News

Dear Clients and Friends,

As you may already be aware, the Department of Commerce (DOC) notified the Mexican signatories to the 2013 Suspension Agreement on Fresh Tomatoes from Mexico that the Department intends to withdraw from the Agreement on May 7, 2019. Upon completion of the withdrawal, the DOC will continue with its investigation and notify the International Trade Commission (ITC) of its final determination. If the Department continues to find sales made at less than fair value in its final determination, the ITC will then complete its own investigation and make a final determination. If both Commerce and the ITC issue affirmative final determinations, an antidumping duty order will be issued. Commerce must give 90 days’ notice of the withdrawal and the administrative review of the Suspension Agreement is still ongoing at this time. Attached please find the official statement provided by the DOC regarding this matter:

• https://www.commerce.gov/news/press-releases/2019/02/us-department-commerce-announces-intent-withdraw-suspension-agreement

Although there is still a lot of uncertainty and the negotiations are still ongoing, to be proactive, we would like to encourage all tomato importers to apply for their own ACH account (Automated Clearing House) and ACE account with CBP. ACH is a U.S. financial network used for electronic payments and money transfers. ACH payments are a way to transfer money from one bank account to another without using paper checks, credit cards, wire transfers, or cash. The ACE Secure Data Portal is a web-based application providing a single, centralized on-line access point to the ACE system that connects to CBP, the trade community and government agencies involved in importing goods to the U.S.  The ACE portal gives users access to view their account information as it exists with CBP and monitor daily operations.

If the withdrawal is finalized and fresh tomatoes become dutiable in the near future, having an ACH and ACE account already set up will make for a smoother transition by facilitating the entry process without interruptions of the day to day operation.

Below please find the links with information and instructions on how to apply for an ACH and ACE account:

• ACH: https://www.cbp.gov/trade/trade-community/automated/automated-systems/gs-automated-systems/ach/signing
• ACH Application Form: https://www.cbp.gov/sites/default/files/assets/documents/2018-Nov/CBP%20Form%20400.pdf
• ACE: https://www.cbp.gov/trade/automated/getting-started/portal-applying.

Having both an ACE and ACH account will enable your company to have complete control and direct access to issue duty payments directly to CBP.  Please contact our office to inquire regarding the different options available as to how this may be handled.

Additionally,  if there is a withdrawal from the agreement please note the requirements for the importers Continuous Bond may be affected as well.  While there still aren’t any final options on how exactly the surety companies will change their underwriting policies and what additional information and/or collateral might be required, we have created a simple formula based on other ADD cases we’ve encountered not related to this agreement to give you a broad idea what surety companies may require in the event the withdrawal is finalized.  Surety companies may possibly treat the matter as a regular antidumping exposure and could require the importer to raise their bond limit depending on the entered value of the merchandise, antidumping (AD) and countervailing (CVD) margins. The bond amounts are normally calculated at 10% of the duties, taxes and fees (DTF) within a 12 month period, however, please note that the percentage used for the calculation could vary. It is also very important for an importer to estimate and project how many shipments they are expecting to import for the following 12 month period to ensure their current bond amount remains sufficient.

Below is an example of how a bond formula could be calculated by a surety company:

• If each entry is valued at $10,000.00 and the duties, taxes and fees (DTF) are calculated using 17.5%, the DTF on each entry would be $1,750.00. If there were 1,000 entries per year, the annual DTF would total $1,750,000.00. Ten percent of $1,750,000.00 is $175,000.00, therefore the bond would need to be increased from $50,000 (minimum) to $175,000.00.

• In the event a surety company required collateral on a bond that had to be increased to $175,000.00, they could possibly require collateral for the FULL BOND AMOUNT of $175,000.00 in the form of a cash deposit or line of credit to back up the bond.

• The surety company could also possibly require collateral for the FULL AMOUNT OF DUTIES of $1,750,000.00 in the form of a cash deposit or line of credit to back up the bond.

We would like to stress that these are merely examples we came up with as a courtesy due to all the uncertainty surrounding the withdrawal and so that our clients could have an idea of what could possibly be required by surety companies if the withdrawal were to be finalized.

In conclusion, although this is disappointing news, please note negotiations are still in progress and we are hopeful a new agreement will be reached that will be satisfactory to all parties involved.  As your U.S. Customs Broker we feel obligated to advise you of what the future may hold and the available actions you can take to be proactive and well prepared ahead of time should the withdrawal become finalized.

In the meantime, all buyers and sellers must continue to abide by the terms of the 2013 Tomato Suspension Agreement with Mexico until further notice.  Please don’t hesitate to contact our office with any additional questions or concerns.

