December, 2004 - Issue #32
In This Issue:
January 2005 Target Date for Elimination of Textile Quota Restrictions
Byrd Amendment Retaliation
E.U. and U.S. to Strengthen Maritime Container Security
Solid Wood Packing Material Update
Final Determination on Antidumping Duty on Chinese Wooden Bedroom Furniture
CBP Trade Symposium Rescheduled for January 2005
CPB Revises Documents on the Import Self-Assessment Program
DHS Update on Mandatory Use of Mechanical Seals
USTR Announces Intent to Negotiate Free Trade Agreements With UAE and Oman
TSA Proposed Air Cargo Security Requirements
Transportation Update
Shapiro’s Italian Consolidation Services
How to Get More from Your Customs Broker
Trade Industry News
January 2005 Target Date for Elimination of Textile Quota Restrictions
The Uruguay Round Agreement on Textiles and Clothing (ATC) has slated January 2005 as the target date for full integration of textiles and textile apparel that are manufactured in countries that are members of the World Trade Organization (WTO). This is the fourth and final phase of the integration. On January 1, 2005, all textiles and textile apparel manufactured in a WTO country and exported on/after January 1, 2005 will no longer be subject to quota restrictions.
The Committee for the Implementation of Textile Agreements (CITA), a committee represented by various federal agencies, is responsible for setting the policy concerning the final phase of the integration. Customs and Border Protection (CBP) is responsible for implementing the policy.
For further details on the coordination of the final implementation please contact the Quota Enforcement and Administration Branch in Washington, DC at 202.344.2650.
Frequently Asked Questions have been posted to the Customs Website:
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Byrd Amendment Retaliation
The European Union (EU) and Japan announced on November 10, 2004 that they are taking steps to impose retaliatory tariffs against more than $135 million of U.S. exports. The action is in response to U.S. inaction to repeal the “Continued Dumping and Subsidy Offset Act” (CDSOA, also known as the “Byrd Amendment”). The World Trade Organization (WTO) is expected to grant their right to retaliate.
A WTO arbitration panel ruled on August 31, 2004 that the EU and seven other member countries were entitled to impose the retaliatory tariffs. Member countries are hoping that the U.S. will immediately repeal the Byrd Amendment so that imposed retaliatory sanctions are not necessary. Member countries are discussing which U.S. products should be targeted. Almost two-thirds of the products on the Japanese list are steel and ball bearings, as well as textiles and machinery.
Of the countries entitled to retaliate, only Brazil and Chile have not yet submitted their lists of U.S. products potentially subject to retaliation.
This does not affect the ability of the United States to continue enforcing its trade laws to impose duties on countries that sell unfairly dumped or subsidized products in the U.S. market. The Byrd Amendment simply deals with how the funds collected from such duties are disbursed by the Treasury.
The U.S. has notified the WTO of our intent to comply. Efforts continue in order to bring the United States into compliance; consulting efforts with trading partners also continue.
Complex issues like these often take time. The WTO arbitrators determined that what the complainants could seek was more than 40% below what they had asserted were damages.
Barring any unforeseen changes in the current situation, and as of this writing, the WTO is expected to allow retaliation to begin as of November 24, 2004.
The eight complainants given the authority to impose tariffs are: Brazil, Canada, Chile, European Communities; India, Japan, Korea, and Mexico. In addition, three other countries gave the United States until December 27, 2004, to come into compliance before they moved to retaliate. They are: Australia, Indonesia, and Thailand. If the United States does not meet that deadline, these countries also have an option to seek similar authorization to retaliate.
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E.U. and U.S. to Strengthen Maritime Container Security
On November 16, 2004, U.S. Customs and Border Protection Commissioner Robert C. Bonner announced new measures that have been agreed to by the European Union (EU) and the U.S. to strengthen the security of maritime container transport.
The measures will facilitate legitimate trade through mutually acceptable security standards and industry partnership programs. The measures have been adopted in the framework of the signed agreement to extend the EU/U.S. Customs Agreement to include trade security cooperation.
According to Commissioner Robert C. Bonner, “With our EU partner, we are building a security system for international trade that prevents and deters terrorist exploitation, and protects the global economy and the economies of all nations.” The measures adopted today in the framework of the EU-U.S. Joint Customs Cooperation Committee include the creation of an information exchange network, the agreement on minimum requirements applicable for European ports that wish to participate in the U.S. Container Security Initiative (CSI) and identification of best practices concerning security controls of international trade.
