Friday, May 3, 2019
National Industries for the Blind Awarded Army Physical Fitness Uniform Contract
NCTO Announces New VP of Communications and Director of Regulatory & Technical Affairs
The National Council of Textile Organizations (NCTO) has to announced the appointment of Kristi Ellis as the organization’s new Vice President of Communications, effective April 29, 2019, and Donald Vavala as the Director of Regulatory and Technical Affairs, effective May 2019.
As Vice President of Communications at NCTO, Kristi Ellis will assume responsibility for developing, overseeing, and implementing a communications strategy for the association and the domestic textile industry as a whole. Ms. Ellis brings 24 years of manufacturing and international trade reporting experience with leading publications such as Women’s Wear Daily and S&P Global Market Intelligence. The majority of her career, which includes nearly 10 years as Washington Bureau Chief for Women’s Wear Daily, has been spent reporting on textile trade policy matters. Regarding her appointment, Ms. Ellis said, “I am really excited and grateful to have the opportunity to help develop and shape NCTO’s communications strategy as we work to amplify the textile industry’s importance as a thriving and innovative manufacturing sector in the United States.”
As NCTO’s Director of Regulatory and Technical Affairs, Don Vavala will support all association activities related to federal government procurement and industry regulatory matters. In this capacity, Mr. Vavala will staff various NCTO committees covering a broad spectrum of contracting, technical, and environmental issues. Mr. Vavala comes to NCTO following a 31-year career at W.L. Gore, a NCTO member organization, where he most recently held the position of Director, Military Government Affairs. He will succeed Hardy Poole, who announced his resignation from the same position at NCTO, effective May 2019. Regarding his appointment, Mr. Vavala stated, “I am very excited about the opportunity to work with Ms. Glas and the staff at NCTO. The textile industry is a major component of the economic backbone of this great nation and I look forward to applying my 31 years of experience to insuring that the industry continues to thrive and maintain its status as a significant contributor to our country’s growth and prosperity.”
The hiring of Ms. Ellis and Mr. Vavala coincide with the arrival of Kimberly Glas as NCTO’s President & CEO, effective April 29, 2019. In referencing these two new hires, Ms. Glas stated, “I am excited Kristi and Don are joining the NCTO team at this important time. They both have significant experience with the textile industry and a wealth of knowledge specific to their new roles. Most importantly, both have shown a strong commitment to the success of the domestic textile industry. We are very fortunate to have them join the organization in these pivotal leadership roles. NCTO’s membership will be well served by these important staff additions.”
NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers, including artificial and synthetic filament and fiber producers.
- U.S. employment in the textile supply chain was 594,147 in 2018.
- The value of shipments for U.S. textiles and apparel was $76.8 billion in 2018.
- U.S. exports of fiber, textiles and apparel were $30.1 billion in 2018.
- Capital expenditures for textile and apparel production totaled $2.0 billion in 2017, the last year for which data is available.
Commerce Imposes Countervailing Duty on Polyester Textured Yarn from India and China
Commerce preliminarily determines that the following estimated countervailable subsidy rates exist:
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Subsidy rate
Company (percent)
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JBF Industries Limited......................... 20.45
Reliance Industries Limited.................... 7.09
All Others...................................... 13.82
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On May 3, 2019, the Department of Commerce published in the Federal Register (84 FR 19040) Polyester Textured Yarn From the People’s Republic of China: Preliminary Affirmative Countervailing Duty Determination, and Alignment of Final Determination With Final Antidumping Duty Determination.
Commerce preliminarily determines that the following estimated countervailable subsidy rates exist:
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Subsidy rate
Company (percent)
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Fujian Billion Polymerization Fiber Technology 32.04
Industrial Co., Ltd \13\............................
Suzhou Shenghong Fiber Co., Ltd \14\................. 459.98
Suzhou Shenghong Garmant Development Co.............. 459.98
All Others........................................... 32.04
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Wednesday, May 1, 2019
Navy Clothing Contract Awarded
Customs Proposed Change to Classification of Certain Garments
- Men's shorts of 50% linen and 50% rayon could be classified at 6203.43.80 (other textile materials) with rate of duty of 27.9% or 6203.49.80 (synthetic) with rate of duty of 2.8%, CBP classified at 6203.49.80, with rate of duty of 2.8%.
