezuela's F-16s and putting pressure on other countries, including Israel, to refrain from making parts sales as well. The U.S. recently blocked Spain's sale of 10 EADS CASA C-295 military transport aircraft to Venezuela, since the aircraft contained ITAR-controlled parts and components.

The Bureau of Industry and Security (BIS) has imposed a $17,000 civil penalty on a Maryland law firm for allegedlly violating the antiboycott regulations. BIS charged that the law firm committed eight violations of the antiboycott regulations by furnishing entities in Syria with information about other persons' business relationships with or in a boycotted country. In addition, BIS charged the law firm with one violation of failing to report a request to engage in restrictive trade practices or boycotts. The charging letter, settlement agreement and order can be viewed here (PDF file).

More than 170 U.S. companies are partcipating in the 23rd Havana International Fair that is currently underway in Cuba. Representatives from more than 40 countries will be attending the annual trade show, which runs through Saturday.