This bulletin has been prepared especially for clients of A. N. Deringer, Inc. by:

• Recent Textile and Apparel Changes: Some of the recent developments governing imports of textile and apparel include the new U.S.-China Textile Agreement; the new requirement to list the Manufacturer Identification (MID) number on entry papers; and the replacement of paper visas with electronic visas (ELVIS).

• New Sock Labeling Requirements: Certain socks classified under heading 6111 and 6115 which are in the "stream of commerce" as of March 3, 2006, will be subject to new package labeling requirements. The new law will require the country of origin to be marked in English in a clear, legible, and conspicuous manner on the front of the packaging, close to the sizing information. If the sizing information is not on the front of the packaging or the socks are not enclosed in packaging but banded together, the country of origin must still be marked on the front of the label.
• Voice Port: CBP is classifying a network interface unit (voice port) which transmits, modulates, and demodulates voice and voice-band data signals over standard Hybrid-Fiber-Coax networks under subheading 8517.50.9000 (duty free), HTSUS, the provision for "Other apparatus…for digital line systems: Other: Telegraphic: Other."
• Cutlery Cutting Sets: CBP is modifying two previous rulings which covered certain cutting sets containing different types of cutting knives, sharpening cassettes and storage blocks, and a set which consisted of only one carving knife and one fork. CBP notes that sets with different types of cutting utensils are properly classified as "sets" under subheading 8211.10.0000, HTSUS, the provision for "Knives with cutting blades...: Sets of assorted articles," and the article with the highest rate of duty is controlling for the entire set. However, the set which contains just one knife and one fork, is properly classifiable under subheading 8215.20.0000, HTSUS, the provision for "Spoons, forks…: Sets of assorted articles…;" as neither the knife nor the fork is of more significance than the other, they are classified under the heading which occurs last in numerical order; again, the article with the highest rate of duty is controlling for the entire set.

• Free Trade Developments: 1) The U.S. Senate joined the U.S. House of Representatives, in approving the U.S.-Bahrain Free Trade Agreement (FTA). President Bush must sign the agreement before it takes effect. This FTA is part of a broader Middle Eastern FTA envisioned by the administration, with countries such as Israel, Jordan, Morocco and Oman already enjoying free trade with the U.S.; 2) sources indicate that it is doubtful whether the recently approved Central America FTA (DR-CAFTA) will take effect for all signatories on January 1, 2006; 3) the U.S. Trade Representative (USTR) announced that the U.S. and Peru have agreed to a bilateral FTA. Although many Peruvian products already enjoy duty free access to the U.S. under the Andean Trade Preference Act (ATPA), the FTA will give U.S. products equal treatment in the Peruvian market. Negotiations toward reaching a FTA with the other ATPA countries, Colombia and Ecuador, will move forward shortly; 4) while the U.S. and Pakistan are currently negotiating a bilateral investment treaty (BIT), Pakistan indicated that it will seek a FTA with the U.S.
• International Trade Developments: 1) President Bush is continuing the national emergency with respect to Iran for an additional year; 2) the goal of an Asia-wide FTA by 2012 moved a step closer when South Korea signed a FTA with the Association of Southeast Asian Nations (ASEAN); 3) in another sign of closer economic relationships, Malaysia signed a FTA with Japan, joining Mexico and Singapore as the only countries having a FTA with Japan; 4) the Mercosur bloc of countries (Argentina, Brazil, Paraguay, and Uruguay, with Bolivia and Chile as associate members) recently agreed to admit Venezuela as a full member.
• AD/CVD Developments: The U.S. International Trade Commission (ITC) recently: 1) determined to revoke the antidumping (AD) order on certain cut-to-length carbon-quality steel plate from France; 2) determined to continue the AD order on certain cased pencils from China; 3) the U.S. International Trade Administration (ITA) recently announced that the countervailing duty (CVD) and cash deposits on certain Canada-wide softwood lumber will be reduced to 8.7% from 16.37%. The AD "review specific" average will be reduced to 2.11% from 3.78%; 4) sources indicate that due to soaring demand for Mexican cement, the U.S. Commerce Department is considering phasing out the current 55% AD duty on Mexican cement and replacing it with a system of quotas; 5) the ITA issued a final ruling affirming the extension to March 21, 2009 of its Steel Import Monitoring and Analysis (SIMA) system, which is an early monitor indicator of U.S. steel imports.

• U.S.-EU Agree on Compensation for Enlargement: To compensate the U.S. for increased duties for goods entering the 10 new EU-member countries, the EU agreed to certain tariff reductions and increased quota levels. The tariff reductions cover certain protein concentrates, fish, chemicals (polyvinyl butyral), aluminum tubes, and molybdenum wire. Increased tariff rate quotas (TRQ) will be extended to certain meats, sugar, certain agricultural products, juices, chocolate, food preparations, pet food, cheeses, and vegetables.

• Bark-Free Packaging Material: Industry sources note that the EU is considering extending the international standards of fumigating or heat treating wood packaging materials (WPM) and require all wooden crates, pallets, and dunnage to be constructed of bark-free wood.
• Record Price Fixing Fine: A U.S. District Judge recently approved a $300 million fine for one of the world’s leading chip makers which plead guilty to fixing the prices of chips used in personal computer and other electronic devices. Two other companies accused in the same scheme recently agreed to pay a combined $240 million to settle charges against them.
• Asia Internet Domain Name: Following its recent approval of the ".eu" internet domain name and in a bid to unify the Asia-Pacific region, the Internet Corporation for Assigned Names and Numbers (ICANN) has tentatively approved internet domain names ending in ".asia."
• Import Certificates: Effective December 1, 2005, exporters will no longer have to obtain an Import Certificate for certain restricted exports to Bulgaria, the Czech Republic, Hungary, India, Poland, Romania, and Slovakia. Under the Export Administration Regulations (EAR), exporters must obtain an Import Certificate certifying that its customer in the foreign country will abide by the EAR regulations.
• Recent CPSC Developments: 1) The U.S. Consumer Product Safety Commission (CPSC) recently announced the acceptance of a $500,000 civil penalty to settle allegations involving a company’s defective oscillating floor fans; 2) the CPSC recently signed an agreement with Mexico to increase the sharing of information relating to: recalled products, product safety information, federal safety violators, emerging hazards, safety research, and changes in product safety laws.

• Recent Legislative Developments: 1) As part of the Miscellaneous Tariff Bill, several bills were introduced in the U.S. Congress calling for the temporary suspension of duties for certain: clocks, glass, lead crystal, music boxes, and rolled glass in sheets; 2) the recently introduced U.S. Export Promotion Act (H.R. 4250) calls for the expansion of overseas U.S. trade promotion and assistance offices, elimination of fees charged to exporters, and the increased promotion of export assistance.

• Incorrect Value: The U.S. government recently filed a complaint against a footwear importer alleging the use of incorrect invoice values which resulted in the loss of duties totaling $173,425. CBP is now asking the U.S. Court of International Trade (CIT) to enter judgment for lost duties and penalties of up to $704,628, plus interest and court costs.
• Textile Covered Conveyor Belts: A case was recently filed at the CIT regarding the correct classification of conveyor belts and belting of textile material with over 60% by weight of impregnated, coated, covered, or laminated plastics. CBP classified the materials under heading 5910, HTSUS, as a belt of textile material, with a duty rate currently at 4% or 2.6% ad valorem depending on the material, while the importer claims that the belts should be entered under the duty free heading 5903, HTSUS, as textile fabrics impregnated, coated, or covered in plastics.

Serko & Simon LLP

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Outside of New York State: 1-800-46-TRADE