International Trade Law News

The Miami Herald reports that officials with the Treasury Department's Office of Foreign Assets Control (OFAC) recently held a meeting in Miami with travel agencies that "specialize in travel to Cuba to go over the rules they must follow to keep their licenses." The article also states that OFAC has "has been auditing travel agencies and religious organizations that specialize in travel to Cuba" and four travel agencies and six religious organizations have had their licenses suspended by OFAC.

Labels: OFAC

On Monday, May 1st, the European Union will expand the coverage of retailiatory sanctions imposed on U.S. products as a result of the failure by the U.S. to bring the Continued Dumping and Subsidy Offset Act (commonly known as the "Byrd Amendment") in compliance with its obligations under WTO agreements. While the Byrd Amendment was repealed by Congress, duties imposed on goods imported into U.S. through September 2007 will still be distributed to the domestic industry. The EU claims that that the Byrd Amendment should be repealed in full and no further antidumping or countervailing duties should be paid directly to U.S. industry. The total value of the new sanctions will be US$9.1 million, bringing the total amount imposed by the EU against U.S. products to $36.9 million.

According to Regulation (EC) No 632/2006, the following is a list of the HTS subheadings and description of the eight additional products will be subject to the additional 15% duty:

1. 6301 40 10 -- Blankets and travelling rugs of synthetic fibres, knitted or crocheted (excl. electric, table covers, bedspreads and articles of bedding and similar furnishing of heading 9404)
2. 6301 30 10 -- Blankets and travelling rugs of cotton, knitted or crocheted (excl. electric, table covers, bedspreads and articles of bedding and similar furnishing of heading 9404)
3. 6301 30 90 -- Blankets and travelling rugs of cotton (excl. knitted or crocheted, electric, table covers, bedspreads and articles of bedding and similar furnishing of heading 9404)
4. 6301 40 90 -- Blankets and travelling rugs of synthetic fibres (excl. knitted or crocheted, electric, table covers, bedspreads and articles of bedding and similar furnishing of heading 9404)
5. 4818 50 00 -- Articles of apparel and clothing accessories, of paper pulp, paper, cellulose wadding or webs of cellulose fibres (excl. footware and parts thereof, incl. insoles, heel pieces and similar removable products, gaiters and similar products, headgear and part
6. 9009 11 00 -- Electrostatic photocopying apparatus, operating by reproducing the original image directly onto the copy [direct process]
7. 9009 12 00 -- Electrostatic photocopying apparatus, operating by reproducing the original image via an intermediate onto the copy [indirect process]
8. 8467 21 99 -- Drills of all kinds for working in the hand, with self-contained electric motor operating with an external source of power (excl. electropneumatic drills)

Labels: Antidumping

Yesterday, the House Homeland Security Committee held a markup of H.R. 4954, the Security and Accountability For Every Port Act or SAFE Port Act and voted unanimously to send the bill to the full House for consideration. Among other things, the SAFE Port Act would set up procedures for restoring port operations after a terrorist attack or other catastrophic event, require the Homeland Security Department to develop standards for container seals, codify certain existing port and maritime security programs and make changes to the C-TPAT program.

During the markup, the committee adopted a Republican-backed amendment that would bar U.S. ports from accepting cargo containers from countries that do not cooperate with U.S. efforts to install nuclear and radiation detection equipment in their seaports.

Update on previous story:

At at joint U.S.-Canada news conference held at the Canadian Embassy in Washington, U.S. Trade Representative Rob Portman joined Canada's International Trade Minister David L. Emerson and Industry Minister Maxime Bernier in announcing that the United States and Canada have agreed on the core terms of a softwood lumber accord. The details of the agreement will be finalized over the next couple of months, but are consistent with those set forth in our previous post.

The U.S. Coalition for Fair Lumber Imports issued a press release expressing their support of the agreement. The Coalition applauded the efforts of the Bush Administration officials who negotiated the agreement and USTR-Designate Ambassador Susan Schwab in particular. The Coalitions' chairman said "Ambassador Schwab could not have been better at advancing United States economic interests while understanding what the Canadian governments and industry could accept. She demonstrated the talents needed to be chief U.S. trade negotiator."

