December 2003 - Issue 20
In This Issue:
WTO Rules Against U.S. Steel Safeguards
FDA Releases Food Risk Assessment for Terrorism and Other Food Concerns
New Quarantine Requirements for all Sea Containers Destined for New Zealand
Container Screenings at Foreign Ports to be Increased
U.S. Import Requirements for Wood Packing Material
Limitations in Cargo Risk Analysis Program
Final Rule Issued on Hazmat Loading, Unloading, and Storage
Possible Antidumping Duties on Chinese Wooden Bedroom Furniture
DOC Proposal to Require Electronic Submission of all Export License Applications and Classification Requests
Proposed Country of Origin Marking on Certain USDA Regulated Commodities
Proposed Mandatory Filing of SED
Commerce Unveils New Interactive Trade Data Website
Transportation Update
Samuel Shapiro & Company, Inc. Announces its Bioterrorism Registration and Communications Services
Trade Industry News
WTO Rules Against U.S. Steel Safeguards
On November 10, 2003, The Appellate Body of the World Trade Organization (WTO) issued a report on the complaints voiced by Brazil, China, the European Communities, Japan, Korea, New Zealand, Norway, and Switzerland against United States regarding U.S. imposed Section 201 safeguard measures on certain imported steel products. The WTO upheld most of the conclusions, ruling that the U.S. measures were inconsistent and in violation of the WTO Safeguards Agreement and the General Agreement on Tariffs and Trade (GATT) of 1994.
As a result, the European Union (EU) is threatening retaliation if the U.S. does not repeal the Section 201 Steel Remedy. The steel safeguards were imposed last year and are scheduled to continue through March, 2005. The EU has indicated that it will raise tariffs from 8% to 30% on a wide variety of U.S. exports including:
- Clothing (such as coats, suits, skirts, shirts, blouses, undergarments, T-shirts, sweaters, stockings, gloves)
- Footwear and footwear parts
- Wooden and plastic furniture
- Blankets
- Camping goods
- Watches
- Games and musical instruments
- Tools and machinery
- Fruits and vegetables
- Paper products
- Iron and steel products (including tableware)
- Motorcycles
- Yachts
- Frames for glasses
- Brooms and brushes
- Ballpoint pens
Sources: "Appellate Body Issues Report on Steel Dispute" posted on WTO website at http://www.wto.org/english/news_e/news_e.htm; "For Bush, a Janus-Like View of Trade" appearing in New York Times dated November 12, 2003; "EU Set to Raise Tariffs on US Exports in Early December, Including Apparel, Footwear, Furniture, and Food Products" appearing in Sandler, Travis & Rosenburg Electronic Advisory, dated November 14, 2003.
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FDA Releases Food Risk Assessment for Terrorism and Other Food Safety Concerns
The U.S. Food and Drug Administration (FDA) has made publicly available its assessment of the risks to public health of a terrorist attack on the food supply, and of serious illness due to inadvertent food contamination. FDA prepared a qualitative risk assessment to accompany the two new final rules on registration and prior notice that were published on October 10, 2003, to improve food safety and security.
Due to the fact that the agency’s goals of food safety and security are closely linked, the assessment discusses both the unintentional hazards that are accidentally introduced into food and the intentional contamination by terrorists intending to sabotage the food supply.
FDA presents various risk scenarios; it discusses the quality of information available for, and the uncertainties associated with, the assessment. The agency has determined that this qualitative risk assessment, which discusses prior incidents of food contamination and unclassified information on prior acts of food sabotage, is appropriate given the current climate.
For more information on the FDA’s Food Risk Assessment please see the following links:
Source: “Risk Assessment for Food Terrorism and Other Food Safety Concerns” posted on the FDA website dated October 7, 2003 http://www.cfsan.fda.gov/~dms/rabtact.html.
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New Quarantine Requirement for Sea Containers Destined to New Zealand
Effective January 1, 2004, pursuant to the Bio-Security Act, New Zealand's Ministry of Agriculture and Forestry (MAF) requires a quarantine declaration for all sea containers entering the country of New Zealand.
