Last updated on 8/3/12

Hong Kong Jeweler Fined Almost $2,000,000 for Undervaluing Imports to US
A Hong Kong jewelry company has been fined $800,000 for defrauding U.S. Customs of more than $1 million.

Fai Po Jewellery (H.K.) Co. LTD entered its plea and was sentenced Friday in U.S. District Court in Anchorage.

The company also must pay just over $1 million in restitution and the costs of the investigation, more than $144,000.

The U.S. attorney’s office for Alaska says in a release that the company prepared two invoices for every shipment of gold to U.S. buyers. One with the true amount was sent to the buyer, but a smaller invoice that undervalued the goods was sent with the shipment through customs.

Officials say by doing that, the company avoided full payment of U.S. Customs duties from March 2007 through October 2009.

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U.S. Giving Up on Overseas X-ray Goal
Five years after Congress set a deadline for requiring all U.S.-bound shipping containers to be X-rayed overseas for nuclear weapons, customs officials have all but given up on the goal.

Customs and Border Protection officials scanned with X-ray or gamma-ray machines 473,380, or 4.1 percent, of the 11.5 million containers shipped in the fiscal year ended Sept. 30, according to the agency. That's essentially the same percentage of containers that were scanned in 2007, the year a Democratic-controlled Congress required that agents start vetting every container.

2-year waiver granted

Screening 100 percent of incoming containers would be almost impossible to implement now, cause huge delays and be less cost-effective than focusing only on suspicious cargo, customs officials say, even as the law's supporters insist the mandate is the only way to ensure the safety of the shipping system.

This year, Homeland Security Secretary Janet Napolitano, who oversees the customs agency, granted a two-year waiver from the requirement. Defending the decision last month before the House Homeland Security Committee, Napolitano said the mandate isn't practicable or affordable now.

Lawmakers favoring the mandate say they're concerned about terrorists detonating a nuclear or dirty bomb at a port, killing workers and rendering the port and surrounding area uninhabitable for years.

The selective approach "will not prevent all potential attacks inside the U.S., as it is not comprehensive and is subject to human error and weaknesses in our defense systems," said Rep. Jerrold Nadler, D-N.Y., who co-sponsored the scanning mandate.

Customs officials and business lobbying groups such as the U.S. Chamber of Commerce have said X-raying all containers would be too expensive, require cooperation from foreign countries that isn't forthcoming, and delay the flow of shipments.

Officials are now getting better information to help them zero in on containers that might have contraband, said Joanne Ferreira, a Customs and Border Protection spokeswoman.

"Targeting has become more refined," Ferreira said.

Taking precautions

Port security and customs officials say they're taking all the precautions they can. Every container coming into the country must be scanned for radiation before it leaves the U.S. port.

Trucks line up at the Portsmouth, Va., port to pass through a structure resembling a tollbooth containing the radiation monitor. The devices' sensors sometimes flag a container with items such as bananas that have naturally occurring radiation, Virginia port officials say. The monitors can't always detect a nuclear or dirty bomb sheathed in lead, they say.

An X-ray produces an image that gives customs authorities a better idea if a container conceals a bomb, said Stephen Flynn, founding co-director of the George J. Kostas Research Institute for Homeland Security at Northeastern University in Boston.

If the current system of taking suspicious containers to a separate X-ray center were expanded to just 7 percent of all cargo, delays of 70 hours could occur, requiring a 2-acre lot to stack the backlogged freight, according to a 2011 University of Pennsylvania study co-written by Flynn.

Terrorists' focus

A system in which less sensitive X-ray machines scan trucks as they drive through the entrance of an overseas port could be used for all cargo without delays, the report said.

Ports are less vulnerable because al Qaeda is more focused on planes than ships, said Stewart Baker, a former assistant secretary for policy at the Homeland Security Department.

"It's hard to kill a lot of people in mechanized modern ports," said Baker, a partner at the Steptoe & Johnson law firm in Washington. "Terrorists' enthusiasm for causing economic harm by blocking port infrastructure has been limited."

Read more: http://www.sfgate.com/business/article/U-S-giving-up-on-overseas-X-ray-goal-3785615.php#ixzz23dRWNwdg

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Guitar Maker to Pay $350,000 to Settle Charges of Lacey Act Violations
The Department of Justice announced Aug. 6 that a major guitar manufacturer will pay a $300,000 penalty as part of a deferred prosecution agreement settling allegations that the company violated the Lacey Act by illegally purchasing and importing ebony wood from Madagascar and rosewood and ebony from India. The agreement also requires the company to implement a program to strengthen its compliance controls and procedures and pay a $50,000 "community service payment" to the National Fish and Wildlife Foundation that will be used to promote the conservation, identification and propagation of protected tree species used in the musical instrument industry and the forests where those species are found. In addition, the company will withdraw its claims to the wood seized in the course of the criminal investigation.

According to a DOJ press release, the guitar company purchased fingerboard blanks consisting of sawn boards of Madagascar ebony from a supplier who obtained them from an exporter in Madagascar. The harvest of ebony in, and export of unfinished ebony from, Madagascar was banned in 2006, and the company was made specifically aware of these restrictions following a 2008 trip to Madagascar by one of its employees. Nevertheless, the DOJ states, the company continued to place and receive orders for ebony fingerboard blanks with no further investigation or action on its part.

The penalty announcement will likely increase calls for reform of the Lacey Act Amendments of 2008, which among other things prohibits the importation of plants and plant products (including wood) that are harvested and exported in violation of any foreign law. The guitar maker’s chief executive officer is among those supporting the Retailers and Entertainers Lacey Implementation and Enforcement Fairness (RELIEF) Act (H.R. 3210), which would clarify that the Lacey Act only prohibits the importation of wood products harvested in violation of foreign laws that pertain to plants. Other changes in this bill, which was approved by the House Natural Resources Committee and placed on the House calendar last month, including (1) exempting plant products imported or manufactured before May 22, 2008, from Lacey Act requirements, (2) providing that individuals who have wood that violates the Lacey Act amendments but do not know it would not be penalized and their property could not be confiscated, (3) limiting the penalty for a first-time Lacey Act violation involving a plant product to a $250 fine for all violations in a single offense (as long as it was not knowingly committed), (4) requiring the federal government to compile a database of forbidden wood sources on the Internet, and (5) limiting the requirement to declare the genus and species of imported plant material on an import declaration to solid wood and items imported only for commerce.

