Monday, December 14, 2009

Narrow Woven Ribbons with Woven Selvedge

The International Trade Administration made its preliminary determination today on Narrow Woven Ribbons with Woven Selvedge. These are ornamental ribbons. Selvedge is a self finished edge.

There were only two companies they reviewed. One they basically found no countervailing and theother they found using "Adverse Facts Available" a duty rate of 118.68%

In there determination they said "In previous CVD investigations into products from the PRC, we have adapted this practice to use the highest rate calculated for the same or similar programs in other PRC CVD investigations." 74 FR 60093. However, instead of doing that they basically double the country wide rate.

I have to read the calculation memo but this seems to be contrary to recent court rulings that even when using AFA the rate should be calculations, "have a probative value of a 'reasonably accurate estimate of respondents actual rate, albiet with some built-in increase as a deterrent to noncompliance'." (Fujian Lianfu Forestry v. United States. slip Op. 09-81. (CIT 2009)(citing F.LLI De Cecco di FilippoFara S. Martino v. United States. 216 F3d at 1032 (Fed. Cir. 2000)))
See my blog entry for August 11th.

This using the highest possible rate was also challenged in Zhejiang Native Produce & Animal By-Prods. Imp. & Exp. Corp. v. United States:
See my blog from August 17th.

The preliminary anti-dumping determination is not due out until February 4th, 2010. The final combined ruling is due out April 19th 2010.

At which point it will be interesting to see if the antidumping and countervailing duties for China amount to double counting. Commerce needs to find a way to asses both NME and CVD without double counting. GPX International Tire v. United States. Slip Op. 09-103.


Wednesday, December 9, 2009

New fish and wildlife/USDA requirements for wood imports.

  The 2008 farm bill amended the nations oldest environmental enforcement bill protecting endangered species. The new amendment now is trying to stop the trade of endangered trees. In doing so they are asking all importers of wooden items to report the genus, species and harvesting locations of every wooden thing imported into the US. They are also making it then a crime to declare falsely the species of wood being imported.
    It is unclear if the intention is to place a large burden on trade or just to add additional crimes to prosecute importers of endangered species. I believe the intention is solely the latter but that they succeed in accomplishing both. They are phasing in different wood products. April 1st 2010 will be the next phase in date that will incorporate many new products. Other products will also be incorporated. Below is the list of goods and their phase in date:

Phase II               April 1st 2009
HTS    Commodity
4401    Fuel Wood
4403    Hoopwood, Pole, Piles and Stakes
4406    Railway or Tramway Sleepers
4407    Wood Sawn or chipped
4408    Sheets for veneer
4409    Wood continuously shaped
4417    Tools, tool handles, broom handles
4418    Builder joinery and carpentry of wood

Phase III                  October 1st 2010
4402    Wood charcoal
4412    Plywood veneered panels (except 44129906 and 44129957)
4414    Wooden frames
4419    Tableware, Kitchenware
4420    Wood marquetry, caskets, statutes .

Phase IV    April 1st 2009
4421    Other articles of wood
6602    Umbrellas, Walking sticks, Riding crops.
8201    Hand tools
9201    Pianos
9202    Stringed instruments
9302    Revolver handles
9305    Pistols parts
940169    Seats, Chairs.
950420    Pool cues, and Billiard accessories.
9703    Wooded art work, and  Wooden sculptures

    We are sending this out now due to the additions coming up in April. Now would be the time to find out from your suppliers the particular species of wood they use and where they get it if from. We foresee this might take some time to find out where actually the wood was harvested from. For finished goods the wood is bought from lumber suppliers, who buy from saw mills, who buy from loggers, plus any number of distributors along the way.
    So we advise importers to begin finding this information out now. We will all have to brush up on our taxonomy. The government requires the scientific name and not familiar name. The USDA states over and over again that they will need both the genus and the species. They are aware that many times it is impossible to know the exact species in a genus. However, they expect importers to state all possible species that the item maybe made from.
    The USDA  states in cases where it is impossible to state the exact species it is not acceptable to state all possible species of the genus. The importer must state each individual species which the wood might possible belong to, based on harvest location, and species in that location. The importer must know and state all the possible species individually. So, the importer must state the genus and if there are multiple species that the wood was derived from each individual species that the wood may belong to.
    The declaration may be made on the forms provided by the USDA. The form is call the PPQ form 505. We are attaching the form for you to look at, or it can be found at the USDA web site: We also can file these forms electronically with the entries. But to file them for you we will need the above information. You may send it to us separately or on the invoices suppled by your supplier.
    Any false declaration will be punishable by criminal statutes and potential fines. The importer is responsible for any information supplied to the broker. There will be more products added to the list mentioned above. The final implantation of the full list is set to take place by August 31st 2010. It is likely that there will be a new list sometime between now and February and we will be keeping an eye out for. The full list of products will likely include as follows:

4405     Wood wool
4410     Particle board
4411     fiberboard
4412      Plywood including 44129906 and 44129957
4413     Densified wood
4415     Packing cases boxes crates and drums
4416     Casks Barrels vats tubs
4701     Mechanical wood pulp
4702    Chemical wood pulp, dissolving
4703    Chemical wood pulp, sulfate
4704     Chemical wood pulp, sulfite
4705    Combination chemical and mechanical wood pulp.
4801    Newsprint
4802    Uncoated writing paper
4803     Toilet or facial tissues
4805    Other uncoated paper
4806    Vegetable parchment
4807    Composite paper and board   
4808    Corrugated paper and board
4809    Carbon paper
4810    Coated paper and paper board
4811    Paper coated
6601        Umbrellas
6603        Umbrella parts
9205         Wind instruments
9401        All seats
990330    Wooden office furniture
940340    Wooden kitchen furniture
940350    Wooden bedroom furniture
940360    Other wooden furniture
940381    Furniture of, cane, osier, bamboo, rattan, or similar materials
9504        Articles for arcade, table, or parlor games. (Parlor???)

    As mentioned before we will can file this electronically, but we will need the information on the invoice or provided for us separately or in the form of the deceleration.  We will monitor the new products and let you know when we find out about them. It is important for imports of the new Phase IV products to begin getting the species, genus and harvest information as soon as possible. Or require your suppliers to begin putting the information on the invoices.