Within the new document from the Ministry of Agriculture and Forestry, New Zealand specifies the requirements to be met for the effective management of bio-security risks associated with the importation of sea containers and the associated packaging of containerized cargo entering New Zealand. All containers must be deemed to be free from contamination before being given bio-security clearance by an inspector. A sample form to be used for exports can be viewed at: http://www.maf.govt.nz/biosecurity/border/transitional-facilities/forms/containers-declaration.doc . This form must be completed on company letterhead of the packer or the exporter.
For more information please contact the Shapiro Compliance Department at compliance@shapiro.com.
Source: “Import Health Standard for Sea Containers from all Countries" posted to New Zealand Ministry of Agriculture and Forestry website at http://www.maf.govt.nz/biosecurity/imports/non-organic/standards/bmg-std-seaco.htm#4%20%20
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Container Screening at Foreign Ports to be Increased
Within the next year, Customs and Border Protection (CBP) expects to more than double the number of foreign ports where containers are inspected before departing for the U.S. Approximately two years ago, the CBP implemented a new program called the Container Security Initiative (CSI), with the goal of preventing weapons of mass destruction from entering into the supply chain. As a result of CBP’s initiative, the top 19 foreign ports have agreed to examine cargo before it leaves the foreign port. Douglas Browning, the deputy commissioner for CBP, states that a total of 47 ports will be participating in this initiative by October 2004.
CBP has also developed another initiative called Customs-Trade Partnership Against Terrorism (C-TPAT) in order to further promote maritime security. C-TPAT is a voluntary initiative designed by the CBP, focusing on the development of cooperative relationships between Customs and the business community. The goal of the program is to strengthen the security of our borders as well as the security of the overall supply chain. C-TPAT members are believed to have many benefits including a reduced number of inspections and eligibility for bi-monthly or monthly duty payments. Over 4,000 companies have committed to C-TPAT and have become eligible to receive “fast lane” processing for their cargo.
Canada also intends to implement similar procedures to ensure maritime security by requiring shippers to transmit manifest information 24 hours before the cargo leaves the foreign port. According to the Department of Homeland Security, Mexico and the European Union are also planning on implementing "the 24-hour rule". Since the 24-hour rule has been introduced in the United States, more than seven million manifests have been inspected, while 600 manifests have been refused.
According to Browning, “Through these strategies – expanding our zone of security, the deployment of new technologies at our ports, mobilizing our resources and enhancing our data collection – we have been able to confront the threat of terrorism.”
Our Consulting Team can provide you with assistance in becoming a certified C-TPAT partner. For more information on how we can help you, please contact our Consulting Team at consulting@shapiro.com.
Source: “Customs to Expand Foreign Port Screening” appearing in Federal Computer Week dated October 30, 2003.
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U.S. Import Requirements for Wood Packing Material
The Animal Plant Health Inspection Service (APHIS) division of the United States Department of Agriculture has published a Draft Rule for new requirements concerning the importation of wood packaging material. The comment period for the rule ended on July 21, 2003. APHIS is currently finalizing the Rule based on the comments that were presented.
USDA was targeting January 1, 2004 for implementation; however, this target implementation date is now being adjusted to April or May of 2004. In anticipation of finalization of the Rule, we are encouraging all importers to meet the conditions of the International Standards For Phyto-sanitary Measures (ISPM 15), along with the Draft Rule which requires that all wood packaging material be appropriately treated and marked under an official program developed and overseen by the National Plant Protection Organization (NPPO) in the country of export.
Even though USDA is not anticipating the finalization of the Rule until later in 2004, they will start issuing notices to the NPPO for material not appropriately treated and marked, starting in January of 2004. These notices will clearly state USDA’s intention of implementation later in the year and will serve as an information dissemination tool. No additional action will be taken on noncompliant material until the rule is finalized. APHIS will follow its current policy for wood packaging material until the new Rule goes into effect.