Copyright [2012], Sandler, Travis & Rosenberg, P.A. Originally published in the August 07, 2012 issue of the Sandler, Travis & Rosenberg Trade Report. Free subscription available. www.strtrade.com.

OCEANAIR Note: The wood was seized. For any questions, please contact Richard Somers or William Connolly of OCEANAIR Inc at 781-286-2700.

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Bureau of Industry & Security (BIS) Enforcement Statistics
"In 2011, the Office of Export Enforcement’s investigations resulted in the conviction of 29 individuals, who received prison sentences totaling 572 months. There were criminal convictions of 10 companies. With individuals being convicted three times as often as companies, you are seeing our emphasis on individual responsibility. These cases resulted in the imposition of $20.2 million in criminal fines and $2.1 million in forfeitures. In 2012 we are on track to meet or exceed those numbers.

Concerning administrative enforcement actions, in 2011 Export Enforcement and our Office of Chief Counsel resolved 39 cases, which imposed a total of $8.5 million in fines. A total of 26 export denial orders were imposed. These denial orders included Temporary Denial Orders as well as permanent denial orders.

So far in 2012, we have resolved 24 administrative cases, which imposed $6.4 million in fines and 24 export denial orders. This underscores the importance of the variety of enforcement tools we at BIS bring to the table. Criminal and administrative sanctions, including fines, denial orders and placement on BIS’s Entity List, can be pursued independently or in conjunction with each other, depending upon the circumstances of a particular case.

But importantly for many in this audience, not all of our investigations ended with the imposition of criminal and administrative penalties. In 2011 the Office of Export Enforcement issued 227 Warning Letters. This year to date, OEE has issued 181 Warning Letters."

Source: Davis Mills, Assistant Commerce Secretary for Export Enforcement, 2012 BIS Update Conference.

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FDA Revises Regulations on Medical Device Registration and Listing
The Food and Drug Administration has issued a final rule that, effective Oct. 1, will amend its regulations to reflect a number of changes made by the FDA Amendments Act of 2007.

Electronic Submission. Domestic and foreign medical device establishments must submit their registration and device listing information by electronic means through the FDA Unified Registration and Listing System. The FDA notes that device establishment owners and operators having been using FURLS since it became operational on Oct. 1, 2007. The FDA is only granting waivers from this requirement for those owners or operators for whom electronic registration and listing is not reasonable.

Information from Foreign Establishments. This rule reflects the requirement in the Bioterrorism Act of 2002 that foreign establishments whose medical devices are imported or offered for import into the U.S. must identify all importers known to them and the name of each person who imports or offers to import their device into the U.S. Specific definitions for these two new categories of information are being added to the regulations.

Exemptions Eliminated. The FDA is eliminating the exemptions from the registration and listing requirements for (1) foreign establishments whose medical devices enter a foreign-trade zone and are re-exported from the FTZ without entering U.S. commerce and (2) devices imported under 21 USC 381(d)(3).

Contract Manufacturers and Sterilizers. All contract manufacturers and contract sterilizers are required to register their establishments and list their devices.

Identification of Exempt Devices. FURLS requires exempt devices to be identified by product code rather than by classification name and number. The product code is already requested for such devices, and this change to the regulation codifies the existing practice.

Operations Reporting. Owners or operators only need to identify the operations or activities their establishments engage in as part of their device listings, not as part of their registrations, because FURLS has been designed to automatically migrate the information provided in the device listing to the registration.

Copyright [2012], Sandler, Travis & Rosenberg, P.A. Originally published in the August 01, 2012 issue of the Sandler, Travis & Rosenberg Trade Report. Free subscription available. www.strtrade.com.

For additional questions, please contact Richard Somers or William Connolly of OCEANAIR Inc at 781-286-2700.

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AES Filers Be Wary of New HTS Numbers—Avoid Fatal Errors
July 20, 2012, AES Broadcast #2012049. Effective immediately, the Harmonized Tariff Schedule (HTS) tables in the AES have been updated to accept the changes to the 2012 codes. AES will accept shipments with outdated 2012 codes during a grace period for 30 days beyond the expiration date of June 30, 2012. Reporting an outdated 2012 code after the 30 day grace period will result in a fatal error.

The AESDirect program has been updated with the 2012 codes. Web users of AESDirect who file via the website at www.aesdirect.gov will have their code tables updated via the program automatically. All AESPcLink users must go to the Tools menu in AESPcLink to update their AES Code Tables to reflect the 2012 changes in Schedule B and HTS.

The 2012 HTS tables are available for downloading at: http://www.census.gov/foreign-trade/aes/documentlibrary/index.html#concordance. The current list of HTS codes that are not valid for AES are available at: http://www.census.gov/foreign-trade/aes/documentlibrary/hts-not-for-aes.html.

For further information or questions, contact the U.S. Census Bureau's AES Branch. Telephone: (800) 549-0595, select option 1 for AES; Email: askaes@census.gov; Online: www.census.gov/trade; Blog: blogs.census.gov/globalreach.

You may also contact Harvey Waite or Paul D'Eon at OCEANAIR at 781-2862700, e-mail compliance@oceanair.net.

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Importers will receive bills from Customs (CBP) for retroactive MPF (Merchandise Processing Fee). Do Not Be Surprised!
The purpose of this memorandum is to announce that the Office of International Trade will begin billing for the increase in merchandise processing fee (MPF), as established by the Trade Adjustment Assistance Extension Act of 2011 (TAA), retroactively effective on October 1, 2011. CBP automated system programming was completed in November 2011 and ACS began accepting the new MPF rate on November 5, 2011. CBP could not begin the retroactive billing process for merchandise entered between October 1, 2011 and November 4, 2011 until the refund processing was completed for the Generalized System of Preferences, Andean Trade Preference Act, and the Andean Trade Promotion and Drug Eradication Act retroactive renewals.

The Entry, Summary, and Drawback Branch (ESD) will script liquidate entries with a future liquidation date to generate a bill for the additional MPF due. Differences of less than $20.00 are de minimis, and as such will not be processed for retroactive MPF. Entries which are flagged for reconciliation shall have the MPF increase accounted for via the reconciliation entry. Once the scripting begins, ESD will post weekly results on CBPnet Secure at the following link: https://cbpnetsecure.cbp.dhs.gov/sites/ot/tpp/tfa/Pages/Welcome.aspx. Entries for which CBP system successfully generated a bill will be listed in the file titled, "MPF Increases." This list is being provided to the ports for use as back-up documentation in relation to the B12 report (Bulletin Notice of Entries Liquidated—by Batch and Sequence). Entries that failed the scripting process will be available via the same link, in the file titled "MPF Script Errors." Ports must manually liquidate all entries that are included in this list.

