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FTC Updates Rule on Registered Identification Numbers - Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP

The FTC has updated the process by which firms can obtain a Registered Identification Number (commonly referred to as an “RN Number”) for use in connection with the sale and/or distribution of textile, fur and wool products. At the same time, the Commission has sought to remind the Trade that Registered Identification Numbers are subject to cancellation if a person or firm to whom a Registered Identification Number has been assigned fails to notify the Commission of any change in name, business address, or legal business status of the business.

Our office is available to assist if you have any questions regarding the process for obtaining a Registered Identification Number or updating the information on file with the Commission.


FTC Upgrades RN Webpage for Labels on Clothing and Other Textile or Fur Products - Federal Trade Commission

Today (9/15/17) the Federal Trade Commission announced that the agency is streamlining requirements under the Fur, Textile and Wool Labeling Rules as part of Acting Chairman Maureen K. Ohlhausen’s regulatory reform agenda.

The FTC is updating the Fur, Textile and Wool Rules to implement web-based electronic filings of requests to obtain, update, or cancel registered identification numbers (RN) used on fur, textile and wool product labels. Use of the web-based RN system will streamline the application process for participating businesses and greatly increase the agency’s efficiency in delivering RN services to the public.

The FTC’s site at RN.FTC.GOV has been updated to allow real-time data validation for applicants and alert them to possible errors to avoid unnecessary delays. Industry members with RN numbers should visit RN.FTC.GOV to verify that their information is accurate. There are currently more than 140,000 entries in the system.

Under the current rules, most clothing and textile and fur products must have a label that identifies the manufacturer or other business responsible for marketing or handling the item. The updated RN system makes it easier for companies to obtain an RN and avoid having to put long company names on labels.

The Commission voted to approve the Federal Register Notice announcing final amendments to the Textile, Wool, and Fur Rules was 2-0. (FTC File No. P074201; the staff contact is Josh Millard, Bureau of Consumer Protection, 202-326-2454)


Essential Oils Company Sentenced for Lacey Act and Endangered Species Act Violations to Pay $760,000 in Fines, Forfeiture, and Community Service, and to Implement a Comprehensive Compliance Plan - U.S. Department of Justice

The Justice Department announced today that YOUNG LIVING ESSENTIAL OILS, L.C., (the Company), headquartered in Lehi, Utah, pleaded guilty in federal court to federal misdemeanor charges regarding its illegal trafficking of rosewood oil and spikenard oil in violation of the Lacey Act and the Endangered Species Act. The Company voluntarily disclosed its rosewood oil violations and has been cooperating with government investigators. Pursuant to the terms of the plea agreement, the Company was sentenced to a fine of $500,000, $135,000 in restitution, a community service payment of $125,000 for the conservation of protected species of plants used in essential oils, and a term of five years’ probation with special conditions. The conditions include the implementation of a corporate compliance plan, audits, and the publication of statements regarding its convictions.

“The importation of illegally harvested wood and timber products harms law-abiding American companies and workers and threatens forest resources around the world,” said Acting Assistant Attorney General Jeffrey H. Wood of the Environment and Natural Resources Division. “Our Division was proud to work alongside the U.S. Attorney’s Office in the District of Utah, the U.S. Department of Agriculture, the U.S. Fish and Wildlife Service, and the Department of Homeland Security to bring this case to a positive conclusion.”

“While the natural resource violations by certain employees of Young Living were intentional and substantial, the Company’s decision to conduct an internal investigation, voluntarily disclose the initial violations to government enforcement authorities, and cooperate throughout the ensuing investigation is to be commended,” said U.S. Attorney John W. Huber for the District of Utah. “This sentence reflects both the seriousness of the offenses and the acceptance of responsibility and cooperation by the Company.”

According to the plea agreement, from June 2010 to October 2014, several company employees and contractors harvested, transported, and distilled rosewood (Aniba roseaodora or Brazilian rosewood) in Peru and imported some of the resulting oil into the United States, through Ecuador. Peruvian law prohibits the unauthorized harvest and transport of timber, including rosewood. Neither the Company nor its suppliers, employees, or agents had any valid authorization from the Peruvian government. Peru also prohibits the export of species protected under the Convention on International Trade in Endangered Species (CITES), without the required permits. The Company did not obtain any CITES export permits from Peru. Between 2010 and 2014, a few Company employees harvested, transported, and possessed a total of approximately 86 tons of rosewood, all of which was harvested in violation of Peruvian law. The rosewood was intended for distillation and export to the United States and some had already been illegally brought over. The Company lacked an internal compliance program or formal procedures, training, or means to review and resolve problems and identify and stop potential violations. As a result, the Company hired outside counsel to conduct an internal investigation into the violations due to the illegal harvesting and shipping of plants that occurred in Peru and Ecuador. On July 20, 2015, once the internal investigation was complete, the Company made an initial written voluntary disclosure to the Government of various facts indicating their potentially illegal violations.

