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THE CURRENT UPDATE
UPDATE FOR May 2008 US - KOREA TRADE PACT IS WORLD'S LARGEST
On April 2nd, United States and South Korean negotiators struck the world’s largest bilateral free trade agreement on Monday, giving the United States a badly needed lift to its trade policy at home and South Korea a chance to reinvigorate its export economy. If ratified, the trade deal would eliminate tariffs on more than 90 percent of the product categories traded between the countries. South Korea agreed to lift trade barriers to important American products like cars and beef, while the United States agreed to allow Seoul to continue to subsidize South Korean rice.The United States will eliminate the 2.5 percent tariff on South Korean cars with engines smaller than 3,000 cubic centimeters; phase out the 25 percent duty on trucks over the course of 10 years; and remove tariffs, which average 8.9 percent, on 61 percent of South Korean textiles. Full details are available from the U.S. Trade Reprsentative here. CUSTOMS E-FOIA COMPLIANCE "DELINQUENT"
The Electronic Freedom of Information Act was intended to open government to the citizenry. E-FOIA amendments, which took effect ten years ago. It requires federal agencies to post key records online, provide citizens with detailed guidance on making information requests and use new information technology to publish information proactively. The National Security Archive reviewed 149 federal agency and component websites and found widespread failure. Among the key findings are that just 21 percent of federal agencies and components fully follow the E-FOIA amendments and post all of the required categories of documents online; only one third s provide the required indexes and guides to agency records; and many agency websites are poorly organized and difficult to navigate.
The National Security Archive cited NASA and the US Department of Education as examples of excellent FOIA websites and the Air Force, Immigration and Customs Enforcement and the US Department of Veterans Affairs [official websites] as delinquent websites. NEW HARMONIZED TARIFF EXPECTED TO BE IMPLEMENTED FEBRUARY 3. 2007 Proposed changes will impact approximately 1600 subheadings in 83 of the 97 chapters to an 8 digit level recognized by the World Customs Organization and eventually to the 10 digit level we use here in United States. These changes will critically impact the chapters covering industrial and high-tech products and the concentration of changes will be found in Chapters 84, 85, 87 and 90. Schedule "B" numbers will change simultaneously with the implementation of the new version of the Harmonized Tariff. Eligibility for for various free trade agreements based on tariff shift could be seriously impacted and rules may need to be rewritten in that area. Currently, the expected changes are available in Draft Form HERE. NEW DOCUMENTARY REQUIREMENT FOR ARRIVALS BY AIR EFFECTIVE JAN. 23 2007 Washington, D.C. — U.S. Department of Homeland Security and U.S. Department of State announced today the official requirement for citizens of the United States, Canada, Mexico, South and Central America, and the Caribbean to present a passport to enter the United States when arriving by air from any part of the Western Hemisphere beginning Jan. 23. For details, click HERE. ELECTRONIC INTELLECTUAL PROPERTY REGISTRATION AVAILABLE This new method for filing initial trademark and copyright recordation applications greatly decreases the time required to register for enforcement of your intellectual property rights. The filing of an electronic application sbegin the administrative recordation process with CBP. A separate application is required for each recordation sought. The recordation fee for copyrights is $190 and for trademarks $190 per International Class of goods. To go to the Customs registration site, click HERE. IMPORT DRUG BAN MAY EASE Americans could buy and carry home prescription drugs from Canada under new proposed terms to legislaton agreed upon on September 21, 2006. Customs agents would be prohibited, as part of a Homeland Security spending bill, from seizing as much as a 90-day supplies of prescribed medicines brought across the border by individuals personally. Purchasing cheaper prescriptions over the Internet or by mail-order from Canadian pharmacies would still be prohibited. Canadian prices for many popular brand-name prescription drugs are 30 percent to 80 percent lower than in the United States, according to surveys by The Associated Press and others. The agreement was announced on the same day that Wal-Mart Stores Inc. announced it plans to slash prices for generic prescriptions to $4.00. While importing drugs into the United States is illegal, the Food and Drug Administration generally has not stopped small amounts of medicine purchased for personal use. However, Customs officials last November began intercepting prescription drugs coming across the border. Since then, CBP agents have seized more than 34,000 packages of drugs coming into the country.