The scripting process will begin the week of June 11, 2012. We expect to liquidate approximately 20,000 entries per week but do not have an estimated completion date. If you have questions regarding this process, please contact Ms. Terry Monroy, International Trade Specialist, Office of International Trade at terry.monroy@dhs.gov.

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Chinese National Charged with Illegal Export of Sensitive Technology to China
BOSTON – A Chinese national in Massachusetts on business was arrested for illegally supplying U.S. origin parts to end-users in China in violation of U.S. export laws.

Qiang Hu, a/k/a Johnson Hu, 47, was charged in a complaint with conspiracy to violate the Export Administration Regulations and the International Emergency Economic Powers Act. The complaint, originally filed on May 18, was unsealed after Hu's arrest at his hotel in North Andover yesterday.

The complaint alleges that Hu has been the sales manager at MKS Instruments Shanghai, Ltd. (MKS-Shanghai) since 2008. MKS-Shanghai is the Shanghai sales office of MKS Instruments, Inc. (MKS), which is headquartered in Andover. Hu's employment gave him access to MKS manufactured parts, including export-controlled pressure-measuring sensors (manometer types 622B, 623B, 626A, 626B, 627B, 722A, and 722B), which are commonly known as pressure transducers. Pressure transducers are export controlled because they are used in gas centrifuges to enrich uranium and produce weapons-grade uranium.

The complaint alleges that beginning in 2007, Hu and others caused thousands of MKS pressure transducers worth millions of dollars to be exported from the United States and delivered to unauthorized end-users using export licenses that were fraudulently obtained from the U.S. Department of Commerce. The complaint alleges that Hu and his co-conspirators used two primary means of deception to export the pressure transducers. First, the conspirators used licenses issued to legitimate MKS business customers to export the pressure transducers to China, and then caused the parts to be delivered to other end-users who were not themselves named on the export licenses or authorized to receive the parts. Second, the conspirators obtained export licenses in the name of a front company and then used these fraudulently obtained licenses to export the parts to China, where they were delivered to the actual end-users.

MKS is not a target of the government's investigation into these matters.

Hu remains in custody, and is scheduled for a detention hearing on May 31 at 11 a.m. If convicted, he faces a maximum sentence of 20 years in federal prison to be followed by up to three years of supervised release, and a $1 million fine.

United States Attorney Carmen M. Ortiz; Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Office; Bruce M. Foucart, Special Agent in Charge of U.S. Immigration and Customs Enforcement's Office of Homeland Security Investigations in Boston; and John J. McKenna, Special Agent in Charge of the U.S. Department of Commerce, Office of Export Enforcement, Boston Field Office made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys William D. Weinreb and B. Stephanie Siegmann in Ortiz's Antiterrorism and National Security Unit.

The details contained in the complaint are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Please visit http://www.bis.doc.gov/index.htm or http://beta-www.bis.doc.gov/index.php/about-bis/newsroom on our BETA site for more information.

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CBP, EU Sign C-TPAT Mutual Recognition Decision
Washington — U.S. Customs and Border Protection (CBP) and the European Union (EU) signed today a Mutual Recognition Decision between CBP's Customs-Trade Partnership Against Terrorism (C-TPAT) program and the EU's Authorized Economic Operator (AEO) program.

U.S. Customs and Border Protection Acting Commissioner David V. Aguilar and European Union Taxation and Customs Union Directorate Director-General Heinz Zourek sign the Mutual Recognition Decision between CBP's Customs-Trade Partnership Against Terrorism program and the EU's Authorized Economic Operator Program.

CBP Acting Commissioner David V. Aguilar and Director-General Heinz Zourek, European Union Taxation and Customs Union Directorate (TAXUD) signed the decision, which recognizes compatibility between the EU and the U.S. cargo security programs.

"I can look back with pride on the considerable work that was completed by CBP and TAXUD to make this effort come to fruition and that we always maintained the necessary focus on security throughout the process," said Acting Commissioner Aguilar.

"Today's decision on the mutual recognition of the EU and U.S. trade partnership programmes is a win-win achievement: It will save time and money for trusted operators on both sides of the Atlantic while it will allow customs authorities to concentrate their resources on risky consignments and better facilitate legitimate trade," said Director-General Zourek.

C-TPAT is a voluntary government-business initiative to build cooperative relationships that strengthen and improve overall international supply chain and U.S. border security. C-TPAT recognized that U.S. Customs and Border Protection can provide the highest level of cargo security only through close cooperation with the ultimate owners of the international supply chain such as importers, carriers, consolidators, licensed customs brokers, and manufacturers.

U.S. Customs and Border Protection (CBP) and the European Union (EU) reached a Mutual Recognition (MR) Decision between CBP's Customs-Trade Partnership Against Terrorism (C-TPAT) program and the EU's Authorized Economic Operator (AEO) program May 4, 2012. The specific date of implementation hasn't been decided, said CBP sources.

The decision means customs authorities for the U.S. and the EU will treat members of the other entity's trade partnership programs as it would its own members, the MR said. This includes favorable consideration of a operator's membership for risk assessment for inspections or controls, it said. Each customs authority can suspend membership treatment of an operator and each authority must also inform the other in cases of any irregularity of a member authorized by the other customs authority.

Information Exchange Between EU and CBP
Under the MR decision, the customs authorities will also exchange certain information, including:

  • providing updates on operation and development on their trade partnership programs in a timely manner
  • engaging in mutually beneficial exchanges of info regarding supply chain security
  • facilitating interagency communication between CBP and the European Union Taxation and Customs Union Directorate (TAXUD) regarding supply chain security

Information exchange is to be conducted in electronic format in accordance with the 1997 agreement between the European Community and the U.S. on Customs Cooperation and Mutual Assistance in Customs, the decision said. Data to be exchanged include: name, address, status of members, validation or authorization date, suspensions and revocations, authorization or identification number (in a form to be determined), and details that may be mutually determined by the customs authorities.

Email documents@brokerpower.com for a copy of the mutual recognition decision.

Expected to Facilitate Trade
CBP Acting Commissioner David Aguilar and Director-General Heinz Zourek, of TAXUD signed the decision, which recognizes compatibility between the EU and the U.S. cargo security programs. "I can look back with pride on the considerable work that was completed by CBP and TAXUD to make this effort come to fruition and that we always maintained the necessary focus on security throughout the process," said Aguilar.

