Reminder Start Filing MTB Petitions Friday

YOU MAY BE ABLE TO SAVE MONEY ON IMPORT DUTIES.

The process is called the Miscellaneous Tariff Bill ("MTB") and was around since the 1980s. The way it worked was companies would go to a senator or representative with a list of requests for duty suspensions. A bill would be filed for each requested suspension. Then, months later, after an investigation by the International Trade Commission ("ITC"), all the requests filed by all the senators and members of congress would be put into one huge bill which, by rule, could pass only by unanimous consent. The result, for the successful requests, was a two year suspension in the collection of duties. Congress did an MTB every two years, so the suspensions always got renewed.

Then the system broke down over partisan politics. No MTB has been passed in years and the last the duty suspensions expired at the end of 2012.

Now there is a new non-political systems. Members of congress cannot file for duty suspensions. Rather a company (or more likely a company's lawyer, lobbyist, or consultant) files directly with the ITC which then conducts an investigation into each request and then gives congress the list of all the request that qualify, which then gets voted as the MTB (I’m leaving out some dull steps in between).

There are three criteria the ITC looks at--

1. Is it non-controversial, meaning are there no domestic producers of the product or a like product who will oppose.

2. Is the total annual tariff revenue lost to the U.S. treasury no greater than $500,000. That cap is applied per item. So in the case of the 11 items listed below they do that calculation 11 times, it’s not an over all number. Even if a single item goes over the $500,000 you can still get a reduction in duty. Say something has 10% rate of duty and total suspension of duty would cost the government $1 million, what they would do is lower the duty to 5%, to make the total industry savings $500,000.

3. It must be “administrable” meaning when goods are presented for entry and claim duty free under the MTB, Customs has to be able to examine the merchandise and determine whether it is. So you cannot do an MTB based on end use.

The new ITC system asks for more information than the old congressional one, so there is some burden. The window for filing for duty suspensions opens Friday, October 14th, and continues for 60 days. For more information, or to find out how your could benefit from a duty suspension under the new MTB procedures, contact David Trumbull at david@agathonassociates.com.

CPSC to Hold Children’s Sleepwear Seminar

On Thursday, October 20, 2016, the Consumer Product Safety Commission will hold a one-day Children’s Sleepwear Seminar. The Seminar will focus on testing, certification, and other compliance guidance relating to the requirements for children’s sleepwear. The Seminar will begin at 8:30 AM – 5:00 PM and held in the 4th Floor Hearing Room at the CPSC offices in Bethesda Towers, 4330 East West Highway, Bethesda, MD. Individuals who plan on attending should register for the seminar by contacting Carolyn Carlin, 301-504-7889, ccarlin@cpsc.gov.

Spider Thread in the News

"In the future, everything you wear could be made of synthetic spider silk," according to this article about Agathon Associates' client, Bolt Threads in Business Insider

2016 Wool Symposium

For the love of place: hear from Fibershed community members near & far as we come together to understand the true cost of soil to soil textiles and clothing. What goes into making a sweater? Hear perspectives on the cost of raising sheep from members who manage landscapes from small parcels to large grazing operations, including Jill Hackett, Jaime Greydanus, Carleen Weirauch, Aaron Gilliam, and Ryan Mahoney.

From shearing to sweater, listen to a discussion on the cost of knitwear with designers ranging from bespoke garments to mechanized production on the latest technology, including Myrrhia Resneck, Emily Cunetto, and Marlie de Swart.

Reserve tickets today to enjoy engaging presentations and the launch of exciting new projects and resources. Stop by mid-day to see hands-on demonstrations and support Fibershed Producers directly in the Marketplace, both of which are free & open to the public.

November 19th, 9:30 – 5:30 PM in Point Reyes Station. Click here for more information.

Monday is Columbus Day in America

Monday, October 10th, is a federal holiday in the United States. National, state, and local government offices will be closed. Observance of the holiday by the private sector varies from region to region.

Monday we celebrate Columbus Day in honor of his historic voyages that opened communication, commerce, and migration between the Old World of Europe and the New World of the Americas. Columbus' voyages of discovery led directly to Spanish settlements in the New World that became, with time, the many Latin-American nations of South, Central and North America and the islands of the Caribbean. The United States, today a sea-to-sea continental nation with citizens and residents whose ancestors lived in every corner of the globe, likewise traces her beginnings to Columbus. As early as 1738 "Columbia" had entered the English tongue as a name for the 13 British colonies in North America that became our original 13 States. Yes, from the birth of our nation it was understood that it all started with Columbus. That's why Columbus matters.