Thursday, December 3, 2009

FDA new PREDICT system

FDA new PREDICT system changes the cargo screening method.

The Food and Drug Administration (FDA) is changing its computer system to utilize more technology and streamline the process of differentiating between high risk food and drugs, and low risk foods and drugs. The Predictive Risk-based Evaluation for Dynamic Import Compliance Targeting (PREDICT) system is replacing the Operational and Administrative System for Import Support (OASIS) system.

As can be told by the acronyms the new system will use computer technology to target foods that are high risk and use less "human" based assets. There will be less people deciding what might be dangerous and more computers deciding what might be dangerous. At the same time they are moving more inspectors into the field overseas. What this means for importers can be both good and bad depending on the importer. The FDA stresses it depends on the accuracy of the data provided to them which will decrease the need for detentions, reviews, exams and sampling.

The more accurate the data provided to the FDA the less likely that goods will be reviewed. For importers that have good data from the manufacturers and the information provided is “consistent, accurate and complete,” then the inspections, request for documents, and reviews will be fewer than the previous system. They emphasize the more the importer concentrates on insuring "CAC" the less exams, sampling, and detention there will be.

 Most importers are not aware of the data we provide the FDA for their imports so I will briefly explain it. There are three basic data elements that the FDA is looking for to decide the risk, the 1) Manufacture Identification, (MID), 2) the PN registration number, and 3) the product code. The FDA wants these data elements to be “consistent, accurate and complete.”

The Manufacture ID is a code used to identify the manufacturer of the food product. The FDA conducts routine inspection of overseas food facilities, therefore it is important to know that your manufacture is producing safe food. The MID is constructed by using the address of the facility. The first two letters are the country code, the next three letters are the first three letters of the manufacturer’s first name, the second three letters are the first three letters of the manufacturer’s second name, the next four digits are first four digits of the manufacturer’s street address, and the last three letters are the first three letters of the manufacturer’s city.

For example if the company was: Food Makers Inc. 123 Main Street, Big City France. The MID would be FRFOOMAK123BIG. This is simple but many times shipper give different information on the bill of lading, the commercial invoice and their web site as to their address and company name.

The FDA claims that it is typical for one manufacturer to have 6 different manufacturer’s ID codes. The problem is that overseas address systems are different than our own. Some times the letter from one language will translate to different roman characters by different people. Furthermore, many overseas producers have several names they use concurrently for their businesses. It is often hard to differentiate on the invoice between town, county or province.

For example, Aziendia Agricola, precedes many vineyard names. But many times they will use the commercial name of the vineyard on invoices. To be consistent it would be best to get a copy of the exact name and address as they filed with their Prior Notice registration. It is also important though that the information they used to filed with the FDA prior notice be accurate.

It would be good for us to go over with you and the information given by your supplier to make sure we are on the same page and that we have consistent information used to file. Even if we have been handling you products for many years it will be worth the time to spend a little time ensuring that we have and file using accurate information. Then in turn we would help to ensure that your products continue to enter the U.S. smoothly and quickly.

The third area that we should also check to help insure that your product are imported easily is ensuring we are using the proper “Product Code.” The product code is two digits three letters and two more digits. The first two digits are the general product division. The first letter and last two digits are the specific product divisions. These are pretty self explanatory as long we have a decent description of the goods then we can figure these out consistently. It is the second two letters where accuracy and consistency issues arise.

The first letter is the packaging that is used. Many invoices do not specify the packaging method. It is important that we get this information from your supplier in order to use the proper product code. The second letter that poses problem represents the sterilization method used. The possible sterilization methods and packaging codes are as follows:

Packaging:                   Sterilization Method:
A- Fabric                    Acidified
B- Ceramic Earthenware       Aseptic Packed
C- Glass                     Commercially Sterile
D- Laminated                 Cultured/ Cure
E- Metal                     Heat Treated
F- Paper                     Not Specified
G- Plastic                   Naturally Dried
H- Non Flex Plastic Package  Food Not Commercially Sterile
J- Wood                      Pasteurized
M- Multiple Containers       Raw, Frozen
V- Vacuum Packed             Raw, Fresh
W- Wax                       Raw Refrigerated
Y- Not Specified             Ultra pasteurized

Based on the specific food it is easy to foresee that it should fall in under a particular sterilization method. If sterilization method and packaging method do not match up with the food it is easy to see why the food should not be admitted into the US. The broker will need to have accurate information from the importer, from the supplier, or have detailed information on the invoices. Especially where is not obvious, however, for a bottle of beer, we would know that it is packed in glass and cultured. But other items are not so obvious.

If the broker can get this information they can help you to have fewer problems with the FDA. Most customers never have any problem and never know what information we file to clear their shipments. However, it would still be a good idea to insure we are using the accurate data to insure we have no problems in the future. On the other hand customers who have had problems should talk with us to get the right information and eliminate problems with the FDA.

The new system can really help the good importers insure that they have fewer problems with the FDA and that products are delivered faster and safer.

Wednesday, December 2, 2009



    With the recession dragging on it is a wonder more small businesses are not taking advantage of one of the largest legal tax breaks given to them. A tax break that will help drive American exports, improve our nations competitiveness, and help the balance of trade account.

    Small business owners are largely missing out on one of the largest tax benefits given by our government for exports. This tax break could effectively change a business owners tax rate from 35% to 15%. The legal way to make a small business owners who export the lowest taxed people in the nation outside of the very poor.

    This tax break is called the “Interest Charged Domestic International Sales Corporation,” IC-DISC, allows profit made on exports to be taxed at a lower rate. The IC-DISC does not pay any tax provided its profits are 95% from exports. The IC-DISC Is a paper corporation that exists to export only and is associated with an actual corporation that manufactures, distributes or provides services.

    Since the 1970's exporting companies have complained ro Congress that European and other nations used the VAT system, which offer a tax rebate on exports from these countries. Due to the different tax system this left US companies at a trade disadvantage to companies based in Europe and elsewhere using the VAT system. Congress responded with a number of attempts, for example the foreign overseas sales corporation, that where challenged by other countries in the World Trade Organization Dispute Settlement Body as an illegal subsidies on exports.

