Sept Ccscontact Issue

CCSContact

Septem mber 2008

CC CSC Con ntaact Enhancin ng Trade Prof ofessionals’ Knowledge K & Skills

How Much M Wood? W ?

Sep ptember Issue I

By Lawrence L M. Friedman

Theree were lots of surprises in th he recently passsed Farm Billl. Most in the brokeerage commun nity already kn now that the Congress C used d the Farm Billl to put th he brakes on Customs C and Border B Protecttion’s proposaal to eliminatee socalled d “first sale vaaluation.” Morre surprising to t some may be b the provisio ons relatiing to illegal lo ogging under the t Lacey Actt. The Lacey L Act, wh hich originally y addressed thee interstate traansportation of o illegaally hunted gam me, stretches back b to the ad dministration of o President Williiam McKinley y. Today, it is codified at 16 USC 3371-33 378. Under thee Farm m Bill amendm ment, it is illegaal to take (meaaning “harvest”), possess, transp port, or sell sp pecified plant material m in vio olation of any state or foreiggn law. Importers I of covered c materials must mak ke a new declaaration stating (1) the sccientific namee of any plant contained c in the shipment, (2) the value and a quantity of the imp portation, and d (3) the name of the country y from which the plantt was taken. In thiis context, “pllant” means an ny wild memb ber of the plan nt kingdom including roots, seeeds, parts and products thereof of. With few ex xceptions, thiss coverrs tree productts from naturaal and planted forests. The exceptions e incllude, amon ng other things, common cu ultivars (excep pt trees) and co ommon food crops c that are a not endanggered. Accord ding to Custom ms, the amend dment will requ uire a declaaration for obvvious productss such as timbeer and cork an nd also less ob bvious produ ucts such as prrinted materiaal, textiles, and d furniture. Cu ustoms estimaates that 8,000 8 HTSUS items are affeected.

Page 1 How Much Wood?

Page 2 Congress Approves Import Safeety Bill

Page 3

CBP Publisshes Rules on Contain ner Seals

Page 5 NCBFAA ISF I How-to Kits Are Avvailable for Purchase Page 6 Portfolio of Events

Con ntinued on Page 3

The CCSContact is part of NCBFAA N Educcational Institutte's (NEI) Certiffied Customs Sp pecialist (CCS) Certificaation Program. The CCSContaact provides imm mediate and currrent informatio on about all aspects of import regullations and logistics managemeent.

CCSContact

Septem mber 2008

Co ongress App provees Imp port Saafety Bill B Conggress sent a fin nal 162-page Consumer C Prod duct Safety bill to o the Presiden nt's desk. The legislation l maarks the most signifficant expansion of the CPS SC since its creeation 35 yearss ago. It nearly y doubles the funding f for thee agency to $136 million by 2014, and allow ws the agency to t monitor testin ng procedures and impose ciivil penalties on o violators.

shiipments that are a intended fo or import to th he US and likeely to include consumer pro oducts that aree in vio olation of CPS SC rules. The agency a is direccted to use ITD DS, insofar ass practicable, to t evaluate and d assess info formation abou ut shipments of o consumer products p inteended for imp port. The agen ncy is also requ uired to devvelop a plan fo or sharing info ormation and coo ordinating insp pection effortss with CBP, in ncluding asssigning CPSC personnel at the t National Targeting T Center and deterrmining wheth her the inform mation avaailable at the National N Targeting Center would w be useeful to the CPS SC or to CBP in identifyingg violative con nsumer products.

The import i safety bill b addresses consumer pro oducts generrally, as well as a provides speecific, more sttringent meassures for toys and a children’s products. The legislation bans the use of lead d and some ph hthalates in to oys and other children’s productss. Toy manufaacturers would d be required to sub bmit their products for indeependent laborratory testing and provide p certificcations prior to t importation n, which must also accompaany the shipment as it is tran nsported to the reetailer.

• Prohibition on o Exports: The CPSC may y prohibit a he US for the purpose p of perrson from exporting from th salee any consum mer product or fabric that is not n in con nformity with an applicablee consumer pro oduct safety standard, unless the importingg country acceepts the imp portation.

