News

ITC Issues Final Report Of Textile-Outsole Footwear

On August 9, the ITC issued its final report in connection with the section 1205 proceeding that it was conducting with respect to the classification of textile outer sole shoes.

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First Sale Update

Thoughts on the ‘first sale’ rule

The ‘first sale’ rule is a method used to arrive at the transaction value of merchandise which is the subject of multi-tiered sales. Because the first sale price is always lower than any subsequent resale price, the use of the first sale appraisement method results in substantial savings in duty. The main commercial blocks of the world – the European Union (EU), United States (US) and Japan – accept the first sale appraisement and in the US, this process has been validated through a series of court decisions. Recently, however, a move to ‘last sale’ appraisement has been proposed. This has prompted many substantial importers, trade groups and industry organisations to file comments and legal briefs in strong opposition to the proposal. This article considers the position being taken by the EU Commission, the likely result in a change to the World Trade Organization (WTO) Agreement on Customs Valuation, and concludes with the hope that customs administrators in the US and EU will heed the comments of the international trade community and continue the ‘first sale’ rule.

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U.S. Trade Representative Cancels Anticipated Modifications To 100% Tariff List Covering Certain Eu-Origin Goods

In 1999, the WTO Dispute Settlement Body authorized the United States to impose increased tariffs on EU products up to a total annual trade value of $116.8 million. Pursuant to this authorization, the US created a "retaliation" list subjecting certain EU goods to a 100% ad valorem tariff rate. In January 2009, the US Trade Representative announced modifications to the 100% tariff list--these amendments included adding additional goods to the list, while removing others. The effective date of the modifications was initially scheduled for March 23, 2009. To permit additional time for resolution of the trade dispute through negotiations, the effective date was delayed until May 9, 2009, although the scheduled removal of certain items was effected. Prior to the final changes being implemented, however, the US and EU have reached a provisional agreement under which the US will not modify the current list of EU products subject to the 100% tariffs.

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Customs Announces The Broker Self-Assessment (Bsa) Pilot Program

CBP is initiating a new initiative called the Broker Self-Assessment (BSA) Outreach Pilot (BSA Pilot)~ The BSA Pilot is a voluntary program and is intended to be a partnership between U.S. Customs and Border Protection (CBP) and participating customs brokers. The BSA Pilot will allow participating customs brokers to assess their own compliance with statutory and regulatory requirements and provide recognition and support to participating brokers. Under the program test, participating customs brokers will demonstrate their internal controls, perform periodic testing of internal controls, and disclose to CBP deficiencies discovered through testing. The BSA program will utilize many of the self-assessment principles of the ISA program. Like the ISA program, CBP believes that the BSA program will facilitate legitimate trade so that CBP can focus its efforts on higher-risk trade enforcement issues.

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