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March, 2005 - Issue #35

In This Issue:

Update on Possible U.S. Rice Retaliation
Synopsis of Major U.S. Trade Agreements
Samuel Shapiro & Company, Inc. Hires New Compliance Manager
Proposed Rule for Mandatory Automated Export System
Remote Location Filing Allowed for Quota / Visa-Free Textiles
Update on ISPM 15 Treatment & Marking for Wood Packaging Material
ITA Public Service List for Receiving Information on AD/CV Duty Cases
Shipper’s Declaration for Dangerous Goods by Air
Customs Changes Formula for Calculating Bond Amounts
CBP FY 2006 Budget Receives Roughly a 4.8% Increase
Commissioner Robert C. Bonner Discusses C-TPAT at TSN Meeting
C-TPAT certified yet?
 

Trade Industry News
Update on Possible U.S. Rice Retaliation

On January 28, 2005, the Office of the U.S. Trade Representative (USTR) notified the World Trade Organization (WTO) of its intent to increase certain tariffs on certain products from all Most Favored Nations (MFN) because it has not reached agreement with the European Union (EU) over U.S. access to the European rice market.

If continued discussions fail to result in an agreement with the EU, the U.S. could inflict increased duties on certain goods effective March 1, 2005.

The proposed duty rates for products are as follows:
Note:

  • The list could be revised due to unforeseen circumstances;
  • The proposed new tariff rates represent the maximum amounts the USTR could impose on these products;

The product descriptions for the U.S. Harmonized Tariff Schedule (HTS) numbers below are for the convenience of the reader and are not intended to delimit the scope of the products that would be subject to increased duties.

Tariff Number

Product

Proposed Tariff Rate

04031090

Yogurt, not in dry form, whether or not flavored or containing add fruit or cocoa

40%

04063085

Processed cheese (incl. mixtures), nesoi, n/o 0.5% by wt. butterfat, not grated or powdered, subject to Ch. 4 US note 23, not GN15

55%

07052100

Witloof chicory, fresh or chilled

1.36 cents/kg

07108065

Brussel sprouts, uncooked or cooked by steaming or boiling in water, frozen, not reduced in size

75%

08052000

Mandarins (including tangerines and satsumas); clementines, wilkings and similar citrus hybrids, fresh or dried

3.3 cents/kg

09042020

Paprika, dried or crushed or ground

3.4 cents/kg

09102000

Saffron

20%

20019025

Artichokes, prepared or preserved by vinegar or acetic acid

55%

20032000

Truffles, prepared or preserved otherwise than by vinegar or acetic acid

20%

20049010

Antipasto, prepared or preserved otherwise than by vinegar or acetic acid, frozen

50%

20057050

Olives (not green) in a saline solution, canned, not pitted

Rate Not Yet Specified

20057070

Olives (not green), in a saline solution, in airtight containers of glass or metal but not canned

Rate Not Yet Specified

20057075

Olives (not green) in a saline solution, not canned, nesoi

Rate Not Yet Specified

20059030

Sauerkraut, prepared or preserved otherwise than by vinegar or acetic acid, not frozen

75%

20087020

Peaches (excluding nectarines), otherwise prepared or preserved, not elsewhere specified or included

55%

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    Synopsis of Major U.S. Trade Agreements

    U.S. Customs and Border Protection (CBP) has outlined a synopsis of various Trade Agreements and Programs and the criteria that must be met in order to qualify for associated preferential treatment. Also included is an outline of the statements and documents that an importer must be prepared to submit in order to substantiate a claim.

    This information will serve as a general guidance and is not intended to constitute legally binding advice on the treatment of imported merchandise or goods under the various trade agreements/programs referenced in the document.

    Trade Agreements and Programs include:

    • GSP (Generalized System of Preferences)
    • AGOA (African Growth and Opportunity Act)
    • ILFTA (U.S.-Israel Free Trade Agreement)
    • JFTA (U.S.-Jordan Free Trade Agreement)
    • ATPA (Andean Trade Preference Act)
    • ATPDEA (Andean Trade Promotion and Drug Eradication Act)
    • CBERA (Caribbean Basin Economic Recovery Act)
    • CBI (Caribbean Basin Initiative)
    • CBTPA (Caribbean Basin Trade Partnership Act); and
    • Civil Aircraft Agreement

    Source: Customs Trade Agreements Synopsis is available at http://www.cbp.gov/linkhandler/cgov/import/international_agreements/fta_provisions.ctt/fta_provisions.doc

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    Samuel Shapiro & Company, Inc. Hires New Compliance Manager

    Samuel Shapiro & Company, Inc. has hired Jane Taeger as the new Compliance Manager. In her role, Jane will oversee import and export regulatory compliance as well as Company internal compliance initiatives.  Since the best means to achieve superb compliance is an educated staff, Jane will also direct Company training programs for the core operations units.

