Weekly Trade Spotlight: The Third-Country Fabric Provision of the African Growth and Opportunity Act
Office of the United States Trade Representative / www.ustr.gov
The renewal of the third-country fabric (TCF) provision of the African Growth and Opportunity Act (AGOA) – passed by Congress last week – is welcome news for apparel workers in Africa and will contribute to a strong foreign policy foundation in the Sub-Saharan Africa region.
In many Sub-Saharan African countries, manufacturers use fabric from international sources to produce apparel because the regional fabric supply is limited. These same apparel manufacturers then export their finished products to the United States. Normally, these products would be subject to U.S. import duties, but the TCF provision lifts those duties and helps to support jobs and the manufacturing industry in certain lesser-developed Sub-Saharan African countries. The benefits of the TCF provision also extend to American apparel retailers; it helps them reduce their costs, diversify their supply chains, and create more apparel options for American consumers. The TCF provision was scheduled to expire in September of this year, but on August 2nd, Congress acted to renew it, safeguarding thousands of jobs for textile workers throughout Sub-Saharan Africa.
In addition to supporting jobs, the renewal of the TCF provision will help the U.S. achieve many of its regional foreign policy objectives. President Obama’s new “U.S. Strategy for Sub-Saharan Africa” describes “sustainable, inclusive economic growth” as a “key ingredient to security, political stability, and development” in the region. The TCF provision, which helps to support stable employment for textile workers, many of whom are women, is making a strong contribution toward that goal.
U.S. Trade Representative Ron Kirk recently traveled to Ghana to highlight the Obama Administration’s new Sub-Saharan African Strategy, and to demonstrate the benefits of the TCF provision. In the course of his visit, Ambassador Kirk toured the Lucky 1888 Mills in Tema, Ghana, and met with workers. Lucky 1888 Mills, which uses the TCF provision to export to the United States, employs approximately 500 women in quality jobs with competitive wages.
Statement from Acting U.S. Commerce Secretary Rebecca Blank on Passage of Trade Bill to Strengthen U.S. Textile Industry
United States Department of Commerce / www.commerce.gov
Acting U.S. Commerce Secretary Rebecca Blank today applauded Congress’s approval of a series of important international trade provisions that will help create jobs in the United States. The legislation will extend trade preferences for African Growth and Opportunity Act (AGOA)-eligible countries, a provision which will help keep hundreds of thousands of women in Africa employed, and was set to expire on September 30. The legislation also makes important technical changes to the textile and apparel provisions of the Dominican Republic-Central America-United States (CAFTA-DR) Free Trade Agreement. The changes will support the U.S. textile industry in North Carolina and South Carolina, and is expected to save 2,000 American jobs.
“I am pleased that today both the House and the Senate approved an extension to renew the Third-Country Fabric provision of AGOA as well as make important fixes to our CAFTA-DR agreement. The approval of these provisions supports the U.S. textile industry and will save 2,000 American jobs,” said Acting U.S. Commerce Secretary Rebecca Blank. “Today’s bipartisan action will save the jobs of thousands of workers and small business owners in the United States, Africa and Latin America. This legislation is an important part of the Obama Administration’s efforts to strengthen the U.S. manufacturing industry, improve our international trade relationships, and support American jobs.”
The legislation now goes to President Obama for his signature. To read recent Commerce testimony before Congress advocating in favor of legislative action on this issue, please visit www.trade.gov/press/testimony.
Gibson Guitar Corp. Agrees to Resolve Investigation into Lacey Act Violations
U.S. Department of Justice / www.justice.gov
WASHINGTON – Gibson Guitar Corp. entered into a criminal enforcement agreement with the United States today resolving a criminal investigation into 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 was announced today by Assistant Attorney General Ignacia S. Moreno of the Justice Department’s Environment and Natural Resources Division, Jerry Martin, U.S. Attorney for the Middle District of Tennessee and Dan Ashe, Director of the Department of the Interior’s U.S. Fish & Wildlife Service.