Mostt of the implem mentation detaails will evolvee as the agenccy exercises itss rulemaking authority a in th he months ahead d. Following are a key featurees of the CPSC C bill of intereest to NCBFA AA members:

• Destruction of o Products: Consumer C pro oducts that aree refused admiission into thee US customs territory t shaall be destroyeed unless the owner, o consign nee or imp porter of recorrd applies to th he Treasury Secretary S for perrmission to ex xport the produ uct.

• Certificate for Consumer Prroducts: Every y imported umer product that is subjectt to a CPSC ru ule or consu stand dard must inclu ude a certificaate provided by y the manu ufacturer (after a test of the product or pu ursuant to a reaso onable testing program) p certifying that thee product comp plies with all ru ules, bans, staandards, etc. enforced by CPSC C. This certificcate shall speccify exactly wh hat rules or stand dards apply. • Certificate for Children's Prroducts: Beforre importing toys or o other childrren's products, a certificate must m also be produ uced, but in th his case, indep pendent, third--party testing of thee product sam mples (or identiical product saamples) must be co onducted. • Certificate To Accompany A Shipment: S Thee certificates must accompany th he product or shipment and d must be furnisshed to each distributor d or retailer r of the product. p • Ellectronic Filin ng of Certifica ate: The CPSC C may proviide for the elecctronic filing of o certificates up u to 24 hourss before arrivaal of the shipm ment. • Riisk Assessmen nt Methodolo ogy: Within tw wo years, the CPSC C is required to t develop a riisk assessmentt meth hodology for th he identificatio on of consumeer product

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CCSContact

Septem mber 2008

Contin nued from page 1

From m a compliancee standpoint, companies c need to begin im mplementing proceedures to gather the required d information. Because of th he broad langu uage relatiing to plants and “products thereof,” man ny importers who w may not curreently be used to o gathering th his type of info ormation will have h to start to o do so. As A mentioned, this applies to o many plant products p otherr than food cro ops. Thuss, it is not just the wood prod ducts industriees that are affeected. Textiless and apparrel may be covvered. Woodeen items as divverse as paper,, toy blocks, an nd sportts equipment must m be reportted. A compan ny that has im mported basebaall bats or o hockey stick ks will now bee required to know k not just the botanical name of thee wood but alsso the location n where it wass harvested an nd whether any y local laws or regulaations prohibiited the harvessting of the wo ood. hering that lastt bit of informaation may be the t most difficcult part and may m Gath requiire identifying new sources of o information n in the countrry of exportatiion. Undeer Customs’ ap pproach to enforcing other trade t program ms, it is unlikelly that Customs C will find f that simp ply asking for assurances a from the importeer will be b sufficient. Unfo ortunately, it will w not be possible for Custo oms to implem ment electronic reporrting before th he December 15 1 deadline. Consequently, CBP C is planniing to requiire a paper decclaration. The Lacey L Act inclludes stiff pen nalties for violaations. Knowiing violations of the Act A may result in civil fines of o $10,000 perr violation. Crriminal penaltiies, including up to fivee years in prison, are also po ossible. In add dition to thesee i violation off the Lacey Acct are subject to t forfeiture. penallties, imports in Lacey y Act penaltiees are in additiion to the stan ndard penaltiess under the custo oms laws. Also o, the Lacey Act A is separate from the Con nvention on Intern national Trade in Endangerred Species off Wild Fauna and a Flora, wh hich is usuallly called CITE ES. That conv vention prohib bits trade in en ndangered animals, plantts and productts thereof. Whille it may be relatively easy for f brokers to spot s plant matterial on somee invoiice description ns, this will no ot always be th he case. Conseequently, brok kers are now going to need n to add an nother area of inquiry i to theiir client munications. Brokers B that faail to educate importers i on this t issue are likely l comm to fin nd themselves in long and po ossibly unpleaasant conversaations with impo orters. So the next n time you see an invoicee description for f apparel, printed materrials, furnituree, toys and gam mes, decorativve items, or do ozens of otherr thinggs, think aboutt the woodchu uck and ask yo our client, “ho ow much wood d?”