For a history and timeline of the 20+ year softwood lumber dispute from the Canadian perspective, the Embassy of Canada has a page on their website containing a history and chronology of the dispute. The U.S. lumber industry's take on this issue can be found on the Coalition for Fair Lumber Import's website.

The Office of the U.S. Trade Representative today announced that the U.S. and Canada have reached a tentative agreement to resolve the longstanding softwood lumber dispute.

According to the agreement, the U.S. will agree to return about 80% of the US$5 billion in countervailing duties collected since May 2002. The agreement provides that Canada's share of the U.S. lumber market will be capped at the current 34% level and the Canadian Government would impose an export tax when North American lumber prices fall below a certain level. Under the agreement, both sides will agree to withdraw the various lawsuits that have been filed, including those in the World Trade Organization.

Registration has opened for the World Customs Organization's World Customs Exhibition that will be held in Brussels, Belgium from June 29-July 1, 2006. For more information see the following link.

OFAC today announced that President Bush signed an Executive Order blocking property of additional persons in conection with the conflict in Sudan's Darfur region. The EO broadens the authority of Executive Order 13067 to designate persons, including both Government of Sudan and non-Government of Sudan officials, who satisfy the criteria set forth in the order. The annex to the EO names four persons whose property have been blocked.

In an unrelated action, OFAC today updated the information for an entity on the SDN list.

Labels: OFAC

The Bureau of Industry and Security (BIS) today published in the Federal Register a final rule amending the Chemical Weapons Convention Regulations (CWCR) (15 CFR Parts 710-722). The final rule revises the CWCR by removing outdated provisions (e.g., the initial declaration requirements in parts 713, 714, and 715) and including additional requirements identified as necessary for the implementation of the Chemical Weapons Convention (CWC) provisions and by clarifying other CWC requirements. The changes made by this rule were eaddressed in a proposed rule and request for public comments that BIS published on December 7, 2004.

The Chemical Weapons Convention, which entered into force on April 29, 1997 bans the development, production, stockpiling or use of chemical weapons and prohibits members to the CWC from assisting or encouraging anyone to engage in a prohibited activity. The CWC also requires signatories to report exports and imports and to impose export and import restrictions on certain chemicals.

Labels: BIS

The U.K.'s Export Control Organisation today announced that it has revised a number of the standard conditions imposed on permanent and standard Standard Individual Export Licences (SIELs).

The U.S. House of Representatives today passed the Iran Freedom Support Act (H.R. 282) by a vote of 397-21. The Iran Freedom Support Act amends the Iran-Libya Sanctions Act of 1996 (ILSA) by removing the restrictions imposed on Libya and codifies sanctions currently imposed on Iran by Executive Order. The bill would impose liability on U.S. parent companies for violations of sanctions by their foreign subsidiaries. The legislation would also require the President to publish in the Federal Register a list of all foreign and domestic entities that have invested more than $20 million in Iran's energy sector and denies U.S. aid to countries that have invested in Iran's energy sector.

President Bush today signed an Executive Order blocking the property of anyone suspected in the assassination of Lebanon's former prime minister Rafiq Hariri. The Executive Order authorizes the Secretary of the Treasury to block the assets of yet-to-be-identified persons who are determined to have been involved in Hariri's death or to have obstructed the work of United Nations investigators.

U.S. Customs and Border Protection has announced that the C-TPAT Online Application process has been temporarily suspended pending the implementation of the new C-TPAT Security Link Portal system. No new C-TPAT applications will be accepted until the new C-TPAT Online Web application is available within the next few weeks.

Labels: Customs

Department of Homeland Security (DHS) Secretary Michael Chertoff held a press conference today to announce that DHS will begin conducting name-based background checks on nearly 400,000 persons that work at U.S. ports. The employees will undergo background checks for links to terrorism and to ensure they are legal U.S. residents.

In response to a question raised during the press conference about a possible amendment to legislation that would require hundred percent physical screening of all incoming cargo into the U.S., Secretary Chertoff said that calling for "physical inspection of every container is like saying we ought to strip search everybody who gets on an airplane. I mean, in theory, that would make us very safe, but I think it would destroy the airline industry. So we're not going to strip search people, everybody getting on an airplane, and I don't think it's wise to physically inspect every container. I do think it's wise to use the kind of technology I saw in Hong Kong, and the kind of technology we are using in ports in this country screening hundred percent, check hundred percent for radiation, and make sure we are looking at any container which is a high-risk."

