The World Customs Organization (WCO) has published the agreed amendments to the Harmonized System (HS) nomenclature.  These amendments will go into effect on January 1, 2012.  Environmental and social issues of global concern are the main catalyst for the HS 2012 amendments.

Importers should start preparing now for the implementation of these new changes to ensure compliance on January 1st.

The proposed WCO amendments can be found at: http://www.wcoomd.org/files/1.%20Public%20files/PDFandDocuments/HarmonizedSystem/HS%20Overview/NG0163B1.pdf

For a copy of WCO’s correlation tables for the 2007 and 2012 versions of the HS can be found at: http://www.wcoomd.org/files/1.%20Public%20files/PDFandDocuments/HarmonizedSystem/tools_instruments/HS_Correlation_Tables_Introduction.pdf

The Animal and Plant Health Inspection Service (APHIS) has issued an updated Federal Order (DA-2011-28) regarding Canadian firewood. This Federal Order replaces DA-2008-69, which was issued on October 17, 2008.

All imported Canadian firewood, including softwood firewood, and spruce logs imported from Nova Scotia, now require heat treatment. Both commercial and non-commercial importations are subject to the treatment and certification requirements.

These new measures are being implemented to prevent the entry of certain pests into the United States and went into effect May 22, 2011.

For complete details, the Federal Order can be found at: http://www.aphis.usda.gov/newsroom/hot_issues/firewood/downloads/FederalOrderCanadaFirewood.pdf

The US Department of Agriculture (USDA) announced that domestic manufacturers and softwood lumber importers voted to approve the creation of a softwood lumber research and promotion program. USDA’s Agricultural Marketing Service (AMS) held a referendum from May 23 through June 10, 2011 to determine whether to implement the Softwood Lumber Research Promotion, Consumer Education and Industry Information Order.

As previously mentioned in a Deringer Trade Alert, An assessment of $0.35 per thousand board feet, collected by US Customs, will be required on imported softwood lumber classified in chapter 44 of the Harmonized Tariff Schedule of the US. The fee will apply to both domestic and imported softwood lumber shipments. Exceptions include:

• Manufacturers who domestically ship or import less than 15 million board feet during a fiscal year would be able to apply for a certificate of exemption prior to the start of the fiscal year.
• Manufacturers who domestically ship or import more than 15 million board feet during a fiscal year would pay the assessment on the first 15 million board feet, but then would be able to apply for a refund on the monies paid on the first 15 million board feet.
• Shipments of softwood lumber by domestic manufacturers to locations outside the US would be exempt.
• Domestic manufacturers who only make and ship softwood lumber that is eligible to be labeled as 100% organic, under the National Organic Program, would be exempt after they apply for exemption from the board.

The AMS press release can be found here.

The Federal Register is available here.

As more information becomes available, Deringer will provide updates.

The Senate Committee on Commerce, Science, and Transportation recently recommended the Commercial Seafood Consumer Protection Act (S.50) be referred to the Senate.

The intent of this bill is to strengthen the Federal consumer protection programs to ensure that commercially distributed seafood in the U.S. meets the food quality and safety requirements of applicable Federal laws.  The agreements would strengthen interagency cooperation on seafood safety, seafood labeling, and seafood fraud.   Highlights of the proposed bill include:

• Cooperative arrangements for examining and testing seafood imports.
• Inspections of foreign facilities.
• Standardizing data on seafood names, inspection records, and laboratory testing
• Collection, storage, analysis, and dissemination of all applicable information, intelligence, and data related to the importation, exportation, transportation, sale, harvest, processing, or trade of seafood in order to detect and investigate violations.
• Expediting imports of seafood into the U.S. from foreign countries and exporters that consistently adhere to the highest standards for ensuring seafood safety.
• Enhancing labeling requirements and methods of assuring compliance with such requirements to clearly identify species and prevent fraudulent practices.
• Sharing of information concerning observed non-compliance with U.S. seafood requirements domestically and in foreign countries and new regulatory decisions and policies that may affect regulatory outcomes.
• Sharing, to the maximum extent allowable by law, all applicable information, intelligence, and data related to the importation, exportation, transportation, sale, harvest, processing, or trade of seafood in order to detect and investigate violations under applicable Federal laws, or otherwise to carry out the provisions of this Act.
• Outreach to private testing laboratories, seafood industries, and the public on Federal efforts to enhance seafood safety and labeling and information on how these entities can work with appropriate Federal agencies to enhance and improve seafood inspection and assist in detecting and preventing seafood fraud and mislabeling.