    In her new position, Taeger will report directly to Margie Shapiro, CEO and President of Samuel Shapiro & Company, Inc.  Given Shapiro's 90-year focus on compliance expertise, the Company needed a strong hand to guide this aspect of the Company.  Additionally, as logistics providers increasingly depend upon new service and product offerings to create a competitive advantage, the Compliance Manager plays a vital role in business development.

    "Jane Taeger has the unique blend of leadership, experience, and creativity needed to leverage Shapiro's compliance history and proven methodology to better develop existing business and to design new products to capture new revenue. We also feel that Jane fits the Shapiro culture of innovation and responsibility perfectly; we could not be more excited about Jane's future... nor ours," said Margie Shapiro.

    Jane Taeger is a 20-year veteran in logistics with an impressively diverse background; she has excelled as a Compliance Specialist, an Import Manager, a Branch Manager, a Consultant, and as a National Account Manager. Jane spent most of her career with Kuehne and Nagel, BDP International, and FW Myers.  Her key functional concentrations have been customer consulting seminars, internal and external auditing, and operations management.

    "I am delighted to be able to combine my areas of expertise in one position, and I am honored to join Samuel Shapiro & Company, a company with a stellar reputation for compliance, commitment to customer service, and first rate automated systems.  What inspires me most is that I feel that I can immediately contribute, and that positive change happens fast here at Shapiro," said Taeger.

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    Proposed Rule for Mandatory Automated Export System Filing for All Shipments Requiring Shipper’s Export Declaration Information

    It is likely that the U.S. Census Bureau will require the mandatory filing of export information through the Automated Export System (AES) or through the AES Direct for all shipments where a Shipper’s Export Declaration (SED) is currently required. In addition to requiring mandatory AES filing, the proposed rule makes other changes to the Foreign Trade Regulations, including increasing penalties substantially.

    This rule will remove any reference to paper Shipper’s Export Declarations (Form 7525-V). All of the information contained on the Shipper’s Export Declaration (SED) must be filed electronically through AES or AES Direct. Paper filing of the Electronic Export Information (EEI) will no longer be accepted.

    Please note that Samuel Shapiro & Company, Inc. has been filing all export information for our clients electronically through AES for several years now.

    Some of the items that are affected in the Foreign Trade Regulations (FTR) (Part 30) include:

    Types of shipments are to be excluded from EEI filing.

    • In ‘‘routed’’ transactions, the U.S. principal party in interest (USPPI) will compile and transmit export information on behalf of the foreign principal party in interest (FPPI) when authorized by the FPPI.
    • Specifies the time and place-of-filing requirements for presenting proof of filing citations, post departure filing citations, and/or exemption legends.
    • Revises the post departure (formerly Option 4) approval procedures.
    • Specific procedures for reporting the value of goods to the AES.
    • Describes the proper manner for reporting cost of repairs and/or alterations to goods, and the reporting of the value of replacement parts exported.
    • Creates a new subpart H to cover FTR penalty provisions. New penalty provisions describe the increase in penalties imposed for violations from $100 to $1,000 per each day of delinquency, to a maximum from $1,000 to $10,000 per violation.
    • The penalty provisions also provide for situations when the filer knowingly fails to file, files false and/or misleading information. A civil penalty shall not exceed $10,000 per violation and a criminal penalty shall not exceed $10,000 or imprisonment for not more than five (5) years, or both, per violation.

    Written comments must be submitted before April 18, 2005. Please view the notice for address information. You may also submit comments, identified by RIN number 0607–AA38, to the Federal e- Rulemaking Portal: http://www.regulations.gov

    For further information regarding this proposed rule, please contact Harvey Monk, Jr., Chief, Foreign Trade Division, U.S. Census Bureau, Room 2104, Federal Building 3, Washington, DC 20233–6700, by phone (301) 763– 2255, by fax (301) 457–2645, or by email: c.harvey.monk.jr@census.gov

    The entire text of the Federal Register Notice dated February 17, 2005, can be found at: http://www.census.gov/foreign-trade/regulations/fedregnotices/fedreg-02172005.pdf

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    Remote Location Filing Allowed for Quota / Visa-Free Textiles

    U.S. Customs and Border Protection (CBP) has announced that brokers and importers may use the Remote Location Filing (RLF) / Electronic Invoice Program (EIP) for entry type 01, “quota and visa-free” textile entries that also require a textile declaration, provided certain requirements are met.

    RLF and EIP entries for textile merchandise must indicate in the electronic invoice transmission that a textile country of origin declaration is on file and is readily available to CBP upon request.