The Center for Nonproliferation Studies (CNS) has published the April edition of the International Export Control Observer (IECO). The IECO reports on weapons of mass destruction export controls in the Newly Independent States, Asia, the Balkans, the Middle East, Africa and South America. This publication will soon be available from the CNS website.

The Committee to Support U.S. Trade Laws (CUSTL) today issued a press release criticizing the recent World Trade Organization Appellate Body's decision in the antidumping "zeroing" dispute brought by the European Union against the U.S.

"The Appellate Body's decision on the 'zeroing issue' is a clear example of WTO overreaching its legal mandate," said Joseph L. Mayer, CUSTL's chairman. He also said that "the U.S. methodology that determines accurate dumping margins is not mentioned in any WTO agreement. Therefore the WTO has no business using its dispute resolution system to undermine this important U.S. practice." Mayer called for the U.S. government to challenge the decision at the WTO.

The CSUSTL is an organization of companies, trade associations, labor unions, workers, and individuals committed to preserving and enhancing U.S. trade laws.

Labels: Antidumping

U.S. Customs and Border Protection (CBP) has released the answer key to the April 2006 customs broker license examination. The examination and key can be found at the following links on CBP's website: Examination/Key (files open as Word Documents).

Labels: Customs

At Friday's State Department Defense Trade Advisory Group meeting it was announced that David C. Trimble, Director, Office of Defense Trade Control Compliance, is leaving the Directorate of Defense Trade Controls to serve on the staff of the National Security Counsel. Peter J. Berry would move from his current assignment as Director, Office of Defense Trade Controls Licensing, to become Special Advisor to Deputy Assistant Secretary of State Gregory M. Suchan. Replacements have not yet been announced.

Labels: DDTC, Export Controls

The Government Accountability Office (GAO) has issued a report entitled "Eliminating Nonmarket Economy Methodology Would Lower Antidumping Duties for Some Chinese Companies." The report, which is the fourth and final report on China import relief mechanisms, explain the special nonmarket economy (NME) methodology that the U.S. employs to calculate antidumping duties on products from China and other NME countries, analyze the application of antidumping duties to China over the last 25 years, compares the duty rates applied to Chinese products with the duty rates applied to products from market economy countries and explain the circumstances in which the U.S. would stop using its NME methodology to calculate antidumping duties on Chinese products.

The GAO found that on 25 occasions the Commerce Department applied duties to the same product from both China and one or more market economy. The antidumping duties imposed on Chinese products were over 20 percentage points higher than those applied to market economies because average China country-wide rates were over 60 points higher than comparable market economy rates. However, individual China company-specific rates were similar to those assigned to market economy companies.

The report concludes that the Commerce Department's application of the NME methodology has produced AD duties on Chinese products that are substantially higher than those applied to the same products from market economy countries. Changing China’s NME status—and thus eliminating the application of this methodology—would have a variety of consequences. For example, the GAO notes that duty rates applied to companies that do not receive individual rates would likely decline and Chinese companies that cooperate in Commerce investigations may also receive comparatively low rates. However, the impact of these lower antidumping margins on overall China averages may be offset by application of high antidumping rates to individual Chinese companies that do not cooperate in antidumping investigations (i.e., receive adverse facts available). The report can be found at the following link: www.gao.gov/new.items/d06231.pdf.

In addition, GAO has prepared an e-supplement which contains a database of U.S. antidumping cases against China and selected other countries from January 1, 1980, through December 31, 2004. The e-supplement can be found here.

Labels: Antidumping

The Bureau of Industry and Security's Information Systems Technical Advisory Committee will meet on April 26, 2006 in Washington, DC. The agenda and other meeing details can be found here.

The World Trade Organization's Appellate Body recently issued an opinion affirming that the "zeroing" methodology used by the U.S. in calculating antidumping margins violates provisions of the WTO Anti-Dumping Agreement. Significantly, the Appellate Body found that the zeroing methodology is inconsistent with the WTO Anti-Dumping Agreement not only when it is used in original investigations also in administrative reviews.