Also included in this bill is the requirement for annual reporting on the implantation of the agreements.  In addition to these reporting requirements, the Secretary and the Chairman of the Federal Trade Commission (FTC) shall submit a joint report to Congress on consumer protection and enforcement efforts with respect to seafood marketing and labeling in the U.S.  Furthermore, the National Oceanic and Atmospheric Administration (NOAA) shall report deceptive seafood marketing and fraud to the FTC.

For complete details, this bill can be found at: http://www.govtrack.us/congress/bill.xpd?bill=s112-50

It is important to note that this Act is not law.  To become law, the House and Senate must pass the same version and then the President must sign it into law.  Deringer will provide updates as they occur. 

The 2011 U.S. Harmonized Tariff Schedule (HTS) was recently updated.  This update included 676 ABI records and 134 harmonized tariff records. Also included in the update are the modifications for the dairy import assessment, which will become effective August 1, 2011.

For complete details, the HTS can be found on the International Trade Commission’s website: http://www.usitc.gov/tata/hts/bychapter/index.htm

The Lacey Act was amended by the Food, Conservation and Energy Act of 2008 to require importers to submit a declaration at the time of importation for certain plants and plant products.  It makes it unlawful to import, export, transport, sell, receive, acquire, or purchase any plant or plant product taken in violation of a US state or any foreign law that protects plants to help curb illegal forestry throughout the world.  Declarations became effective on December 15, 2008 and since then issues have surfaced with declaring some of the required information.   

The US Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) has recognized that revisions to the Lacey Act declaration form should be made in order to improve its effectiveness and remove unnecessary burdens on the trade community.  APHIS is requesting public comments by August 29, 2011 on the following issues.  

• Whether an exception from the declaration requirements for products containing small amounts of plant material could be developed that would be less burdensome while still carrying out the intent of the Lace Act amendments.
• How importers may comply with the declaration requirement when importing composite plant products when the genus, species, and country of harvest of some or all of the plant material is very difficult or prohibitively expensive to determine.  
• How to accommodate products made of re-used plant products, or plant materials harvested or manufactured before the 2008 Lacey Act amendments, and for which identifying country of harvest, and possibly species, would be difficult if not impossible.
• Whether to revise the import declaration to substitute a new term, “harvest location”, for the term “country of harvest”, which experience has indicated is so similar to the Customs term “country of origin” as to be confusing.  
• Whether groups of species commonly used in commercial production, could be given a separate name that could be entered on the declaration form as a type of shorthand identification of genus and species, such as the currently recognized “SPF” acronym for “spruce, pine, and fir.”

To submit comments and view the APHIS advanced notice of proposed rulemaking, please visit: http://www.regulations.gov/#!documentDetail;D=APHIS-2010-0129-0001   

Effective July 1, 2011, the 10% export charge levied on softwood lumber products originating from Option B regions of Canada will be terminated.  Option B regions include Quebec, Ontario, Manitoba, and Saskatchewan.  A refund process is available to reimburse overpayments of this charge.

The export charge was originally ordered in 2009 when the London Court of International Arbitration (LCIA), ruling in favor of the United States, determined that Canada did not properly apply the adjustment factor as ordered by the Softwood Lumber Agreement.  The breach of Agreement took place during the first six months of 2007.  The LCIA imposed the 10% export charge on softwood lumber products from this region until the remedy amount was collected.  The Canada Revenue Agency (CRA) has determined that the full remedy amount of C$68.26 million has been satisfied.

The CRA will determine the amount of export charge overpayments and provide refunds to exporters based on their pro-rata share of the overpayment per month.  Exporters will not be required to file a refund application.

The Canada Revenue Agency announcement regarding the export charge termination can be found in the softwood lumber product notice SWLN39 on their website.

The Food and Drug Administration (FDA) is seeking comments about preventive controls and other practices used by facilities to identify and address hazards associated with specific types of food and specific processes.  FDA will use the information in the development (where appropriate) of guidance required by the Food Safety Modernization Act (FSMA) on preventive controls for facilities that manufacture, process, pack, or hold human food or animal food/feed.   