    If CBP requests the paper submission of the textile country of origin declaration, it must be provided immediately. Failure to respond to CBP’s request or, a pattern of making incorrect origin claims or classification determinations that result in the circumvention of a safeguard or other admissibility restraint, may result in the discontinuation of entries being processed via RLF/EIP for that broker or importer.

    For more information on the textile country of origin declaration requirements or any other textile issues, please contact Ms. Susan Thomas, at (202) 344-3719 or Mr. Robert Abels, at (202) 344-1959, of the Textile Enforcement and Operations Division.

    For more information on the Electronic Invoice Program or the Remote Location Filing Prototype, please contact Ms. Sherri Braxton, Summary and Account Management Division, at (202) 344-1082.

    Sources: Customs and Border Protection Website at www.cbp.gov Memorandum for Directors, Field Operations can be viewed at the following link: http://cbp.gov/linkhandler/cgov/import/textiles_and_quotas/tbts/TBT2005/tbt_05_003.ctt/tbt_05_003.doc

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    Update on ISPM 15 Treatment & Marking for Wood Packaging Material

    The Animal and Plant Health Inspection Service (APHIS) has posted an Industry Alert update on various countries’ implementation and enforcement of the International Standards for Phytosanitary Measures (ISPM) 15 treatment and marking requirements for wood packaging material (WPM). The APHIS Industry Alert can be viewed at: http://www.aphis.usda.gov/ppq/swp/industry/

    ISPM 15 calls for regulated wood packaging material to be heat-treated or fumigated with methyl bromide and marked with an approved international mark certifying treatment. The treatment certification mark harmonizes the regulations and replaces country-by-country certifications.

    On September 17, 2004, APHIS issued a final rule to require all regulated wooden packaging materials (e.g., pallets, crates, boxes, and dunnage) imported into the United States be heat- treated or fumigated with methyl bromide, in accordance with ISPM 15 requirements. APHIS states that the final rule for wooden packaging materials will be effective September 16, 2005.  Implementation of the new requirements has been delayed one year from the date of publication to give affected parties time to comply.

    Sources: The Animal and Plant Health Inspection Services (APHIS) web page for Wood Packing Materials  http://www.aphis.usda.gov/lpa/issues/wpm/wpm.html and http://www.aphis.usda.gov/lpa/news/2004/09/woodmate_ppq.html

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    Customs Changes Formula for Calculating Bond Amounts

    Previously, Customs and Border Protection continuous bond liability amount was based on 10% of duty, taxes, and fees paid during the previous calendar year. If the importer was new to the industry and had no previous activity, then an amount of 10% of the estimated duties, taxes and fees for the current year was used. There were also other additional exceptions, such as 2% of value for quota merchandise and on textile products.

    Customs and Border Protection will now require that the continuous bond liability be calculated at 10% of the duty, taxes and fees paid the previous 12 months.

    Other formulas may apply depending on whether:

    • The imported material is subject to antidumping (ADD) and/or countervailing (CVD) duties;
    • The agriculture/aquaculture merchandise is subject to ADD/CVD;
    • If the importer has delinquent bills, not protested, and over 120 days;
    • Or if there were any unpaid debit vouchers, and/or bills previously paid by a surety.

    Formulas are rounded up by increments of $10,000 up to $100,000 and then by increments of $100,000 with a minimum of $50,000.

    What does this mean?   The $50,000 bond liability minimum may not apply.  Additionally, if antidumping is identified, there is added risk for the surety.  Bonding companies may require a letter of credit or other collateral.

    For more information on Customs Bonds please contact compliance@shapiro.com Shapiro’s bond application and indemnity agreement are available at: http://www.shapiro.com/AvalonCF301BondApplication.doc

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    CBP FY 2006 Budget Receives Roughly a 4.8% Increase

    U.S. Customs and Border Protection (CBP) received a nearly 4.8% budget increase -- one of the highest in government. Specifically, the FY 2006 budget for CBP totals $6.7 billion, including $5.6 billion in appropriated resources and $1.1 billion in funding derived from user fees.

    The FY 2006 budget recognizes that securing America’s borders is a top priority. According to CBP Commissioner Robert Bonner, “Today global terrorism is a real threat that allows no room for error. The President's budget, and the funding for technology, reflects the imperative of securing our border if we are to protect America against that threat.”