"Today's decision on the mutual recognition of the EU and U.S. trade partnership programs is a win-win achievement," said Zourek. It will save time and money for trusted operators on both sides of the Atlantic while it will allow customs authorities to concentrate their resources on risky consignments and better facilitate legitimate trade.

C-TPAT is a voluntary government-business initiative to build cooperative relationships that strengthen and improve overall international supply chain and U.S. border security. C-TPAT recognized that U.S. Customs and Border Protection can provide the highest level of cargo security only through close cooperation with the ultimate owners of the international supply chain such as importers, carriers, consolidators, licensed customs brokers, and manufacturers.

Since 2008 European companies can apply for an AEO status to have easier access to customs simplifications and to be in a more favorable position to comply with EU security requirements

U.S. Customs and Border Protection last year issued a press release stating that it and the TAXUD had agreed to language for the U.S.-EU MR Decision.

The deal with the EU marks the sixth MR agreement. Previous agreements are:

  • New Zealand - June 2007 – New Zealand Customs Service's Secure Export Scheme Program - SES
  • Canada - June 2008 – Canada Border Services Agency's Partners in Protection Program - PIP
  • Jordan – June 2008 – Jordan Customs Department's Golden List Program - GLP
  • Japan - June 2009 – Japan Customs and Tariff Bureau's Authorized Economic Operator Program – AEO
  • Korea - June 2010 – Korea Customs Service's Authorized Economic Operator Program – AEO.

CBP has also said it has an MR agreement with Singapore and its Secure Trade Partnership Plus (STP-Plus) Program is in the works. A recent CBP release outlining the benefits of MR arrangements is available from their website.

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Two New Centers Opened to Improve Administration of Export Controls (E2C2 & ITU)
by Susan Kohn Ross

On Thursday, March 15, 2012, the US-Korea Free Trade Agreement was implemented in both the U.S. and Korea. While the agreement has generally gone by the acronym KORUS, documentation from Customs and Border Protection (CBP) refers to it as the UKFTA. The final text of the agreement can be found at US - Korea FTA Final Text. Implementation was triggered by Presidential Proclamation 87873 issued on March 6, 2012. Interim regulations were published in the Federal Register on March 19, 2012. See KORUS Interim Regulations.

In a March 12, 2012 memorandum, CBP's Headquarters provided the needed guidance to its staff and the trade community about claims filing under this free trade agreement at CBP Guidance re KORUS. The updated system programming is not expected to be completed until March 21, but claims can nonetheless already be filed.

As with all the other free trade agreements to which the U.S. is a party, certain rules of origin must be met and proper supporting documentation must be in hand making clear how the good qualifies for the FTA benefits being claimed. The KORUS provisions are in General Note 33 of the Harmonized Tariff. A good must be shipped directly from one country to the other. Any stops in a location other than the U.S. or Korea for anything other than unloading, reloading, or other processes needed to preserve the condition of the good will disqualify the shipment from KORUS benefits. If you use non-U.S. or non-Korean components or raw materials in making your goods, there is a de minimis provision of ten (10%) percent of the value, and for textiles the rule is ten (10%) percent by weight. For textiles and apparel, in general, qualifying goods must be yarn forward, meaning the yarn was made in either the U.S. or Korea. For the yarn itself to qualify, the fiber must made in the U.S. or Korea. There are, of course, exceptions and special rules, some for commodities and others for specific circumstances. As with all the other FTAs to which the U.S. is a signatory, KORUS-eligible goods are exempt from the merchandise processing fee.

Each shipment must also be accompanied by a certificate of origin. While there is no specific form to use, traders are reminded that the contents of the certificate of origin should contain the following: the name and address of the importer, exporter, and producer; a description of the good; its tariff classification; the preference criteria relied on (based on your rule of origin analysis); if not a blanket certificate, the commercial invoice number; if a blanket certificate, identification of the effective period, not to exceed 12 months; and it must be signed.

The certificate of origin must also include the following language:

  • I certify that:
  • The information on this document is true and accurate and I assume the responsibility for proving such representations. I understand that I am liable for any false statements or material omissions made on or in connection with this document;
  • I agree to maintain and present upon request documentation necessary to support these representations;
  • The goods comply with all requirements for preferential tariff treatment specified for those goods in the United States-Korea Free Trade Agreement; and
  • This document consists of ___ pages, including all attachments.

The signature line follows and must include the signature, title, and company name, along with the person's telephone, fax, and email address. Make sure the title of the person signing denotes job responsibilities sufficient for him/her to have the necessary knowledge to be able to provide a proper certification. A title such as "shipping clerk" would not be valid for these purposes. The signatory should be an officer, director, or manager, and some inquiry beyond title may be in order to verify his/her personal knowledge of these matters. Does the Sales Manager really know about raw materials sourcing? Who may be better qualified and more appropriate to sign on behalf of the company?

A tool is available to further assist American traders and was set up by the U.S. Trade Representative's office. The Free Trade Agreements Tariff Tool is available at USTR FTA Tariff Tool.

International traders are reminded the customs authorities in both countries have the right to verify any claims made. Given the frequency with which investigations of claims involving other FTAs are being pursued, and penalties for unsupported claims are being imposed, it is reasonable to expect the same level of scrutiny will be applied to KORUS claims. Those planning to make KORUS claims are encouraged to include any additional documentation relative to the particular goods you are shipping to accurately and comprehensively support such claims.

This excellent article brought to you by: Mitchell Silberberg & Knupp LLP, MS&K International Trade Alert, March 20, 2012 edition.

WWW.MSK.COM, Author Susan Kohn Ross, SKR@MSK.COM. Used by permission.

If you have any questions, please contact Bill Connolly or Richard Somers at OCEANAIR Inc 781-286-2700.

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Two New Centers Opened to Improve Administration of Export Controls (E2C2 & ITU)
The Obama administration announced March 7 the opening of two new multi-agency centers to improve the administration of U.S. export controls. A White House press release called the move "a significant step forward in the President's Export Control Reform Initiative" and said it represents "a more fully coordinated and harmonized approach that facilitates secure trade."

