Renewal of the Generalized System of Preference (GSP)

On June 29, 2015, President Obama signed into law a bill (H.R. 1295), that reauthorizes the Generalized System of Preferences (GSP) (which expired on July 31, 2013) through Dec. 31, 2017.  Under the new law, duty reductions under the GSP program will begin 30 days after the law is enacted, which is effective July 29, 2015.  H.R. 1295 also extends duty reductions retroactively for any goods entered in between July 31, 2013, and the effective date.  This excludes goods that entered from Russia, which formally graduated from the GSP program on Oct. 4, 2014, and any other countries that are no longer eligible for GSP benefits, such as Bangladesh.

Accordingly, filers shall be entitled to file GSP-eligible entry summaries, utilizing the Special Program Indicator (SPI) “A,” “A+,” or “A*,” without the payment of duty for shipments entered or withdrawn from warehouse for consumption effective July 29, 2015.

Goods entered between July 31, 2013 and July 29, 2015 “shall be liquidated or re-liquidated” as though they had entered before the program expired.  A process is in place by which importers can claim their duty refunds by filing a request for liquidation or re-liquidation with CBP within 180 days of enactment (by December 28, 2015).  Then CBP would refund the duties not later than 90 days after liquidation or re-liquidation.

U.S. Customs and Border Protection (CBP) will begin processing for entries filed via the Automated Broker Interface (ABI) with the Special Program Indicator (SPI) “A,” “A+,” or “A*” for duties deposited on GSP-eligible goods during the lapse period from August 1, 2013 through July 28, 2015. Therefore, no action is required for such entries filed with SPIs “A,” “A+,” or “A*” during the lapse period described above.

For un-liquated  ACE entry summaries where no SPI was transmitted, retroactive GSP claims must be made via post-summary correction, where applicable, i.e., if the entry meets the time requirements for PSC filing and the Congressional December 28, 2015 deadline.

All other requests for refunds must be made in writing by December 28, 2015 and must contain sufficient information to enable CBP to locate the entry. To expedite the refund, CBP recommends that the request indicate the entry number, line number, and requested refund amount. Any amounts owed by the United States pursuant to the liquidation or re-liquidation of an entry will be paid, without interest.

Questions regarding this guidance, with respect to the GSP program, should be directed to the Trade Agreements Branch at FTA@dhs.gov. Entry summary and refund processing questions should be directed to the Entry Process Branch atOTENTRYSUMMARY@CBP.DHS.GOV.

 

http://www.cbp.gov/trade/trade-community/outreach-programs/trade-agreements/special-trade-programs/gsp/gsp-renewal

Lockheed to buy United Tech’s Sikorsky for over $8 billion

WASHINGTON (Reuters) – Lockheed Martin Corp (LMT.N) has agreed to buy United Technologies Corp’s (UTX.N) Sikorsky Aircraft for over $8 billion, two sources said on Sunday, cementing a deal that would confirm Lockheed’s dominance in weapons making and giving the Black Hawk helicopter to the maker of the F-35 fighter jet.

The deal will add further heft to Lockheed, which already has annual revenues of around $45 billion and dwarves its nearest competitors, the defense business of Boeing Co (BA.N) and Northrop Grumman Corp (NOC.N).

It will make Lockheed less reliant on the $391 billion F-35 fighter jet business, while expanding its overseas sales by adding Sikorsky’s iconic Black Hawk helicopters to a product line that already spans everything from satellites to naval ships.

The two companies plan to announce the deal on Monday before both report second-quarter results on Tuesday, said the sources, who were not authorized to speak publicly.

It will be Lockheed’s largest acquisition since it bought Martin Marietta Corp for about $10 billion two decades ago. It is the first major strategic move for both United Tech Chief Executive Officer Greg Hayes, who was elevated to CEO from finance chief in November, and Lockheed CEO Marillyn Hewson, who took her job in January 2013.

United Technologies and Lockheed officials declined comment.

Textron Inc (TXT.N), parent of Bell Helicopter, had submitted a bid for Sikorsky, but dropped out of the bidding after the price rose, according to several sources familiar with the matter. Both helicopter makers have seen revenues drop due to lower demand from the oil and gas sector.

Pentagon officials last week said they would carefully evaluate any sale of Sikorsky, saying it was important to the department to maintain competition and avoid market distortions.

The U.S. Defense Department can object to a merger involving its key suppliers during a federal antitrust review, which in this case could be led by the U.S. Justice Department.

Industry executives do not expect antitrust objections since Lockheed does not build helicopters, but said U.S. officials could ask for certain written assurances given Lockheed’s expanded scale.

“It’s a big deal, but it doesn’t concentrate markets any further than they already were,” said Virginia-based defense consultant Loren Thompson. “There’s no real overlap between the fighter market and the rotorcraft market. They’re discrete markets with different customers and users.”

Lockheed is also looking to shed some of its lower-margin services businesses, which could help lower revenues in coming months, according to several sources familiar with the matter.