Lawrence Frieedman is a partner p in thee Chicago off ffice of Barnees, www.barnesriichardson.coom). He can be Richardson & Colburn (w contaacted at lfried dman@barnesrichardson n.com.

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CBP Pu ublished d Rules on Con ntainer Seals S In an Augusst 7 Federal Register R Notice, CBP P reminds the trade that, effective Occtober 15, all containers c in transit to the United Statees must be sealed with a seal meetingg the d for sealing ISO/PAS 17712 standard ment applies to o containers. This requirem ontainers inclu uding freight all loaded co remaining on o board (FRO OB), although certain typees of specialty containers (open top, tanks, custom built, etc.) aree excluded fro om this requirrement. Parties responsible for vio olating this quirement willl face civil statutory req penalties altthough CBP has h stated that it will phasee in penalty asssessments. A copy of the entire Trade Information I Notice can be b found here and a copy of the Augu ust 7 Federal Register R Notice is avvailable here.

CBP Prroposes Uniform med Rulles of Origin for Impo orted Mercha andize P has proposedd Seeking uniiformity, CBP replacing th he substantial transformattion test with tariff t shift rules to determine the country of origin n d merchandisee. Comments of imported on the CBP P proposal, wh hich may be reviewed in n its entirety here http://edoccket.access.gp po.gov/2008/ E8-17025.h htm, are due September 23, 2008.

CCSContact

Septem mber 2008

CB BP Instiitutes Teemporaary Lu umber Act A Reprrieve

CBP P has previously advised thee trade commu unity of new repo orting requirem ments to ensurre that importeers comply with h the new declaaration requirrements passed d in the Farm m Bill related to t transaction value of impo orted mercchandise.

CBP P’s Office Of In nternational Trade T announcced a 30-day gracee period for im mplementation n of the new Softwood S Lum mber Act of 200 08 reporting reequirements.

Impo orters are now w required to provide p CBP with w an "F" indiccator next to the t declared vaalue at the linee level on CBP P Form 7501, or o the electron nic equivalent, when the declaared transactio on value of the imported meerchandise is deetermined on the t basis of thee price paid by y the buyer in a sale occurringg earlier than the t last sale prrior to the intro oduction of thee merchandisee into the Unitted States. Thiss element mustt be submitted d for each line on the entry summ mary, CBP fo orm 7501. Und der the Farm Bill, B the declaaration requirement is effective for a one--year period.

The new law requires importerss to provide ad dditional C for all imp portations of softwood s data elements to CBP ber and softwo ood lumber prroducts, as desscribed in lumb the act. a The data collection n was to take effect on Auggust 18, 60 dayss after the enacctment of the legislation, l bu ut the interrim rule implementing the act a was not pub blished by that date. To perm mit the trade su ufficient time to t comply with h the requiremeents in the actt, the data colllection will not begin b until Sep ptember 18.

W Can Who n Sign POAs?

As a result of the delayed d implementation, im mportations of so oftwood lumbeer subject to th he Act made between b Augu ust 18 and Sep ptember 17 wiill not be rejeccted based on an ny Softwood Lumber L Act of o 2008 requireements. In addittion, entries of o softwood lum mber subject to t the act made between Au ugust 18 and September 17 will w not be nded nor supp plemented to provide p the thrree new amen data elements.

Questions on who o can and who o can’t sign a power p of attorrney frequently arise. • D Does a person’’s title affect th he validity of the t POA? • Does D the signer have to one of these: Presiident, T Treasurer, Secrretary, Vice Prresident, CEO O, CFO, C CIO, or COO?? • Does D CBP provvide a list of acceptable a titlees?