The criminal enforcement agreement defers prosecution for criminal violations of the Lacey Act and requires Gibson to pay a penalty amount of $300,000. The agreement further provides for a community service payment of $50,000 to the National Fish and Wildlife Foundation to 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. Gibson will also implement a compliance program designed to strengthen its compliance controls and procedures. In related civil forfeiture actions, Gibson will withdraw its claims to the wood seized in the course of the criminal investigation, including Madagascar ebony from shipments with a total invoice value of $261,844.
In light of Gibson’s acknowledgement of its conduct, its duties under the Lacey Act and its promised cooperation and remedial actions, the government will decline charging Gibson criminally in connection with Gibson’s order, purchase or importation of ebony from Madagascar and ebony and rosewood from India, provided that Gibson fully carries out its obligations under the agreement, and commits no future violations of law, including Lacey Act violations.
“As a result of this investigation and criminal enforcement agreement, Gibson has acknowledged that it failed to act on information that the Madagascar ebony it was purchasing may have violated laws intended to limit overharvesting and conserve valuable wood species from Madagascar, a country which has been severely impacted by deforestation,” said Assistant Attorney General Moreno. “Gibson has ceased acquisitions of wood species from Madagascar and recognizes its duty under the U.S. Lacey Act to guard against the acquisition of wood of illegal origin by verifying the circumstances of its harvest and export, which is good for American business and American consumers.”
“The Department of Justice is committed to enforcing the laws enacted by Congress,” said U.S. Attorney Martin. “Failure to do so harms those who play by the rules and follow the law. This criminal enforcement agreement goes a long way in demonstrating the government’s commitment to protecting the world’s natural resources. The agreement is fair and just in that it assesses serious penalties for Gibson’s behavior while allowing Gibson to continue to focus on the business of making guitars.”
“The Lacey Act’s illegal logging provisions were enacted with bipartisan support in Congress to protect vanishing foreign species and forest ecosystems, while ensuring a level playing field for America’s forest products industry and the people and communities who depend on it,” said U.S. Fish and Wildlife Service Director Ashe. “We’re pleased that Gibson Guitar Corp. has recognized its duties under the Lacey Act to guard against the acquisition of wood of illegal origin from threatened forests and has taken responsibility for actions that may have contributed to the unlawful export and exploitation of wood from some of the world’s most threatened forests.”
Since May 2008, it has been illegal under the Lacey Act to import into the United States plants and plant products (including wood) that have been harvested and exported in violation of the laws of another country. Congress extended the protections of the Lacey Act, the nation’s oldest resource protection law, to these products in an effort to address the environmental and economic impact of illegal logging around the world.
The criminal enforcement agreement includes a detailed statement of facts describing the conduct for which Gibson accepts and acknowledges responsibility. The facts establish the following:
Madagascar Ebony is a slow-growing tree species and supplies are considered threatened in its native environment due to over-exploitation. Both legal and illegal logging of Madagascar Ebony and other tree species have significantly reduced Madagascar’s forest cover. Madagascar’s forests are home to many rare endemic species of plants and animals. The harvest of ebony in and export of unfinished ebony from, Madagascar has been banned since 2006.
Gibson purchased “fingerboard blanks,” consisting of sawn boards of Madagascar ebony, for use in manufacturing guitars. The Madagascar ebony fingerboard blanks were ordered from a supplier who obtained them from an exporter in Madagascar. Gibson’s supplier continued to receive Madagascar ebony fingerboard blanks from its Madagascar exporter after the 2006 ban. The Madagascar exporter did not have authority to export ebony fingerboard blanks after the law issued in Madagascar in 2006.