Industry executives have long predicted further consolidation in the U.S. defense market after a massive contraction in the 1990s after the Cold War. The only sector that had remained largely unscathed was the helicopter market. Boeing, which makes CH-47 Chinook helicopters and works with Bell on the V-22, has already teamed up with Sikorsky to develop a next-generation helicopter for the U.S. military.

UTC in March said it would explore alternatives for Sikorsky, which accounted for $7.5 billion in sales last year out of total UTC revenues of $65 billion. In June, it said it would exit the helicopter business and sell or spin off Sikorsky, which expects slower revenue growth and has lower profit margins than other UTC divisions.

Sikorsky’s fit with United Tech, which also makes Pratt & Whitney jet engines and Otis elevators, had been long debated on Wall Street.

Sikorsky’s first-quarter operating profit dropped 11 percent on a 7 percent fall in sales. In June, the unit announced 1,400 job cuts and said it would consolidate facilities.

The price of the acquisition was inflated by a huge tax bill facing UTC since Sikorsky’s value has appreciated so much since it became part of United Tech in 1929.

UTC could use the funds for other large acquisitions, although the CEO has said the high valuations of targets have made potential transactions expensive.

Lockheed decided to proceed with the deal, despite the hefty price tag, because it views Sikorsky as a “signature company” that will ensure strong revenues in the medium term, when F-35 production begins to taper off, according to two of the sources.

Lockheed and Sikorsky already work together on several major helicopter programs, including the presidential helicopter, a combat rescue helicopter and the MH-60R- and S-model helicopters built for the Navy and Marine Corps.

Sikorsky’s strong foreign sales would help Lockheed expand its international footprint, said Richard Aboulafia, aerospace analyst with the Virginia-based Teal Group.

“It’s a great business for them to own. In addition to the F-35 and the C-130J, Sikorsky is another great brand for them to underpin their defense strategy,” he said.

Lockheed is keen to preserve the Sikorsky brand, the sources said, which means the company may well allow Sikorsky to continue functioning as a standalone business instead of integrating it into its already huge Aeronautics division, which had revenues of over $14 billion last year.

Other big aerospace companies, including Italy’s Finmeccanica SpA, Europe’s Airbus and Textron Inc, allow their helicopter businesses to operate as separate units.

(Additional reporting by Mike Stone; Editing by Andrew Heavens, Andrea Ricci and Nick Zieminski)

http://mobile.reuters.com/article/idUSKCN0PT0MM20150719?irpc=932

China betting big on these ten industries

Global consultancy McKinsey projects China companies to become front-runners in some, if not all, of the key industries that are listed in the “Made in China 2025” initiative.

 

The national plan, announced in May 2015, is designed to transform China from a manufacturing giant into a world manufacturing power in ten years, according to an earlier notice by State Council, the country’s cabinet.  The cabinet also unveiled a list of ten key sectors that have the most growth potential.  “We can be sure that many Chinese companies, private and State-owned, are revising their strategies to align with the government’s priorities and that local capacity will rise exponentially,” wrote Gordon Orr, chairman and director of McKinsey Asia, in his blog in the company’s website.

 

“Customers may be the biggest beneficiaries in the decade ahead as the government’s strategy drives companies down the experience curve much faster than would otherwise have been the case,” said Orr.  “While experience reminds us that success will be elusive in some sectors, in several it is likely that Chinese companies will become much, much stronger global leaders by the end of this period,” said the Shanghai-based director.

 

Listed below are the ten key industries where China will be promoting breakthroughs:

 

  1. Agricultural machinery.

 

  1. Medicine and medical devices.

 

  1. New materials.

 

  1. Power equipment.

 

  1. Energy-saving vehicles and new-energy vehicles.

 

  1. Railway equipment.

 

  1. Ocean engineering equipment and high-tech ships.

 

  1. Aerospace equipment.

 

  1. Numerical control tools and robotics.

 

  1. Information technology.

http://www.chinadaily.com.cn/business/2015-06/30/content_21138379.htm

China signs deal with Airbus to purchase 45 A330 planes

PARIS – On June 30, 2015, China Aviation Supplies Holding Company signed a deal with Airbus to purchase 45 330 Family aircrafts; they also signed a Memorandum of Understanding for an option to purchase 30 A330s, said Airbus in a press release published on June 30, 2015.

“China is today the most important market for aviation in the world, we can be confident that air transport in China will continue to undergo rapid growth,” said Fabrice Bregier, Airbus President and CEO, adding that “we are honored to contribute to this development.”

According to Airbus’ market forecast, China will become the leading country for passenger air traffic, given the fact that its passenger traffic grows well above the world average.  According to the aircraft manufacturer, in the 20-year period between 2014-2033, China will need more than 5,300 new commercial passenger aircraft.  At the present time, the in-service Airbus fleet with China operators comprises over 1,150 aircraft, including 150 A330 Family aircraft (http://www.chinadaily.com.cn/business/2015-07/01/content_21148953.htm).