CBP P urges the trad de to implemeent the Softwo ood Lumber Act of o 2008 data collection c requ uirements as so oon as feasiible before Sep ptember 18. CB BP also advisees the trade that a mailbox excclusively for em mail questionss concerning S 2008 is avvailable at [email protected] ov. the SLA

As sp pecified in 19 C.F.R. 141.38, CBP requirres that a corp poration's Pow wer of Attorney y (POA) be "eexecuted by a perrson duly auth horized to do so." s This wou uld mean a corp porate officer or o another person who is no ot an officer, but expressly e has been b granted authority a from m the corp poration to issu ue a POA.

CB BP Anno ounces 30-Dayy Grace Period forr First Sale S

CBP P does not keep p a list of corp porate officer titles t that wou uld be acceptab ble, but rather relies upon geenerally acceepted corporate officer titles.. These would d include those noted abovee as these indivviduals are gen nerally horized to bind d the corporatiion. auth

Due to the compleexity of the programming ch hanges uired, CBP is delaying d the reeporting of thee First Sale requ Decllaration Requiirement for 30 0 days to allow w the trade timee for software programming p changes. How wever, entries subjeect to the Firstt Sale Declaraation Requirem ment not repo orted between August 20 and d September 19, 1 will requ uire amendmen nt. CBP will provide p furtherr guidance describing the ameendments shortly. For addittional inforrmation, pleasse visit the Traade section of the CBP webssite. http:://www.custo oms.ustreas.go ov/xp/cgov/ttrade/

How wever, if someo one executes a POA with a title not geneerally considerred an officer'ss title, such as "logistics man nager," then th his should be a red flag to a broker b that this person p may not have autho ority to executee a POA. The broker should d not rely upon n such a POA A without acco ompanying documentation from f the corpo oration gran nting that indivvidual the auth hority to execu ute a POA.

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CCSContact

Septem mber 2008

NC CBFAA Surveyin S ng Memb bers Abou ut thee TSN

imp port of plant products, p succh as a Proteccted Plant Perm mit, which authorizes a an n individual to t import, exp ort and re-ex xport protectted plant spe cies.

To gllean a better understanding u of the role thee TSN plays, the NCBFAA N Custtoms Committtee's Subcomm mittee on Auto omation, chairred by Cindy Allen, A is askingg interested Regu ular and Affiliaate NCBFAA members to click c on and comp plete this volun ntary survey. If I you have allready taken the tiime to compleete our survey,, thank you; iff not, won’t you please p click heere http:///www.surveyymonkey.com/s.aspx?sm=N NNr8pU3b7 9E8R RTxA99r_2f0Q Q_3d_3d and d do so. The NCBFAA N welco omes your inp put, as the info ormation you provide p will greatlly assist us in more effectiveely serving you ur business intereests.

At this time,, the exact fo ormat of the plant p m, electronic filing, f decllaration (e.g. , paper form disssemination o f required in nformation o n com mmercial invo oice, etc.) haas not been published. p Clicck here http p://www.ncb bfaa.org/filees/secure/ind dex.cfm?Fil eID D=21016 for additional a deetails on thiss measure.

The survey's s purpo ose is to determ mine who, am mong our mem mbers, participaates in the TSN N, to discoverr what they know w about ACE changes c comin ng down the road r and to find out o if there is interest i in an ACE A webinar of any sort. Sincee 1994, the Traade Support Network N (TSN N), composed of meembers from various v trade community c secctors (brok kers, importerss, carriers, forw warders, attorrneys, suretiies, etc.) has allowed a CBP and a the trade community c to excchange ideas on o the design, features and interface of ACE E. It performs much m of the saame function that t NCB BFAA did wheen ABI was firrst under development in the eaarly 1980s. Th here are about 130 memberss, who attend at leaast two of the three t annual meetings m to rem main active mem mbers. There arre numerous NCBFAA N reprresentatives and Customs C comm mittee membeers on the TSN N.

NC CBFAA ISF How w-to Kitss Are Av vailable for f Purch hase The NCBFAA haas made Imporrter Security Filing F How-to p by cu ustoms brokerrs for use kits available for purchase p in n wheen communicaating this proggram to other participants the supply s chain, specifically im mporters, freigght forwarders and software vend dors. The kits are available for f purchase sepaarately or as a set.