Solid Wood Packing Material (SWPM) includes wood packing materials other than loose wood packing materials, used or for use with cargo to prevent damage, including, but not limited to, crating, pallets, packing blocks, drums, cases, and skids.
We are including several links from the APHIS/USDA website for additional detailed information concerning this topic for your reference. If you have additional questions, please contact compliance@shapiro.com.
Source: "International Standards for Phyto-sanitary Measures - Guidelines for Regulating Wood Packaging Material in International Trade" posted on the IPPC website http://www.ippc.int/servlet/BinaryDownloaderServlet/16259_ISPM_15_English.pdf?filename=1055161712885_ISPM15_e.pdf&refID=16259.pdf
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Limitations in Cargo Risk Analysis Program
On October 28, 2003, Senators Susan Collins and Joe Lieberman addressed a letter to Asa Hutchinson, the Under Secretary for Border and Transportation Security (BTS), outlining potential weakness of the Customs and Border Protection’s (CBP’s) risk analysis procedures for cargo.
Senator Collins points out that, even though significant progress has been made to strengthen port protection, there are still many areas that must be improved to reduce port vulnerability. Senator Collins also notes that very few containers coming into the U.S. are inspected, increasing the possibility of intrusion of dangerous weapons, materials, and people into our country. At the same time, Senator Lieberman states that, unless immediate improvements are made to CBP’s risk analysis program, port security will remain at risk.
Both Senators agreed that the following factors should be considered as weaknesses of the current cargo risk assessment program:
- CBP relies on manifest data alone: When determining whether a container is labeled as “low” or “high-risk,” the CBP only studies 14 data elements that are transmitted under the 24-hour rule. Experts agree that this data is not sufficient to identify irregularities; purchase order data should also be submitted for further evaluation.
- CBP lacks tools for tracking containers: Currently, the CBP does not have a program in place that allows for tracking of containers through multiple shipping points, starting at the port of loading. Risk could be minimized by requiring data to specify all ports-of-call for the vessel and all containers on board, or by physically tracking each container.
- CBP lacks system to identify “low-risk” containers: CBP does not have a program in place to validate “low-risk” containers. For this reason, a system needs to be developed so that even the containers that are considered “low-risk” are randomly examined in order to ensure that the current parameters for risk assessment are accurate.
- CBP does not have plans for auditing C-TPAT members after validation: Even though CBP is currently working on validating over 4,000 companies that volunteered to participate in the Customs-Trade Partnership Against Terrorism (C-TPAT), it lacks a program to audit its members after validation. This means that companies could continue to receive lower “risk” scores, even if the benefit is no longer warranted.
The Senators concluded by asking Under Secretary Asa Hutchison to outline, by November 28, 2003, what CBP has accomplished and its future plans to address all issues noted above.
Source: “Two Senators Question Weaknesses in CBP’s Risk Assessment of Cargo” appearing in International Trade Today dated November 5, 2003.
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Final Rule Issued on Hazmat Loading, Unloading, and Storage
The Department of Transportation, Research, and Special Programs Administration (TRSPA) has issued a final rule, effective October 1, 2004, to clarify the applicability of the Hazardous Materials Regulations (HMR) to specific functions and activities, including hazmat loading and unloading operations and storage of hazardous materials during pre-transportation and transportation functions.
The final rule amends the HMR to incorporate new definitions for:
- pre-transportation functions
- transportation functions
- movement
- loading incidental to movement
- unloading incidental to movement
- storage incidental to movement
“Pre-transportation functions” are functions performed to prepare hazardous material for transportation or cause a hazardous material to be transported.
“Transportation functions” are functions performed as part of the actual movement of hazardous materials in commerce, including loading, unloading, and storage.
“Movement” means the physical transfer of a hazardous material from one geographic location to another by rail car, aircraft, motor vehicle, or vessel.
“Loading incidental to movement” is the loading by carrier personnel, or in the presence of carrier personnel, of packaged or containerized hazardous material onto a transport vehicle, aircraft, or vessel for the purpose of transporting it.