    Finally Congress passed the IC-DISC provisions into the US Tax code. It allows small companies to lower their taxes on the profits they make from exports. In order for them to avoid the taxes the need to set up a separate corporation, the IC-DISC, the paper corporation mentioned above. All this is filing few papers and making a few accounting adjustments and cashing in on tax savings. Although it does not level the playing field it can help some small businesses.

     But small businesses are not using this provision mostly because they do not know about it. Furthermore their tax preparers and accountants are too busy keeping on top of all the new changes to the old regulations to go through this one. Learning about how a IC-DISC can benefit a company can be a daunting task. One thing is certain this provision can only save small businesses on their taxes. There is no provision to increase a tax elsewhere that you would not have had to pay. I will try to explain this in more detail.

What is an IC-DISC?

An IC-DISC is a paper corporation use to lower tax liabilities. It is a creation of the U.S. tax code that does not pay taxes. The restrictions it must follow are: 1) it must earn 95% of its revenue from exporting U.S. products; 2) it must elect to be an IC-DISC by filing form 4879 with the internal revenue service; 3) it must be a “C” corporation filed with any state; 4) must have a par value of no less that $2500 per share and 5) it must maintain separate books.

Then it can start earning revenues. The revenues it earns are deducted from the earnings of the related corporation.

How does the IC-DISC earn money?

The IC-DISC earns money by using the greater of three methods. The higher the IC-DISC earnings are the more taxes savings can be earned. The first method is the 4% of gross sales method plus 10% of the export promotion costs. Here the earnings are 4% of the gross sales price plus 10% of the cost attributed to ‘export promotion.’ Example:

Export Sale:                   $100,000.00
Export promotion costs:         $10,000.00

4 % of gross income:             $4,000.00
10% of export promotion costs    $1,000.00

IC-DISC earnings:                $5,000.00

The 4% method will give higher profits to exports with low margins. Alternative the next method is the 50/50 profit plus 10% of export promotion costs. Example:

Gross Sales               $100,000.00
Cost of goods sold         $80,000.00
Export promotion costs     $10,000.00
Total DISC Profit          $10,000.00

IC-DISC Earnings:
50/50 profit                $5,000.00
10% of promotion cost       $1,000.00
Total DISC Profit           $6,000.00

In this case the IC would earn more money with only a 10% profit margin. The last way is by following the Section 482 method. Example:

Gross export sales             $100,000.00
Arms length transaction price   $75,000.00
IC-Disc expenses                 $5,000.00
Total DISC profit               $20,000.00

The profits the IC-DISC makes are deductible as non-taxable expenses by the related company. It depends on the method used. If its treated as a arms length transaction then the export gross receipts are taken off the income of the related party and replaces with the arms length transaction price. If, however, the income of the IC-DISC is treated as a commission then those commission are treated as an expense. In no case can the related corporation lose money on the transaction.

Then the profit can be kept in the DISC until they are either paid out in dividends or they are deemed paid out as dividends. They are deemed paid for example when ever the accumulated profits in the DISC are over $10,000,000.00 for example or they are deemed for a number of reason listed in the code.

How are the IC-DISC earnings treated by the related corporation?

The earnings of the IC-DISC are deducted from the earnings of the related corporation. When they are paid or deemed paid dividends then it can have different tax consequences depending on the corporate structure.
If the corporate structure is a closed “C” Corporation or an “S” Corporation it can be set up that the DISC will pay the individual shareholders directly and it will be taxable to those shareholders at the 15% dividend income rate. So for small exporters this is a huge tax break for exporting.

If the DISC is held by 100% by a corporate shareholder the income paid through in dividends is taxed as general income. The dividends do not qualify as most corporate dividends would as tax free status. So the benefit to a large C corporation is less but it can be used to defer income up the $10,000,000.00 mark.
Dividends deemed paid but not paid instead of paying income tax can be set to be interest charged instead. Dividends that are deemed paid will be taxed either at the dividend rate or the corporate income tax rate. But the corporation, or shareholders, can elect to pay interest on the taxes the tax. The interest rate would be the interest rate on US treasuries currently 4.5%.

For example:
Before the DISC:
Export Profits                       $20,000,000.00
Total Taxes 35%                       $7,000,000.00

After the DISC                       $20,000,000.00
Accumulated non taxed DISC income    $10,000,000.00
Deemed paid dividends                $10,000,000.00
If dividends paid individuals         $1,500,000.00
If dividends paid to a corporation    $3,500,000.00
If elected “Interest Charge” by a Corp. $157,500.00

While the small business gets the best break, even a large corporation can save by having taxes deferred. It is unknown how long you can keep the taxes deferred. However, if the income of the DISC on the accumulated earnings from investment or interest exceeds 5% of the total income from the year it will cease to be a DISC. So maybe that is what is keep people from keeping a horde of money at low interest rates.

What I can do to start you going?

I can help by filing to start a corporation following the rules. Filing to have the corporation elected to be an IC-DISC. Then set up procedures to have your export profits reported on the 1120 IC-DISC for instead of your 1120. Then report the disbursed the 1120 IC-DISC income to your shareholders (or shareholder) so they pay the dividend tax rate instead of either the personal income rate or the corporate income rate.
Also we can file you tax returns.

Friday, November 6, 2009


So trade is booming in October and now in November. I tried that periodic updates but it was too cumbersome when its get extremely busy.

New things coming up are:

Import Security Filings. 10+2. I wonder how much this will stifle trade. Customs seems to think that a small importer is one that imports 10 times a year. As a small broker I can see so many more first time importers coming though my doors I would view ten imports a year as a huge importer. These first time and very small importers that import once every other year are so numerous that they must be entirely ignored by customs. We know they don't like dealing with them because they send them to me all the time.

I think importing for them will soon be over if every shipment comes with a $1,000 fine because their suppliers failled to fillout and send in the ISF paperwork.

Anti dumping cases:

On the rise we are waiting to see what will happen with the China Countervailing cases.

When will Zeroing be finished? No time soon. There needs to be an appeal to CAFC at some point.

I finally have a free weekend so hopefully I'll be able to review the recent cases and maybe write about more new issues in trade.

Thursday, October 1, 2009

Trade in review

Lamy speech: G20 must walk the talk on Doha.

Panel set for Certain measures affecting imports of poultry from China.
Chairman: Mr Ole Lundby
Members: Mr Felipe Lopeandía
Mr Mohammad Saeed

Notice of appeal by China of measures affecting trading rights and distribution services for certain publications and audio visual entertainment products.