Zeroing involves setting negative antidumping margins (i.e., sales in which the U.S. price is higher than normal value) to zero, which increases the final dumping margin by preventing the negative margins from offsetting the positive margins in the dumping margin calculation.

The Appellate Body's decision and other documents relating to this case can be found here. For more information on the zeroing methodolgy, see the Cato Institute's Center for Free Trade Policy Studies report entitled "Zeroing In: Antidumping's Flawed Methodology under Fire."

Labels: Antidumping

An Op-Ed appearing in the San Jose MercuryNews describes how the growing number of private companies now screening potential customers against OFAC's Specially Designated Nationals List (SDN List) has created difficulties for persons with names similar to those on the SDN List.

Labels: OFAC

The Taipei Times reports that Taiwan's Bureau of Foreign Trade is investigating Taiwanese exporters of high-precision machine tools to determine whether there have been any violations of Taiwan's Regulations Governing Export and Import of Strategic High-Tech Commodities. The article also reports on the difficulties faced in determining whether exports of controlled technology to China has occured.

The State Department's Directorate of Defense Trade Controls today published in the Federal Register a final "fix-it" rule making numerous amendments to the International Traffic in Arms Regulations (ITAR). While most of the changes are minor, such as updating the ITAR to reflect current office names, correcting cross-references, correcting a number of typographical errors in the U.S. Munitions List and updating the reference to the Wassenaar Arrangement, the rule contains several more significant changes. The significant changes in the final rule include:

• Clarifying that the "business of manufacturing or exporting defense articles or furnishing defense services includes participating in one action and does not require more than one action.
• Clarifying the definition of brokering activities to reflect that the "business of brokering activities'' includes participating in one or more actions as described in the definition and making clear tha the registration requirements for brokers are not meant to exclude foreign persons from registering as brokers. The rule notes that where foreign persons cannot provide the same information that a U.S. person would provide, they still are required to submit information that is substantially similar in content to that which would be provided by a U.S. person.

U.S. Customs and Border Protection (CBP) has announced the implementation of a new C-TPAT Internet Application and Communications Portal. The C-TPAT Security Link Portal, which is intended to improve the processing and communication for all C-TPAT participants, will be mandatory. The C-TPAT Portal will permit authorized users to:

• Enter new applications;
• Submit information updates and add new information to their C-TPAT file;
• Maintain a “living” Supply Chain Security Profile that can be updated as needed and must be updated and re-certified on a yearly basis;
• Communicate directly with CBP C-TPAT and/or their designated C-TPAT Supply Chain Security Specialists using a secure system;
• Receive information directly from CBP to include cargo security alerts and sanitized intelligence information; and
  
• Maintain a list of authorized users.

Labels: Customs

Today President Bush will name U.S. Trade Representative (USTR) Rob Portman as the Director of the Office of Management and Budget, replacing Joshua Bolten, who is now White House Chief of Staff. Deputy USTR Susan Schwab will replace Portman as USTR.

Today's Washington Post reports that the Government of Iran has increased its efforts to illegally obtain weapons, technology and spare parts to maintain Iran's U.S. made military aircraft and for its missile and nuclear weapons programs.

The article states that "arms dealers have exported or attempted to export to Iran experimental aircraft; machines used for measuring the strength of steel, which is critical in the development of nuclear weapons; assembly kits for F-14 Tomcat fighter jets; and a range of components used in missile systems and fighter-jet engines."

The article notes that, according to the Department of Homeland Security, that since 2002 there have been 17 major cases involving the illegal shipment of weapons technology to Iran, compared to 15 cases involving China. In addition, since 2000, the U.S. government has commenced 800 export investigations involving Iran.

An article in today's Rutland (Vermont) Herald on Vermont's trade with Cuba demonstrates the competing forces in play with respect to sales to Cuba. On the one hand, Vermont officials are claiming that the state's trade with Cuba has decreased in the past year due to the Bush administration's cash-in-advance payment requirements for agricultural products. On the other hand, the article notes that the U.S.-Cuba Trade and Economic Council disputes Vermont's rationale for the declining exports, citing other reasons for the decline in exports, including Cuba's closer trade relations with Venezuela and China as well as Cuba's increased trade with Canada and South America.

