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

 

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

 

January 19, 2007

 

CUSTOMS and BORDER PROTECTION (CBP)

 

  • Grace Period for Tariff Changes:  CBP issued a notice to the industry announcing that it will allow a 17-day grace period for correcting entries using the old classifications once the new HTSUS classifications take effect on February 3, 2007.  CBP noted that substantiation by importers that the additional time was needed to correct a classification will be considered a mitigating factor to help prevent possible penalties for filing an incorrect entry.  The grace period will end February 20, 2007.    
  • CBP May Require Additional Documents to Prove Textile Country of Origin:  In a recent memorandum, CBP noted that it may request additional documentation from importers in order to prove the correctness of claimed country of origin for textile imports.  Examples of documents CBP may require is a certificate of origin or other document importer relied on when ascertaining the country of origin.  CBP is seeking to ensure that goods are not transshipped to circumvent quota or visa requirements.  Failure to provide the requested documents may lead to exclusion from entry.
  • Product Petitions for GSP Annual Review:  The U.S. Trade Representative (USTR) announced its annual review of certain eligible GSP products and country practices for their further continued GSP eligibility.  The list of products being considered is available at:       http://www.ustr.gov/assets/Trade_Development/Preference_Programs/GSP/asset_upload_file19_10292.pdf .  Pre-hearing briefs are due by February 2, 2007. 
  • Uniform Compliance Dates for New Food Labeling Regulations:  The U.S. Food and Drug Administration (FDA) set January 1, 2010 as the uniform compliance date for all new food labeling requirements issued between January 1, 2007 and December 31, 2008.  The FDA previously established January 1, 2008 as the compliance date for new labeling rules issued between March 14, 2005 and December 31, 2006.
  • Approved Diamond Trading Entities:  The U.S. Department of State revised its latest list of participating countries and entities eligible for trade in rough diamonds under the Clean Diamond Act of 2003 to include Bangladesh.  The revised list can be accessed at: http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/E6-22068.htm .
  • Classification Changes:

      Laminated Veneer Lumber – Certain laminated veneer lumber (LVL) with multiple laminations and parallel grains are not to be classified as “Builder’s joinery and carpentry of wood…: Other: Other” under subheading 4418.90.45 (3.2%); as the LVL’s use is not limited to the construction of buildings, it is more properly classified as “Plywood, veneered panels, and similar laminated wood” of heading 4412, with the actual duty determined by the species of the wood.

 

TRADE TALK

 

·         South Korea FTA:  While U.S. and South Korean trade negotiators intend to tackle the  contentious issues of antidumping (AD), rice, automobiles, and pharmaceuticals during the sixth round of free trade (FTA) negotiations to be held in mid-January, time is running short to get a deal done.  Any FTA set to be passed under President Bush’s “fast track authority”, currently set to expire on June 30, 2007, must be submitted to the U.S. Congress 90 days prior to that date, i.e., April 1, 2007.   

·         Fair Trade Developments:  The U.S. Commerce Department recently took the   following action:

Cut-to-Length Plate – Revoked the AD and CVD on certain cut-to-length steel plate from Belgium, Brazil, Finland, Germany, Mexico, Poland, Romania, Spain, Sweden, Taiwan, and the United Kingdom.

Corrosion Resistant Carbon Flat Products - Revoked the AD and CVD on certain corrosion resistant carbon steel flat products from Australia, Canada, France, and Japan. However, the orders will remain in effect for Germany and Korea. 

Flash Memory Devices – The ITC terminated its Section 337 patent infringement investigation of certain flash memory devices, components thereof, and products            containing the same.

 

  TRANSPORTATION TIDBITS 

 

·     Screening of All Inbound Freight:  The U.S. House of Representatives passed the “Implementing the 9/11 Commission Recommendations Act of 2007” (H.R. 1) to require screening of all inbound air cargo by the end of 2009 and scanning of all inbound water-bourn containers at the foreign port of lading within five years.  The bill must pass the Senate before it can be sent to the President for his signature.

 

BUSINESS BRIEFS

 

·         Oversight of Controlled Information Lacking:  The U.S. General Accountability Office (GAO) recently released a study showing that in contrast to effective controls on        the export of sensitive goods through the Export Administration Regulations (EAR), there is a lack of control on the export of sensitive controlled data information. Export       control laws on sensitive goods apply equally to the export of sensitive information, but unlike the export of goods, the export of sensitive information is much harder to control         and the restrictions thereof are less widely known and followed.  The GAO report can be accessed at: http://www.gao.gov/new.items/d0769.pdf .

·         Second Highest Total Antitrust Fines Collected in 2005:  The U.S. Justice Department  recently announced that in FY 2005 it collected antitrust fines totaling more than $473 million, the second highest yearly amount ever collected.  Among others, enforcement  action is continuing in the DRAM chip, chemical, concrete, freight forwarding, and pipeline construction industries.  

 

LEGISLATIVE DEVELOPMENTS

 

  • Recently Introduced Legislation:

Minimum Wage Increase – The U.S. House of Representatives recently passed legislation (H.R. 2) to raise the federal minimum wage from $5.15 to $7.25 an hour in three stages over 26 months.  The U.S. Senate is considering a similar bill.

Drug Importation – The recently introduced Pharmaceutical Market Access and Drug Safety Act of 2007 (H.R. 380, S. 242) would amend the Federal Food, Drug, and Cosmetic Act and allow for the direct import of FDA approved medications from outside the U.S. when done by a registered and approved importer and/or exporter.

China Currency Development - The “Currency Harmonization Initiative through Neutralizing Action (CHINA) Act of 2007” (H.R. 321) recently introduced in Congress calls for the automatic imposition of additional tariffs on all imports from China if it is found to be manipulating its currency.

 

COURT CASES

 

·         Backpacks Which Include Toys Are Not Toys:  In Processed Plastic Company v. United States, the U.S. Court of Appeals for the Federal Circuit (CAFC) affirmed a Court of International Trade ruling that children’s backpacks and beach bags with mesh bottoms which are sold along with an assortment of plastic sand toys are not to be classified as “toys” of Chapter 95 (duty free), but rather, as “travel, sport, and similar bags” of subheading 4202.92, HTSUS (20% duty).  The CAFC stated that any amusement qualities the bags may have are incidental to their function of “organizing, storing, and protecting”, regardless of the actual level of organization, storage, or protection it provides.  In addition, the CAFC ruled that the bags are not “accessories” to the sand toys as they do not bear a “direct” relationship to the primary articles they are alleged to accessorize.        

 

Serko Simon Gluck & Kane LLP
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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. ©2007