“Unloading incidental to movement” is the removal of a package or containerized hazardous material from a transport vehicle, aircraft, or vessel, or the emptying of hazardous material from a bulk package after it has been delivered to a consignee and prior to the delivering carrier’s departure from the consignee facility.
“Storage incidental to movement” is defined as storage by any person of a transport vehicle, freight container, or package containing a hazardous material between the times that a carrier takes possession of the hazardous material until the package is physically delivered to the destination indicated on a shipping document. In the case of railroad shipments, storage on the track is also considered “storage incidental to movement.”
The final rule also amends the Hazardous Materials Regulations to incorporate the following:
- Amending 49 CFR 171.1 to list regulated and non-regulated functions;
- Amending 49 CFR 171.1 to indicate that the facility at which functions are performed may be subject to applicable standards and regulations of other federal agencies, and state or local government laws.
The final rule was posted in the Federal Register / Vol. 68, No. 210 dated October 30, 2003 and is effective October 1, 2004. The Federal Register can be viewed at the following location: http://frwebgate4.access.gpo.gov/cgi-bin/waisgate.cgi?WAISdocID=75836118983+0+0+0&WAISaction=retrieve
Source: “RSPA Issues Final Rule on Hazmat Loading, Unloading, and Storage, Etc.” appearing in International Trade Today dated November 6, 2003.
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Possible Antidumping Duties on Chinese Wooden Bedroom Furniture
The Department of Commerce (DOC) and the International Trade Commission (ITC) have announced that a petition has been filed seeking antidumping duties (ADD) on wooden bedroom furniture from China. The ADD could be as high as 441%.
The joint effort, initiated by labor groups and U.S. manufacturers, targets products which include wooden bedroom furniture generally designed, manufactured, and offered for sale in suites and classified in the Harmonized Tariff Schedule under 9403.50.9040 and 9403.50.9080.
Once ADD petitions are filed, the cases are investigated by both the DOC and the ITC. If the findings result in a need for corrective action, the DOC issues an antidumping order which includes a requirement for payment of additional duties by U.S. importers of merchandise outlined in the order.
Samuel Shapiro & Company, Inc. will pass along additional information as it becomes available. Questions may be directed to our Compliance Department at compliance@shapiro.com.
Source: "441% Antidumping Duties Requested for Wooden Bedroom Furniture from China" appearing in Tuttle Law Electronic Newsletter dated November 11, 2003.
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DOC Proposal to Require Electronic Submission of All Export License Applications and Classification Requests
The Department of Commerce’s (DOC) Bureau of Industry and Security (BIS) has issued a proposed rule that would amend the Export Administration Regulations (EAR) to implement a revised version of the Simplified Network Application Processing (SNAP) system, referred to as SNAP+. This proposed rule would also require the use of SNAP+ for all filings of export license applications (except special comprehensive licenses), re-export authorization requests, classification requests, encryption review requests, and license exception AGR notifications, unless BIS authorizes paper filing for a particular user or transaction. The requirement to use SNAP+ would also apply to any documentation that needs to be submitted with applications, requests, or notifications to BIS.
This proposal would also amend the EAR to require that requests for advisory opinions include the Export Control Classification Number (ECCN) of the item(s) at issue, and also require item classification requests to include a recommended ECCN at the time of the request.
This proposed rule would make classification of export articles more complicated for exporters. Samuel Shapiro & Company, Inc. currently files for classification requests utilizing the Department of Commerce SNAP system. If you need a classification, we will be glad to assist you with this service. Please contact consulting@shapiro.com for information.
Comments on this proposed rule are due by January 12, 2004.
Written comments should be emailed to rpd@bis.doc.govor faxed to 202-482-3355.
Deliveries should be addressed to:
- Regulatory Policy Division
- Office of Exporter Services
- Bureau of Industry and Security
- Department of Commerce
- 14th and Pennsylvania Avenue, NW
- Room 2705
- Washington, DC, 20230.
Please reference Regulatory Identification Number 0694-AC20 in all comments.