The Export Enforcement Coordination Center will be responsible for enhanced information sharing and coordination between law enforcement and intelligence officials regarding possible violations of U.S. export controls laws. The E2C2 will be administered by the Department of Homeland Security with a leadership team comprised of officials from DHS, the Federal Bureau of Investigation and the Department of Commerce. The White House states that the opening of the E2C2 "builds on the increased criminal penalties for export control violations and the provision of Commerce's permanent law enforcement authorities implemented in partnership with Congress in the Comprehensive Iran Sanctions, Accountability, and Divestment Act."

The Information Triage Unit, which will be housed at DOC, will be responsible for assembling and disseminating relevant information from which to base informed decisions on proposed exports requiring a U.S. government license. This multi-agency screening will coordinate the reviews of separate processes across the government to ensure that all departments and agencies have a full dataset, consistent with national security, from which to make decisions on export license applications. "Such screening contributes to more timely, predictable, and consistent processes that U.S. exporters engaged in global trade have confirmed are critical to their competitiveness," the press release states.

Further, the Office of the National Counterintelligence Executive has been designated as the entity responsible for coordinating export control issues involving the intelligence community. According to the White House, this move represents "another significant process improvement for more seamless and comprehensive access to intelligence."

© 2012, Sandler, Travis & Rosenberg, P.A. Originally published in the March 08, 2012 issue of the Sandler, Travis & Rosenberg Trade Report (http://strtradenews.com/s/01d360b579a5d894948e28d005af5f0dd2d56cbb). Reprinted by permission.

If you have any questions, please do not hesitate to contact Harvey Waite, OCEANAIR Inc., 781-286-2700 hwaite@oceanair.net.

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Update Regarding 5 ITAR Debarred Forwarders
The U.S. Department of State's Directorate of Defense Trade Controls (State/DDTC) has posted guidance on its website regarding authorizations including the following five freight forwarders that the U.S. Air Force debarred from government contracting on February 16, 2012:

  • BAX Global Inc.: 440 Exchange, Irvine, CA
  • Kuhne and Nagel International AG: PO Box 67, Schindellegi, Switzerland
  • Panalpina Welttransport (Holding) AG: Postfach, Basel, Switzerland, 4002
  • Panalpina Inc.: 1776 On the Green, 67 E Park Pl Fl 3, Morristown, NJ, 07960-7103
  • Schenker AG: Alfredstr. 81, Essen, Nordrhein-Westfalen, Deutschland, 45130

By notice from the Department of the Air Force on February 24, 2012, the debarment of Ceva Logistics LLC a/k/a EGL, Inc. from contracting with an agency of the government has been terminated.

The five entities listed above are ineligible to contract with an agency of the U.S. Government and are therefore generally ineligible in accordance with § 120.1 of the International Traffic in Arms Regulations (ITAR). In accordance with § 127.1(c) of the ITAR, written authorization from DDTC is required before a person with knowledge that another person is then ineligible pursuant to § 120.1(c) of the ITAR directly or indirectly applies for, obtains or uses an export control document for such ineligible person; or orders, buys, receives, uses, sells, delivers, stores, disposes of, forwards, transports, finances, otherwise services or participates in any transaction which may involve any defense article or the furnishing of any defense service for which a license or approval is required by the ITAR for export where such ineligible person may obtain any benefit there from or have any direct or indirect interest therein.

State/DDTC has determined to manage existing, pending, and future authorizations involving these seven entities as follows:

  • Existing Authorizations: Existing authorizations (i.e., authorizations approved by DDTC prior to this notice) are not affected. Authorizations that include any individual entity, or combination of entities, listed above as intermediate consignee, consignor, or freight forwarder may continue to be utilized by the applicant without need to amend or obtain otherExisting Authorizations Existing authorizations (i.e., authorizations approved by DDTC prior to this notice) are not affected. Authorizations that include any individual entity, or combination of entities, listed above as intermediate consignee, consignor, or freight forwarder may continue to be utilized by the applicant without need to amend or obtain other written authorization from DDTC.
  • Pending Authorization Requests: Authorization requests received by DDTC prior to February 18, 2012 (U.S. Air Force action was created February 16, 2012), will be reviewed by DDTC in the normal course, without the submission of a request for approval in accordance with § 127.1(c) of the ITAR to include an ineligible party in the transaction (commonly referred to as a "transaction exception request"). Authorization holders may utilize the named entity(ies) in their approved roles. Authorization requests received by DDTC February 18, 2012, and after, and which are pending with the Department as of the date of this notice, involving any one or more of the parties above, but that do not include a transaction exception request will be Returned Without Action, unless a transaction exception request is submitted via DTrade2 within 72 hours from the date of this notice. Those that do include such a request will be reviewed.
  • Future Authorization Requests: Authorization requests received by DDTC after the date of this notice involving any one or more of the parties above, must include a transaction exception request or they will be Returned Without Action. Those that do include such a request will be reviewed. Transaction exception requests should include, at a minimum, an explanation of why the request should be considered, why the generally ineligible entity should be part of the transaction (i.e., why the applicant is unable to utilize a different freight forwarder), and how the inclusion of the ineligible entity is in the interests of U.S. foreign policy or national security.

Reprinted by permission from "Defense and Export-Import Update," Feb 27, 2012, Global Legal Services PC, Gary L. Stanley, President, Phone 1-202 6864854 E-mail gstanley@glstrade.com.

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New High Security Seal Standards Postponed
Customs and Border Protection have postponed the new High Security Seals Standards until ISO can issue corrected standards. It is still a recommendation to use the new higher security seals as a matter good business practice due to the increased protection against compromise. The official notification follows:

This message is to clarify the notice sent to all partners on February 7, 2012—Notice of New High Security Seal Standards—March 1, 2012. The message advised C-TPAT partners that the new International Organization for Standardization (ISO) mechanical seal standard (ISO 17712:2010 ) is scheduled to become effective on March 1, 2012, and recommended that certified companies begin phasing in ISO 17712:2010 compliant seals after their current stocks of high security seals have been exhausted.

Since the issuance of the previous notice, C-TPAT has learned that the tamper evidence element of the ISO 17712:2010 requirements (Clause 6) cannot be met. To date, no accredited independent laboratories have been willing to test and certify seals as complying with the tamper evidence requirement. Consequently, C-TPAT has determined that implementation of the new standard is not viable by the March 01, 2012 deadline.

C-TPAT has also become aware that the ISO is working to amend ISO 17712:2010 to address the issue with this standard. Therefore, implementation of the new ISO 17712:2010 standard for mechanical seals will be delayed until C-TPAT receives definitive information that ISO has resolved this issue. C-TPAT partners will be advised when the ISO has resolved the tamper evidence issue with the ISO 17712:2010 standard.

