U.S. Export Controls

Associated Press - On Monday, May 24, China pressed the United States at a high-level dialogue to end export curbs on "dual use" technology with possible military applications.

Beijing has pressed for years to ease such controls, saying high-tech exports could help to narrow the U.S. trade deficit with China. American officials say the controls affect few products and are needed to ensure national security.

"During this dialogue, we hope to hear from the U.S. side in detail its timetable and roadmap for gradually removing barriers to high-tech exports to China," said Vice Premier Wang Qishan at a meeting with Treasury Secretary Timothy Geithner and other U.S. officials.

Washington is in the midst of a review of its export controls, which are meant to deny China's military access to technology that might aid its modernization. They apply to goods such as supercomputers, lasers, navigation systems and high-performance materials used in missiles.

U.S. Commerce Secretary Gary Locke said during a visit to Beijing last week that less than 1 percent of U.S. exports fall under the controls and 98 percent of requests for export licenses are granted.

Locke said the review of the system was expected to be completed by summer and Washington would then decide whether to change its controls.

- AP, May 24, 2010

This press release brought to mind Defense Secretary Robert M Gates' April 20th address to the Business Executives for National Security, which called for an overhaul of current US export licensing controls. Gates pointed to cases where the system didn't work and proposed a tiered approach that would allow the US to tighten restriction on the more sensitive crucial technologies while easing it on others.

The Administration's plan is to replace the current system (a merging of bureaucracies within Commerce, Defense, State, and other Federal Departments, Bureaus, and Agencies) with a single licensing agency and one list of the controlled/restricted commodities that would streamline the process and reduce confusion. At the same time, creation of a single enforcement agency would better ensure compliance with all necessary export restrictions.

Visit one of the links below to read articles on Secretary Gate's speech:

http://www.washingtonpost.com/wp-dyn/content/article/2010/04/20/AR2010042005104.html

http://www.aolnews.com/nation/article/defense-secretary-gates-calls-out-dangerous-gaps-in-us-military-exports/19447744

http://thehill.com/business-a-lobbying/93353-gates-makes-pitch-for-major-reforms-of-us-controls-on-sensitive-exports

Import safety, a Customs (CBP) Priority Trade Issue (PTI)

CBP states that "the Import Safety Priority Trade Issue is designed to ensure that unsafe products do not enter the commerce of the United States by working collaboratively and collectively with other government agencies, other foreign governments and the trade to better define and assess risk through increased automation and the sharing of information to encourage greater use of partnership and best practices to protect the U.S. consumer."

The three areas of most concern to international trade are as follows:

CPSIA (Consumer Product Safety Improvement Act), a partnership with CPSC (Consumer Product Safety Commission) to ensure the safety of merchandise intended to be used by children (12 years and under) and of some other merchandise (i.e. All-Terrain Vehicles, ATVs) used by domestic consumers.
TSCA (Toxic Substance Control Act), a partnership with EPA (Environmental Protection Agency) to enforce the requirements of importing and exporting chemical substances.
BTA (BioTerrorism Act), a partnership with FDA (Food & Drug Administration) to closely monitor the movement of biologicals and food stuffs.

There are frequent updates as to which commodities are regulated and the requirements of the regulations. The below links are kept current by the various federal agencies.

PTI page:   http://www.cbp.gov/xp/cgov/trade/priority_trade/

CBP Import Safety - Main Page:   http://www.cbp.gov/xp/cgov/trade/trade_programs/is_initiatives/

CPSIA:   http://www.cpsc.gov/ABOUT/Cpsia/cpsia.html

TSCA:   http://www.epa.gov/oppt/import-export/

Bioterrorism:
CBP site - http://www.cbp.gov/xp/cgov/trade/trade_programs/is_initiatives/bioterrorism/
FDA site - http://www.fda.gov/EmergencyPreparedness/Counterterrorism/
BioterrorismAct/default.htm
FDA Prior Notice of Food Page - http://www.fda.gov/Food/GuidanceComplianceRegulatory
Information/PriorNoticeofImportedFoods/default.htm

Classification in Harmonized System (HS)

Used by more than 200 countries and economies as a basis for their Customs tariffs and for the collection of international trade statistics, the HS is a multipurpose international product nomenclature developed by the World Customs Organization (WCO). The intent is for the tariff of all member countries to be identical for the first six digits.

The US has one version for exports (Schedule B) and another more detailed version for imports (HTSUS). Knowing the classification in one version will assist with classification in the other version. The site for the HTSUS also incorporates a search function.

Another classification aid is CROSS (Customs Rulings Online Search System) which gives access to legal decisions/rulings that CBP uses to classify merchandise.

Schedule B:   http://www.census.gov/foreign-trade/schedules/b/index.html

HTS online reference tool:   http://hts.usitc.gov/

CROSS:   http://rulings.cbp.gov/

If you have any questions or comments regarding the Compliance eNewsletter,
please contact Paul Codere from the Customs Brokerage Department.

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