In 2008, an employee of Gibson participated in a trip to Madagascar, sponsored by a non-profit organization. Participants on the trip, including the Gibson employee, were told that a law passed in 2006 in Madagascar banned the harvest of ebony and the export of any ebony products that were not in finished form. They were further told by trip organizers that instrument parts, such as fingerboard blanks, would be considered unfinished and therefore illegal to export under the 2006 law. Participants also visited the facility of the exporter in Madagascar, from which Gibson’s supplier sourced its Madagascar ebony, and were informed that the wood at the facility was under seizure at that time and could not be moved.
After the Gibson employee returned from Madagascar with this information, he conveyed the information to superiors and others at Gibson. The information received by the Gibson employee during the June 2008 trip, and sent to company management by the employee and others following the June 2008 trip, was not further investigated or acted upon prior to Gibson continuing to place orders with its supplier. Gibson received four shipments of Madagascar ebony fingerboard blanks from its supplier between October 2008 and September 2009.
This case was investigated by the U.S. Fish and Wildlife Service with assistance from U.S. Immigration and Customs Enforcement. The case was handled by the Environmental Crimes Section of the U.S. Department of Justice and the U.S. Attorney’s Office for the Middle District of Tennessee.
CBP U.S. Border Patrol Agents Make Two Seizures of Methampheta-mine Worth More Than $2.1 Million
U.S. Customs & Border Protection / www.cbp.gov
San Diego — U.S. Border Patrol agents seized a total of 105.47 pounds of methamphetamine worth an estimated $2,109,400 yesterday in two separate events.
At approximately 11:30 a.m., agents encountered a 37-year-old male United States citizen driving a 2005 Chevrolet Trailblazer at the I-5 Border Patrol checkpoint. Agents became suspicious of the man’s nervous demeanor and referred him for a secondary inspection. A Border Patrol K-9 team performed a cursory inspection of the vehicle resulting in an alert. Agents searched the vehicle and discovered a five gallon plastic water bottle containing a greenish liquid. The fluid in the bottle tested positive for liquid methamphetamine and weighed a total of 47.62 pounds with an estimated street value of $952,400. The suspected smuggler and narcotics were turned over to the Drug Enforcement Administration (DEA) for further investigation.
Later in the day at about 6 p.m., a Border Patrol K-9 alerted to a 2003 Suzuki XL7 parked near the San Ysidro Port of Entry. Agents searched the unattended vehicle and discovered 28 packages of methamphetamine concealed in the rear quarter panels. The meth weighed 57.85 pounds and had an estimated street value of $1,157,000. The narcotics were seized and turned over to the DEA. The vehicles in both events were seized by the U.S. Border Patrol.
To prevent illicit smuggling of humans, drugs, and other contraband, the U.S. Border Patrol maintains a high level of vigilance on corridors of egress away from our nation’s borders. To report suspicious activity to the U.S. Border Patrol, contact San Diego Sector at (619) 498-9900.
Refunds Stemming From Reebok's Settlement With FTC Mailed to Consumers Who Bought EasyTone and RunTone Shoes and EasyTone Apparel
Company Paid $25 Million for Refunds to Settle FTC Charges of Deceptive Advertising
Federal Trade Commission / www.ftc.gov
In connection with the Federal Trade Commission’s settlement with Reebok International Ltd, a settlement administrator is mailing approximately 315,000 checks to consumers who bought allegedly deceptively advertised toning shoes and apparel from the company.
Ads for Reebok’s toning shoes claimed that sole technology featuring pockets of moving air creates “micro instability” that tones and strengthens muscles as you walk or run.
As part of its efforts to stem overhyped health claims, the FTC last year alleged that Reebok deceptively advertised its “toning shoes” by claiming that consumers wearing the shoes would strengthen and tone leg and buttock muscles more than by wearing regular shoes. Reebok paid $25 million for refunds as part of its settlement agreement with the agency.
The amount each consumer gets back is based on the amount the consumer claimed to have spent on the products. Consumers will receive approximately 87 percent of the amount on their claim forms that was submitted and approved. The deadline for filing a refund request has expired.