WALL STREET JOURNAL INTERVIEWS MOONEY FOR IMPORT ARTICLE In its July 18, 2006 issue, The Wall Street Journal published a column on starting up an Import business. Neil Mooney was the first attorney selected for interview, and provided most of the information used in the article which you may read here.
NEW CUSTOMS AND BORDER PROTECTION CHIEF On June 5th President Bush swore W. Ralph Basham of the Secret Service in as the new Commissioner for U.S. Customs and Border Protection. Basham served as Director of the U.S. Secret Service. A 28-year veteran of the Secret Service, Basham has also served as Director of the Federal Law Enforcement Training Center and Chief of Staff of the Transportation Security Administration. For more information on the new Commissioners, click HERE. CORRUPT CUSTOMS SPECIAL AGENT SENTENCED In Tampa, Florida on March 29, 2006, former customs agent Rafael Francisco Pacheco Jr. was sentenced to seven years and three months in federal prison after pleading guilty to taking bribes from a narcotics trafficker. Pacheco received nearly $18,000.00 from a Mexican trafficker and money launderer to influence U.S. officials. He used some of the money to pay off a car loan at Florida Customs Federal Credit Union, and he lied to representatives at the American Consulate in Mexico about using the criminal as a source in a Tampa criminal investigation. In this manner Pacheco helped the smuggler obtain visas to the United States for himself and his family. ESTIMATING U.S. DUTY RATES ONLINE The U.S. International Trade Commission - Tariff Database link, located HERE will take you to an interactive data base that will enable you to get an approximate idea of the duty rate for a particular product. Note that the duty rate you request is only as good as the information you provide. The actual duty rate of the item you import may not be what you think it should be as a result of your research. Customs and Border Protection actually makes the final determination of what the correct rate of duty is. For very specific duty information on a particular item you may request a Binding Ruling and/or receive guidance by calling your local CBP port. BASHAM NOMINATED TO REPLACE BONNER Feb. 1, 2006: President George W. Bush has nominated W. Ralph Basham to replace Robert C. Bonner as Commissioner of U.S. Customs & Border Protection (CPB). Basham became the director of the U.S. Secret Service in January 2003, after working for the agency for about 35 years. Prior to that he served as chief of staff for the Transportation Security Administration (TSA), overseeing the hiring of federal security directors for U.S. airports, and, earlier, as director of the Federal Law Enforcement Training Center.
U.S. CUSTOMS ELIMINATES THE TEXTILE DECLARATION With immediate effect, the Customs changes are as follows:
Importers should ensure that the Commercial Invoice contains all required information for textile commodities, as specified in the U.S. Customs regulations. General invoice requirements and specific information for certain commodities can be found in the U.S. Customs regulations at 19 CFR 141.86 and 141.89.
CITA ALLOWS BRIEF ENTRY OF EMBARGOED GOODS Effective November 28, the Committee for the Implementation of Textile Agreements (CITA) authorized the release of the following items from embargo for only five working days - November 28 to December 2:: • Cotton knit shirts and blouses (category 338/339) • Cotton trousers, breeches, and shorts (category 347/348) • Cotton and manmade fiber underwear (category 352/652) • Manmade fiber knit shirts and blouses (category 638/639) • Manmade fiber trousers, breeches, and shorts (category 647/648)
PRESIDENT OF STEALTH COMPONENTS, INC. SENTENCED FOR PRESENTATION OF FALSE INVOICES TO CUSTOMS ON ENTRIES
Bernard Smith, the President and part owner of a distributor of
computer components, will in November begin serving a sentence in
connection with a scheme to avoid paying over $385,000 in antidumping
duties. A Massachusetts Federal Judge sentenced Smith to 3 years
of probation, the first 4 months of which are to be spent in community
confinement, to be followed by 8 months and 1 day in home detention
with electronic monitoring. Smith was also ordered to pay a $30,000
fine.