Farrm Bill Revises R Plant, P Plaant Pro oducts Im mport Deeclaration n The Farm F Bill, H.R R. 2419, contaains a significaant revision to thee Lacey Act (1 16 USC 3371)), which will establish e a new import declaration requirem ment for "plan nts and plant ucts." This new declaration n requirement will w become produ effecttive for goods arriving on orr after Novem mber 24, 2008, and could im mpact a wide range r of imporrted ucts containin ng wood, papeer and other materials. m produ

Reggular memberss will need to log l on to the NCBFAA N Web bsite and, und der “Upcomingg Events,” clicck on the entrry labeled “Reggular Memberrs.” Once you ur purchase as been n completed and payment verified, v you will w be emailed d a lin nk to these onlline materials,, which are deescribed on thee site.

Failu ure to comply y with the plant declarati on requ irement coulld result in ciivil fines of up u to $10, 000 and crim minal prosecu ution. In add dition, violaations could result in the suspension or revo cation of any y licenses/peermits authorrizing the

Non n-member firm ms may also pu urchase these materials by click king on the lin nk labeled “No on-Members.”” As with Reggular Memberss, upon paymeent verification n, you will receeive a link to th he materials.

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CCSContact

Septem mber 2008

P Portfoli io of Ev vents Eveent

Event #

Datte

Location

CE Points

8372 2

Challeenges and Opp portunities witth 10+2

9/4

Los An ngeles, CA

4

8357 7

TSN Plenary P Sessio on Agenda

9/8-11 1

Tyson’ss Corner, VA

5

8361 1

Managging Harmoniized Tariff Sch hedule Class

9/8

Newark k, NJ

6.5

8359 9

C-TPA AT Certificatio on Training Workshop W

9/9

Newark k, NJ

6.5

8389 9

Building Stone & Household H Glaassware Mini Seminar S

9/9

Savann nah, GA

4

8143 3

Classiffication of Au utomotive Prod ducts III

9/10

Detroit, MI

6

8145 5

Underrstanding ACE EV

9/10

Seattle, WA

3

8380 0

Advan nced Import/E Export Operattions, Documeentation and Comp pliance Managgement

9/10-1 11

Newark k, NJ

15

8385 5

Classiffication Semin nar

9/11

Chula Vista, V CA

3

8152 2

Makin ng the Most off Your ACE Account A V

9/11

Seattle, WA

3

8155 5

NAFT TA Auto Prod ducts II

9/11

Detroit, MI

6

8154 4

Managging Your AC CE Account V

9/11

Seattle, WA

3

8377 7

Building Stone & Household H Glaassware

9/11

Atlantaa, GA

4

8349 9

Recurrrent Product Code C Review Processing Up pdate & Requirrements Affirm mation of Com mpliance Overrview

9/16

El Segu undo, CA

6

8397 7

Securiing Your Supp ply Chain Sem minar

9/16

Huntinggton, NY

2

8394 41

Recurrrent Product Code C Review Processing Up pdate & Requirrements Affirm mation of Com mpliance Overrview

9/17

El Segu undo, CA

6

8334 4

AES Compliance C Seeminar

9/17-1 18

Savann nah, GA

5

8394 42

Recurrrent Product Code C Review Processing Up pdate & Requirrements Affirm mation of Com mpliance Overrview

9/18

El Segu undo, CA

6

8149 9

Fundaamentals of Im mporting Proceedures

9/18

Detroit, MI

3

8189 9

Steel Identification, I Classification n & Trade Law w Seminar

9/18-1 19

Baltimo ore, MD

9

For F complete listing, pleasee visit www.ncbfaa.org/edu ucation

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CCSContact

Septem mber 2008

FD DA Alertss NCBFA AA to In ncrease Sam mpling off Pepperrs

served on the NCBFAA Annual A Conferrence nance Committtee, Committee, Budget & Fin nt Committee, FABnet (now w Endorsemen IT/Commun nications) Com mmittee and Scholarship S Committee. As such, he was w always verry actively involved witth the many ch hanges that haave taken place in this nation’s impo ort and export regulations and procedu ures.