US Court of International Trade
National Fisheries Institute v. United States Customs and Border Protection.

GPX International Tire Company v. United States, Bridgestone Tire Corp.

This is an extremely important ruling in China antidumping and countervailing
  • Background: An antidumping margin is calculated based on the difference between the home market price and the export sales prices. Where is the price is sold less than the home market tot eh export market it is assessed a dumping margin collected by customs.
  • Countervailing does not deal with the home market price but only the amount of subsidy given by the exporting country's government.
  • Because the U.S. started trading with "Non-market economies" (NMEs), Congress added to the antidumping statute a method for calculatings dumping margins for nations that are deemed "NMEs." The reason being that in NMEs there was no reliable home market price. The relationship between the government and the businesses involved in exporter were too intertwined. Congress did write into the statute that the antidumping NME method would preclude countervailing.
  • Up until 2007 Commerce choose to use antidumping method for NME exclusively as the trade remedy for NMEs and did not add countervailing duties to the ADD. The Federal Court of Appeals upheld Commerce's decision as a permissible interpretation of the statute.
  • After 2007, however, they began apply both AD for NME and Countervailing duties (CVD).
  • The first time this was applied to was for coated paper. That case was dropped by the International Trade Commission for lack of injury.
  • This case Chef Judge Restani ruled that apply both CDC and ADD for NME would result in a high likely hood of double charging. Therefore this interpretation would be unreasonable. Commerce can apply both ADD for NME and CDV but they have to show that it is done fairly and without double charging.
  • The other issue was that Commerce set a dead line for calculate what countervailing subsidies would be counted. Subsidies give before China entered the WTO would not be counted toward the CVD while subsidies after would be included. Plaintiffs and defendants in this case agreed they did not want to include the prior subsidies but defendant intervenors argued that they should be. Here she ruled it was arbitrary and unsupported by substantial evidence to set such a dead line.
  • So it was remanded back for Commerce to set policies in place to insure that there would be no double counting of CVD and ADD margins. Also remanded that if Commerce decides it want to continue to apply CDV the cut off date for the subsidies would not be acceptable.
I wonder now what sort policies could be in place to even lower the chance of not double counting. You have one method prescribed by statute, NME method, where you basically construct a new price based on foreign surrogates and where possible actual international market place prices, and CVD where you just count up all the inputs received from the government.

The difference between the surrogate price and the price sold will include all of the subsides because it it measuring from a hypothetical outside point. So if you take out a double counting you would have to adjust it so the result would be the same.

I think commerce is stuck trying to figure out how to get aqure pegs in round holes on this one. It will be interesting to see what they come up with.

Gilda Industries v. United States.

Court denied class action status for those companies effected by the EU-beef hormone retaliatory tariffs. Seems to me the place to fight these tariffs would be a lobbying effort in the EU to change their beef importation policy. 

Kahrs International, Inc., v. United States.
Seven count case:
  1. Customs did not follow the proper comment and notice when revoking its prior rulings as required by the statute.
  2. Customs did not follow the proper comment and notice when revoking a prior established uniform practice. This was the most interesting part of the case. The argument was that by allowing Kahrs to import flooring for many years, even inspecting the flooring several times, customs tactily gave there approval to that classification. So then that to change their mind after so many years and shipments that customs had infact revoked a ruling that required a request for comment for them to change the classification on Kahrs flooring products. Here the court reasoned just because customs lets you import something doesn't equate to a ruling on the product. Rulings need to be in writing to have affect. I think it confirmed what I have been telling customers all along that just because you've been importing something and customs hasn't said anything doesn't mean you are home free. Of course even rulings can be revoked and they can claim after the ruling that you didn't provide them with all pertinate information. 
  3. Challenges the classification: These items were properly classified as parquet panels 4412. The court went to the dictionary and looked up "parquet" and concluded to be a parquet panel it required geometric patterns. Which would you think it the more descriptive though for wooden floor tiles parquet panels or plywood? The court did not go into the Carborundum factors.
  4. Challenges the classification: These items then should be edge glued lumber under 4418.90.2000.
  5. Can't find the fifth cause of action?
  6. Challenges the classification: Or maybe these should be classified as Builders Joinery 4418.90.4500.
  7. Declaratory judgment sought that Kahrs exercised reasonable care. Kahrs motioned for a declaratory judgment that in classify its goods. The court ruled it lacked jurisdiction because the penalty phase had not reach ripeness through the adminstrative remedies. I think maybe since the Declaratory Relief Act was ment to curtail continuous litigation maybe it would be good to revise the way the court treats standing under the Administrative Procedure Act at some point.

Kahrs International, Inc., v. United States.
Evidentiary motions on the above case.

Federal Register Notices:

International Trade Administration
International Trade Commission
  • Certain High-Brightness Light-Emitting Diodes and Products Containing Same: Investigation
  • Certain Liquid Crystal Display Modules, Products Containing Same, and Methods Using the SameInvestigation
  • Certain Probe Card Assemblies, Components, and Certain Tested Dram and Flash Memory Devices, etc Investigation
  • Certain Sodium and Potassium Phosphate Salts from China. Countervailing and Antidumping
  • Certain Video Displays, Components, and Products Containing Same, Investigation.
  • Ni–Resist Piston Inserts from Argentina and Korea, Countervailing
  • Seamless Carbon and Alloy Steel Standard, Line, and Pressure Pipe from China Investigation
Presidential Proclamations:
Chinese safeguard measures for tires.
  • Additional duties of:
  • 35% September 26th 2009 to 2010
  • 30% September 26th 2010 to 2011
  • 25% September 26th 2011 to 2012
  • Expiring September 25 2012.
  • new pneumatic tires for the kind used on motor cars,light trucks vans and SUVs.
Not covered:
  • pneumatic racing tires
  • new pneumatic tires for large trucks and buses
  • new pneumatic tires for agricultural or forestry vehicles and machines and construction or industrial handling vehicles or machines
  • new pneumatic tires used for aircraft, bicycles, motorcycles, trailers, all terrain vehicles lawn mowers and golf carts.
  • used pneumatic tires retread and recycled tires
  • non-pneumatic tires
To determine whether the tire will be a light truck tire or a large truck tire will be based on the load rate: All LT or P tires will be considered covered. All tires with a load range standard load, light load or extra load will be covered. All tires with a load range of "A" to "E" will be covered and those tires with a load range of "G" and higher will not be covered. But a load range of "F" will require more documentation into its final use.