Source: "Mandatory Use of Simplified Network Application Processing System" appearing the Federal Register Notice dated November 12, 2003. http://a257.g.akamaitech.net/7/257/2422/14mar20010800/edocket.access.gpo.gov/2003/pdf/03-28133.pdf .
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Proposed Country of Origin Marking on Certain USDA Regulated Commodities
The Department of Agriculture (USDA) has announced a proposed rule that would require retailers to notify customers of the country of origin on certain USDA regulated commodities beginning September 30, 2004. The commodities include muscle cuts of beef (including veal), lamb, pork; ground beef, ground lamb, and ground pork; farm-raised fish and shellfish; wild fish and shellfish; perishable agricultural commodities (fresh and frozen fruits and vegetables); and peanuts.
The proposed rule is outlined in the Farm Security and Rural Investment Act of 2002 and the 2002 Supplemental Appropriations Act. The law requires the USDA to issue regulations to implement a mandatory Country Of Origin Labeling (COOL) program no later than September 30, 2004. The proposed rule contains definitions, the requirements for consumer notification and product marking, and the record keeping responsibilities of both retailers and suppliers.
The USDA is requesting that comments be submitted on or before December 29, 2003 to be assured of consideration.
Please state that your comments refer to Docket Number LS - 03 - 04.
Please send written comments to:
- Country of Origin Labeling Program
- Room 2092-S
- Agricultural Marketing Service (AMS)
- USDA - STOP 0249
- 1400 Independence Avenue, SW
- Washington, DC 20250-0249
Or fax comments to 202.720.3499
Or email cool@usda.gov
To review detailed information please refer to Federal Register link provided below.
For further information please contact:
- Robert Keeney, Deputy Administrator
- Fruit and Vegetable Programs, AMS, USDA
- Phone: 202.720.4722
- Email: robert.keeney@usda.gov
OR
- William Sessions, Associate Deputy Administrator
- Livestock and Seed Program, AMS, USDA
- Phone: 202.720.5705
- Email: william.sessions@usda.gov
Questions may be directed to our Compliance Department at compliance@shapiro.com.
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Proposed Mandatory Filing of SED
The Bureau of the Census, Commerce Department, is issuing an advance notice of proposed rulemaking to announce and to solicit comments on its intent to propose a rule that would make mandatory the filing of all export shipments requiring Shipper's Export Declaration (SED) information on the Automated Export System (AES)/AES Direct. The Census Bureau also requests comment on its intention, subject to agreement with the Bureau of Customs and Border Protection (CBP) and other Federal agencies participating in the AES, to modify the AES Option 4 post-departure filing program. The Census Bureau welcomes any comments or concerns regarding the impact of these intended changes on the export community.
The deadline to comment is: November 21, 2003. All written comments should be sent to: Director, U.S. Census Bureau, Room 2049, Federal Building 3, Washington, DC 20233. To view the Federal Register Notice in its entirety, please refer to the link provided below.
Source: Department of Commerce website: http://www.census.gov/foreign-trade/regulations/fedregnotices/index.html#fedreg-07172003
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Commerce Unveils New Interactive Trade Data Website
New TradeStats Express Includes Custom-Tailored Maps and Graphics of U.S. Trade Statistics
Linda Conlin, Assistant Secretary of Commerce for Trade Development for the International Trade Administration (ITA), today announced that the latest annual U.S. trade statistics can be found on a new, interactive and user-friendly Department of Commerce website.
"This new state-of-the-art website allows businesses to easily obtain national and state-level trade statistics custom-tailored to their needs," Conlin said. "It will be especially useful for U.S. businesses that need quick access to U.S. trade figures in order to identify the most promising export prospects for their products."
TradeStats Express enables visitors to easily retrieve, visualize, analyze, print, and download U.S. trade data including exports, imports, and trade balances for the years 1989 through 2002. Users can specify exactly what they want by employing intuitive, interactive menus. When requests are submitted, results are displayed in detailed maps, graphs, and tables.