Commissioner Bonner said that as a result of cooperation with the EU and its Member States, the Container Security Initiative (CSI) has already been implemented at twenty European seaports, covering 86% of the outbound cargo containers that move through Europe to United States seaports. Bonner noted that CSI is fully reciprocal.
In view of facilitating legitimate trade while securing the supply chain, EU and U.S. experts will study the industry partnership programs applied in the EU and the U.S. The outcome of the study will support further cooperation towards the development of mutually acceptable industry partnership programs, such as the Customs-Trade Partnership Against Terrorism (C-TPAT).
Source: “European Union and U.S. Customs and Border Protection Adopt Measures to Strengthen Maritime Container Security” appearing in U.S. Customs and Border Protection’s website on November, 16, 2004 available at http://www.customs.gov/xp/cgov/newsroom/press_releases/
11162004.xml
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Solid Wood Packing Material Update
The U.S. Department of Agriculture’s (USDA) Animal and Plant Health inspection Service (APHIS) is responsible for protecting and promoting U.S. agricultural health, administering the Animal Welfare Act, and carrying out wildlife damage management activities.
The APHIS mission is an integral part of USDA efforts to provide the Nation with safe and affordable food. Without APHIS protecting America's animal and plant resources from agricultural pests and diseases, threats to our food supply and to our Nation's economy would be enormous.
In recent years, the scope of APHIS' protection function has expanded beyond pest and disease management. Because of its technical expertise and leadership in assessing and regulating the risks associated with agricultural imports, APHIS has assumed a greater role in the global agricultural arena. Now, the agency must respond to other countries' animal and plant health import requirements and negotiate science-based standards that ensure America's agricultural exports are protected from unjustified trade restrictions.
APHIS has published the Final Rule for new requirements concerning the importation of wood packaging material. The implementation date for regulatory enforcement shall be September 16, 2005. The delay between publication and implementation shall allow an appropriate amount of time for countries to establish programs to become compliant with ISPM 15 and the Final Rule.
APHIS has set standards for Wood Packaging Material imported into the USA through 7 CFR 319.40 - Importation of Wood Packaging Material, as published on September 16, 2004. This rule states that all regulated wood packaging material shall be appropriately treated and marked under an official program developed and overseen by the National Plant Protection Organization (NPPO) in the country of export.
Effective September 16, 2005, wooden packaging materials (e.g., pallets, crates, boxes, and dunnage) imported into the United States must be heat treated or fumigated with methyl bromide and marked with the International Plant Protection Convention (IPPC) logo and appropriate country code designating the location of treatment. Additional paper certifications will not be required.
Until September 16, 2005, as the designated enforcement date, APHIS will follow its current requirements for imported wood packaging material. Please note that authorities are in the process of updating all references to SOLID WOOD PACKAGING to reflect the September 16, 2004 rule for REGULATED WOOD PACKING MATERIAL.
Both, APHIS and U.S. Customs and Border Protection inspectors will verify that shipments comply with the regulations.
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Final Determination on Antidumping Duty on Chinese Wooden Bedroom Furniture
On November 9, 2004, the Department of Commerce announced its final affirmative determination in the antidumping duty investigation of wooden bedroom furniture from the People's Republic of China (PRC), finding that, with the exception of one company, Chinese producers/exporters made sales of subject merchandise to their U.S. customers at less than fair value.
The U.S. International Trade Commission (ITC) is scheduled to issue its final injury determination no later than December 23, 2004. If the ITC finds that a U.S. industry is injured or threatened with material injury as a result of imports of wooden bedroom furniture from the PRC, the Department will issue an antidumping order and will instruct U.S. Customs and Border Protection to collect cash deposits on entries of subject merchandise at the applicable dumping duty rate.
For complete details of the announcement please
click here.
For additional information please also see the ITC's website at http://www.ia.ita.doc.gov.
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CBP Trade Symposium Rescheduled for January 2005
U.S. Customs and Border Protection (CBP) will host its 5th annual trade symposium on January 12-14, 2004 at the Ronald Reagan Building and International Trade Center in Washington, DC.
The theme will be “Security and Facilitation of Trade: The Way Forward." The event will include discussions between senior CBP managers and representatives of the international trade and transportation community. Topics will include Department of Homeland Security (DHS)/Border and Transportation Security (BTS) Executive roundtable, Trade Act of 2002 implementation, Bioterrorism Act of 2002, the Container Security Initiative (CSI), and the Automated Commercial Environment (ACE).
