This bulletin has been prepared especially for clients of A. N. Deringer, Inc. by:

July 18, 2006

• Classification Developments: Notebook Computer – CBP is proposing to reclassify a notebook computer having two operating systems (Windows and Linux) along with audio/visual features allowing for television reception in subheading 8471.30.0000 (duty free), HTSUS, the provision for "Portable digital automatic data processing machines…." As the television function can’t function without use of the automated data processing (ADP) function, and as the primary purpose of the machine is for its ADP capabilities, it is not classifiable under subheading 8528.12.7201 (5% duty), HTSUS, the provision for "Reception apparatus for television…:Other."

• AD/CVD Developments: Stainless Steel Bars - The U.S. Commerce Department recently scheduled a "sunset review" of its antidumping (AD) order on certain stainless steel bars from Brazil, India, Japan, and Spain.
• EU Proposes Novel AD Remedy for Shoes: Having found that China and Vietnam are unfairly dumping shoes on the EU market, the EU is proposing a deferred AD duty system whereby they will allow a certain amount of merchandise to be entered duty free, with imports above an agreed threshold being subject to the AD duties. In addition, the AD duties will be set at an amount to correct the trade distorting effects of the unfair pricing and not to make the imports uncompetitive, as is the case with regular AD orders.

• G-8 Trade Issues:

• U.S.-Canada Reach Agreement on Softwood Lumber: On July 1, 2006, the U.S. and Canada initialed the previously announced agreement to bring resolution over U.S. dumping duties imposed on Canadian softwood lumber. The agreement calls for an end to all legal proceedings, an end to U.S. dumping duties as they are imposed now, and a return of most of the dumping duties collected to the Canadian exporters. While the agreement calls for unrestricted trade, it does provide for certain safeguards when prices fall below $355 per Thousand Board Feet (TBF). Canada will impose volume limits and charge an export tax in 5% increments, up to a maximum 15% export tax charged when prices fall below $315 per TBF.

• CSI: The Dominican Republic agreed to join CBP’s Container Security Initiative (CSI) as well as the U.S. Department of Energy’s new Megaport Initiative.

• IPR Issues: The U.S. Trade Representative (USTR) recently filled positions at the new office to protect intellectual property rights (IPR) and the Chief Counsel for China Trade Enforcement. These new offices will focus on ensuring China’s compliance to its international trade commitments and IPR enforcement. In addition, the U.S. and EU recently agreed to work together to stem the trade in counterfeit goods after a sharp increase in counterfeit food, beverage, and medicines was registered.
• International Standards: The U.S. and EU are uniting to fight China’s desire to set its own trade standards and regulations on a host of goods sold in China. Already requiring stricter sanitary guidelines for food imports, China is now demanding a Chinese mark be branded on tires, which is in addition to the required international standards. The U.S. and EU fear that a third set of regulations will unfairly favor domestic Chinese firms and only add to the cost of manufacturing, which can equal 20% in the case of automobiles.
• Wal-Mart Efforts to Reduce Global Warming: In recent discussions regarding steps it has taken to reduce its share of global warming emissions, Wal-Mart discussed ways to encourage its supplier network to work with it in reducing their emissions as well. To that end, Wal-Mart stated that "all things being equal, we’ll give business to operators who show they’re fully engaged" in fuel efficiency efforts.
• EAR: In an effort to make its anti-boycott administrative and enforcement process more efficient, the U.S. Bureau of Industry and Security (BIS) is seeking comments by August 29, 2006 on a proposal to publish guidelines and procedures regarding the voluntary self disclosures of requests to comply with the anti-boycott provisions of the Export Administration Regulations (EAR). The guidelines will spell out how the BIS responds to violations, how it makes penalty determinations, and what factors it considers when settling violations.
• Currency and Tax Developments:

• CPSC: The U.S. Consumer Product Safety Commission (CPSC) is seeking comments by July 28, 2006 on a proposed $100,000 civil penalty settlement with a company accused of not notifying it in a timely fashion with regard to defects found in their electric blankets.

• Miscellaneous Tariff Bills: The U.S. Senate Finance Committee is seeking comments by August 15, 2006, on the introduced miscellaneous tariff bills. Bills will be considered only if they have consensus and are revenue neutral.
• Haiti: As a result of losses due to the end of the quota system and the Central America Free Trade Agreement (CAFTA), Representative Charles Rangel (D.-N.Y.) is asking his congressional colleagues to act swiftly and approve the Haitian Hemispheric Opportunity Partnership Encouragement Act (HOPE) as a means to foster democracy in Haiti and restore its trade advantages.