This bulletin has been prepared especially for
clients of A. N. Deringer, Inc. by:
SERKO SIMON GLUCK & KANE LLP –
Customs & International Trade Law
November 21, 2006
CUSTOMS and BORDER PROTECTION (CBP)
- Major Changes Coming to the HTSUS on January 1,
2007: Effective January 1, 2007, the World
Customs Organization (WCO) revamped the Harmonized Tariff Schedule (HTS)
which is used by virtually all trading countries. New changes to the U.S. Harmonized
Tariff Schedule (HTSUS), comprising 354 amendments and affecting 83 of the
97 HTS chapters, are also expected to be implemented on or closely after
January 1, 2007, pending a Presidential Proclamation and Federal Register
Publication. Importers must review
the classifications being used for their merchandise and update their IT
systems to ensure full compliance with all CBP regulations. While most of the changes will be duty
neutral, there will some changes to the duty rates. Following is a web link to CBP’s
overview of the changes and linking to a detailed U.S. International Trade
Commission (ITC) report on each of the specific changes to the U.S.
tariff codes: http://www.cbp.gov/xp/cgov/toolbox/legal/Rulings/harmonized.xml
.
- Appliance Efficiency: In settling a lawsuit brought by several
states and environmental groups, the U.S. Department of Energy (DOE)
agreed to boost its energy efficiency requirements for 22 appliances and
household equipment. The lawsuit
claimed that the DOE was at times 13 years late in updating efficiency
requirements. The new standards
will be implemented over five years, and will cover heating and air
conditioning systems, water heaters, boilers and motors, dishwashers,
clothes dryers, and fluorescent lighting.
- Classification Changes: Porcelain Vase – A floral porcelain
vase, 4.5” wide x 4.5” deep x 7.5” high, should not be classified as
“household articles of porcelain” under subheading 6911.90.0050 (5.4% duty),
HTSUS; as the vase is purely decorative, and it can hold flowers, which
increases its decorative value, the proper classification is under the
provision for “Statuettes and other ornamental ceramic articles:…”, under
subheading 6913.10.5000 (duty free), HTSUS.
TRADE TALK
- Expiration
of Andean Free Trade: Reports indicate that the U.S.
administration will ask the U.S. Congress to extend the Andean Trade
Promotion and Drug Eradication Act (ATPDEA), currently set to expire on
December 31, 2006. ATPDEA grants
preferential trade benefits for qualifying goods imported from Bolivia, Colombia,
Ecuador, and Peru.
- APEC Summit Statement: At the recently concluded
Asia-Pacific Economic Cooperation (APEC) meeting in Vietnam,
participating world leaders strongly advocated for the resumption of the stalled
World Trade Organization (WTO) Doha Round of trade talks. The leaders stated that they are ready
for further concessions and urged other WTO members to be open to
additional concessions in order to save the Doha Round. The leaders stated that should the Doha
Round talks ultimately fail they would consider an APEC-wide FTA
encompassing half the global trade and 56% of its gross domestic
product. APEC consists of Australia, Brunei,
Canada, China, Chile,
Hong Kong, Indonesia,
Japan, Malaysia, Mexico,
New Zealand, Papua New Guinea, Peru, Philippines,
Russia, Singapore, South
Korea, Taiwan,
Thailand, U.S., and Vietnam.
- Colombia FTA: White
House sources indicate that President Bush is set to sign soon the U.S. - Colombia
Free Trade Agreement (FTA).
However, Congressional action is not expected until at least after
January 1, 2007. It is thought that
in the interim, Congress will act to extend ATPDEA allowing Colombia (as
well as Peru) to continue enjoying preferential duty treatment until
passage of their respective FTA’s.
- ITA
Proposes Changes to NME Calculations: The U.S. International
Trade Administration (ITA) is proposing changes in the way it uses market
economy surrogate information in calculating antidumping duties (AD) for
non-market economies (NME).
Specifically, the ITA is revising the methodology when a NME uses
inputs from a market economy and from a NME. The ITA is also changing its calculation
of NME wages whereby it will only use wage data from the International
Labor Organization. Finally, the
ITA proposes to change the calculation of duty drawback adjustments to the
export price when the producer uses both domestic and foreign inputs. Details are available at: http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/E6-17376.htm
.