Transportation Security Administration:
Customs and Border Protection
Customs and Border Protection Bulletin

Sunday, September 13, 2009

Review of the past two weeks.


U.S. Court of International Trade

Bond Street, Ltd. v. United States
Canadian Wheat Board v. United States
ENI Tech. Inc. v. United States
May Food Mfg. v. United States
NSK Corp. v. United States

Federal Register Notices:

Federal Maritime Administration:
Foreign Asset Control Office:
Industry and Security Bureau:
International Trade Administration:
  • Consolidated Decision on Applications for Duty-Free Entry of Electron Microscopes: University of Oklahoma, et al.

  • Ball Bearings and Parts from France, Germany, Italy, Japan, and the United Kingdom: Antidumping. Final Results of Antidumping Duty Administrative Reviews and Revocation of an Order in Part.
  • Carbazole Violet Pigment 23 From India: Antidumping
  • Certain Cased Pencils from the People's Republic of China: Antidumping
  • Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Antidumping
  • Certain Steel Concrete Reinforcing Bars from Turkey Antidumping
  • Certain Worsted Wool Fabrics to Persons Who Cut and Sew Men's and Boys' Worsted Wool Suits, etc Solicitation of Applications for Allocation of Tariff Rate Quotas
  • Certain Worsted Wool Fabrics to Persons Who Weave Such Fabrics in the United States: Solicitation of Applications for Allocation of Tariff Rate Quotas
  • Circular Welded Carbon Steel Pipes and Tubes from Thailand Antidumping. New shipper review
  • Corrosion-Resistant Carbon Steel Flat Products from the Republic of Korea: Antidumping, Countervailing.
  • Floor-Standing, Metal-Top Ironing Tables and Certain Parts Thereof from the People's Republic of China: Antidumping
  • Frozen Warmwater Shrimp from the People's Republic of China: Antidumping
  • Frozen Warmwater Shrimp from the Socialist Republic of Vietnam, Antidumping Extension of Time Limit for the Final Results of the Third Administrative Review.
  • Honey from Argentina: Antidumping
  • Hot-Rolled Carbon Steel Products from India: Antidumping
  • Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Japan: Antdumping
  • Polyethylene Retail Carrier Bags from the Socialist Republic of Vietnam: Countervailing
  • Wooden Bedroom Furniture from the People's Republic of China: Antidumping Partial Rescission of Antidumping Duty Administrative Review.
International Trade Commission:
Presidential Proclamations:
State Department:
Trade Representative of the United States:
  • China's Compliance with WTO Commitments: Hearings
U.S Customs and Border Protection
Customs Bulletin:

Wednesday, September 9, 2009

skipped a week

It has been a slow week with the vacation day on Monday. But I know rulings and decisions are piling up. I will publish my review of the past two weeks next Sunday.

Friday, August 28, 2009

Trade Review for the week ending August 30th

Calculation of antidumping costs decided this week. Resulting in the permissibility of unfairness.


US Court of International Trade:

Solvay Solexis SPA and Solvay Solexis. Inc., vs. TheUnited States
Depreciating of goodwill after a merger attributed to one division rather than the company as a whole increased the cost based and antidumping duties for importer Solvay. The court ruled the Commerce used a permissible interpretation of accounting standards. But no investigation appears to be done on whether the costs of the merger should have been applied, whether there was a greater nexus between the division and the merger to the company as a whole.

National Fisheries Institute Inc., Et Al. vs. United States Customs and Border Protection.
Customs exceeded its authority in setting bonding requirements well beyond the likely antidumping amount for importers of shrimp. But who could blame them as they had just recently been sued for not setting the bonding amounts high enough. Fortunately did not hold customs liable for setting the bond requirements too low in the previous case.

Puerto Rico Towing and Barge Company vs. The Untied States.
Puerto Rico is considered a US port when considering whether ship repairs will be dutiable.

Federal Register Notices:

Export-Import Bank:
  • Advisory Committee of Export–Import Bank of the United States: Meeting.

International Trade Administration:

  • Administrative announcements:
  • Agency Information Collection Activities; Proposals, Submissions, and Approvals
  • Scope rulings
  • Application(s) for Duty-Free Entry of Scientific Instruments: 1 and 2
  • Applications for the International Buyer Program (Calendar Year 2011)
  • Trade Remedies:

  • Circular Welded Non-Alloy Steel Pipe from the Republic of Korea. Antidumping: Wheatland tube withdrew its request for review of Kumkang. The antidumping rate will be set at the cash deposit rate if no other importer intervenes within the time period.
  • Hot-Rolled Carbon Steel Products from India: Countervailing: Extension of time for preliminary results of administrative review Now due December 31st 2009.
  • Glycine from the Peoples Republic of China. Antidumping: Rescission of administrative review.
  • Magnesia Carbon Bricks from the People's Republic of China and Mexico. Antidumping, Countervailing. Initiation of investigation. Yet another new ADD.CVD case is born.
  • Oil Country Tubular Goods from the People's Republic of China: Antidumping, postponement of preliminary determinations. New due date November 4th.
  • Wooden Bedroom Furniture from the People's Republic of China: Antidumping. Initiation of new shipper reviews.
International Trade Commission
  • Pressure Sensitive Plastic Tape from Italy: Antidumping
  • Certain MLC Flash Memory Devices and Products Containing Same: Investigation.
  • Certain Non-Shellfish Derived Glucosamine and Products Containing the Same: Investigation.
  • Articulated Coordinate Measuring Arm: Investigation
  • Certain Flash Memory Controllers, Drives, Memory Cards, and Media Players and Products Containing Same: Investigation
Federal Maritime Administration

State Department
Trade Representative, Office of.
Customs Bulletin
  • Pellicles: Propose ruling revocation
  • Expansion of global entry pilot project.
  • Information Collection Activities.