On April 12, 2006, the Treasury Department's Office of Foreign Assets Control (OFAC) imposed sanctions on the Palestinian Authority. Hamas, which now holds the majority of seats on the Palestinian Authority's Legislative Council, has been designated a terrorist entity whose property and interests in property are blocked under three separate OFAC-administered economic sanctions programs. As a result, U.S. persons (i.e., individuals and corporations) are prohibited from engaging in transactions with the Palestinian Authority unless authorized by general or specific license. In addition, U.S. persons may not transfer, pay, withdraw, export or otherwise deal in any assets in which the Palestinian Authority has an interest unless authorized. OFAC also issued the following six general licenses authorizing the following limited transactions by U.S. persons with the Palestinian Authority:

General License 1 - Official activities of certain international organizations; U.S. person employees of certain governments.

General License 2 - Travel, employment, residence and maintenance transactions with the Palestinian Authority.

General License 3 - Payment of taxes and incidental fees to the Palestinian Authority.

General License 4 - Transactions with entities under the control of the Palestinian President and certain other entities.

General License 5 - Concluding activities with the Palestinian Authority.

General License 6 - In-kind donations of medicine.

General License 4 issued by OFAC requires U.S. financial institutions to reject transactions with members of the Palestinian Authority's Legislative Council that are members of Hamas. While such individuals will not be included on OFAC's list of Specially Designated Nationals and Blocked Persons (SDN List), OFAC has issued a separate Palestinian Legislative Council (PLC) list, which contains the name of such persons. These new restrictions on the Palestinian Authority do not prohibit general transactions between U.S. persons and non-governmental entities within the West Bank or Gaza and do not prohibit transactions with private sector banks within the region.

Labels: OFAC

The Associated Press reports that the National Aeronautics and Space Administration (NASA) announced that it will not release its investigative report on the failure of the Demonstration of Autonomous Rendezvous Technology (DART) spacecraft that occurred in April 2005 because the report contains information subject to the International Traffic in Arms Regulations (ITAR).

Launched from Vandenberg Air Force Base in April 2005, the DART spacecraft was intended to test the technologies needed for a spacecraft to locate, communicate with and maneuver close to another spacecraft without human intervention. The project ended prematurely, however, when the spacecraft placed itself in the retirement phase before completing all planned operations.

The Bureau of Industry and Security's Office of Export Enforcement has updated its "Major Cases List" to reflect developments in enforcement cases that have taken place during the past few months. The PDF document can be found at the following link: www.bis.doc.gov/ComplianceAndEnforcement/Majorcaselist.pdf.

Labels: BIS

AdvaMed, the Advanced Medical Technology Assocation, is presenting a program entitled "Export Compliance for Medical Technology Companies" on May 10-11, 2006 at the Hilton Embassy Row in Washington, DC. Topics that will be covered include:

• The importance of export compliance by medical technology companies
• Applying for licenses to export medical devices to Iran, Sudan, Cuba and Syria
• Understanding and complying with the Foreign Corrupt Practices Act (FCPA)
• Complying with U.S. antiboycott regulations
• What medical device companies need to know about the Automated Export System (AES)
• Establishing and implementing an effective export compliance program
• Understanding, obtaining and complying with overseas medical device certifications
• Understanding and complying with foreign customs regulations and procedures

The confirmed U.S. Government speakers include Michael D. Turner, Director of the Bureau of Industry and Security's Office of Export Enforcement and Bill Bostic, Chief of the Census Bureau's Foreign Trade Division.

For further information and a complete list of speakers, see the following link: www.advamedmtli.org/mtli/mtg06-19.cfm.

The U.S. and China today held the annual senior-level meeting of the Joint Commission on Commerce and Trade (JCCT). Established in 1983, the JCCT is an ongoing dialogue to address issues affecting U.S.-China trade and investment.

During today’s meeting, China committed to addressing a number of U.S. trade concerns in three areas: enhancing access of U.S. companies and farmers and ranchers to the Chinese market; improving protection of intellectual property rights (IPR) in China; and moving toward a transparent and market-oriented system of government procurement in China.