Since the ISO 17712: 2010 (18 mm) certification for high security seals is attainable without the Clause 6 testing portion of the standard, C-TPAT encourages partners to buy seals that meet this part of the standard. If C-TPAT companies decide to transition to seals that meet this portion of the new ISO standard, they should request documentation to confirm that the purchased seals comply with the current testing requirements for ISO 17712: 2010 (18 mm) certification.

For any questions, please contact Harvey Waite at OCEANAIR at 781-286-2700 or cell 617-335-7790.

OCEANAIR INC. A CTPAT APPROVED BROKER AND FORWARDER
Customs-Trade Partnership Against Terrorism

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New High Security Seal Standards for Containers (Full Container Load)
To all C-TPAT Partners:

Please be advised that effective March 1, 2012, the current International Organization for Standardization (ISO) mechanical seal standard (ISO/PAS 17712) will be replaced with a new ISO standard--ISO 17712:2010. C-TPAT understands that seals are costly, and companies are not expected to discard seals currently in stock. However, after companies have exhausted their current stock of high security seals, we recommend that they purchase seals which are compliant with the new ISO 17712:2010 standard.

The new standard compliance requirements:

  • Testing to determine a seal's classification for physical strength (as a barrier of entry).
  • Process auditing of the manufacturer's security-related business practices.
  • Testing (pass/fail) of a seals ability to indicate evidence of tampering.
  • A new 18mm minimum width diameter for bolt seals.

Benefits of the new seal standards include:

  • Reduced possibility of cargo theft or tampering.
  • Reduced possibility of unauthorized material being inserted into containers or other instruments of international traffic (IIT).
  • Reducing shipping delays that result when seals are missing or broken.
  • When inspecting seals for signs of tampering, tamper-evident seals should allow personnel, with the appropriate training, to detect compromised seals easier.

When C-TPAT companies transition to the new ISO 17712:2010 compliant seals, they should request documentation (lab reports) to confirm that the purchased seals comply with the new standard.

For more information, please visit the World Customs Organization (WCO) website at www.wcoomd.org or contact the C-TPAT program at industry.parnership@dhs.gov

Third Generation of the ISO 17712
ISO 17712 (2010) was first published in September 2010 and included an 18-month transition period (to March 2012) to deal with technical issues. The new standard is the third generation of 17712. The first was a Publically Available Specification (PAS) published in 2003 and the second was a revision to PAS 17712 published in 2006. Each revision builds on previous requirements.

OCEANAIR Note: This information is also available on some carrier's websites. This does not appear to be a mandatory requirement where carriers will refuse containers without the new seals after March 1, 2012. This information should be supplied to your overseas offices and suppliers to allow them time to source the requested seals.

Also it is wise to check with their ocean carriers to determine how they are going to interpret this updated ISO standard. If you have questions, please consult your carriers or Harvey Waite at OCEANAIR Inc at 781-2862700 hwaite@oceanair.net.

OCEANAIR INC. A CTPAT APPROVED BROKER AND FORWARDER
Customs-Trade Partnership Against Terrorism

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New Argentina Import Controls Effective February 01
In an effort to stem a falling trade surplus, Argentina will be imposing a new import policy on February 01, 2012.

A new policy has been announced by the tax agency, AFIP, which will require that importers apply for an import permit to AFIP by presenting a sworn statement to the agency to obtain permission to allow their import. Officials claim the decision to permit or deny the requests will be made within 15 working days after submission.

This measure is just the latest in a series of measures to help Argentina control their shrinking trade surplus. As this new measure is difficult to interpret and understand, we suggest you contact your trading partners in Argentina for more specific information as this process will likely cause delayed or denied imports.

If you have any questions, please contact Harvey Waite at OCEANAIR Inc at 781-286-2700.

OCEANAIR INC., A CTPAT APPROVED BROKER AND FORWARDER
Customs-Trade Partnership Against Terrorism

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OFAC Flirts With 21st Century
The Office of Foreign Assets Control ("OFAC") has just debuted a new web page which features a facility allowing users to search OFAC's Specially Designated Nationals and Blocked Persons list. Go to that new page by clicking here. Put in a name and it quickly spits out the results. You can even export those results to an Excel spreadsheet. The page worked perfectly on my Android phone in case you need to consult the SDN list while on the run.

But before you get too excited there is a major limitation. As the hilariously prolix disclaimer attached to the site notes, all searches are literal. No close matches are returned. Misspelled names won't yield any results. This is a big deal since a large number of the names on the list are roman character transliterations from the Arabic and Persian where there is no agreed convention on transliteration.

Let's just pull an example that immediately comes to mind like…say…Khadaffi. Enter that last name and you get no results, even though there are members of the Khadaffi family that are alike, kicking and still on the SDN list. In all fairness, ABC News reports that there are more spellings of the notorious family name than you can shake a stick at.

Beyond that, the lawyers have gotten to the page with an OFAC version of the "don't try this at home, kids" disclaimer:

Use of this system implies understanding that searches performed by SDN Search are conducted at the user's own risk, and that the search results provided by SDN Search do not represent an official confirmation by the Office of Foreign Assets Control or the Department of the Treasury of the existence or absence of a match between any information entered by the user and any information contained on the SDN List. The use of SDN Search does not limit or excuse any liability for any act undertaken as a result of, or in reliance on, such use.

In other words, use at or own risk and if the site misses a match, well, that's your problem and OFAC reserves the right to fine you $250,000 anyway. Even if the mistake was OFAC's fault.

This is not much different from the ridiculous disclaimer that OFAC prints each time it prints a new version of the SDN list in the Federal Register:

The list published as Appendix A is not definitive or all-inclusive, and new or updated information may be added to OFAC's Web site and published in the Federal Register at any time. U.S. persons or persons subject to U.S. jurisdiction, depending on the sanctions program, are advised to check the Federal Register and the most recent version of the SDN List posted on OFAC's Web site for updated information on designations and blocking actions before engaging in transactions.

So even with the printed SDN list, OFAC has to tell you that you can't rely on it and that you can't engage in any transaction without searching the last century of the Federal Register all the way back to the first issue in 1936 to see if a party was designated by OFAC but inadvertently left off the SDN list. Right.

(For a humorous rewrite of the search site disclaimer, go read Scott Kinney's blog post on it.)

Reprinted from Export Law Blog by permission of its author, Clif Burns, Bryan Cave LLP, clif.burns@bryancave.com

OCEANAIR Note: Click on the source link www.exportlawblog.com for an easy free subscription. An excellent source for the compliance minded.