Under the terms of the FTC settlement, the funds were made available through a court-approved class action lawsuit. Rust Consulting, Inc., the court approved settlement administrator, will begin mailing the checks on August 8, 2012 to eligible consumers who submitted a valid claim for a refund. The checks must be cashed on or before November 6, 2012. Consumers who have questions should call 1-888-398-5389. The FTC never requires consumers to pay money or provide information before redress checks can be cashed.
Consumers should carefully evaluate advertising claims for work-out gear and exercise equipment. For more information see: How's that Work-out Working Out? Tips on Buying Fitness Gear.
Governor Cuomo Announces State Makes it Illegal to Sell or Possess Bath Salts or Synthetic Drugs
Governor Andrew M. Cuomo / http://www.governor.ny.gov/
Governor Andrew M. Cuomo today announced that the New York State Department of Health (DOH) has issued new regulations to crack down on the increasingly widespread use of bath salts and other synthetic drugs.
The new regulations, issued today by DOH and approved by the Public Health and Health Planning Council, will expand the existing list of prohibited drugs and chemicals to include dozens more substances that are now used to make synthetic drugs, better ensuring that distributors can no longer skirt the law by simply modifying the drug's ingredients. In addition, the regulations will allow for the first time an owner of an establishment and/or an employee selling synthetic drugs to be charged with possession of an illicit substance. Further, to support enforcement, the regulations will increase the criminal penalties for those who violate the rules. Violators will face fines up to $500 and potentially up to 15 days in jail.
"Bath salts and other synthetic drugs pose a direct, serious threat to public health and safety, and we must do everything we can to remove these harmful substances from sale and distribution in New York," Governor Cuomo said. "The actions we are announcing today attack the problem by helping our law enforcement officers enforce the rules, expanding the list of banned substances used to manufacture bath salts, and imposing tougher penalties so those who sell these drugs are held accountable."
Over the past year, there has been a dangerous rise in instances of New Yorkers using synthetic drugs. In 2011, there were 39 reported emergency room visits in upstate New York as a result of bath salts. Already in 2012, there have been 191 such visits with 120 occurring this past June and July. According to the New York State Poison Control Center, in 2010 there were only 20 calls concerning synthetic marijuana poisonings. There were 291 in 2011, and there were already 321 through the first six months of 2012.
Bath salts and other synthetic drugs are manufactured with a similar, but slightly modified structure of controlled substances that are listed on Schedule I of the state and/or federal controlled substances laws as a means to avoid existing drug laws. These designer drugs can be - and are - continually chemically modified in the attempt to avoid legal repercussions.
In an effort to mask their true purpose, these products are marketed as "bath salts" or as "legal alternatives to marijuana." They are currently sold online, in small convenience stores, smoke shops, and other retail outlets. When consumed, these substances produce dangerous effects similar to cocaine and amphetamines, including hallucinations, paranoia, delusions, suicidal thoughts, and violent behavior as well as chest pains, increased blood pressure, and increased heart rates.
Bath Salts are sold under names including, White Lightning, Snow Leopard, Tranquility, Zoom, Ivory Wave, Red Dove, Vanilla Sky, and others. Synthetic marijuana is sold as Spice, K2, Blaze and Red Dawn X among other names.
Although federal law bans the manufacture or sale of many of these substances, as a result of the new regulations put in place today, local law enforcement officials for the first time will be able to pursue perpetrators under state laws and refer violators to local District Attorneys for prosecution.
The State Health Department and the New York State Police will coordinate investigations and arrests with local law enforcement and district attorneys. New criminal penalties will include a fine up to $500 and or up to 15 days in jail. New civil penalties will include a fine of up to $2,000 per violation.
The Governor also announced a new toll-free hotline 1-888-99SALTS (1-888-997-2587). Individuals with information about illegal distribution of bath salts or synthetic drugs are encouraged to call this hotline. For more information visit: http://www.health.ny.gov/professionals/narcotic/index.htm