CUSTOMS AND BORDER PROTECTION CHIEF TO RETIRE
A Sept. 28 statement from the Department of Homeland Security Department, Bureau of Customs and Border Protections, said CBP Commissioner Bonner submitted his resignation to President Bush earlier in the week. His retirement date has not been set. CBP spokeswoman Kristi Clemens said Bonner plans to return to Los Angeles to be close to his family and go where he worked prior to taking his post as Customs commissioner in September 2001. Bonner's "guidance and efforts have been instrumental in balancing our need to preserve the integrity of our borders without sacrificing the free flow of commerce on which our nation and the global community depends," Homeland Security Secretary Michael Chertoff said. Bonner helped oversee the merger of three separate agencies and 42,000 employees into CBP when the Homeland Security Department was created.
DR-CAFTA PASSES BY TWO VOTES IN HOUSE, NINE IN SENATE
The agreement between the US and Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic eliminates tariffs and opens up the region to U.S. goods and services. Certain textile quotas will remain in place at the same time as a retroactive provision may allow to the refunds going back all the way to January 1, 2004. The agreement also lowers obstacles to investment in the area and strengthens protections for intellectual property.
CBP ISSUES ACE RESOURCE CONTACT GUIDE WITH PORTAL SUPPORT CENTER
NEW QUOTAS / LIMITS PLACED ON CHINESE TEXTILES BY UNITED STATES AFTER BRIEF EXPERIMENT: CHINA ADDS ITS OWN INTERNAL EXPORT QUOTAS On Dec. 31, 2004, China had ended most textile export quotas, as did other World Trade Organization (WTO) members, and surges in Chinese textile exports followed. We previously reported that in May and June 2005 the U. S. decided to impose limits on the import of Chinese shirts, blouses, trousers, cotton yarn, and underwear in various textile categories after a flood of garment caused significant market disruption in the first quarter of the year when they had been lifted. The Committee for the Implementation of Textile Agreements (CITA), the Federal agency which makes such determinations, has already imposed with growth limited to 7.5 percent per year. Details on a textile or garment-specific basis as to U.S. limits can be obtained here. China also imposed limits on its own exports of certain textile products, to begin July 20, 2005. This was in response to pressure from the United States and the European Union (EU) to limit textile exports following surges of Chinese imports beginning last January discussed above. In negotiations with the EU, China agreed to cap the growth of textile exports to EU countries at rates ranging from 8 to 12.5 percent, depending on the textile category. Details on a textile or garment-specific basis as to Chinese limits can be obtained here.
COURT OF INTERNATIONAL TRADE OVERTURNED
The safeguard petitions would place limits on imported Chinese textile products based upon the threat of US market disruption. In issuing its injunction, the U.S. Court of International Trade had maintained that CITA could not consider the petitions until there was proof that an actual market disruption was occurring. With the end of the first quarter activity for 2005, some proof may be on hand: according to the American Manufacturing Trade Action Coalition (AMTAC), during the four months when the injunction was in effect, the U.S. lost over 17,000 textile/apparel manufacturing jobs and, during the first quarter of 2005, U.S. imports of textiles and apparel from China increased by 63 percent over the comparable period last year.
EIGHT ITEMS DUTY SURCHARGED BY CANADA IN RETALIATION Because the United States did not repeal the Byrd Amendment prior to May 1, 2005, the government of Canada has retaliated by imposing an additional duty of fifteen percent on the following eight goods of U.S. origin moving from the U.S. into Canada:
The Byrd Amendment, which the World Trade Organization (WTO) ruled to be illegal under global law in 2003, permits U.S. companies to receive anti-dumping and countervailing duties collected by the U.S. government from foreign competitors. In 2004 the WTO granted Canada, Brazil, Chile, the European Union, India, Japan, Mexico and South Korea the right to retaliate against the U.S. for failing to comply with recommendations that it be repealed.
REFUNDS AVAILABLE FOLLOWING U.S. NAFTA ORIGIN RULE CHANGES The U.S. has changed the rules of origin used to qualify goods under NAFTA. The changes make it easier for certain Canadian and Mexican products imported into the U.S. to qualify for NAFTA status. Applicable immediately to Canadian goods imported after January 1, 2005 , Mexican applicability is still not announced. The retroactive feature provides for refunds of duties and user fees on eligible Canadian goods classified in Chapters 9, 12, 13, 21, 71, 84, 85, 90 and 95 of the HTSUSA. The expanded NAFTA rules of origin were announced in Presidential Proclamation 7870, which can be found here.