The investigation revealed that, in addition to the conduct disclosed by the Company, in December 2015, the Company exported spikenard oil harvested in Napal to the United Kingdom, without a CITES permit. The spikenard oil was previously imported from a company in the United Kingdom that had obtained a CITES export permit. The Company found the product to be unsatisfactory and shipped it back to the United Kingdom. On March 23, 2016, a Company employee filed an application for a CITES permit for this shipment after the fact, and without providing the required copy of the permit authorizing its original export from the United Kingdom.

The investigation also revealed that between November 2014 and January 2016, the Company purchased over 1,100 kilograms of rosewood oil from a supplier/importer in the United States without conducting sufficient due diligence to verify lawful sourcing of that oil.

The Government calculates the fair market retail value of the plant products involved in the violations and relevant conduct, including but not limited to product equaling approximately 1,899.75 liters of rosewood oil, to be more than $3.5 million but not more than $9 million.

The investigation was conducted by the Law Enforcement Offices of the U.S. Department of Agriculture, Office of the Inspector General, with assistance of the U.S. Fish and Wildlife Service and the Department of Homeland Security, Investigations. This case is being prosecuted by the Justice Department’s Environment and Natural Resources Division’s Environmental Crimes Section and the District of Utah’s U.S Attorney’s Office.


USITC:  News Releases, Documents and Announcement - International Trade Administration

Limitations of Duty- and Quota-Free Imports of Apparel Articles Assembled in Beneficiary Sub-Saharan African Countries From Regional and Third- Country Fabric

AGENCY: Committee for the Implementation of Textile Agreements (CITA).

ACTION: Publishing the new 12-month cap on duty- and quota-free benefits.

DATES:  Applicable October 1, 2017.

FOR FURTHER INFORMATION CONTACT:

Maria D’Andrea-Yothers, International Trade Specialist, Office of Textiles and Apparel, U.S. Department of Commerce, (202) 482–1550.

SUPPLEMENTARY INFORMATION: 

Authority: Title I, Section 112(b)(3) of the Trade and Development Act of 2000 (TDA 2000), Public Law (Pub. L.) 106–200, as amended by Division B, Title XXI, section 3108 of the Trade Act of 2002, Pub. L. 107–210; Section 7(b)(2) of the AGOA Acceleration Act of 2004, Pub. L. 108–274; Division D, Title VI, section 6002 of the Tax Relief and Health Care Act of 2006 (TRHCA 2006), Pub. L. 109–432, and section 1 of The African Growth and Opportunity Amendments (Pub. L. 112–163), August 10, 2012; Presidential Proclamation 7350 of October 2, 2000 (65 FR 59321); Presidential Proclamation 7626 of November 13, 2002 (67 FR 69459); and Title I, Section 103(b)(2) and (3) of the Trade Preferences Extension Act of 2015, Pub. L. 114–27, June 29, 2015. 

Title I of TDA 2000 provides for dutyand quota-free treatment for certain textile and apparel articles imported from designated beneficiary sub-Saharan African countries.

Section 112(b)(3) of TDA 2000 provides duty- and quota-free treatment for apparel articles wholly  assembled in one or more beneficiary sub-Saharan African countries from fabric wholly formed in one or more beneficiary sub-Saharan African countries from yarn originating in the United States or one or more beneficiary sub-Saharan African countries. 

This preferential treatment is also available for apparel articles assembled in one or more lesser-developed beneficiary sub-Saharan African countries, regardless of the country of origin of the fabric used to make such articles, subject to quantitative limitation. Public Law 114–27 extended this special rule for lesser-developed countries through September 30, 2025. 

The AGOA Acceleration Act of 2004 provides that the quantitative limitation for the twelve-month period beginning October 1, 2017 will be an amount not to exceed 7 percent of the aggregate square meter equivalents of all apparel articles imported into the United States in the preceding 12-month period for which data are available. See Section 112(b)(3)(A)(ii)(I) of TDA 2000, as amended by Section 7(b)(2)(B) of the AGOA Acceleration Act of 2004. Of this overall amount, apparel imported under the special rule for lesser-developed countries is limited to an amount not to exceed 3.5 percent of all apparel articles imported into the United States in the preceding 12-month period. See Section 112(b)(3)(B)(ii)(II) of TDA 2000, as amended by Section 6002(a)(3) of TRHCA 2006. The Annex to Presidential Proclamation 7350 of October 2, 2000 directed CITA to publish the aggregate quantity of imports allowed during each 12-month period in the Federal Register. 

For the one-year period, beginning on October 1, 2017, and extending through September 30, 2018, the aggregate quantity of imports eligible for preferential treatment under these provisions is 2,022,822,376 square meters equivalent. Of this amount, 1,011,411,188 square meters equivalent is available to apparel articles imported under the special rule for lesser developed countries. Apparel articles entered in excess of these quantities will be subject to otherwise applicable tariffs. 