Specifically, China agreed to the following measures: reopening its market to U.S. beef exports; launching negotiations to join the WTO government procurement agreement; requiring all computers produced in or imported into China to use legal software; closing optical disk plants that produce pirated CDs and DVDs and stepped up enforcement of IPR; requiring all trade-related measures to be published in the China Foreign Trade and Economic Cooperation Gazette, issued by the Ministry of Commerce; eliminating barriers to trade in medical devices; and the launching of a dialogue on the steel industry.

The U.S. and China also agreed to establish a U.S.-China High Technology andStrategic Trade Working Group under the JCCT to review export control cooperation and facilitate high technology trade. Among the Group’s first activities will be planning a bilateral export control seminar in China.

The USTR's fact sheet describing the outcomes of the U.S. requests during the 17th annual JCCT can be found here.

The U.S. Department of Commerce (DOC) today announced preliminary affirmative determinations in its antidumping (AD) duty investigations on certain lined paper products from China and India. As a result, DOC will impose antidumping duties ranging from 52.10% to 258.21% on imports of lined paper products from China and 22.53% to 110.43% on imports of such products from India. The determinations are in response to antidumping petitions filed by the Association of American School Paper Suppliers in September 2005.

DOC will now suspend liquidation of all entries of certain lined paper product imports from China and India, and will require importers to provide a cash deposit or post a bond for such entries in the amount of the AD margins. The determinations primarily cover lined paper school supplies, such as notebooks, filler paper and composition books. DOC also found a surge of imports amounting to "critical circumstances" in a number of instances, which may result in imposing the duties retroactively to mid-January 2006.

DOC has already imposed AD duties of 97.85% to 118.63% on imports of lined paper products from Indonesia, countervailing duties (CVD) of 33.31% on lined paper products from Indonesia and CVDs of 2.2% to 7.2% on imports of such products from India.

DOC is expected to issue its final AD and CVD determinations in mid-2006. A fact sheet issued by DOC on today's determinations can be found here.

Labels: Antidumping

Today's Washington Post contains an interesting story entitled "Hit-and-Miss List: If You're in This Directory, Forget Shopping" describing how car dealerships and other U.S. businesses are attempting to comply with OFAC's Specially Designated Nationals and Blocked Persons List.

The article quotes a Treasury Department spokesperson as saying that "financial institutions have really stepped up to the plate in combating illicit finances and checking the list" and "other industries are following suit. . . . We expect U.S. businesses to do all they can to comply with the law, but we do recognize there are challenges in applying broad sanctions of this sort."

Labels: OFAC

The Bureau of Industry and Security (BIS) has published the agency's 2006 Foreign Policy Report. The report, which is required by law, provides an overview of U.S. foreign policy controls and discusses regulatory and policy changes that took place in 2005. The report covers the following foreign policy export controls: Crime Control/Human Rights; Regional Stability; Anti-Terrorism Controls; Embargoed Countries and Persons; Chemicals, Chemical Precursors and Associated Equipment, Technology and Software; Biological Agents and Associated Equipment and Technology; Missile Technology Controls; High Performance Computers; Encryption; "Hot Section" Technology; and Nuclear Nonproliferation.

Labels: BIS

The Seattle Times reports on Boeing's recently completed $15 million settlement with the State Department's Directorate of Defense Trade Controls (DDTC) for violating the International Traffic in Arms Regulations (ITAR) by making unlicensed foreign sales of commercial aircraft containing the controlled QRS-11 gyrochip.

The article describes the commodity jurisdiction history of the QRS-11 and notes that the State Department had determined that the gyrochip was covered by the U.S. Munitions List as early as 1993. However, "Boeing continued the exports even after the State Department told the company to stop" and Boeing's "lawyers advised that the State Department 'did not have jurisdiction' to regulate the exports." The article quotes a Boeing spokesman as saying that "In hindsight, we should have handled it differently" and "we would handle it differently today."

Separately, DDTC also entered into a consent agreement with Goodrich Corporation and L-3 Communications imposing a $7 million penalty to settle alleged violations of the ITAR. Among other things, DDTC alleged that Goodrich and L-3, including L-3's subsidiary, L-3 Communications Avionics, Inc., formerly a subsidiary of Goodrich known as Goodrich Avionics Systems, Inc., violated the ITAR by omitting material facts from a commodity jurisdiction for a product containing QRS-11 gyrochips and making unauthorized exports of such products. Under the consent agreement, Goodrich will pay a civil penalty of $1,250,000 and L-3 will pay a civil penalty of $2,000,000. The remainder of the penalty will be spent on remedial compliance measures. Both companies are also required to appoint qualified individuals to serve as Special Compliance Officers for three years.