FIFTEEN EUROPEAN UNION ITEMS ASSESSED INCREASED DUTY Fifteen tariff classifications of agricultural products that may incur drastically higher import duties when imported from the European Union starting March 1, 2005 were listed by the United States Trade Representative's office. It has notified the WTO that tariff concessions on the products will be withdrawn unless an agreement can be reached with the EU over increased duties it adopted last year, allegedly effecting U.S. exports. Negotiations are continuing. The Harmonized Tariff Schedule of the U.S. item numbers that would be impacted should tariff concessions be withdrawn are 04031090, 04063085, 07052100, 07108065, 08052000, 09042020, 09102000, 20019025, 20032000, 20049010, 20057050, 20057070, 20057075, 20059030, and 20087020. Products covered by these HTS items include certain dairy items, such as yogurt and cheese, some spices, certain vegetables such as Brussels sprouts, artichokes and olives, some citrus, sauerkraut, and peaches. The trade dispute arose because the EU changed its rice import regime on September 1, 2004, raising tariffs on some rice imports above the maximum permissible WTO rate of duty. The USTR notice and list of products can be found HERE:
Up to 6 additional months to finalize certain entries is being provided by the Bureau of Customs and Border Protection (CBP) under changes to the Reconciliation process. As required by the Miscellaneous Trade and Technical Corrections Act of 2004 signed into law in December 2004, CBP is giving importers more time except in those cases involving NAFTA or US-CFTA issues. Once an importer declares his intent to file a Reconciliation Entry package, the time period for filing is extended from fifteen months to twenty one months. The change becomes effective on February 9, 2005. If you would like to participate, click here .
CUSTOMS AND FDA ALTER PRIOR NOTICE PROCESSING ON FOODSTUFFS Please jump to our "FDA" page for the latest information on changes to entry processing requirements as to foreign manufacturers and imported foods. Customs penalties and/or seizure may result from habitual failure to abide these and all import regulations.
JUDGE RESTANI OF CIT ESTABLISHES FIRM INJUNCTIONS ON LITIGATED LIQUIDATIONS
CUSTOMS INFORMS ON FDA BIOTERRORISM ACT PROCEDURES
CUSTOMS CHANGES ANTIDUMPING AND COUNTERVAILING DUTY BOND REQUIREMENTS
FIRST AID FOR CUSTOMS PENALTIES Customs penalties are officially subject to uniform regulation, obviously, and one would hope they would be handled the same way nationwide. However the fact is that different ports continue to interpret and implement Inspection, Detention, Seizure, and other enforcement rules differently. Here, briefly, are the best five things you can do to minimize fines or liquidated damages: 1. React immediately: if you suspect that a problem is forthcoming and know which agent or official is involved, contact them informally without delay. Often their interpretation of your complex situation is erroneous because they have had very general training and apply it to sophisticated situations. They are intelligent people, and may be made to understand the merits of your particular case without taking it any further down the seizure/penalty road. 2. Know your rights: do not divulge more than is necessary to address the issue at hand. While you have nothing to hide, allowing agency personnel to "go fishing" as to prior shipments or practices can only lead to the loss of precious time and the delayed attainment of your goal. 3. Carefully study the allegation. Often the language of a penalty says one thing, while the code or regulation cited as having been violated relates to something different. Customs personnel get used to using certain general statutes, and frequently cite irrelevant sections when issuing penalties. 4. Heed deadlines. If you were unable to prevent the issuance of a penalty or liquidated damage notice by speaking informally with the enforcement personnel, heed the deadlines in letters and formal notices. Even responding one day late may preclude relief in a case where a timely filing might have resulted in cancellation of the notice. At the same time, you may be able to request expedited handling if your response is within particular timelines. 5. Be thorough and honest in your response. Only in rare cases do you get more than two chances to petition, and since the second one will probably not be replied to sooner than eight or nine months after the initial seizure or issuance of penalties, it is important that the first petition, which you may expect a reply to in 90 -120 days, be sufficient to allow the remedy you seek. Handling Customs and other agency penalties is a big part of our practice. You may be able to prepare and submit the first petition successfully in accordance with your own knowledge and experience. However, under no circumstances is it advisable to submit the second (supplementary) petition yourself. That is your final chance at avoiding litigation or payment and/or forfeiture, far too important, in our view, to be undertaken independently.
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