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

SERKO SIMON GLUCK & KANE LLP – Customs & International Trade Law

December 7, 2006

CUSTOMS and BORDER PROTECTION (CBP)

• Trade Bills Being Considered in Congress: Several trade issues are currently being considered in the U.S. Congress. An all encompassing bill (H.R. 6346) would, among others things: 1) extend the Generalized System of Preferences (GSP) program for an additional two years (through 2008) and make changes to the program to make its benefits more readily available to lesser developed countries; 2) provide a tax credit for investing in eligible countries under the African Growth and Opportunity Act (AGOA); 3) provide additional preferential trade treatment to certain eligible articles from Haiti; 4) extend preferential treatment to imports from the Andean countries of Bolivia, Colombia, Ecuador, and Peru; and 5) grant Vietnam Permanent Normal Trade Relation (PNTR) status.
• HTSUS Changes May Be Delayed Past January 1, 2007: Trade sources note that the scheduled changes to the HTSUS, expected to occur on January 1, 2007, may be delayed until February 2007. Due to the certain time requirements set by law, the required Presidential Proclamation announcing the changes may not be issued until after Congress returns in January from its year-end vacation. Further, as the law now states, any Proclamation will only take effect 15 days after it is signed. However, Congress is considering whether to extend this 15-day time period, which would further affect the implementation date.
• Monitoring of Vietnam Textile Imports: The U.S. International Trade Administration (ITA) is seeking comments by December 27, 2006 on the establishment of a monitoring program to better track textile and apparel imports from Vietnam. In an effort to win approval for Vietnam’s PNTR status, the U.S. administration promised to monitor Vietnam’s exports and self-initiate antidumping (AD) investigations, should it be deemed necessary. Irrespective of its PNTR status, U.S. import quotas will be removed on all Vietnamese exports as soon as it joins the WTO; additional information is available at: http://www.otexa.ita.doc.gov/fr2006/vietmonit.htm
• Classification Changes:

Foundation Undergarments – Certain undergarments made of lace cups, front and side panels extending below the waist and covering the upper abdomen, are constructed of 91% nylon and 9% lightweight elastane net and lace fabrics and were classified as “corsets” under subheading 6212.30.0020 (23.5% duty, cat. 649), HTSUS. Although the garments cover the torso and upper abdomen, it is not designed to “cinch, reshape, or mold”, thus, they can not be classified as corsets; the proper classification is under subheading 6212.90.0030 (6.6% duty; cat. 659), HTSUS, the provision for “Brassieres, girdles, corsets…: Other.”

TRADE TALK

• International Trade Developments:

Iran - President Bush continued the national emergency with respect to Iran for an additional year.

Lebanon – The U.S. signed a Trade and Investment Framework Agreement (TIFA) with Lebanon. TIFA’s are used to foster and liberalize trade and are often used as precursors to free trade agreements.

• AD/CVD Developments: The U.S. Commerce Department took the following action:

Butt-weld Pipe Fittings – Decided to keep in place the AD order on certain stainless steel butt-weld pipe fittings from Malaysia and the Philippines.

Steel Flat Products – Decided to conduct a sunset review of its AD order on certain hot-rolled carbon steel flat products from Argentina, China, India, Indonesia, Kazakhstan, Netherlands, Romania, South Africa, Taiwan, Thailand, and Ukraine.

Steel Concrete Reinforcing Bars – Decided to conduct a sunset review on its AD order on certain steel concrete reinforcing bars from Belarus, China, Indonesia, Korea, Latvia, Moldova, Poland, and Ukraine.

• Section 337 Investigations: The ITC instituted special Section 337 trademark infringement investigations on the following products:

Computer Switches – Certain computer peripheral switches and products containing same which allow the operation of multiple computers from one console.

Digital Multimeters – Certain handheld devices that measure and display electrical parameters, such as voltage and resistance.

BUSINESS BRIEFS

· Export Administration Regulations:

Electronic Communications – Effective November 20, 2006, the U.S. Bureau of Industry and Security (BIS) added devices used in intercepting wire, oral, or electronic communications to the list of goods subject to export controls.

Review of China Export Regulations Urged – Some of the largest U.S. exporters are urging the BIS to reconsider its newly proposed export regulations with regard to China. The exporters argue that most of the new items to be regulated are readily available to China from foreign or indigenous sources and that any ban will only hurt U.S. companies.

· Miscellaneous Developments:

Slovenia Converts to the Euro – Effective January 1, 2007, Slovenia will convert to the Euro currency. It is the only EU country to convert its currency in 2007.

Another DRAM Price Fixing Conviction – The U.S. Department of Justice recently announced another conviction of a Japanese executive involved in the price fixing of dynamic random access memory semiconductors (DRAMS). The executive also agreed to pay a $250,000 fine, bringing the total monies recovered in the case to $731 million.

Acid-Washed Denim – Imports of certain acid washed denim garments and accessories, which until now required documentary evidence of non-infringement with the “213 Patent”, may now be imported without restriction, as the patent covering the washing process has expired.

Asthma Friendly Products – Many common household articles, including toys, are known to trigger asthma and allergy attacks. With the prevalent rates for asthma and allergies among children doubling in the past 20 years, the Asthma and Allergy Foundation of America (AAFA) instituted a new program to certify toys as “asthma friendly.” Toys which have been scientifically tested and proven to be better choices for suffering children have been certified as “asthma friendly.” Other household products, such as pillows, mattresses, pillow covers, vacuum cleaners, and flooring, are in various stages of testing.

Biotech Presence in Apparel Industry – Genetically engineered crops are increasingly finding their way into the apparel industry. The latest use of biotech products are those using biodegradable fabrics and apparel made of a new fiber called Ingeo™. Biodegradable corn-based disposable diapers, already sold in Europe, will soon be introduced into the U.S.

COURT CASES

· Failure to Follow Classification Ruling: In U.S. v. Rockwell Automation, Inc., the U.S. Court of International Trade (CIT) ordered the defendant to stand trial for making material false statements and omissions on its entry documents. Because the defendant entered its merchandise using a classification other than that it received from CBP in a pre-entry classification ruling, it essentially made a “false” statement under CBP rules and regulations. It also failed to mention the pre-classification ruling in the entry documents as required under the regulations.

· Luxury Purveyor Sues Mass Retailer: A leading luxury handbag maker recently sued one of the nation’s leading mass retailers for $1 million for allegedly selling what it believes is a counterfeit copy of their bag. This suit follows a similar one filed a few months ago by another handbag manufacturer against another mass retailer for allegedly selling knockoffs of its handbags. In the earlier case, the plaintiff argued that as it does not have any merchandising agreement with the retailer or anyone affiliated with it, it is more than likely that the bargain selling price of its expensive bags must be for counterfeits.

Serko Simon Gluck & Kane LLP
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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