"The governor shall annually issue a proclamation setting apart the second Monday in October as Columbus Day and recommending that it be observed by the people, with appropriate exercises in the schools and otherwise, to the end that the memory of the courage, perseverance and spiritual fervor of Christopher Columbus, discoverer of America, may be perpetuated." --Mass. Gen. Laws, Chapter 6, Section 12V. (Emphasis added.)

The second Monday in October is also Thanksgiving Day in Canada.

FTZ Report Shows Program Under Utilized in New England

Last week the Foreign-Trade Zone Board released the 76th ANNUAL REPORT of the Foreign-Trade Zones Board to the Congress OF THE UNITED STATES.

Foreign-trade zones are secure areas under supervision of U.S. Customs and Border Protection (CBP) that are considered outside the customs territory of the United States for the purposes of duty payment. Located in or near customs ports of entry, they are the U.S. version of what are known internationally as free trade zones. Authority for establishing these facilities is granted by the Foreign-Trade Zones Board under the Foreign-Trade Zones Act of 1934, as amended (19 U.S.C. 81a-81u), and the Board’s regulations (15 C.F.R. Part 400). The Executive Secretariat of the Board is located within Enforcement and Compliance of the U.S. Department of Commerce in Washington, D.C.

During Fiscal Year 2015, the FTZ Board received and docketed 85 requests, and issued 87 decisions. The FTZ Board’s decisions included the establishment of four new foreign-trade zones, the reorganization or expansion of 22 zones under the alternative site framework (ASF), as well as decisions on 54 applications and notifications for new or expanded production authority. Under delegated authority, the FTZ Board Staff processed an additional 181 requests that included minor boundary modifications and scope determinations.

There were 186 FTZs active during the year, with a total of 324 active production operations. Over 420,000 persons were employed at some 2,900 firms that used FTZs during the year. The value of shipments into zones totaled nearly $660 billion, compared with $798 billion the previous year. About 63 percent of the shipments received at zones involved domestic status merchandise. The level of domestic status inputs used by FTZ operations indicates that FTZ activity tends to involve domestic operations that combine foreign inputs with significant domestic inputs.

Warehouse/distribution operations received nearly $228 billion in merchandise while production operations received over $431 billion (65 percent of zone activity). The largest industries accounting for zone production activity include the oil refining, automotive, electronics, pharmaceutical, and machinery/equipment sectors.

Exports (shipments to foreign countries) from facilities operating under FTZ procedures amounted to over $84 billion.

Main Foreign-Status Products Received in U.S. FTZs

WAREHOUSE/DISTRIBUTION OPERATORS	($ million)	PRODUCTION OPERATORS	($ million)
Vehicles	33,269	Oil/Petroleum	64,822
Consumer Products	12,781	Consumer Electronics	15,890
Consumer Electronics	11,153	Vehicle Parts	13,605
Electrical Machinery	10,954	Pharmaceuticals	6,416
Oil/Petroleum	9,665	Machinery/Equipment	6,104
Textiles/Footwear	8,907	Petrochemicals	2,606
Machinery/Equipment	7,731	Chemicals	1,498
Other Electronics	5,915	Other Electronics	1,316
Other Metals/Minerals	4,850	Plastic/Rubber	724
Pharmaceuticals	3,615	Aircraft/Spacecraft	722
Vehicle Parts	2,457	Other Metals/Minerals	513
Optical, Photographic and Medical Instruments	777	Consumer Products	448
Beverages/Spirits	733	Electrical Machinery	422
Plastic/Rubber	638	Optical, Photographic and Medical Instruments	314
Iron/Steel	479	Textiles/Footwear	209
Food Products	311	Advanced Fiber Materials	75
Tobacco Products	278	Fragrances/Cosmetics	67
Wood/Paper	175	Dyes/Pigments/Paints	67
Rail Cars, Parts & Equipment	153	Food Products	54
Stone/Plaster/Cement/Ceramics	126	Beverages/Spirits	54
Petrochemicals	118	Ships/Boats	45
Chemicals	103	Stone/Plaster/Cement/Ceramics	41
Fragrances/Cosmetics	95	Vehicles	39
Aircraft/Spacecraft	87	Iron/Steel	27
Advanced Fiber Materials	36	Arms/Ammunition	18
Arms/Ammunition	8	Wood/Paper	9
Dyes/Pigments/Paints	3	Rail Cars, Parts & Equipment	7
Ships/Boats	2

FTZ Procedures Under Utilized in New England

Connecticut

FTZ 71, WINDSOR LOCKS, no activity.

FTZ 76, BRIDGEPORT, no activity.

FTZ 162, NEW HAVEN, no activity.

Maine

FTZ 58, BANGOR, no activity.

FTZ 179, MADAWASKA:

• Production: Evergreen Trading Co. LLC (Fragrances/Cosmetics), $25-50 million.