These quantities are calculated using the aggregate square meter equivalents of all apparel articles imported into the United States, derived from the set of Harmonized System lines listed in the Annex to the World Trade Organization Agreement on Textiles and Clothing (ATC), and the conversion factors for units of measure into square meter equivalents used by the United States in implementing the ATC.


There is Safety in Numbers: CBP Commercial Targeting and Analysis Center Welcomes Addition of Alcohol and Tobacco Tax and Trade Bureau - U.S. Customs & Border Protection

WASHINGTON – U.S. Customs and Border Protection welcomed the addition of the Alcohol and Tobacco Tax and Trade Bureau (TTB) to the Commercial Targeting and Analysis Center (CTAC) on September 19 with the signing a Memorandum of Understanding. TTB joins CBP, Homeland Security Investigations (HSI) and nine other existing Federal government agencies as part of the CTAC.

This multi-agency enforcement partnership works to target, interdict and investigate the importation, exportation and trafficking of articles that pose a risk to import safety, involve environmental crimes, and illicit wildlife and cultural property.

“The CTAC stands as a glowing example of how interagency collaboration as ‘one U.S. Government at the border’ can better serve the American public,” said Brenda B. Smith, Executive Assistant Commissioner for the CBP Office of Trade. “CTAC collaboration, which is fortified by the progress of the Automated Commercial Environment (ACE) Single Window, allows for better management of resources and more efficient, streamlined import processing.”

“TTB sees the opportunity to partner with other Federal agencies through the CTAC, as an opportunity to continue to promote TTB’s mission to protect U.S. consumers by ensuring the integrity of alcohol products imported into the U.S.,” said Thomas R. Crone, Assistant Administrator, TTB Field Operations.

Bringing together Federal agencies to collectively target against high-risk shipments and increase compliance with Federal standards and regulations allows the U.S. Government to more cohesively serve the U.S. public. CBP is proud to host the CTAC and cultivate this effort to enhance inter-agency information sharing, curb redundancies, streamline inspections at the ports of entry and increase efforts throughout the trade community to facilitate legitimate trade.

For additional information on the CTAC, please visit www.cbp.gov/ctac.


Frontier Airlines Fined $1.5 Million for Violating Tarmac Delay Rule - Department of Transportation

WASHINGTON – The U.S. Department of Transportation (DOT) today fined Frontier Airlines $1.5 million for violating the Department’s rule prohibiting long tarmac delays. The airline was ordered to cease and desist from future similar violations.

Of the $1.5 million assessed, $900,000 will be credited to Frontier for compensation provided to passengers on the affected flights and also passengers on other delayed flights. The $1.5 million fine represents the second highest amount assessed against an airline for violating the tarmac delay rule, following $1.6 million fines assessed against American Airlines in 2016 and Southwest Airlines in 2015.

An investigation by DOT’s Aviation Enforcement Office found that on December 16-18, 2016, Frontier allowed 12 domestic flights at Denver International Airport to remain on the tarmac for more than three hours without providing passengers an opportunity to deplane. The long tarmac delays on these 12 flights occurred during and after a large snowstorm in Denver.

Under DOT rules, U.S. airlines operating aircraft with 30 or more passenger seats are prohibited from allowing their domestic flights to remain on the tarmac for more than three hours without giving passengers an opportunity to leave the plane. Exceptions to the time limits are allowed only for safety, security, or air traffic control-related reasons. The rules also require airlines to provide adequate food and water, ensure that lavatories are working and, if necessary, provide medical attention to passengers during long tarmac delays. U.S. airlines are also required to have adequate resources to implement their tarmac delay contingency plans, such as having sufficient staff to accommodate flights during irregular operations.

The Department found that Frontier failed to properly adjust its operations in response to the snowstorm and resulting gate congestion to avoid the long tarmac delays. Frontier failed to properly assess the gate situation during the height of the snowstorm and continued to experience gate availability issues and a ground staff shortage after the storm had passed. Frontier failed to have adequate resources at Denver to accommodate the additional aircraft on the ground at the airport. Moreover, Frontier failed to delay, divert, or cancel a sufficient number of flights scheduled to arrive at Denver, even though it was aware of the conditions at Denver, to allow the carrier to recover and reduce the probability of flights experiencing long tarmac delays. In addition, Frontier could have mitigated or prevented the lengthy tarmac delays if it had accepted services offered by the airport.

The consent order is available at www.regulations.gov, docket number DOT-OST-2017-0001.

The Department has launched an airline passenger microsite to make it easy for travelers to understand their rights. The site can be viewed here: https://www.transportation.gov/airconsumer/flights-and-rights
 
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