Additional information is available on CBP's website at www.cbp.gov.
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CPB Revises Documents on the Import Self-Assessment Program
U.S. Customs and Border Protection (CBP) has updated its documents on the Importer Self-Assessment Program (ISA) on its website. According to CBP, its goal is to make the site more dynamic; therefore, it will be regularly updating the “Frequently Asked Questions” and adding to the “Best Practices” document as warranted.
The ISA program is a trade facilitation partnership between CBP and importers and is unique in that it is a voluntary approach to importing that allows companies maximum control over Customs compliance. The program is built on knowledge, trust and a willingness to maintain an ongoing Customs/company relationship. The program offers meaningful benefits that can be tailored to industry needs, including (not an all-inclusive list): CBP will provide consultation and guidance as requested; the importer will be removed from the Regulatory Audit Division’s (RAD) audit pool established for Focused Assessments (Importers may be subject to on-site examinations for single-issue or other reviews); the importer will have access to key liaison officials.
The driving force of the ISA program is the development and use of established business practices and good internal controls designed specifically for a company's Customs operations. The importer may structure internal controls and procedures to meet individual needs. To be eligible for ISA, an importer must be a member of C-TPAT, must be a resident importer in the United States, and must have two years of importing experience prior to the date the importer applies to the program.
CBP has also updated some of the documents on the site such as the Handbook and Questionnaire. CBP notes that dates will change every time a document is updated so that interested parties or participants can tell whether they have the most recent version. Users are able to ask questions online or contact one of the Trade Liaisons by telephone.
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.
For more information, please visit CBP’s website at: http://www.customs.gov/xp/cgov/import/regulatory_audit_program/importer_self_assessment/
Source: “Importer Self-Assessment Program – A Voluntary Approach to Trade Compliance” appearing in U.S. Customs and Border Protection’s website available at http://www.customs.gov/xp/cgov/import/regulatory_audit_program/importer_self_assessment/
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DHS Update on Mandatory Use of Mechanical Seals
The Department of Homeland Security (DHS) continues their work on a regulation mandating importers use of tamper-evident, mechanical seals for all incoming ocean containers. DHS is considering quickly implementing the same requirement for shippers in the Customs-Trade Partnership Against Terrorism (C-TPAT) program as a temporary safeguard until formal rulemaking is completed. Real world testing of electronic seals and container security devices has not produced total confidence as of yet; if electronic surveillance technology is going to be relied upon, the integrity of the equipment needs to be as fail-safe as possible before its use is required. It is estimated that it will take another three years before it can endorse a container security device for limited deployment and five years for universal deployment on the millions of containers in the system.
Source: American Shipper website http://www.americanshipper.com/ dated 11/12/04.
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TSA Proposed Air Cargo Security Requirements
The Transportation Security Administration (TSA), an agency within the Department of Homeland Security's Border and Transportation Security Directorate, proposes to amend current transportation security regulations to enhance and improve the security of air cargo transportation. These proposed rules result from an internal and external analysis conducted by the TSA after being directed to take measures to enhance the security of air cargo transported in both passenger and all-cargo aircraft.
This proposed rulemaking would require the adoption of security measures throughout the air cargo supply chain; these security measures will be applicable to airport operators, aircraft operators, foreign air carriers, and indirect air carriers.
Below is a summary of the proposed amendments:
A. Current regulation of aircraft operators and foreign air carriers
B. Security Threat Assessments for Air Cargo Workers
C. Security Measures for Persons Boarding an All-cargo Aircraft
D. Screening Cargo
E. Securing the Cargo Operating Environment
F. Accepting Cargo from Comparable Entities
G. Known Shipper Program
H. Establish All-Cargo Operator Standard Security Program
I. Strengthen Foreign Aircraft Operator Security Measures
J. Enhancing Existing Requirements for IACs
K. Establishing New Training and Personnel Requirements
Be sure to send all comments on or before January 10, 2005.
You may submit comments, identified by the TSA docket number, using any one of the following methods:
Comments Filed Electronically: You may submit comments through the docket Web site at http://dms.dot.gov. You also may submit comments through the Federal eRulemaking portal at http://www.regulations.gov.