Labels: DDTC, Export Controls

Reuters reports on Friday's decision by the U.S. Court of International Trade (CIT) holding that U.S. Customs and Border Protection violated the North American Free Trade Agreement (NAFTA) by applying the Byrd Amendment to antidumping and countervailing duties on products from Canada and Mexico. In his 116-page decision in Canadian Lumber Trade Alliance v. United States, Judge Donald Pogue held that that under NAFTA, any trade measure that targets imports must specifically mention Canada and Mexico to be legally valid for those nations.

While the article mentions that the decision will have major implications in the long-running countervailing duty case involving softwood lumber from Canada, since it would remove a major incentive for the U.S. industry to continue the litigation, the article fails to note that the question of the remedy that should be applied has not yet been settled. The Canadian plaintiffs are seeking both prospective injunctive relief and disgorgement of all past Byrd Amendment distributions paid by CBP. However, the U.S. contends that CBP is only required to return and "overpayments." As a result, Judge Pogue ordered the parties to submit any jointly proposed remedy to the court by May 8, 2006. If the parties cannot agree on a proposed remedy, the parties must by that date submit recommendations and arguments concerning the proper remedy and the scope of such remedy.

Labels: Antidumping

The Bureau of Industry and Security (BIS) has published its annual report for Fiscal Year 2005 (October 1, 2004, through September 30, 2005). In addition to an overview of BIS's activities during the past year, including describing regulatory changes, the report contains extensive tables on licensing and enforcement activity, including a detailed list of approved license applications for Country Group D:1 and Cuba. The report's highlights include:

• BIS processed 16,719 export license applications (compared to 15,534 in Fiscal Year 2004) worth approximately $36 billion, in an average processing time of 31 days. Of those applications, BIS approved 14,100, returned 2,380 without action and denied 239 applications.
• The average license processing time was 14% shorter than in Fiscal Year 2004.
  
• The highest number of approvals under one commodity classification was for thermal imaging and light intensifying cameras (ECCN 6A003), with 2,413 approved applications worth $68.2 million.
• The highest number of approvals under one commodity classification was
  for thermal imaging and light intensifying cameras (ECCN 6A003), with 2,413 approved applications worth $68.2 million.
• China was the destination for the largest number of approved licenses. BIS approved
  1,303 licenses for exports to China, worth more than $2.4 billion (31% of for "deemed exports" licenses).
• BIS investigations resulted in the criminal conviction of 31 individuals and businesses and the imposition of more than $7.7 million in criminal fines for export and antiboycott violations (compared to 33 convictions and $2.9 million in criminal fines in Fiscal Year 2004).
  
• BIS investigations resulted in the completion of 74 administrative cases against individuals and businesses and the imposition of $6.8 million in administrative penalties (compared to 69 cases and 6.2 million in administrative penalties in Fiscal Year 2004).
• Processed approximately 1,600 technical review requests for over 2,600 controlled encryption products, components and source code items. Of the 2,600 controlled products, 2,099 were encryption products and components submitted for 30-day technical
  review for potential exclusion from the government end-user licensing requirement.
• Approved 636 license applications for the export or reexport of “restricted” encryption products (e.g., high-end routers and other network infrastructure equipment)
  and technology outside the U.S. and Canada to non-sanctioned end-users outside Country Group E:1. Estimated value of these transactions was $61.2 million.
• Approved 483 liceapplicationstons worth more than $3 billion to Cuba. Most of the licenses were for EAR99 agricultural products authorized under TSRA.