The FDA is seeking input on the following categories with respect to human food or animal food/feed:

• Conducting a hazard analysis to determine the hazards associated with specific human food or animal food/feed and processes (e.g., the procedures used to determine potential hazards and to assess whether they are reasonably likely to occur.  
• Implementing process controls (e.g., processes employed to prevent, eliminate, or reduce to acceptable levels the occurrence of any hazards that are reasonable likely to occur).
• Validating food/feed safety controls (e.g., information on procedures used to determine that control measures are capable of controlling the identified hazards).
• Implementing sanitation controls (e.g., procedures and practices utilized to minimize the risk of contamination) for human food and animal food/feed.
• Implementing supplier controls. (e.g., procedures and practices used to ensure raw materials and ingredients are safe for their intended use).
• Allergen control (human food) including procedures to ensure that ingredients are accurately declared on the label, procedures to ensure the proper label is applied to the food, and procedures and practices to prevent the unintentional incorporation of a major food allergen into a food by cross contact during manufacturing, processing, and holding food.  
• Environmental monitoring for Salmonella and for Listeria monocytogenes for specific types of food facilities (e.g., ready-to-eat food facilities, pet food facilities).
• Microbiological and other testing used to ensure the safety of specific human food and animal food/feed.
• Specific biological, chemical, radiological, and physical hazards and controls for food types such as spices, nuts, ready-to-eat food, bakery products, fresh-cut produce, milk products, and medical food.
• Specific biological, chemical, radiological, and physical hazards and controls for animal food/feed including feed ingredients.  
• Preventive control approaches and practices (e.g., for validation, supplier controls) that are practical for small and very small businesses to implement.  

To submit a comment, please visit: http://www.regulations.gov/#!submitComment;D=FDA-2011-N-0238-0001

Deringer will continue to keep customers abreast of new rules enacted under the FSMA.  Recent changes resulting from FSMA, frequently asked questions, and other information are available on the new FSMA web page of FDA’s website.  Previously submitted comments can be viewed online.

On July 13, US Customs and Border Protection (CBP) released a Cargo Systems Messaging Service (CSMS) announcement announcing that new Importer Security Filing (ISF) capabilities were deployed via the Automated Commercial Environment (ACE).  Importers now have access to the ISF progress reports through ACE, which up until now have only been available via email.  Additionally, importers who file 12 or fewer ISF transactions per year are now able to file and track their ISF transactions directly through the ACE portal, without the need to file via the Electronic Data Interchange (EDI).

 ACE will continue to deliver additional ISF capabilities later in 2011, including the capability to query the status of an ISF transaction by transaction number and by bill of lading.  Additionally, Tier 3 C-TPAT members will be able to query individual ISF transactions.

The CSMS can be viewed here

The Food and Drug Administration (FDA) recently released guidance to the industry on when a premarket safety notification for a dietary supplement containing a new dietary ingredient (NDI) is necessary and in preparing premarket safety notifications (also known as NDI notifications). In a question and answer format the document addresses the following topics:

• What qualifies as an NDI
• When an NDI notification is necessary
• Procedure for submitting an NDI notification
• Data that FDA recommends companies to consider when evaluating the safety of a dietary supplement containing a NDI
• What should be included in a NDI notification
• Definitions that can affect whether a particular substance may be marketed as a dietary ingredient in a dietary supplement.

FDA's guidance documents, including this guidance, do not establish legally enforceable responsibilities. Instead, guidances describe the Agency's current thinking on a topic and should be viewed only as recommendations, unless specific regulatory or statutory requirements are cited. The use of the word should in Agency guidances means that something is suggested or recommended, but not required

To read the complete guidance document, please visit: http://www.fda.gov/Food/GuidanceComplianceRegulatoryInformation/GuidanceDocuments/DietarySupplements/ucm257563.htm

For more information, please contact your local Deringer representative.