Comments Submitted by Mail, Fax, or In Person: Address or deliver your written, signed comments to the Docket Management System, U.S. Department of Transportation, Room Plaza 401, 400 Seventh Street, SW., Washington, DC 20590-0001; Fax: 202-493-2251.
Please note that any comments that are confidential or considered Sensitive Security Information (SSI) should not be submitted to the public regulatory docket. See the Federal Register notice for further details.
View the entire Federal Register notice dated November 10, 2004 (Volume 69, Number 217) [Page 65257-65291] at: http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/pdf/04-24883.pdf
For further information please contact: Tamika McCree, Transportation Security Administration, Office of Transportation Security Policy (TSA-9), 601 South 12th Street, Arlington, Virginia, 22202, (571-227-2632), tamika.mccree@dhs.gov.
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Transportation Update
OCEAN NEWS
FAR EAST
Space problems still continue to exist from the Far East to the east coast. The all water services to the east coast are running at 100% capacity. The carriers extended the Peak Season Surcharge on all water shipments to the east coast through January 31, 2005; peak Season Surcharges to the west coast ended on October 31,2004.
The delays on the west coast of the USA in Long Beach/Los Angeles have help exacerbate the problems with space on the all-water service. Cargo destined to the East Coast that is shipped via the west coast is still experiencing delays once they arrive in Long Beach/Los Angeles. It’s still taking upwards of two weeks for containers to arrive by rail to the east coast. Many importers have diverted their cargo to Northwest ports where there is less congestion. Seattle and Tacoma are experiencing record increases in container throughput at this time.
Some carriers have plans to add extra capacity to the all-water service to the east coast; however, it’s not enough to help ease the crunch. During the peak shipping time in 2005, it is expected that there will be additional all-water capacity to the east coast.
In 2005 more large vessels should come into service. Carriers will be able to redeploy vessels once these vessels come online. The problem with these vessels is that they are so big that they strain the terminals due to the fact that they take three to five days to turn around. The massive amount of containers that come off these vessels can overwhelm the terminal operators. The additional capacity will have a positive impact. The volume of imports from Asia will continue to grow.
NORTHERN EUROPE
Carriers have implemented Port Security charges for all shipments. The charges are still not uniform with all the carriers. The average cost is between $10.00 and $20.00 per container.
Carriers have raised the bunker fuel surcharge effective November 16, 2004 from Northern Europe to the United States.
The new bunker surcharges are as follows:
20’ container $210.00 to the East Coast and $ 315.00 to the west coast
40’, 40’ HC and 45’ container $420.00 to the East Coast and $ 630.00 to the west coast
MEDITERRANEAN
Carriers have implemented Port Security charges for all shipments. The charges are still not uniform with all the carriers. The average cost is between $10.00 and $20.00 per container.
Carriers have caused a major problem in the MED/USA trade lane. The redeployment of larger vessels to Asia and the introduction of smaller vessels into the trade have created a space problem from Turkey, Italy, Spain and Portugal. Carriers have also withdrawn capacity exacerbating the situation. The situation is very difficult from all origin ports. Carriers are overbooked for up to two to three weeks. Bad weather has also caused delays.
Carriers raised rates by $200.00 per 20’ container in October from Italy and Turkey. Carriers will increase the bunker fuel surcharge on December 1,2004 by $50.00 per TEU.
The Port of Izmir, Turkey is experiencing severe congestion. Carriers have implemented a $90.00 per container congestion surcharge for all containers sailing from Izmir.
GERMANY
The long-delayed nationwide truck toll is expected to begin in January 2005. The toll will be charged on the German highways throughout the country on a per kilometer basis. It is expected to add up to 15% in additional costs for transporting cargo in or through the country. The cost is essentially 15 cents per mile. The toll will be levied on all trucks weighing more than 12 metric tons. The goal is to shift cargo from the highway to the rail and river ways. The toll is expected to raise four billion dollars annually from the 1.4 million trucks that use the German highways each year.
ITALY
Samuel Shapiro & Company is offering at least twice a month ocean LCL consolidation service from Italy to Baltimore. Cargo is received in Milan and sails on Mediterranean Shipping vessels from La Spezia direct to Baltimore. Transit time is 16 days. Most LCL cargo destined to Baltimore arrives in bond via New York. Cargo can take up to 7-10 days to move in bond from New York to Baltimore. Our goal in 2005 is to offer a weekly service from Italy to Baltimore. For additional information contact Marketing@shapiro.com.