OCEANAIR INC., A CTPAT APPROVED BROKER AND FORWARDER
Customs-Trade Partnership Against Terrorism

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Merchandise Processing Fee Increase
Recent trade legislation, H.R. 2832, was signed into law on October 21, 2011, changing the merchandise processing fee (MPF) rate for formal entries from 0.21% (.0021) to 0.3464% (.003464), effective October 1, 2011. The minimum and maximum fees, $25 and $485 respectively, did not change. CBP is currently in the process of modifying our automated systems to accept the new MPF rate of 0.3464%. We do not have an estimated completion date at this time; however, we will notify the trade as soon as possible via the Cargo Systems Messaging Service, when filers may begin transmitting entry summary information with the new MPF rate. (Cargo Systems Messaging Service)

For entries filed on or after October 1, 2011, until the CBP system changes take effect with the 0.3464% rate, CBP will bill the importer for the increase in MPF. CBP will disregard differences of less than $20.

Source: Customs & Border Protection

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Anti-Boycott Penalty
We did What? When?

Sometime in 2006, Weiss-Rohlig USA LLC, a logistics company, handled an export shipment and issued a certificate that "The carrying vessel is allowed to enter Kuwaiti ports."

On October 04, 2011, five years later, the company was fined $8000.00 for violations of the Antiboycott Regulations.

The company was subject to two violations, one for issuing the statement and one for failing to report the statement to the Office of Antiboycott Compliance.

I am sure the LAST thing in this world the company ever expected was to receive a charging letter dated September 6, 2011 for this violation. As the offending language appeared in a letter of credit, one can only assume that the bank did its due diligence back in 2006 by reporting the violation to the Boycott Office while the logistics company was apparently unaware of the regulations.

This is just one of several recent violations coming out of the Office of Antiboycott Compliance. For further information you may refer to 15CFR Parts 760-766 or contact Harvey Waite of OCEANAIR Inc at 781-286-2700.

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IMPORTANT! Recent Fines and Penalties Assessed by BIS/OFAC July & August 2011
Please note the attached list is only a partial listing of penalty actions taken by the Bureau of Industry & Security (BIS) and the Office of Foreign Assets Control (OFAC) for a relatively short period of time. If you have any questions regarding this material, please contact Paul D'Eon or Harvey Waite of OCEANAIR Inc at 781-286-2700 or pdeon@oceanair.net or hwaite@oceanair.net.

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Most Paper Courtesy Notices of Liquidation to be Eliminated
U.S. Customs and Border Protection has issued a final rule under which it will discontinue its practice of mailing paper courtesy notices of liquidation to importers of record whose entry summaries are electronically filed in the Automated Broker Interface. This change will be implemented as of the first day on or after Sept. 30 that CBP can provide importers with complete liquidation reports, including liquidation dates, electronically through the Automatic Commercial Environment portal. IORs whose entries are not filed through ABI will continue to receive paper courtesy notices of liquidation.

Courtesy notices of liquidation provide informal, advance notice of the liquidation date and are not required by statute. Currently, CBP transmits electronic courtesy notices to all ABI filers: IORs who file their own entries and customs brokers who file as the duly authorized agents of the IOR. CBP also mails paper courtesy notices, on CBP form 4333-A, to all IORs whose entry summaries are set to liquidate by each port of entry. As a result, IORs that are also ABI filers receive both an electronic and a paper courtesy notice.

To streamline the notification process and reduce printing and mailing costs, CBP is discontinuing mailing the paper courtesy notice to IORs who personally receive an electronic courtesy notice or whose broker receives an electronic notice on their behalf. CBP estimates that over 90% of paper courtesy notices will be eliminated under this rule, resulting in a $3.8 million annual savings.

In response to concerns that this change will make IORs reliant on their brokers for liquidation information, presenting significant liability issues if the broker fails to provide such information in a timely manner, CBP states that (a) liquidation information is related to "customs business" and brokers therefore cannot withhold it from their importer clients, (b) ACE is being reprogrammed to allow all IORs to monitor liquidation of entries filed under their IOR number through the ACE Portal, and (c) IORs may gain limited access to their broker's ACE Portal account to obtain reports for entries filed on their behalf.

Importers who use paper notices of liquidation to monitor their outstanding liabilities to Customs as part of their internal compliance procedures should sign up for ACE. Sandler, Travis & Rosenberg, P.A., or Sandler and Travis Trade Advisory Services Inc. can help importers who do not currently have an ACE account to apply for one. For further information, please contact Beth Ring at (212) 590-4885 or David Seeley at (248) 474-7200.

Copyright 2011, Sandler, Travis & Rosenberg, P.A. Originally published in the August 09, 2011 issue of ST&R's WorldTrade\Interactive (www.strtrade.com/wti/register.asp). Reprinted by permission.

OCEANAIR Note: for additional information, consult the source document or please contact Bill Connolly or Richard Somers at OCEANAIR Inc 781-286-2700.

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Medical Device Labeling Requirements Under Review
The Food and Drug Administration is inviting public comments through Sept. 8 on information collections associated with the medical device labeling regulations. FDA regulations require manufacturers, importers and distributors of a wide range of medical devices to disclose specific information about themselves or the devices, including content quantities and adequate directions for use, on the label or labeling for the devices. FDA regulations also require the maintenance of various records, such as invoices, shipping documents and records of sale or distribution, for specific products.

Source Document 1

Copyright 2011, Sandler, Travis & Rosenberg, P.A. Originally published in the August 09, 2011 issue of ST&R's WorldTrade\Interactive (www.strtrade.com/wti/register.asp). Reprinted by permission.

OCEANAIR Note: for additional information, consult the source document or please contact Bill Connolly or Richard Somers at OCEANAIR Inc 781-286-2700.

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EU Expands Ban on Hazardous Substances to Almost All Electronic Equipment
New European Union rules substantially expanding the ban on heavy metals and other dangerous chemicals in electrical and electronic equipment took effect July 21. However, EU member states have 18 months to incorporate the new rules into their national legislation, during which time the old rules will continue to apply.

An EU press release states that the new rules constitute a revision of the RoHS directive, which took effect in 2003 and bans lead, mercury, cadmium, hexavalent chromium and the flame retardants polybrominated biphenyls (PBB) and polybrominated diphenyl ethers (PBDE) in several categories of electrical and electronic equipment, including household appliances and information technology goods. The rules will now cover virtually all electronic equipment, cables and spare parts. However, exemptions can still be granted in cases where no satisfactory alternative is available. In addition, photovoltaic panels are exempted in an effort to help the EU reach its objectives for renewable energy and energy efficiency.