In thee wake of salm monella contam mination in im mported peppeers from Mexico, the FDA F sent an urgent u adminisstrative messaage to all ABI filers thaat the agency will w be increassing its samplin ng of im mported unproccessed basil, ciilantro, as welll as serrano an nd jalapeeno peppers. The T FDA furth her advised alll filers to provide the name of o the actual grrower for all unprocessed u ultural commo odities. Frequently, FDA, stated, the co-o op agricu or con nsolidator is being b identified d as the manu ufacturer, whicch is inteerfering with FDA's F screening and evaluaation of imporrts. The agency a remind ded filers that good g faith effo orts must be madee to identify an nd list the actu ual grower as the t manu ufacturer.

The NCBFA AA offers its siincere and heaartfelt condolences to his wife, Lila, L with whom he shared 0 years, their daughters, d Jen nnifer and more than 40 Elizabeth an nd several gran ndchildren as well w as his many friendss and professio onal colleaguees. George’s greeat heart has been b stilled butt the memory of his h kindness an nd generosity lives on in those of us who w were hono ored to know him and to call him frien nd.

Prior to transmittin ng the ABI meessage, the FD DA conferred with NCBFAA N and d AAEI to req quest the coop peration of brokeers and importters. NCBFAA A's Regulatory y Agencies Comm mittee Chairm man Cary Weinberg pledged d the assocciation's suppo ort and prompttly arranged fo or the FDA messaage to be sent to all NCBFA AA members ahead a of time,, encou uraging brokerrs to make eveery effort to ob btain the actuaal groweer information n before transm mitting any Prrior Notice an nd OASIIS information n.

Lon ng-Time NCBFA AA Activ vist Geo orge Men nendez Has H Passsed The NCBFAA N has lost a stalwarrt supporter an nd dedicated A

activiist with the un nexpected deatth on Saturday y, August 16, of Geeorge Menend dez, President of Tampa Bay y-based Sack & Meenendez, Inc. Georgge joined Sack k & Menendezz in 1969, got his brokers licensse in 1974, and d became Pressident of the fiirm in 1976. He reeceived his BS degree in Ind dustrial Managgement from Georggia Tech in 19 967 and his MBA M in Internaational Busin ness from the Wharton W Grad duate School at a the Univeersity of Penn nsylvania in 19 969. In addition to serviing on the Boaard of the Florrida Customs ders Associatio on for many years, y he was Brokeers & Forward involvved in numero ous civic and religious r organ nizations. His seervice on the Board B of the National N Custo oms Brokers & Forwarders Asso ociation of Am merica, Inc., in ncluded termss as Area 4 Dirrector, Secretaary, and Vice-President from 1992 to 2000. He was w the Chairm man of the NC CBFAA’s Custtoms Comm mittee from 19 994 through 1998. Over thee years he

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CCSContact

mber 2008 Septem

NEI Upcom U ming Webina W ars September 18, 2008 ~ 1:00 0 - 2:30 PM (E EST) Strategic Plan nning Speaker: Renn nie Alston, Paartner, Americcan River Inteernational September 25, 2008 ~ 1:00 - 2:30 PM (E EST) S Tuna Trracking & Verrification Proggram The United States Speakers: Bill Jacobson & Chris C Fanningg, Tuna Trackiing & Verification Program, P NOAA Fisheries Service October 23, 2008 ~ 1:00 - 2:30 PM (ES ST) ng the Export Administratio on Regulation ns (EAR) Understandin Speaker: Don nna L. Bade, Esq., E Partner, Sandler, S Traviis & Rosenberrg (ST&R)

ww.ncbfaa.org g/education. For complete listing, pleease visit: ww If you have any questionss or need moree information,, please contacct us at ei@ncb bfaa.org or on n 202-466-0222 2.

Weebinar Registrration Rates •

APN Rate: $2 250 for first 10 ( $20 per additioonal person)

•

MemberRate: $150 for the fiirst 3 ($40 per additioonal person)

•

Non-Member Rate: $250 for the first 3 ($60 per additioonal person)