Labels: BIS

Now that the goods from El Salvador, Honduras and Nicaragua are now eligible to enter the U.S. under the U.S. - Central America - Dominican Republic Free Trade Agreement (CAFTA-DR), as with all free trade agreements U.S. importers must obtain a certificate of origin from their supplier in order to claim preferential duty status. U.S. exporters are also required to provide their customers with a certificate of origin to claim preferential duty status for goods being exported to El Salvador, Honduras and Nicaragua. Unlike NAFTA, there is no official CAFTA-DR certificate of origin form. Rather, Article 4.16 of the CAFTA-DR agreement provides that claims for preferential treatment may be made in any written form, as long as the following required information is provided:

• Name of person that certifies and when necessary, contact information or any other form of identification;
• Tariff classification under the harmonized system and description of the merchandise;
• Upon the request of custom authorities, provide additional information that demonstrates the origin of the product;
• Date of Certification;
• Information demonstrating that the good is originating;
• If the Certification will be use for several shipments, the period covered by the Certification should be detailed (not to exceed 12 months).

The U.S. International Trade Commission (ITC) today announced that it has launched a general factfinding investigation regarding certain competitive conditions affecting U.S. trade of medical devices and equipment in principal foreign markets. The investigation, "Medical Devices and Equipment: Competitive Conditions Affecting U.S. Trade in Japan and Other Principal Foreign Markets", (Inv. No. 332-474), was requested by the House Ways and Means Committee.

The ITC will focus on the main U.S. exports of medical devices and equipment to these markets and compare Japan's regulatory conditions with those of the other major foreign markets for U.S.-made medical devices and equipment.

The ITC will hold a public hearing in connection with the investigation at 9:30 a.m. on July 11, 2006. Requests to appear at the public hearing should be filed with the Secretary, United States International Trade Commission, 500 E Street SW, Washington, DC, 20436, and must be received by June 27, 2006.

The ITC will provide its report to the Ways and Meams Committee by March 9, 2007.

The National Council on International Trade Development (NCITD) has another excellent lineup of speakers at its April 6, 2006 Trade Compliance Committee meeting. The topics and speakers include:

• Update on Foreign Policy Export Controls -- Joan Roberts, Director, Foreign Policy Division, Bureau of Industry & Security
• Update on Mandatory Automated Export System (AES) Requirements -- Dick Preuss, Foreign Trade Division, U.S. Census Bureau
• Deemed Export Update -- Todd Willis, Office of National Security & Technology Transfer Control, Bureau of Industry & Security

The NCITD meeting will be University Club of Washington, DC. Please contact the NCITD Secretariat (202-872-8181 or cu@ncitd.org) to RSVP for this meeting. The non-member fee to attend this meeting is $45. Further information on the NCITD can be found at www.ncitd.org.

The United Kingdom's Department of Trade and Industry's Export Controls Organisation has imposed a £10,000 fine on Vestguard UK Ltd. for exporting military body armor subject to the U.K.'s Military List (similar to U.S. Munitions List) to various Middle East countries without the correct export licenses. The company pleaded guilty to 15 violations of U.K.'s export control laws control legislation at the City Magistrates' Court in London.

Senators Charles Schumer (D-NY) and Charles Rangel (D-NY) have introduced legislation (S. 248 and H.R. 5069) that would require the Secretary of Homeland Security to hire additional full-time non-supervisory import specialists at the Bureau of Customs and Border Protection.

As a result of a proclamation recently issued by President Bush, goods from Honduras and Nicaragua entering the U.S. after April 1, 2006 are eligible for preferential benefits under the U.S. - Central America - Dominican Republic Free Trade Agreement (CAFTA-DR). Honduras and Nicaragua join El Salvador as countries now eligible for full CAFTA-DR benefits. Goods from Costa Rica, Dominican Republic and Guatemala are not yet eligible for CAFTA-DR benefits.

Homeland Security Secretary Michael Chertoff is currently on a trip to Asia, meeting with security counterparts in Japan, Singapore, Hong Kong and China. In remarks made to the American Chamber of Commerce in Singapore, Secretary Chertoff said the U.S. will add radiation detectors at domestic and foreign seaports in coming months and seek new foreign partners in the Container Security Initiative. He also urged private companies to build databases for sharing information about cargo with the government. He also called for technology to track containers and protect them from tampering.

The Office of the U.S. Trade Representative (USTR) has released the 2006 National Trade Estimate Report on Foreign Trade Barriers, the stautorily mandated annual compendium of significant barriers to U.S. exports. The NTE covers 62 major trading partners and provides an account of barriers and unfair trade practices to U.S. exports of goods, services and agricultural products. Not surprisingly, the 71-page chapter on China is the most comprehensive and covers a myriad of trade-related barriers