The Consumer Product Safety Commission (CPSC) recently voted in favor of the 100 parts per million (ppm) lead content limit for children’s products as of August 14, 2011, as required by the Consumer Product Safety Improvement Act (CPSIA). This change will affect all children’s products sold, offered for sale, manufactured for sale, distributed in commerce, or imported for sale in the United States, including existing inventory, unless if not otherwise excluded. The Consumer Product Safety Improvement Act (CPSIA) states that, as of August 14, 2011, children’s products may not contain more than 100ppm of lead, unless the Commission determines that this limit is not technologically feasible. CPSC made this determination after requesting comment and seeking information from the trade. The previous lead limit, enacted in 2009, was 300 ppm. For complete details, the draft notice can be found at: http://www.cpsc.gov/library/foia/foia11/brief/lead100tech.pdf

The Consumer Product Safety Commission (CPSC) recently voted unanimously in favor to extend the stay of enforcement for children’s toys until January 1, 2012. The Consumer Product Safety Improvement Act (CPSIA), enacted in 2008, required the toy industry to comply with the American Society for Testing and Materials (ASTM) F963 standards, but did not require third party testing and certifications. Children’s toys fall under the ASTM F963-08 standards and toy chests fall under the ASTM F963-07 standards. This extension of the stay will allow the ASTM toy committee time to complete the 2011 version of the standard. Also, the extension will align the lifting of this stay with the date of the lifting of the testing and certification stay for lead in children’s products. To read a news release from CPSC, which includes links to three commissioners’ statements in regards to these changes, please go to: http://www.cpsc.gov/cpscpub/prerel/prhtml11/11282.html

The Consumer Product Safety Commission (CPSC) launched www.saferproducts.gov in March 2011.  The website contains a database of consumer complaints for potentially dangerous products.  The new website is a requirement of the Consumer Product Safety Improvement Act and will assist the CPSC in quickly identifying product hazards as well as provide safety information to consumers.  

Consumers have the ability to submit complaints about a particular product.  CPSC then submits a notice to the manufacturer, importer, or private labeler about the claim, and they have 10 days to respond to the CPSC.  If the company fails to respond, the database will be populated with the manufacturer, product ID, and the complaint.  If the company replies within the 10 window with comments and claims, the entire report will be posted on the new website.  

It is recommended that manufacturers and importers register with www.Saferproducts.gov if they have not done so already.  Registered companies will receive alerts when a complaint is filed.  To register, please visit http://www.saferproducts.gov/CPSRMSPublic/Industry/Home.aspx.    

The Department of Agriculture’s Agricultural Marketing Service (AMS) has issued a final rule that, effective September 30, 2011, will increase the assessment rate of cotton tax paid on cotton and cotton-containing imported products.  The assessment is mandated under the Cotton Research and Promotion Order.  The assessments are increasing from $0.01088 per kilogram to $0.012665 per kilogram, an increase of approximately 14%.  The AMS advises that this assessment increase reflects the increased weighted average price of Upland cotton received by US farmers during 2010.

The final rule also revises the assessment conversion factor used to determine the raw fiber equivalents of imported cotton-containing products. The collection of the cotton import assessments by Harmonized Tariff Schedule (HTS) number is detailed in the final rule published in the Federal Register on August 31, 2011.  Additionally, the AMS is also expanding the quantity of HTS numbers subject to the assessments.  The list of affected HTS numbers has expanded from 706 to 2,371.
 
The Federal Register states that the assessment adjustments are required on imported cotton and cotton-containing products because the same assessments are collected on domestically produced cotton.

On September 7, 2011, the House of Representatives is expected to renew the Generalized System of Preferences (GSP) program through July 31, 2013.  GSP is a trade program impacting imports into the US from many developing countries.  The GSP renewal will be retroactive to December 31, 2010, the program’s expiry date.  Once the House approves the program extension, it will go to the Senate.  The Senate is expected to amend the bill to include an extension of the Trade Adjustment Assistance program including changes introduced in 2009.  Since other Senate issues will take precedence over the GSP/TAA renewal, it is unclear when the bill will meet approval in the Senate.  The GSP extension bill includes a merchandise processing fee increase from 0.21% to 0.3464%.  Trade sources speculate that the GSP/TAA momentum might also prompt President Obama to submit to Congress the legislation to move forward the Korea, Colombia, and Panama free trade agreements.

Deringer will continue to monitor the progress of the bill and provide updates.  For more information, please contact your local Deringer representative.