According to the EU, the key elements of the revised directive include: a phase-in of the new requirements with full compliance anticipated by 2019, a review of the list of banned substances by July 2014 and periodically thereafter, clearer and more transparent rules for granting exemptions from the substance ban, improved coherence with the Regulation on the Registration, Evaluation, Authorization and Restriction of Chemicals, and the reservation of the CE marking denoting compliance with European norms for electronic products that also respect RoHS requirements.

Copyright 2011, Sandler, Travis & Rosenberg, P.A. Originally published in the July 25, 2011 issue of ST&R's WorldTrade\Interactive (www.strtrade.com/wti/register.asp). Reprinted by permission.

OCEANAIR Note: This is a large expansion of the scope of the present RoHS Directive originally adopted in 2003. The directive expands coverage to a much wider range of products, including medical devices, electrical appliances, electronic equipment, cables and spare parts.

For further information, please visit the RoHS site at: http://www.rohs.eu/english/index.html

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Lacey Act Import Declaration for Plant Products Could See Changes
The Department of Agriculture's Animal and Plant Health Inspection Service is inviting public comments by Aug. 29 on regulatory options that could address certain issues that have arisen with the implementation of the declaration required for imports of certain plants and plant products under the Lacey Act amendments of 2008. This declaration must contain the scientific name of the plant, the value of the importation, the quantity of the plant and the name of the country from which the plant was harvested.

Specifically, APHIS is seeking input on the following issues.

De minimis exception - Whether an exception from the declaration requirement for products containing minimal amounts of plant material could be developed that would be less burdensome while still carrying out the intent of the Lacey Act amendments, as well as the threshold (e.g., 2%, 5% or 10%) for such an exception in terms of the volume, weight and/or value of plant material in each item being imported. This exception would not apply to products containing plant material from species of conservation concern that are listed in an appendix to the Convention on International Trade in Endangered Species of Wild Fauna and Flora, as an endangered or threatened species under the Endangered Species Act of 1973 or pursuant to any state law that provides for the conservation of species that are indigenous to the state and are threatened with extinction.

Composite products - How importers may comply with the declaration requirement when importing composite plant products when the genus, species and country of harvest of some or all of the plant material may be extremely difficult or prohibitively expensive to determine. One approach APHIS is considering is to define the term "composite plant materials" and then formally recognize a de minimis exception from the declaration requirement for products containing such materials. Using this approach, "composite plant materials" might be defined as plant products and plant-based components of products where the original plant material is mechanically or chemically broken down and subsequently re-composed or used as an extract in a manufacturing process.

Comments are also sought on two possible approaches to incorporating such a definition into a de minimis exception from the declaration requirement for composite plant materials. In the first approach, importers would have to identify the genus, species and country of harvest of no less than a given percentage of the composite plant material content, measured on the basis of either weight or volume. In the second approach, the declaration would have to contain the average percent composite plant content, measured on the basis of either weight or volume, without regard for the species or country of harvest of the plant, in addition to information as to genus, species and country of harvest for any non-composite plant content.

Dated products - How to accommodate products made of re-used plant materials or plant materials harvested or manufactured prior to the Lacey Act amendments and for which identifying the country of harvest, and possibly species, would be difficult if not impossible.

Declaration revision - Whether to revise the import declaration to substitute a new term, "harvest location," for the term "country of harvest," which experience has indicated is so similar to the customs term "country of origin" as to be confusing.

Shorthand for common species - Whether groups of species commonly used in commercial production could be given a separate name that could be entered on the declaration form as a type of shorthand identification of genus and species, such as the currently recognized SPF acronym for spruce, pine and fir.

Source Document 1

Copyright 2011, Sandler, Travis & Rosenberg, P.A. Originally published in the June 30, 2011 issue of ST&R's WorldTrade\Interactive (www.strtade.com/wti/register.asp). Reprinted by permission.

If you have any comments or questions, please do not hesitate to contact OCEANAIR Inc for Bill Connolly or Richard Somers at 781-286-2700.

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Carriers Implementing Fees for No-Shows, Rolled Shipments
Jun 24, 2011 3:48PM GMT
APL, Maersk both moving towards new system of service
Peter T. Leach
http://www.joc.com

Ocean carriers are moving toward space and volume guarantees in agreements with shippers that include fees on both shippers and carriers if either side fails to meet the commitments spelled out in the agreements.

APL included such guarantees and mutual penalties in some trans-Pacific contracts with shippers this year. "There are a number of contracts this year where we wrote service guarantees into the contract, where we have a certain on-time performance guarantee and a certain space allotment by customers," said Bob Sappio, APL's vice president of Pan-American Trades.

By the Numbers: Container Rate Benchmark
"If a customer fails to meet that space allotment within a window of tolerance, it will pay a penalty, and likewise if we fail to meet the service guarantee or the space allotment, we would be required to pay the customer a penalty," he said. "The penalty is several hundred dollars per dry container."

Maersk Line is developing a similar plan that it will roll out globally by mid-summer next year that will include what it calls a "load protection fee" on shippers that fail to deliver booked containers to the port of departure and a similar fee it would pay to shippers for booked containers that are not loaded on outbound Maersk ships.

"We will roll it out on a rifle-shot basis on trades that are ready for it, and not just on a big bang rollout," said John Nielsen, Maersk Line's senior director of charge management, network and product. Under the plan, Maersk would allow a grace period for changes or cancellations by the shipper until seven days before the booked departure from the first load port, he said.

"From then on changes to a booking hurt our planning, therefore we will apply a charge on all reductions of booking or moves or cancellations or no-show," he said. The charge would be $100 per dry container and $500 per reefer container.

Similarly, Maersk will pay the same charges to a shipper for a container that it fails to load on the scheduled ship. "It's a quid pro quo," said Nielsen.

He said Maersk will make final a decision on the schedule for the rollout in the third quarter, based on pilot tests conducted this year in Sweden, Germany and some Latin American countries. It also conducted a pilot with a nominal $10 per container fee for no-show or rolled export containers in the Pacific Northwest last year.

-- Contact Peter T. Leach at pleach@joc.com. Follow him on Twitter @petertleach.

Copyright 2011 Journal of Commerce. Used by Permission

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