    The following initiatives are highlights of the President’s FY 2006 budget for CBP (partial list):

    • Weapons of Mass Destruction (WMD) Detection Technology:  Includes $137 million for Weapons of Mass Destruction Detection Technology, including $125 million for the purchase of Radiation Portal Monitors (RPM’s).
    • America’s Shield Initiative (ASI): ASI is an integrated, national web of border security with centralized command designed to gain greater control of our borders with Canada and Mexico.  Totals $51.1 million for America’s Shield Initiative (ASI), including $19.8 million for new investments.
    • Air and Marine Operations: Provides $293 million for operations and maintenance of CBP’s air and marine infrastructure to identify, deter, interdict, and investigate acts of terrorism and smuggling arising from unlawful movement of people and goods into and out of the U.S.
    • Automated Targeting Systems (ATS) Enhancement: Contains $28.3 million for automated targeting systems (ATS), including $5.4 million to enhance CBP’s targeting and risk analysis capabilities. ATS aids CBP in identifying high-risk cargo and passengers.
    • Container Security Initiative (CSI): Provides $138.8 million, including $5.4 million in new funding to expand the program in seven additional countries. CBP will continue to expand our nation’s zone of security, ensuring that U.S. borders are NOT the first line of defense.
    • Customs-Trade Partnership Against Terrorism (C-TPAT):  Contains $54.3 million for C-TPAT, including an additional $8.2 million to enhance CBP’s ability to conduct the ever-critical supply chain security validations. Companies that institute CBP-approved security measures receive expedited processing and fewer examinations of cargo shipments.
    • Automated Commercial Environment (ACE):  $305.5 million in ACE funding and $16.2 million in International Trade Data System funding to continue the multi-year modernization of CBP’s trade management systems.

    The FY 2006 budget allows CBP to fulfill its priority mission of preventing terrorists and terrorist weapons from entering the U.S., while simultaneously facilitating the flow of people and trade across our borders.

    Source: “U.S. Customs and Border Protection FY 2006 Budget” appearing on The Bureau of Customs and Border Protection’s website on February 7, 2005 at http://www.cbp.gov/xp/cgov/newsroom/press_releases/02082005.xml

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    Commissioner Robert C. Bonner Discusses C-TPAT at TSN Meeting

    On February 1, 2005, CBP Commissioner Robert Bonner addressed the Trade Support Network (TSN) in Los Angeles, California. Commissioner Bonner concentrated on addressing security issues with a particular focus on the Customs-Trade Partnership Against Terrorism (C-TPAT) program.

    The following are highlights of Commissioner Robert Bonner’s remarks to the TSN (partial list):

    • C-TPAT’s vast success: The program has taken off with 2,000 to 3,000 new members applying each year.  C-TPAT cargo comprises about 40 percent of containerized imported goods into the U.S. by value. Already 10 percent of all certified partners have had critical aspects of their supply chains validated by CBP, and another 20 percent are in the process.
    • C-TPAT as a voluntary program: The U.S. Government does not have the ability to effectively regulate, or to enforce regulations, deep into the supply chain, relating to point of origin security, to a foreign manufacturer’s loading docks. Many C-TPAT companies have used their leverage with their foreign vendors to increase security at the overseas point of origin and beyond to foreign transport and outbound overseas ports.
    • The Smart Box: The Smart Box is a container that, at a minimum, tells CBP whether it has been tampered with anywhere along its journey.  CBP should focus on this development as soon as the technology to reduce false positives to an acceptable level is there to do so.
    • Improvements to C-TPAT - The Next Level: CBP is now more clearly defining the point of stuffing security criteria for C-TPAT members, but especially for C-TPAT importers and their foreign vendors and manufacturers.   If importers can require Quality Assurance (QA) from their vendors, they can require C-TPAT security assurance (SA) from them, as well.
    • The Vision for the “Green Lane”: C-TPAT benefits for validated C-TPAT members who meet supply chain security best practices should mean:
      • No inspections - a true “Green Lane” treatment.  Importers will be subjected to only relatively infrequent random inspections or inspection where a shipment is subject to specific tactical intelligence as a security or enforcement threat.  It will mean moving shipments of C-TPAT members to the front of the inspection line, because the added investment to meet and maintain “best practices” should be recognized and rewarded.
      • A two-tiered system of C-TPAT benefits, based on the level of security, validation results, and use of “best practices,” like the Smart Box, and taking ownership of its supply chain. First tier, certified C-TPAT importers who meet C-TPAT minimal security criteria, will receive, as now, a lower ATS score and fewer inspections on arrival.  Second, or higher, tier C-TPAT partners using C-TPAT best security practices will get the Green Lane: no inspections for security.

    CBP’s efforts are revolutionizing the approach to supply chain security in ways that facilitate trade, rather than impede trade. CBP’s efforts, together with the international trade community, are helping to secure our homeland.

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    This newsletter is for informational purposes only.  Although every effort is made to ensure accuracy, Samuel Shapiro & Company, Inc. assumes no legal liability for any erroneous information. Links to other websites are provided for reference and convenience and do not constitute endorsement of the content of those sites.