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05.18.2010 Highlights in Internaltional Trade and Commerce The International Law Section of Williams Mullen prepared the following brief descriptions of selected issues in international trade and commerce for general information purposes and use by clients and friends of the firm.

CIT: Accelerated Disposition Request Required to Force CBP to Act on Protest
The Court of International Trade (CIT) recently found in Hitachi v. U.S. Customs and Border Protection (CBP) that CBP’s failure to act on a protest does not, by operation of law, result in either an automatic grant of the protest or an automatic denial, unless the importer requests from CBP an accelerated disposition of the protest. In the case, CBP assessed duties on televisions imported from Mexico. Hitachi protested, claiming that the televisions qualified for duty-free treatment under the North American Free Trade Agreement (NAFTA). CBP failed to respond to Hitachi’s protest within two years as required by 19 U.S.C. 1515(a). Hitachi sued, arguing in part that CBP’s failure to decide the protest in effect amounted to a denial—giving the CIT jurisdiction to hear the dispute. The court disagreed, ruling that CBP’s failure to act constituted neither a denial nor a grant of the protest. The proper procedure for Hitachi to force CBP to address its protest, the court said, is to request an accelerated disposition under 19 U.S.C. 1515(b). If CBP does not then respond within 30 days, the protest is deemed to be denied, and Hitachi can appeal the decision to the CIT. Importers, take note: The best or only way to force CBP to respond to a protest in a reasonable time is to request an accelerated disposition.

ITC to Hold Hearing on China’s Indigenous Innovation Policy, IPR Violations
Senators Max Baucus (D-MT) and Charles Grassley (R-IA), respectively the Chair and Ranking Member of the Senate Finance Committee, recently asked the International Trade Commission (ITC) to investigate China's infringement of intellectual property rights (IPR) and its effect on the U.S. economy and U.S. jobs. In response, the ITC will hold a public hearing about IPR violations and China’s Indigenous Innovation policy next month. Under section 332(g) of the Tariff Act of 1930, the ITC, at the request of Congress or the Administration, investigates the economic effects of possible regulatory changes. While U.S. businesses have long complained that China does not adequately protect IPR, the Chinese Government may be becoming more serious about combating the problem. Last month a Chinese court ordered a Chinese insurance company backed by state-owned companies to pay Microsoft $318,000 in damages for software piracy, the largest amount ever ordered by a Chinese court in a software piracy suit. Congress, however, remains concerned about IPR in China. As discussed in last month’s HIGHLIGHTS, China has also been criticized for its Indigenous Innovation policy, a government procurement policy that favors intellectual property developed in China over foreign products. Trade issues that hurt American exports, such as IPR violations and the Indigenous Innovation policy, are of particular concern to lawmakers given the large U.S. trade imbalance with China and President Obama’s goal of doubling U.S. exports over five years. The ITC will hold a public hearing concerning both IPR infringement and the Indigenous Innovation policy on June 15. The deadline to file a request to appear at the hearing is June 1.

Importers Note Change in CBP Prior Disclosure Policy
Importers have noticed a change in U.S. Customs and Border Protection’s (CBP’s) use of forms 28 (Request for Information) and 29 (Notice of Action). Importers report that CBP has begun to treat the issuance of these forms as marking the beginning of a formal investigation. CBP’s treatment is problematic for importers because it limits their ability to make prior disclosures. Generally, if an importer timely notifies CBP of a violation of customs laws through a prior disclosure, the penalties assessed will be less severe than if CBP discovers the violation on its own and commences an investigation. To take advantage of the protection of a prior disclosure, however, the importer must notify CBP of the violation before an investigation commences. In the past, an importer’s receipt of a CBP form 28 or 29 did not signify the beginning of an investigation and thus did not prevent the importer from securing the protection of a prior disclosure. Now, CBP may have changed its policy. Stay tuned to HIGHLIGHTS for more information.

Commerce Requests Nominations for Private Sector Advisors
The Department of Commerce’s International Trade Administration renewed the charters of the 16 Industry Trade Advisory Committees (ITACs) earlier this month and is requesting nominations to fill vacancies on each of them. ITACs consist of private-sector members who provide policy and technical advice, information and recommendations about trade barriers and agreements, and other issues, to the Secretary of Commerce and to the United State Trade Representative. ITAC members receive confidential briefings and provide feedback regarding U.S. trade policy, potential government responses to international trade problems, the U.S. negotiating position in various trade agreements and similar strategic issues. Industries that ITACs represent include, among others, Chemicals, Consumer Goods, Intellectual Property Rights, and Services and Finance Industries. Because the Obama Administration is adverse to appointing lobbyists to the ITACs, all of the committees have vacancies and new members are being sought. Appointments are made on a rolling basis, such that nominations will be accepted until the current charter ends on February 17, 2014. Companies may nominate their employees or sponsor (non-lobbyist) representatives. For a full list of the committees and for more information about the nomination process, see www.trade.gov/itac.

If you have any questions concerning the subject matter addressed above, please feel free to contact any of the attorneys listed on the left.

Highlights in International Trade and Commerce by Williams Mullen is prepared for information purposes only and does not constitute legal advice. Persons seeking legal advice concerning the issues addressed in this issue are encouraged to contact competent legal counsel.

For comments or suggestions, please contact the publication editor, Jimmie V. Reyna, Esq.