Regards,

Dear Clients and Friends,

As a friendly reminder, food facilities that are required to register with FDA (Food & Drug Administration) must renew their registrations between Oct.1, 2018 thru Dec. 31, 2018. Biennial renewal is required every two years by the FDA.

According to the FDA, the following types of companies must register: “Those facilities are domestic and foreign facilities that manufacture, process, pack, or hold food for human or animal consumption in the United States (21 CFR 1.225). For purposes of section 415, the term “facility” in relevant part does not include farms, restaurants, and retail food establishments (section 415(c)(1) of the FD&C Act; 21 CFR 1.226).”

We strongly suggest you begin the renewal process as soon as possible beginning October 1st.  Putting off registration renewals to the last minute could result in the delay in crossings of your future shipments.

If K&K International processed your company’s FDA registration, we will automatically begin the renewal process starting October 1st. If your company has changed names, address, etc; we request that you contact us immediately so that we may be aware of the changes in order to renew your registration with your updated information. If you DO NOT provide any updated information prior to December 31, we will assume no changes have been made and will automatically update your registration with the existing information we have in our system.

If you would not like for us to renew your registration please let us know before October 1^st, 2018; otherwise, we will continue with the renewal process.

If K&K International did not process your company’s FDA registration, please provide us with a copy of your renewal as soon as it has been completed by your company so that we my update our records.

You can access additional information about facility registration on the FDA’s website at:  http://www.fda.gov/Food/GuidanceRegulation/FoodFacilityRegistration/ucm2006831.htm.

This page includes links to key guidance documents about registration.

Please feel free to contact our office at 520-287-3550 with any additional questions or concerns.

Kindest regards,

______________________________________________________________

Estimados Clientes y Amigos,

Un recordatorio, a los establecimientos de alimentos los cuales están obligados a registrarse ante FDA (Food & Drug Administration) dichas empresas deben de renovar sus registros a partir del 1ro de octubre 2018 hasta el día 31 Diciembre 2018. La renovación de su registro se requiere se haga cada dos años ante FDA.

De acuerdo con FDA, los siguientes tipos de empresas se deben de registrar: “Those facilities are domestic and foreign facilities that manufacture, process, pack, or hold food for human or animal consumption in the United States (21 CFR 1.225). For purposes of section 415, the term “facility” in relevant part does not include farms, restaurants, and retail food establishments (section 415(c)(1) of the FD&C Act; 21 CFR 1.226).”

Le sugerimos de empezar el proceso de renovación lo antes posible a partir del día 1ro de octubre. La espera de la renovación del registro hasta los últimos días podría causar contratiempos en los cruces de sus futuros embarques; por lo cual le sugerimos que se haga lo más pronto posible para evitar contratiempos.

Como parte de nuestro servicio, si nosotros registramos su empresa ante FDA, vamos a renovar su registro automáticamente. Si su empresa tuvo cambios de nombre, dirección, etc., solicitamos que se pongan en contacto con nosotros inmediatamente para que podamos actualizar sus datos y renovar el registro con la información debida. Si no proporcionan información actualizada antes del día 31 de diciembre 2018, vamos a suponer que no se ha hecho ningún cambio y el registro se actualizara automáticamente con la información existente.

Si no gustan que K&K International Logistics renueve su registro, favor de avisarnos antes del día 1ro de Octobre, 2018. De lo contrario procedemos con la renovación.

Si K&K International Logistics no registro su empresa ante FDA, favor de proporcionar copia de su registro lo antes posible para actualizar nuestros archivos.

Pueden acceder información adicional acerca del registro en el siguiente sitio web de la FDA:http://www.fda.gov/Food/GuidanceRegulation/FoodFacilityRegistration/ucm2006831.htm.

Esta página incluye enlaces a documentos de orientación sobre el registro.

Favor de comunicarse a nuestras oficinas al 520-287-3550 con cualquier pregunta o duda al respecto.

Gracias y saludos,

Dear Clients and Friends,

Attached please find reminders for fresh produce shipments requiring state inspection by the California Department of Food and Agriculture (CDFA) to meet Agriculture Marketing Services (AMS) quality standards.

Specifically, a shipment with affected commodities, i.e. Avocado, dry Onions, Table Grapes and Tomatoes (round/bola tomato), are asked to be parked at the dock prior to 1800 hours (6:00 p.m.)   Failure to do so may (will) result in NOT obtaining the clearance and subject to inspection the following day (or later).

Thank you,

Agriculture State Inspection and Clearance CDFA AMS PIN 2008-014

Agriculture – State of CA inspection CDFA