basics - leg/reg
------------------------------------------------------------------------

Environmental Law Alert
OSHA Issues New Rule Requiring Employers
to Pay for Personal Protective Equipment
The U.S. Occupational Safety and Health Administration (OSHA) has published its long-awaited final rule requiring employers to pay for the personal protective equipment (PPE) that their employees are required to use. (72 Fed. Reg. 64341, Nov. 15, 2007.) PPE includes general safety equipment such as hard hats, safety glasses and gloves, as well as more-specialized equipment such as fall protection harnesses.
[Read Full Article]

Cambodia's economic boom relies on U.S. garment exports
USA Today recently reported on Cambodia's economic boom, which some deem as “incongruous, if not slightly absurd." However "after a generation spent slumbering in the shadows of its fast-rising neighbors, Cambodia is on the move. The economy this year is expected to expand at a robust annual rate of 9.5 percent after three consecutive years of double-digit growth, the World Bank says." The Cambodian economy hinges on exports of goods like "Levi jeans, Gap clothes and Nike athletic shoes, all bearing made-in-Cambodia labels." But "Cambodia's thriving garments industry" is in trouble, as "U.S. restrictions on imports of clothing from China...expire by the end of 2008, potentially opening the door for China to seize market share at the expense of Cambodian producers." Now "[t]he government here is pinning its hopes on proposed U.S. legislation that would eliminate tariffs on products from the world's poorest countries, including Cambodia." But, "Prospects for approval of the measure, introduced by Rep. Jim McDermott (D-Wash.) are cloudy. Rep. Charles Rangel (D-N.Y.) the chairman of the House Ways and Means Committee, has endorsed the proposal, aimed at helping the world's poorest countries develop. But with public support for trade ebbing, and the economy weakening, lawmakers may shy in an election year from being seen as helping foreign workers."

CITA Seeks Comments on Proposed NAFTA Rule of Origin Change
The Committee for the Implementation of Textile Agreements is seeking comments by Jan. 14, 2008, on a NAFTA short supply request received on Oct. 16. The petitioner alleges that certain rayon fibers (other than “lyocell”) cannot be supplied by the domestic industry in commercial quantities in a timely manner. The petitioner is also requesting that CITA consider whether the NAFTA rule of origin for textile filaments, staple yarns and woven fabrics classified under HTSUS chapters 52, 54 and 55 and non-woven and other textile articles of HTSUS chapter 56 should be modified to allow the use of non-North American rayon fibers (other than “lyocell”). In addition, CITA is considering a broad change in the rule of origin for all other textile products to allow the use of such fibers. The president may proclaim a modification to the NAFTA rules of origin under these circumstances to implement an agreement with the other NAFTA countries on the modification.

President Bush Appoints Members of Trade Policy Advisory Committee
President Bush has announced his intention to appoint the following individuals to be members of the Advisory Committee for Trade Policy and Negotiations for four-year terms.

• Sheldon G. Adelson
• Phil Gramm
• Harold McGraw III
• George Perdue
• Faryar Shirzad

Canada Advances Plan to Aid Textile and Apparel Industries
Canada’s Department of Finance published notice this month announcing its intent to implement an outward processing initiative that will encourage the use of Canadian textiles in the manufacture of apparel in developing countries. This initiative is part of a package of measures Canada has pursued to help its domestic textile and apparel industries after the Jan. 1, 2005, elimination of quotas among WTO member countries. According to the notice, the proposed outward processing initiative is based on the principle that textiles produced in Canada would be exported to a developing country or territory eligible for General Preferential Tariff treatment and incorporated there into apparel that would then be imported into Canada. Import duties on such apparel would be reduced or eliminated provided that the items are produced in whole or in part from textiles produced in Canada. In addition, the following conditions would have to be met: the apparel is produced in and shipped directly from the same GPT beneficiary country to which the textiles produced in Canada were exported; in instances where textiles produced in Canada contain imported materials, (1) the value of the imported materials, with the exception of natural fibers, accounts for less than 50 percent of the value of the textiles produced in Canada and (2) the imported materials are sufficiently transformed in Canada as to result in a change in tariff classification; no other form of relief, refund or drawback of the customs duties paid or payable has already been granted; textiles produced in Canada are exported on or after the date the initiative takes effect and the apparel is imported within two years of the exportation from Canada of the incorporated textiles produced in Canada; the importer has submitted a duty remission application to the Canada Border Services Agency within one year of the importation of the apparel and filed such evidence as may be required to determine eligibility.

General comments or inquiries about the proposed initiative should be submitted to the Department of Finance by Jan. 15, 2008. More specific comments and inquiries on the administration of the proposed initiative are due to the CBSA by the same date.

ITA’s Apparel and Textile Office to Visit Colombia
The International Trade Administration recently announced that representatives from its Office of Textiles and Apparel will be making an exploratory mission to Colombia the week of Jan. 21, 2008, to promote increased textile and apparel trade between the U.S. and Colombia. According to the ITA statement, the mission will aim to increase OTEXA’s knowledge of the Colombian textile and apparel market so that it can provide greater assistance to U.S. textile and apparel exporters, especially in anticipation of a potential U.S.-Colombia free trade agreement. Under that FTA, which has not yet been approved, all qualifying textile and apparel products would be able to enter Colombia duty-free. The ITA notes that its representatives will visit yarn, fabric and apparel factories in Colombia, meet with Colombian industry associations and participate in ColombiaTex2008, a trade show for the apparel industry to be held in Medellin.