Monday, August 17, 2009

Week in Review Ending August 22nd

US Court of International Trade

Federal Register Notices

Foreign Asset Control Office
  • Designation of Entities (Pursuant to Executive Order 13382) The new list can be found at the agencies web site
  • Change in address for ANTARES SHIPPING COMPANY NV (f.k.a. IRISL Benelux NV), Noorderlaan 139, B-2030, Antwerp, Belgium; V.A.T. Number BE480224531 (Belgium) [NPWMD]

International Trade Administration.
  • Trade Remedies:
  • Carbazole Violet Pigment 23 from India: Countervailing: Preliminary results deadline for the administrative review for the period of calendar 2007 pushed back from 245 days to 365 days. They are now due December 31st 2009 from September 2 2009.
  • Certain Circular Welded Non-Alloy Steel Pipe and Tube from Mexico: Antidumping Final results of changed circumstances review. Determined that Ternium is the same as Hylsa for dumping deposit rates. Ternium will get Hysla's 10.38% cash deposit rate.
  • Frozen Warmwater Shrimp from Vietnam: Antidumping: Final results of changed circumstance review for several entities.
  • Honey from the People’s Republic of China: Antidumping 7th administrative review. The department extends the deadline for preliminary results two months to November 2 from September 2 2009 becuase it needs more time to evaluate the data from surrogate countries.
  • Light-Walled Rectangular Pipe and Tube from Mexico: Antidumping Final results of changed circumstances review. Determined that Ternium is the same as Hylsa for dumping deposit rates. Ternium will get Hysla's 3.76% cash deposit rate.
  • Petroleum Wax Candles from the People's Republic of China: Antidumping Request for comments on the scope of the antidumping order. Change could include candles there were not previous in the scope. This could be a big change for importers of candles. Comments due Date September 16th 2009.
  • Polyester Staple Fiber from Taiwan: Antidumping Administrative review. Petitioner withdrew it's request for review of Nan Ya Plastics Corporation. Antidumping. Rescision of administrative review of Saehan and its successor Woogjon.
  • Polyethylene Retail Carrier Bags from Indonesia, Taiwan, and the Socialist Republic of Vietnam: Antidumping Preliminary determination date postmponement. Peitioners requested a 42 day postponement for Tiawan and a 50 day postponement for Indonesia and Vietnam.
  • Wooden Bedroom Furniture. Antidumping: Final results of yearly administrative review. POR Jan 1st 2007 to December 31st 2007. Most new shippers reviewed received 29% dumping rates new PRC wide rate shot up to 219% for the period most companies were not reviewed got to keep their 7% rates from the cash deposit. Some CIT action still to shake out with this case. See last weeks CIT rulings.
  • Other Related:
  • Energy Efficiency Trade Mission to India, November 16th to 20th
International Trade Commission
  • Certain Textile Articles Containing Acrylic and Modacrylic Fibers: Effect of Modifications of NAFTA Rules of Origin for Goods of Canada Institution of investigation. Request for comments from interested parties due date October 2nd 2009.
  • Certain Textile Articles Containing Rayon and Other Manmade Fibers; Institution of investigation. Request for comments from interested parties due date October 2nd 2009.
  • Woven Electric Blankets From China: Antidumping: Prelimary finding of injury.
  • Certain Ink Cartridges and Components: Termination of enforcement procedings: Multi-million dollar civil penalties handed down.

Economic Development Administration
  • List of firms petitioning for Trade Adjustment Assistance
Customs Bulletin:
  • Container Transport: Lloyds Register America Inc. Has authority to certify containers for international transport under customs seal. American Bureau of Shipping, International Cargo Gear Bureau, and National Cargo Bureau, Inc. have authorty to certify containers and road vehicles.
  • Quarterly interst rate for under payments 4%, over payments by non-corporations 4%, over payments by corporations 3%.
  • Proposed Revocation Rulings: MP3 player cases with speakers. from 8518 to 4202
  • Revocation of rulings for DNA Sequencing machienry from 9027 to 8479.
  • Modification on ruling letters for satilite radio tuners.

Tuesday, August 11, 2009

Week in Review ending August the 15th

  • Panel Report on US vs. China: US prevails that China's distribution of CD's and DVD thought government chanels are not consistent with WTO obligations.

US Court if International Trade Rulings:

Fujian Lianfu Forestry Co., Ltd. v. United States
Massive opinion covering many issues regard the antidumping of wooden bedroom funriture:
  1. Commerce allowed to remand to provide explanation to why it decided not to use combination rate between exporters and producers.
  2. The rate established for Starcorp based on "Adverse Facts Available" AFA was found to be incorrect. When establishing a AFA rate Commerce must apply a rate that is connected with the probable rate for the effected company plus a penalty amount for noncompliance and deterrent. Commerce can not just assign the highest rate available. This is proabably the most important part of the decision.
  3. Commerce was proper in concluding Starcorp failed to cooperate to the best of its ability and was subject to AFA.
  4. Commerce reasonably concluded values from India did not have systemic errors and India was a proper surrogate.
  5. AFMC failed to exhaust administrative remedies regarding its challenge to four market economy inputs.
  6. Commerce's decision not to include Jayabharatham financial statements was reasonable
  7. Commerce's use of using actual entered values as apposed to the invoice values provided by Dara was in accordance to the regulations.
  8. Zeroing is still the accepted practice for administrative reviews and used on entry-by-entry basis. The court rejected the argument that 1677(35) be applied uniformly to investigations and reviews. Commerce's use of zeroing both for entry-by-entry and in administrative reviews is still a permissible interpretation. (I wonder if there is not some equal protection argument that can not be made.) This is a predictable adding to the Swiss cheese that is zeroing. It is still there with lots of holes.

NMB Singapore Ltd. v. United States
Remand results of a CACF case where affirmed.

Qingdao Taifa Group Co., Ltd. v. United States

Depersia v. United States
Challenge the the customs brokers test.
Court ruled the question ambiguous but not entirely wrong.

Ad Hoc Shrimp Trade Action Comm. v. United States
Case dismissed pending consolidated case. The use of a NACA study regarding the costs of the surrogate country's, Bangladesh's, shrimp pricing after the tsunami not decided by the Court. Some question remained what relief the parties were seeking. Warning not to use cliches like "gold standard" in your briefs or the judge might embarrass you.