FTZ 186, WATERVILLE, no activity.

• Flemish Master Weavers (Textiles/Footwear) was approved in 2016, but effectively limited to warehousing/distribution and production for export.

FTZ 263, AUBURN, no activity.

FTZ 282, BRUNSWICK, no activity.

Massachusetts

FTZ 27, BOSTON:

• Warehousing/Distribution: 14 companies, $500-750 million.
• Production: AstraZeneca (Pharmaceuticals), $1-5 million.
• Production: Claremont Flock was approved in late 2015 and actived in 2016.

FTZ 28, NEW BEDFORD:

• Warehousing/Distribution: 1 company, $100-250 million.
• Production: Acushnet Company (Textiles/Footwear), $70-100 million

FTZ 201, HOLYOKE, no activity.

New Hampshire

FTZ 81, PORTSMOUTH:

• Production: Millipore Corporation (Advanced Fiber Materials), $100-250 million.

Rhode Island

FTZ 105, PROVIDENCE & NORTH KINGSTOWN:

• Warehousing/Distribution: 1 company, $1-5 million.

Vermont

FTZ 55, BURLINGTON:

• Production: Wyeth Nutritionals, Inc (Food Product), $0-0.5 million.

FTZ 268, BRATTLEBORO, no activity.

FTZ 286, CALEDONIA, ESSEX AND ORLEANS COUNTIES, no activity.

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David Trumbull, Agathon Associates, has over twenty years of experience assisting U.S. manufacturing companies to save money through informed use of the U.S. Customs regulations. He has worked with companies to file Foreign Trade Zone applications. David has also testified as an expert witness at the Foreign Trade Zone Board in Washington, DC. He is a Licensed Customs Broker (Lic. No. 30179) and was, from 2007 to 2013, an official advisor on manufacturing trade policy to the administrations of presidents George W. Bush and Barack Obama.

Glenn Page, New England Global Advisors, spent over 30 years with U.S. Customs and Border Protection, (CBP). While assigned to the Portsmouth, NH office of CBP he managed oversight for U.S. Customs of Foreign Trade Zone 81, which included Millipore Corporation and Westinghouse Electric.

Glenn and David recently worked together with Claremont Flock in obtaining and utilizing Foreign Trade Zone procedures.

Glenn can be reached at 603-957-8247 or glenn@neglobaladvisors.com

David can be reached at 617-237-6008 or david@agathonassociates.com

Army Camouflage Parka Contract Awarded

Coachys and Associates, Roswell, Georgia, has been awarded a maximum $12,499,907 firm-fixed-price contract for camouflage parkas. This is a one-year base contract with two one-year option periods. This was a competitive acquisition with five responses received. Locations of performance are Georgia and Tennessee, with a Sept. 28, 2017, performance completion date. Using military service is Army. Type of appropriation is fiscal 2016 through fiscal 2017 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-16-D-1087).

U.S. Department of Defense contracts for clothing and textiles are general subject the the Berry Amendment, which was originally passed by Congress in 1941 to promote the purchase of certain U.S. goods. The Amendment was included in subsequent defense appropriations act until it was made permanent in Fiscal Year 1994 by section 8005 of Public Law 103-139. It was subsequently codified as 10 U.S.C. 2533a in 2002 by section 832 of Public Law 107-107.

The Berry Amendment applies only to the U.S. Department of Defense ("DOD"). As implemented in the Defense Federal Acquisition Regulation Supplement ("DFARS"), it generally restricts DOD's expenditure of funds for supplies consisting in whole or in part of certain articles and items not grown or produced in the United States or its possessions.

The restrictions apply to:

• food;
• clothing;
• tents, tarpaulins, or covers;
• cotton and other natural fiber products, or wool;
• woven silk or woven silk blends;
• spun silk yarn for cartridge cloth;
• synthetic fabric or coated synthetic fabric;
• canvas products;
• individual equipment manufactured from or containing any of the listed fibers, yarns, fabrics, or materials;
• certain specialty metals; and
• hand or measuring tools.

The Berry Amendment applies to all funds "made available" to the Defense Department. That includes Department of Defense procurement for a Foreign Military Sale ("FMS") where the funds were provided by the customer country.

When the Berry Amendment applies to aquisition of textiles or clothing, it applies to the final product, as well as all fiber components. For example, Navy peacoats of wool must be made in the U.S.A., of fabric woven in the U.S.A., of yarn spun in the U.S.A., of wool from sheep that grazed on U.S.A. soil.

Clients of Agathon Associates can learn more about the Berry Amendment at www.agathonassociates.com/textile-pri/berry/index.htm. You will need to enter your username and password. If you do not know your username and password email David Trumbull at david@agathonassociates.com.