- Men's shirts of 50% linen and 50% rayon could be classified at 6205.30.20 (man-made fiber) with rate of duty of 29.1 center/kg + 25.9% or 6205.90.40 (other textile materials) with rate of duty of 2.8%, CBP classified at 6205.90.40, with rate of duty of 2.8%.
- Men's sweater of 50% cotton and 50% silk could be classified at 6110.20.20 (cotton) with rate of duty of 16.5% or 6110.90.90 (other textile materials) with rate of duty of 6%, CBP classified at 6110.90.90, with rate of duty of 6%.
- A knit tunic of 50% wool and 50% silk could be classified at 6110.11.00 (wool) with rate of duty of 16% or 6110.90.00 (other textile materials) with rate of duty of 6%, CBP classified at 6110.90.90, with rate of duty of 6%.
In each case CBP ruled for the classification that came numerically last within the subheading that described the article.
Now CBP has taken a fresh look at the General Rules of Interpretation and is proposing to reverse those rulings and change the way articles of 50/50 composition are classified.
Here are the relevant rules
Note 2 (A) to Section XI, HTSUS, provides: Goods classifiable in chapters 50 to 55 or in heading 5809 or 5902 and of a mixture of two or more textile materials are to be classified as if consisting wholly of that one textile material which predominates by weight over each other single textile material. When no one textile material predominates by weight, the goods are to be classified as if consisting wholly of that one textile material which is covered by the heading which occurs last in numerical order among those which equally merit consideration.
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Subheading Note 2 (A) to Section XI, HTSUS, provides: Products of chapters 56 to 63 containing two or more textile materials are to be regarded as consisting wholly of that textile material which would be selected under note 2 to this section for the classification of a product of chapters 50 to 55 or of heading 5809 consisting of the same textile materials.
READ MORE
To see the CBP proposal Click HERE
It is now CBP's position that an apparel article of 50/50 composition be classified according to which fabric classification comes last numerically. So, in the case of the linen (Chapter 53) / rayon (Chapter 54 or 55) blend, they classify as rayon. In the case of silk (Chapter 30) / Cotton (Chapter 52) they classify as cotton. In the case of silk (Chapter 50) / wool (Chapter 51) they classify as wool.
The result of this change is that in each of the cases above, and similar ones, the higher duty will apply.
Note this change affects classification of apparel and home textiles of 50/50 blends. It does not affect the classification of fiber, yarn, or fabric.
AGATHON ASSOCIATES NOTES
1. Even if these proposed change goes through, they still have the wrong classification in the case of the linen/rayon shorts. Under this proposed way of classifying, they would be at 6203.49.05 for artificial fiber, not 6203.43.90 (synthetic). The rate of duty is the same either way, 27.9%
2. This is why Agathon Associates always discourages clients from importing goods of 50/50 blend of two textile fibers. Aside from this proposed change in classification, it is a bad idea. A small inadvertent variance in the manufacturing process can easily shift your goods from the expected classification to another classification that could affect the rate of duty. Such inadvertent variance could also result in the content of the goods not agreeing with the product labeling, which is a violation of the Federal Trade Commission labeling laws.
CBP Proposing to Eliminate a Means to Avoid China 301 Tariffs on Plastic Clothes Hangers.
In Binding Ruling Letter HQ H058876 of May 14, 2009, Customs and Border Protection designated certain plastic garment hangers as instruments of international traffic, which enables the items to be released without payment of duty. In order to qualify as an IIT CBP has traditionally held that an article must be: used as a container or holder in international traffic, substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. CBP has reviewed its prior rulings and determined this ruling letter to be in error. It is now CBP's position that plastic garment hangers cannot be granted IIT status when they are not used to physically suspend garments during transportation in international traffic. The proposed revocation does not foreclose the possibility that CBP will grant IIT status to certain plastic garment hangers in response to future ruling requests that satisfy this analysis, however.
CBP is proposing to revoke HQ H058876 and to revoke or modify any other ruling not specifically identified to reflect the analysis contained in a new Ruling, HQ H300587. Additionally, CBP is proposing to revoke any treatment previously accorded by CBP to substantially identical transactions.