Policy/ Potential for Penalties for Importer Self-Assessment Participants Importing Textiles and Textile Products
To reinforce U.S. Customs and Border Protection’s (CBP) risk management program, increase the efficiency and effectiveness of resource use, and enhance the promotion of legitimate trade, importers that have been approved under the Importer Self-Assessment (ISA) program will not have goods subject to detention, under specific circumstances, resulting from Textile Production Verification Team (TPVT) visits.

Subsequent to CBP’s TPVT visits to foreign factory locations, certain conditions warranted that goods be detained during the request for and review of production records. Typically, the exclusion rate for those importers who are ISA participants has been minimal. Therefore, CBP has modified the detention practice for shipments from ISA participating importers.

Usual procedures for shipments that are detained as a result of TPVT findings require the presentation of production records to ascertain the country of origin and to determine admissibility. In certain cases, shipments from ISA participating companies will not be detained. In those circumstances, CBP will conditionally release the merchandise and immediately issue a Request for Information (CBP Form 28) to obtain production records to determine the country of origin. In addition, the Import Specialist will contact the National or Port Account Manager of the ISA company, as applicable, who will work with the account to ensure maximum compliance with minimum disruption to the company’s trade activities.

This exception to the detention policy does not apply to ISA participants using manufacturers the TPVT has identified that 1) have falsely declared a country of origin; 2) were closed at the time of the visit and were verified closed at the supposed time of production of the goods; or 3) never existed.

For additional information on this topic, visit the CBP website (click here)

2007 Textile Enforcement Efforts
U.S. Customs and Border Protection recently announced the progress it made in fiscal year 2007 in its enforcement efforts against imports of high-risk textiles and apparel. According to an agency press release, CBP used tactics such as verifying foreign production, targeting suspect supply chain movements, auditing high-risk firms and seizing violative goods. CBP said that in FY 2008 it will focus its enforcement efforts on textile quota evasion and improper claims for duty-free preference using free trade agreements and other trade preference programs.

CBP notes the following accomplishments in textile enforcement in FY 2007.

• Foreign factory visits were increased by 57 percent. CBP visited 671 foreign factories to monitor for illegal transshipment by sending textile production verification teams to confirm actual country of origin and compliance with trade preference programs.

• CBP visited 168 foreign factories in 10 countries to verify claims involving FTAs and other trade preference programs.

• CBP conducted 66 audits on textile importers and recommended additional revenue collections of $5.61 million, an increase of 57 percent in audit activity.

• CBP examined 13,327 shipments at ports of entry and found more than 2,300 shipments where discrepancies were identified.

• CBP initiated 1,905 reviews of entry documents resulting in 959 detained shipments and 314 seized shipments worth $48.1 million for violations of China quota restraints.

• CBP initiated 68 actions totaling $50.1 million in penalties for commercial fraud.

Possible Safeguard for Honduran Socks Further Delayed
The Committee for the Implementation of Textile Agreements is extending to Jan. 18, 2008, the deadline for determining whether to take safeguard action under DR-CAFTA against imports of cotton, wool and manmade fiber socks from Honduras. CITA is currently investigating whether such socks are being imported in such increased quantities, in absolute terms or relative to the domestic market, and under such conditions as to cause serious damage or threat thereof to the U.S. industry producing such socks. CITA said it is continuing to evaluate conditions in the market along with current trade data and other relevant information. If an affirmative determination is made, CITA will provide written notice to Honduras and initiate consultations, which must be completed within 60 days. CITA will then determine within an additional 30 days whether a safeguard measure will actually be applied. Any safeguard would come in the form of import tariff relief; specifically, an increase in the duties on the affected articles back to most-favored-nation rates. The maximum total period for such relief would be three years.

If such a safeguard is imposed, the U.S. would have to provide Honduras “mutually agreed trade liberalizing compensation in the form of concessions having substantially equivalent trade effects or equivalent to the value of the additional customs duties expected to result from the textile safeguard measure.” Such concessions would be limited to textile and apparel articles unless the U.S. and Honduras agreed otherwise. If they were unable to agree on compensation, Honduras would be able to increase its customs duties on any U.S. articles to achieve substantially equivalent trade effects.

2008 Import Limits for Apparel from Haiti
The Committee for the Implementation of Textile Agreements has announced the quantitative limits on apparel articles imported duty-free from Haiti under the Haitian Hemispheric Opportunity Through Partnership for Encouragement Act for the period Dec. 20, 2007, through Dec. 19, 2008. During this period, the quantity of imports eligible for such treatment is 313,000,534 square meters equivalent. Apparel articles entered in excess of these quantities will be subject to otherwise applicable tariffs.

2008 Annual Broker Fees Due Feb. 15
U.S. Customs and Border Protection has issued notice advising customs brokers that the annual fee of $138 assessed for each permit held by a broker, whether it be an individual, partnership, association or corporation, is due by Feb. 15, 2008.