TradeStats Express was developed by MapInfo Corporation, the leading provider of location-intelligence solutions for businesses. A growing number of federal, state, and local government agencies and other public sector organizations have embraced MapInfo's location technology for the development and deployment of e-government initiatives, resulting in streamlined communications and improved services with citizens and businesses.
Questions about the technology can be directed to Angela Girard at (508) 285-6000 or angela_girard@mapinfo.com.
The new TradeStats Express website can be found at http://tse.export.gov/.
Source: "Commerce Unveils New Interactive Trade Data Website" press release posted on United States Department of Commerce, International Trade Administration Website dated October 20, 2003 http://www.ita.doc.gov/media/PressReleases/1003/tse_102003.html.
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Transportation Update
Strikes have been called all over Europe to protest workplace changes in European Union (EU) ports. The work stoppages have ranged in time from a few hours per day in ports such as Rotterdam to day-long strikes in Naples and Valencia. The strikes have caused disruption in service, primarily from Italy and Spain. There have also been repeated strikes in Israel; workers in Haifa and Ashdod have walked out several times over the last couple of months.
As a result of the recent strikes, carriers have bypassed Valencia, resulting in a shortage of 20’ containers at the port. This shortage has impacted tile importers from Spain, as the majority of tile shipments move in 20’ containers. The situation should improve soon as carriers continue to reposition empty containers. If the strikes continue, however, the shortage could reappear, especially in Valencia, where a strike on November 17, 2003 has resulted in carriers repositioning equipment there on a weekly basis.
The Peak Season Surcharge from Asia has been eliminated at this time. Volume is still strong, especially from China. Seasonality isn't a large factor anymore; volume should continue to be steady throughout the year. Carriers are looking into adding more service to the East Coast via the Panama Canal in 2004. As increasing numbers of companies set up distribution centers on the East Coast, importers will require more all-water options. The Port of Norfolk is experiencing continued growth in distribution. Major retailing chains, such as Wal-Mart and Target, have set up distribution centers near the port.
Exports are continuing to grow; however, rates are still low compared to several years ago. Carriers will try to raise rates in 2004. It remains to be seen if the market will accept these increases. Carriers are looking to increase the bunker surcharge to the Middle East.
Airfreight rates from Asia continue to rise. Hong Kong and Shanghai are experiencing a rush in last minute Christmas shipments. Space is very tight from both origin airports. It remains to be seen whether the merger of Air France and KLM will result in fewer flights to the USA.
Inland news: Effective November 17, 2003, the Maryland Department of Transportation has increased the trucking toll rates at the Harbor Tunnel, the Fort McHenry Tunnel, and the Francis Scott Key Bridge in Baltimore, Maryland. The amount of the increase is $8.00. Importers and Exporters using the Port of Baltimore will see an increase of $8.00 on their future trucking invoices.
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Shapiro Products & Services
Deadline is December 12, 2003!!! Have you Registered with FDA?
Samuel Shapiro & Company, Inc. Announces its Bioterrorism Registration and Communications Services
The Food and Drug Administration’s (FDA's) new Bioterrorism Regulation will significantly impact your company’s domestic and international supply chain.
The Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (BTA) requires that all foreign and domestic facilities that manufacturer, process, pack, distribute, receive, or hold food for consumption by humans or animals in the United States must register with the FDA no later than December 12, 2003.
Samuel Shapiro & Company, Inc. now offers a new Bioterrorism Registration Service to assist domestic and foreign facilities required to register with the FDA under the scope of the Bioterrorism Act. Shapiro can reduce your headaches by registering your domestic and/or foreign facilities for you. We also offer to act as a communications liaison between the FDA and foreign facilities by availing ourselves as the U.S. Agent in charge.
Both of our new services, the Bioterrorism Registration Service and the Bioterrorism Communications Service (U.S. Agent), are available at very competitive rates.
Please contact our Compliance Department at compliance@shapiro.com for additional information or to request a copy of our Bioterrorism Registration and Communications Kit.
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