Peerless Clothing Int'l, Inc. v. United States
Facts: Manufacturer of suits in Canada Invoices its US subsidiary for cost to cut, cost of fabric and cost to warehouse and other administrative expenses. They did not declare the third invoice which was for eleven categories of warehousing and expenses. Customs ruled that some of the eleven categories were not dutiable but most were dutiable. Peerless then argued the six categories should be allocated on a computed value based on GAAP and the court agreed. Customs motioned to reconsider this. Arguing that transaction value should not be used.
Customs motion to reconsider was denied.

U.S. Court of Appeals for the Federal Circuit Rulings:

United States Vs. UPS Customshouse Brokerage.
Remanded for customs to consider all ten factors regarding whether the broker exercised reasonable care.
The issue on whether $75K vs. $30K fine to a broker is permissible was not decided. Maybe the judge was hoping they would settle? Because it seem like the ruling will just create a loss of judicial resources.
They will consider all ten factors, come up with the same conclusion, and they will be right back at the same place with more legal bills in a year.

Federal Register Notices

Committee for the Implementation of Textile Agreements
Foreign Agriculture Service

International Trade Administration:
  • Determinations:
  • Consolidated Decision on Applications for Duty-Free Entry of Electron Microscopes: University of Texas at Austin, et al. , Approved duty free entry of electron microscopes.
  • Decision on Applications for Duty-Free Entry of Scientific Instruments: National Renewable Energy Laboratory, et al. Approved duty free entry of scientific instruments
  • Withdrawal of Application for Duty-Free Entry of Scientific Instruments
  • Trade Remedies:
  • Certain Hot-Rolled Carbon Steel Flat Products from the People's Republic of China: Antidumping, rescission of and preliminary results of administrative review. Final rescission
  • Certain Orange Juice from Brazil, Antidumping Final results of administrative review.No dumping duties for Fascher SA and only 2.17% for Sucocitrico Cutrale S.A.
  • Certain Pasta from Italy, Antidumping: Gluten free pasta excluded from the dumping scope.
  • Certain Preserved Mushrooms from the People's Republic of China, Antidumping and Countervailing: Request for yearly administrative review was withdrawn.
  • Certain Steel Grating from the People's Republic of China: Countervailing Postponement of preliminary results to August 22nd 2009.
  • Certain Cut-to-Length Carbon Steel Plate From the People's Republic of China
  • Carbon Steel Butt-Weld Pipe Fittings from Japan: Antidumping. Rescission of administrative review.
  • Glycine from the People's Republic of China Antidumping: Final Results, Cash deposit rates set at 33.67 percent for Baoding Mantong Fine Chemistry and 155.89% nation wide. HTSUS:2922.49.4020 (not dispositive)
  • Magnesium Metal from the Russian Federation: Final Results and Partial Rescission of Antidumping Duty Administrative Review: Antidumping Rate of 43.58% dumping margin for AVISMA, Rescission for SMW for lack of shipments, 21.01% for all other shippers.
  • Polyethylene Retail Carrier Bags from Thailand: Antidumping preliminary Results Yearly administrative review for period August 2007 July 2008. Master packaging hit with 122% for AFA decision. while TPBG 22.01%.
  • Pressure Sensitive Plastic Tape from Italy: Antidumping, Final Results of 5 year sunset review dumping margins set at 10% for Italian manufacturers.
  • Magnesium Metal from the Russian Federation: Antidumping Adminstrative review for two shippers SMW and AVISMA. Rescission for SMW for lack of shipments and 43.58% for AVISMA.
  • Wire Decking from the People's Republic of China: Countervailing Postponement of preliminary determination date to November 2nd 2009.
International Trade Commission
  • Certain Active Comfort Footwear, Investigation. Granted motion to dismiss patent infringement based on a settlement agreement between Masai Marketing &
    Trading AG of Romanshorn and RYN Korea Co., Ltd.
  • Certain Lighting Control Devices Including Dimmer Switches and Parts
  • Certain Magnesia Carbon Bricks from China and Mexico
  • Certain R–134a Coolant (Otherwise Known as 1,1,1,2–Tetrafluoroethane)
  • Certain Wireless Communications Devices and Components, Investigation: Notice of termination.
  • Pressure Sensitive Plastic Tape From Italy, Investigation, The Commission will proceed witht he five year sunset review and will announce the results at a later undetermined date.
  • Semiconductor Chips With Minimized Chip Package Size and Products Containing Same (IV) Investigation. Granted Tessera, Inc. of San Jose motion to dismiss there patent infringement complain against "numerous entities."
  • Shifts in U.S. Merchandise Trade 2008, Investigation: The Report is now available at the department's website.
State Department
  1. Auxiliary Power Units and Propulsion Engines to Mexico
  2. Military Vehicle Wiring Harnesses to Mexico
  3. Commercial communications satellite to the United Kingdom.
  4. 2.75'' Laser Guided Rocket All-Up-Round for the United Arab Emirates Armed Forces.
  5. Proton launch of the SIRIUS-5 Commercial Communication Satellite from the Baikonur Cosmodrome in Kazakhstan
  6. Personnel Locator System (PLS) in Mexico for end-use by the U.S. Air Force.
  7. S-70B (SH-60J/K) Helicopters, parts and support equipment for end-use by Japan's Maritime Defense Forces
  8. S-70A (UH-60J) Helicopters, parts and support equipment for end-use by Japan's Maritime Defense Forces
  9. Iraqi Ministry of Defense communication systems for end-use by the Iraqi Ministry of Defense
  10. AN/APN-217 (V) 2-3-6 Doppler Navigation System in Japan for end-use by the Ministry of Defense of Japan.
  11. Digital Dispensing System I and VII for the Ministry of Defense of Israel for use on the F-15 Aircraft.
  12. Phalanx Close-In Weapon System Block 1A for Australia
  13. AN/SSQ-62, AN/SSQ-53, and AN/SSQ-36 Sonobuoys and Sonobuoy Assemblies in Canada.
  14. AN/APG-63(V) 1 Radar System Retrofit Kits for end-use by the Ministry of Japan
  15. Block 1B Baseline Weapon Systems. C-130J aircraft, associated support equipment, initial logistics support and initial maintenance and operational training to the Government of Qatar.
    U.S. Customs Department
    • Expansion of Global Entry Pilot Program
    U.S. Defense Department
    • FAR Case 2009–014, New Designated Country –– Taiwan
    • Prohibition on Restricted Business Operations in Sudan and Imports from Burma
    U.S. Trade Representative
    • Implementation of the U.S.–EC Beef Hormones Memorandum of Understanding

    US Customs Rulings and Bulletins:

    Monday, August 10, 2009

    Week in Review August 9th

    International Trade News for the week ending August 9th.

