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16
Korea Free Trade Agreement To Take Effect This Week

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP / www.gdlsk.com

In a recent press release, the U.S. Trade Representative confirmed that the provisions of the U.S.-Korea Free Trade Agreement will take effect on Thursday March 15, 2012.

A Presidential Proclamation just published in the Federal Register indicates that, except for certain provisions with other specified effective dates, the Korean Free Trade Agreement will take effect with respect to goods entered (or withdrawn from warehouse for consumption) on or after March 15th. Thus, assuming they would otherwise qualify, goods already exported from Korea but which are to be entered on or after March 15th may conceivably benefit under the Korea FTA.

The Korea FTA (variously also referred to as “KORUS” and, most recently, as “UKFTA”) extends duty-free or reduced duty treatment to articles satisfying various eligibility rules. Conceptually, the Agreement, like the NAFTA, is “tariff shift based”. What that means is that, depending upon the commodity, the use of certain foreign inputs may be permitted but they must undergo a specified change in tariff classification as a result of production in Korea. The applicable tariff shift eligibility rule varies from commodity to commodity depending upon its tariff classification.

A very important point of which to be aware is that the Agreement provides for a phase-out of duties on qualifying articles. Depending upon the “staging category” applicable to a particular commodity, a qualifying article may become duty-free immediately on March 15, 2012 or have its duty rate phased-out over a period from two to fifteen years. It is critical that any sourcing strategies be informed not only by a commodity’s eligibility rule but its staging category as well.

The Agreement is rife with additional eligibility rules addressing such things as the impact of any non-Korean/non-U.S. processing, the presence of de minimis amounts of non-originating materials, and the importation of retail sets incorporating foreign components that do not satisfy the Agreement rules, just to name a few. As with other Free Trade Agreements, requirements regarding recordkeeping and eligibility verifications (audits) figure prominently.

If we can be of assistance in providing training to your company concerning importing under the Korea Free Trade Agreement or if you have any particular questions, please contact Arthur W. Bodek.

 


 

Speaking in Seoul on Korea Free Trade

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP / www.gdlsk.com

At the invitation of the Korea International Trade Association (KITA) and the Kim & Chang law firm, Alan Lebowitz spoke at the Free Trade Agreement seminar held in Seoul on March 9.

Mr. Lebowitz spoke in depth about the rules of origin under the United States- Korea Free Trade Agreement (referred to variously as either KORUS or UKFTA) set to go into effect on March 15, 2012. Additionally, he discussed new enforcement provisions set forth in the agreement as well as Customs traditional FTA enforcement strategies and available enforcement resources and tools. Compliance obligations under KORUS and best practices were covered as well. A copy of Mr. Lebowitz’ power point presentation is available here. For more information about importing and exporting opportunities under the KORUS, please contact Alan Lebowitz.

 


 

CBP Detroit Stops Another Shipment of Hazardous Toys

Similar shipment seized in January

U.S. Customs & Border Protection / www.cbp.gov

Detroit – On Feb. 28, U.S. Customs and Border Protection officers in Detroit seized another shipment of Chinese made toys with high lead paint levels at a Centralized Examination Station (CES). Seventeen boxes of toys valued at $3,744 destined for Flint, Mich. were selected for review by the Consumer Product Safety Commission (CPSC) and examined by U.S. Customs and Border Protection.

A similar shipment of toys going to Flint was seized on Jan. 24, of this year. Using this knowledge, CPSC inspectors requested that CBP detain the shipment for examination in Detroit. Samples of the toys were sent to a CPSC lab to specifically test the lead content in the paint. Chemical analysis determined that the lead levels exceeded limits in violation of CPSC regulations. The toys will be held pending re-exportation or destruction.

“CBP officers work closely with CPSC Inspectors to keep dangerous toys off store shelves,” said Area Port Director Roderick Blanchard. “We will continue our efforts with the Consumer Product Safety Commission to stop unsafe imports from entering our country.”

It is unlawful to import into the U.S. any children’s product that contains lead with more than 90 parts per million of lead paint or more than 300 parts per million of total lead content.

Collaboration between CBP and CPSC protects the consumer from hazardous and dangerous imported products. For more information on CBP regulations, please visit the CBP or CPSC Web sites.

(CBP website ) ( CPSC website )

 


 

Importation Advisory – Kinder Eggs

U.S. Customs & Border Protection / www.cbp.gov

Pembina, N.D. — As the Spring travel season approaches, U.S. Customs and Border Protection would like to remind importers and the traveling public that a familiar product, popular at this time of year, is banned from import into the United States.

Kinder Eggs are hollow milk chocolate eggs about the size of a large hen’s egg. They are usually packaged in a colorful foil wrapper and are a popular treat during the Easter holiday season. In each Kinder Egg, there is a toy contained in an oval-shaped plastic capsule within the chocolate. This toy has small parts that may require assembly. Each egg contains a different toy.

Kinder eggs are a prohibited item because they contain a toy surprise, hidden inside, that poses a choking and aspiration hazard for children younger than three years of age. Kinder Eggs may not be imported into the United States and will be confiscated and destroyed. The traveler, in possession of the Kinder Eggs, may also be allowed to take them back to Canada.

CBP, the Food and Drug Administration, and the Consumer Product Safety Commission work in close collaboration to ensure the safety of imported goods. Travelers are encouraged to visit the CBP website at www.cbp.gov for useful information and publications such as “Know Before You Go” regarding what items travelers can legally bring into the United States.