- AD/CVD
Developments: The U.S. Commerce Department took the
following action:
Coated Free Sheet Paper – Initiated
an AD and CVD on coated free sheet paper from China,
Indonesia, and Korea.
Large Newspaper Printing Press – Reconsidering its AD order on large newspaper printing
presses from Japan.
WORLD TRADE ORGANIZATION (WTO)
- Russia’s WTO Accession Hopes: The U.S. and Russia
signed an agreement paving the way for Russia to finally join the
WTO. The agreement, signed on the
sides of the recently concluded APEC summit, is the last major hurdle
facing Russia’s
entrée into the WTO. However, Russia
must still integrate the 57 bilateral agreements it signed with other
countries, which is not expected until mid-2007. In addition, Georgia
and Moldova, are
threatening to block Russia’s
accession to the WTO (which must be unanimous). U.S. Congress must also grant Russia
Permanent Normal Trade Relations (PNTR) status before the two nations can
start trading under WTO rules.
- Vietnam’s WTO Accession: The first attempt to pass PNTR legislation for Vietnam
failed, as Congressional leaders could not muster the two-thirds majority
needed under special rules. Congress
plans to hold another vote on the bill in December. While the U.S.
must lift quotas it imposed on Vietnamese textiles once it becomes a WTO
member, U.S. importers can’t
benefit from Vietnam’s
WTO accession until it is granted PNTR.
- Iron
Silk Road Closer to Fruition: A group of 18 Asian nations recently
signed onto the U.N. sponsored Trans-Asian Railway Network which will link
Asia and Europe, reduce shipping costs,
and help landlocked countries prosper.
Dubbed the “Iron Silk Road,” the plan calls to leverage the
existing rail lines and fill in the missing links to create a seamless
continent-wide rail network.
BUSINESS BRIEFS
·
China Trade Environment: At the
APEC summit held in Vietnam,
China’s
President promised to counter its
politically sensitive trade imbalances through better protection of intellectual
property rights (IPR), to further open its economy to foreign investment, and work
to accelerate the rise of the Yuan.
However, no detailed proposals were mentioned.
·
Yuan Reaches
Record High Against U.S. Dollar: The Yuan’s
exchange rate was recently set at 7.8781 to the U.S. dollar, its highest level
ever. China’s Vice Premier reiterated
plans to continue pushing forward with reforms of the exchange rate.
·
$10 Million
NAFTA Penalty: The Journal of Commerce reported
that CBP recently reached a $10 million settlement with an importer for
allegedly making false NAFTA claims. The
importer claimed that its speakers being imported from Mexico qualify
for NAFTA treatment, when in fact the components were not manufactured
there. In addition, Customs assessed a
$15 million penalty for alleged recordkeeping violations.
COURT
CASES
· Appeals
Court Reaffirms Proper Protest Procedures: In International Custom Products, Inc. v. U.S., the U.S. Court of Appeals
for the Federal Circuit (CAFC) stated that it will not allow the proper protest
procedure to be easily circumvented. The
importer filed the original case after CBP issued a Notice of Action changing
the classification of importer’s white sauce by raising the duty a staggering
2,400%. The importer filed suit at the U.S. Court of International Trade
(CIT) under residual 1581(i) jurisdiction, claiming that it relied on a
pre-importation ruling, and that the Notice of Action is tantamount to a
classification revocation requiring a 60-day notice and comment period. The CIT agreed with the importer. However, the CAFC found that the CIT had no jurisdiction, as 1581(i)
jurisdiction is “strictly limited” and the importer
should have filed under regular 1581(a) jurisdiction, which governs protests. In
addition, the court indicated that the importer’s pleadings, that the regular
protest route will take too long and force it into bankruptcy, were mere
allegations and assertions, especially since an accelerated protest review is
available.
Serko Simon
Gluck & Kane LLP
1700 Broadway, 31st Floor
New York, New York 10019
Phone (212) 775-005 Fax (212) 839-9103
Outside of New York State: 1-800-46-TRADE
E-mail address: serko-simon@customs-law.com On the
internet at: www.customs-law.com
Note: This
information is current as of the date of this document, and is not, nor is it
intended to be, legal advice, which can only be provided by Serko Simon Gluck
&Kane LLP on a case-by-case basis. ©2006
This Trade Alert has been
prepared by Chaim Appel, Technical Advisor.