The rate of duty on plastic hangers (Classification 3923.90.0080 Harmonized Tariff Schedule of the United States) is just 3%, but the significance of this proposed action is that plastic hangers from China are subject to additional 10% Section 301 import duty. As instruments of international traffic the 301 tariff could be avoided.
Before taking this action, CBP will consideration any written comments timely received. Comments must be received on or before May 31, 2019.
USTR Releases Annual Special 301 Report on Intellectual Property Protection and Review of Notorious Markets for Piracy and Counterfeiting
On April 25, 2019, the Office of the United States Trade Representative released its annual Special 301 Report on the adequacy and effectiveness of trading partners’ protection of intellectual property rights and the findings of its Notorious Markets List, which highlights online and physical markets that reportedly engage in and facilitate substantial copyright piracy and trademark counterfeiting.
Special 301 Report
The Special 301 Report identifies trading partners that do not adequately or effectively protect and enforce intellectual property (IP) rights or otherwise deny market access to U.S. innovators and creators that rely on protection of their IP rights.
Trading partners that currently present the most significant concerns regarding IP rights are placed on the Priority Watch List or Watch List. USTR identified 36 countries for these lists in the Special 301 Report:
- Algeria, Argentina, Chile, China, India, Indonesia, Kuwait, Russia, Saudi Arabia, Ukraine and Venezuela are on the Priority Watch List.
- Barbados, Bolivia, Brazil, Canada, Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt, Greece, Guatemala, Jamaica, Lebanon, Mexico, Pakistan, Paraguay, Peru, Romania, Switzerland, Thailand, Turkey, Turkmenistan, the United Arab Emirates, Uzbekistan and Vietnam are on the Watch List.
These trading partners will be the subject of increased bilateral engagement with USTR to address IP concerns. Specifically, over the coming weeks, USTR will review the developments against the benchmarks established in the Special 301 action plans for countries that have been on the Priority Watch List for multiple years. For such countries that fail to address U.S. concerns, USTR will take appropriate actions, such as enforcement actions under Section 301 of the Trade Act or pursuant to World Trade Organization or other trade agreement dispute settlement procedures, necessary to combat unfair trade practices and to ensure that trading partners follow through with their international commitments.
As part of the Special 301 review process, USTR invited public comments and held a public hearing that featured testimony from witnesses representing foreign governments, industry, and non-governmental organizations. USTR also offered a post-hearing comment period during which hearing participants could submit additional information.
Click here to read the 2019 Special 301 public hearing transcript.
Click here to view the video recording of the 2019 Special 301 public hearing.
To read the Special 301 Report, click here.
Notorious Markets List
The Notorious Markets List highlights 33 online markets and 25 physical markets that are reported to engage in and facilitate substantial copyright piracy and trademark counterfeiting. This activity harms the American economy by undermining the innovation and intellectual property rights of U.S. IP owners in foreign markets. An estimated 2.5 percent, or nearly half a trillion dollars’ worth, of global imports are counterfeit and pirated products.
The 2018 Notorious Markets List maintains its special focus on the distribution of pirated content and counterfeit goods online. This year, the Notorious Markets List highlights free trade zones and the role they may play in facilitating trade in counterfeit and pirated goods. It also continues to discuss emerging piracy models, including illicit streaming devices, “stream-ripping,” and piracy portals and apps, that cause major damage to the digital marketplace for legitimate music, movies, and television. The Notorious Markets List also calls on several e-commerce platforms to improve takedown procedures and cooperation with right holders—particularly small and medium-sized businesses—to decrease the volume and prevalence of counterfeit and pirated goods on their platforms.
The Notorious Markets List does not constitute an exhaustive list of all markets reported to deal in pirated or counterfeit goods around the world, nor does it reflect findings of legal violations or the U.S. Government’s analysis of the general IP protection and enforcement climate in the country concerned. This announcement concludes the 2018 Out-of-Cycle Review of Notorious Markets, which USTR initiated on August 16, 2018, through publication in the Federal Register of a request for public comments. The request for comments and the public’s responses is online at www.regulations.gov, Docket number USTR-2018-0027.
To read the Notorious Markets List, click here.