AIR NEWS
Air AMS will be implemented to the West Coast of the USA. On December 13, 2004, the following states will be added to the system: AK, AZ, CA, CO, HI, ID, MT, NV, ND, OR, UT, WA.
Most importers will start to see an extra charge of approx $8.00 to $10.00 for all shipments coming into the USA due to this requirement. The carriers are finding a way to gain extra revenue.
Rates from Asia are at their very peak at this writing. Air rates should begin to drop off in late December.
Fuel surcharges have risen worldwide due to the increase in jet fuel. The rates can range from 42 cents per kilo from Hong Kong to 35 euro cents from Europe.
Some carriers are going to add international service in 2005. United Airlines has announced several new services. This is being driven by passenger requirements and not by cargo needs, but cargo will certainly benefit.
EXPORT OCEAN NEWS
Carriers have raised rates; however, the increases are not too significant. Vessels are not going out at 100% capacity though this may change as the dollar continues to weaken. Exports should increase as the dollar loses its value against the euro.
DOMESTIC USA
There are still major rail delays from the west coast to the east coast due to a shortage of rail cars, personnel issues and surges in volume from Asia.
Rail carriers are starting to reduce their free time at the rail ramps all over the country. In Baltimore, Norfolk Southern has announced that, effective November 8, 2004, all inbound marine containers will have 48 hours free after notification of arrival. Containers that arrive in-bond that have been notified on or before 12:00 PM will have the day of notification plus the following two days; notification after 12:00 PM will have the day of notification plus the following three days. It should be noted that these are calendar days and not business days.
There are still truck driver shortages. Truckers are very busy at all ports in the USA. Truckers continue to raise their fuel surcharge as the price of diesel fuel rises.
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Shapiro Products & Services
Shapiro’s Italian Consolidation Services
Samuel Shapiro & Company, Inc. along with its partner in Italy, MP International, is proud to announce a direct less-than-container-load (LCL) consolidation service from Italy to Baltimore.
- All cargo is received in Milan and sails weekly from La Spezia to Baltimore on Mediterranean Shipping Company vessels.
- Service is direct with a transit time of 16 days.
- Most consolidations from Italy arrive in New York and containers are broken down there and then moved in bond to Baltimore, Philadelphia, and Boston. Cargo can take from 7 to 14 days to travel from New York to Baltimore.) Our consolidation is a great way to serve clients in the Mid-Atlantic region.
- Our consolidation service is a great alternative if your cargo is destined to Maryland, all points in Pennsylvania, Southern NJ, Delaware, Virginia, West Virginia and Eastern Ohio.
For more information, please contact us at Marketing@shapiro.com.
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Did You Know…?
How to Get More from Your Customs Broker
The best way to improve the service and quality of information you receive from your Customs broker is to make your broker your freight forwarder. Why should you give more work and responsibility to your trusted but harried broker? Here are a few of the reasons:
- You avoid costly transfer fees charged by freight forwarders
- Your broker knows immediately when your cargo is booked overseas
- Your file is opened at the time your broker’s foreign partner books the cargo overseas.
- Your broker traces your cargo, and looks for documents at the soonest possible moment at the very first place in your supply chain
- You are able to view logistics information and Customs clearance information on one tracking system
- You control the way you view your information by adjusting our standard tracking, asking for tailored reports, or naming the specific events about which you wish to be notified via e-mail
- You simplify your vendor list and avoid costly accounting complications
- It is much easier to comply with C-TPAT guidelines with a shorter vendor list
- You no longer run the risk of “watered down” responsibility... your broker and your forwarder are one company, and there is no one to hide behind when things go wrong
- You have more buying power with your broker, and you can often realize cost savings by allowing your broker to gain revenue in the transportation segments
Samuel Shapiro & Company, Inc. works hard to provide you with an integrated approach to forwarding and brokerage. We strive to give you up-to-the-second information about your cargo in a sophisticated and customer-tailored tracking environment. Through EDI relationships with our agents, vendors, and cargo tracing services, we remain on the cutting-edge in cargo information services. Coupled with our close to 90 years of brokerage know-how, our technology-driven forwarding process gives us a uniquely effective shipping solution for our diverse customer list. When you allow us to move the cargo, we become a better Customs broker. Let us simplify your supply chain. We won’t let you down.
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