    Breaking News:

    NAFTA Summit: Trucking Deal on the Agenda.

    US Court of International Trade Rulings:

    Polly U.S.A., Inc. v. United States
    Facts: Polly USA imported medical uniforms under the African Growth and Opportunity Act.
    Customs request information about production processes, time lines and worker documentation.
    Polly USA provided the information but customs claims they did not provide all documentation requested and that the documents failed to establish the required "traceable production timeline."

    Two Issues: Whether customs had the authority to request the additional documentation or whether all that is required is a country of origin declaration and whether the country of origin was proven despite the discrepancies which may be unavoidable when doing business in Swaziland.

    Ruling: An importers country of origin declaration is insufficient alone, in cases of unilateral trade preferences, to establish the country of origin. Because the AGOA is a unilateral trade preference and not a free trade agreement customs may request "whatever verification a port directer deems necessary" to establish claims of preferential treatment. Rather than the trade agreement standard that the port directer may request more information if he cannot determine the country of origin on the face of the declaration.

    Ruling: Despite the difficulties in keeping good records in developing countries customs regulations requires that such records be kept and the customs may impose duties when such records are not kept. The court cites 19 CFR 10.178a (e).

    Will this in effect kill the AGOA? Seems like it or it will create jobs for auditors and accountants to go over there and create record keeping systems

    Bridgestone Americas, Inc. v. United States

    Federal Register Notices:

    Bureau of Industry and Security
    Census Bureau
    • Eliminate the Social Security Number (SSN) as an identification number in the Automated Export System (AES): Customs will no longer accept personal Social Security Number for an export. Sole proprietors are asked to obtain a Federal ID number or a DUNS from the IRS to prior to exporting.
    Committee for the Implementation of Textile Agreements

    International Trade Administration
    International Trade Commission
    • Sunset Review for Barbwire from Argentina
    State Department

    U.S. China Economic and Security Review Commission
    WTO DSB News:

    Monday, August 3, 2009

    Cap and Trade Bill Will Affect Importers.

    H.R. 2454 commonly referred to as the cap and trade bill includes importers. It is unclear how this will operate because it leaves much of the formulation on the administration to develop the rules and regulations. But it makes a covered entity, any company that imports more than 25,000 tons of carbon dioxide or equivalent emission in a calender year. It then allows the administration to set up rules for that entity to begin purchasing or applying for emission rights.

    One major difficulty will be how will them implement a carbon cap and trade on importers and still be compliant with article three of GATT. I do not see how it could easily work. People who should be most concerned are companies who import products whose production processes include the emission of one of the 16 greenhouse gases that have high carbon dioxide equivalents that will easily place them above the 25,000 ton ‘covered entity’ threshold.

    The bill still needs to pass the Senate and will undoubtedly be changed several times before it becomes law. After that it would still have much more metamorphosing through the administrative rule making process before there would be any idea of the specifics of who it will affect. But it is more likely that it will affect importers so it is time to start watching it now.

    I believe there should be a carbon tax straight out but that’s a topic for another article.

    Wednesday, June 17, 2009

    Dumping anti-circumvention Targets mix waxed candles: New requirements for "commercially availabe" made.

    The ITC ruled today on the fate of mixed wax candles from China. There has been an anti dumping order on petroleum wax candles from China since 1988. Recently Target and others began importing wax candles made of vegetable oil and petroleum. The goods were not part of the original scope of the anti dumping order for petroleum was candles, they were not considered back in 1988 nor are the classified the same way under the harmonized tariff schedule.

    But anti dumping scopes have nothing to do with harmonized tariff schedule. While on the other hand once the scope is set by the Commerce department it can not be changed lightly. This is because the International Trade Commission determines whether a set of imported products is injuring an U.S. industry at the same time the International Trade Administration is determining whether that same set of products is being exported at less than fair market value. In order for this double headed hydro to work they need to be considering the exact same set of products. Products can not be added or subtracted or the beast will get confused and the findings will be incorrect.

    However, there is an exception to allow products to be included later into the scope after the investigation and this the anti circumvention prevention section, 19 U.S.C. 1677j. This section is written to insure minor changes in manufacturing or other changes, are not used to skip on by the anti dumping order. In this case Commerce contends the "later-developed" product exception applies to these mixed wax candles.

    In additional to the merchandise being developed later there are five criteria for a finding of later developed merchandise. The dispute in the case was the whether mixed waxed candles were "later developed" or not. The Commerce Department came up with two criteria to determine whether a product is "later developed:" 1) whether there were significant changes in the product and 2) whether the product was commercially unavailable at the time of the original investigation. In the first Target case the court upheld these two criteria as a reasonable interpretation of the, 19 U.S.C. 1677j, statute.

    The question now boils down to whether the mixed waxed candles were commercially available during the initial investigation. If they were, then they should have independently been included in the scope of the investigation and we can consider them outside of the scope now. If they were not commercially available, then they can considered be later developed products and now can be added into the scope, twenty years later under the anti circumvention exception, as later developed products.

    Now all the parties have to hop into their respective time machines and try to show that mixed wax candles were around or not around back in 1988. Not surprising each time machine finds different evidence. The parties against later developed find, a patent for mixed wax candles filed before the initiation of the investigation, vegetable wax candles were listed in the original ITC investigation as more expensive candles not to be considered, and a few catalogs with vegetable wax candles in them. The parties for the later developed theory show 2200 some catalogs from the period without any mention of vegetable wax candles, and the government concludes that it could not find anyone making mixed wax candles in the United States or elsewhere.

    The tie goes to the government. If this was a tie but even if it wasn't the court rules that Commerce is correct and "commercially available" must mean that the goods were being made at the time of the original investigation not just capable of being commercially available. So this should make some businesses weary when developing new products. Even new products or products that could be around prior to anti dumping investigations might find themselves the subject to anti dumping duties.