( CBP website )

 


 

CBP USBP Checkpoint Thwarts Transport of Meth, Cocaine and Heroin

U.S. Customs & Border Protection / www.cbp.gov

Tucson, Ariz. – U.S. Customs and Border Protection Tucson Sector Border Patrol agents seized nearly four pounds of hard narcotics on March 7, with a combined value of nearly $55,000, while working the Interstate 19 checkpoint.

A Border Patrol canine team working the pre-inspection lanes alerted to a commercial passenger transportation vehicle, which was then sent to secondary inspection. The canine alerted to a backpack with four small packages of possible narcotics. The substances in the packages tested positive for methamphetamine, weighing approximately 2.3 pounds and worth $34,500; cocaine, weighing less than half a pound and valued at $3,400; and heroin weighing about 1.21 pounds and worth more than $17,000. The owner of the abandoned backpack was not identified during the initial investigation. The narcotics will be turned over to the Drug Enforcement Administration.

Tiered border enforcement efforts, such as CBP Border Patrol checkpoints, help prevent transnational criminal organizations from smuggling illegal narcotics further into the country. Significant gains have been made toward combating illicit activity along the Arizona/Mexico border by impacting smugglers’ ability to transport contraband through routes of egress, ensuring they face significant penalties for their actions.

CBP welcomes assistance from the community. Citizens can report suspicious activity to Border Patrol agents and remain anonymous by calling (877) 872-7435 toll free.

 


 

CBP Agriculture Specialists Stop Prohibited Seeds, Cache of Mangoes, & Smuggled Bird Carcasses at San Diego Border

Prevent Prohibited Items that Could Carry Pests and Disease from Entering U.S.

U.S. Customs & Border Protection / www.cbp.gov

San Diego — U.S. Customs and Border Protection agriculture specialists at San Diego area ports of entry last week stopped prohibited agriculture items from entering the U.S. undeclared: ten pounds of raw bird carcasses; 57 mangoes; and flower seeds embedded in jewelry packaging.

At about 6:45 p.m. on Monday, March 5, a 27-year-old male U.S. citizen and resident of San Diego arrived at the San Ysidro port of entry driving a 2008 Jeep. The CBP officer conducting his inspection noticed a large ice chest with seafood in the vehicle, and made a referral for further inspection.

During the intensive inspection, a CBP agriculture specialist with an agriculture detector dog screened the ice chest and the canine alerted. The CBP agriculture specialist discovered that inside the ice chest, underneath the seafood, was about ten pounds of raw bird carcasses.

CBP agriculture specialists seized the carcasses, which were incinerated on site, and assessed the driver a $300 penalty for failing to declare the prohibited items.

Raw avian products can be a host of foreign animal diseases, such as exotic Newcastle disease, that can be contagious and fatal to poultry. Transporting these products from Mexico is prohibited by the U.S. Department of Agriculture, and enforced at the border by CBP.

At about 3:45 p.m. on Tuesday, March 6, a 71-year-old male legal permanent resident of the U.S. arrived on foot to the Otay Mesa passenger port of entry. As part of his inspection, CBP agriculture specialists had the man submit the package he was traveling with, a milk crate full of food items, for an x-ray inspection.

During the x-ray, the CBP agriculture specialist noticed several anomalies and decided to physically inspect the crate and its contents. The agriculture specialist found 57 mangoes hidden inside the crate beneath layers of cheese and papers.

Agriculture specialists seized the mangoes and inspected them before destroying them, and issued the man a $300 civil penalty for failing to declare the prohibited items.

Mangoes from Mexico are prohibited from being brought by travelers because they are hosts for exotic fruit flies, like the Mexican fruit fly. According to the California Department of Food and Agriculture, the Mexican fruit fly is among the world’s most destructive pests and can destroy many types of fruit. Female fruit flies lay their eggs in ripening fruit. The eggs hatch into larvae that eat the flesh of the fruit, causing it to rot.

On March 5, 2012, a driver brought a shipment listed as jewelry to the Otay Mesa Cargo port of entry that included 1,296 bracelets. The CBP officer referred the shipment to the dock for a more intensive inspection. During the inspection, a CBP officer noticed seeds embedded in the paper packaging for the bracelets and contacted CBP agriculture specialists for assistance.

CBP agriculture specialists confirmed that the packaging contained seeds intended for planting; however, the seeds were not listed on the cargo manifest and were not accompanied by the necessary documentation.

CBP agriculture specialists submitted a seed sample to specialists with the USDA Animal Plant Health Inspection Service Plant Protection and Quarantine program. ( Aphis Plant Health ) On March 8, the USDA specialists identified the seeds as Nemophila menziesii, a blue and white wildflower. The truck and cargo were returned to Mexico.

 


 

Proper Identification for Boarding a Cruise Line Consumer Alert

Federal Maritime Commission / www.fmc.gov

The Commission’s Office of Consumer Affairs and Dispute Resolution Services (CADRS) has received a growing number of inquiries and complaints from cruise passengers involving the refusal of cruise lines to permit passengers to board an international cruise without proper documentation. As passenger ticket contracts usually place responsibility for proper documentation on the passenger, cruise lines decline to reimburse passengers for the missed cruise in these situations.

To avoid missing your cruise and incurring additional costs, you should have a valid Government-issued passport and be prepared to show your passport to cruise officials when boarding. Some destinations will accept an original birth certificate as proof of identity under the following conditions:

•You must use an original or copy of your birth certificate with a raised seal issued by the Vital Records Department in the state where you were born
•Cruise lines will not accept certificates of birth issued by a hospital
•Documents must be presented at time of embarkation

For more information regarding documentation requirements, please refer to your cruise ticket contract. Consumers may contact CADRS with any additional questions or concerns that they have regarding this matter at (202) 523-5807.

 
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