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American Institute for International Steel Inc - Comments Received on Advanced Notice of Proposed Rule Making

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American Institute for International Steel Inc - Comments Received on Advanced Notice of Proposed Rule Making Powered By Docstoc
					AMERICAN INSTITUTE FORINTERNATIONAL STEEL,INC.

September24t2004

Kelly Parlchill Director for Industry Support and Analysis Import Administration, Room.3713 Defartrnentof Commerce 14l Streetand Constitution Avenue,N.W. Waslililgton, D,C. ~0230 Re: Comments on Advanleed Notice of Proposed Rille Makin!: Monitorin, and Analysis System
Dear Mr. Parkhill:

Steel Import

The American Institute for IntemationaJSteel (AIlS) is a trade associationworking to promote econonUcgrowth through free trade,tIle defenseof private initiative ill the 'buyiug and selling of steel, and the preservation of unhamperedaccessto world markets. AIlS has previously cons\lltedwith YOUt both in meetingsat your offices and in your presentations AIlS at meetings,and Sllbmittedwritten CODUlleuts co,nc~ming existing Steel Import Monitoring and the Analysis {SIMA} system. These comments specifically respond to the Advanced Notice of Proposed Rulemaking. DoclcetNumber 040305083-40B3-01, published hi the FederalRegister. AIlS once agmnsets forth its argumentthat SIMA, and allY ~)(tended replacementsystem)is or an unnecessary additional layer of tTadedocumentation, adding to the time and,cost for tr~,ers engaged importing steel without providing any significant infonnational benefit. The Institute in also respondsto Ute specific issuesraised in the Notice of ProposedRulemaking with regard to
issue~and features that should be considered if SIMA i& llevertheless extended or replaced. SJMA is an Unnecessary Administrative Burden on the ImDort Process The advanced notice indicates that "the purpose of the...sIMA provide...accurate and timely infonnation on imports of certain steel products," part of the "Global Steel 201" relief package, part of tbe intent was to provide "5uTges" ofimports to aid in the administratio}), oftTade is~l\.)e&; another aspect of system is to Established as infounation 011 the system is to

provide data analysisand infomlation in 'useflll fonnats for all parties concernedwith steeltrade. The generallyeasy accessibilityof information on the system,and certain of the l'epOl1 fonnats, have been found helpful by some importers and traders ill wutching and anaJyzingtnde movements, AIlS believes, however, that t1\is limited utility is outweighed by the additions} burden placed on the trading community of filil]g and complying witl1 import license requirements, view of the easy accessto other publicly available trade data which provides in essentiallythe sameinformation contentin an ahnoBtidentical, and sometimes improved. time frame.

1),00 Stteet, NW. Snitc1830 W.shingtOD, DC 20006 Tch 202,628.5878 Fax: 202.1'7.3134 Internet: www,aiia.otB L

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AIlS applaudsthe efforts made by the CommerceDepa.rtJnent developing the SIMA in system to establish a program which. does .not entail excessively burdensome reporting requirements. Nevertheless,importers directly, or through their brokers or suppliers,have extra administrative steps added to every import transaction, including completion of the import license application, with the necessity for proper classification and attribution of goods; and carryingthe License infonnationthroughto the entrysummary filed with Customs Border and Protection)with potential penalty liability for even inadvertentfailure to comply. Although the burden involved in any single transactionmay be reasonablynegligible. the total or time and effort requiredfor a11 the steel import transactions of which.occur addssignificant cost, and can on occasional result in delayedproduct clearance, inadvertentpenaJtyliability. or Alternative sourcesof information.are easily availableto provide the samec9sentiBl data. in somecaseson an even more timely basis than that producedby the SIMA system. All of the information which goes into the SIMA system also goes into Census,and results in publicly available reports distributed only a short time after the availability of the SIMA data. The infonnation in these reports is also picl{ed up and redistributed by various organizations, including the AISI and ADS itself. The SIMA data, like the Censusdata, are based on actUal transactions. One of the prohlcms inus1l1Sthose data to follow trends. and predict possible"surges". is the limitation to actual transactio'ns, and the necessarylag in reporting uutil the transactionstake place. An alternatedata sourceis the steelimport market survey conductedby and for AILS, and reported on its website at www.aiis.org. This SlUVcy securesinput from multiple trading sources.and ~ompilesthe data to produce reports on expectedtrends in vohu:ne,prices, and supply/demand balancebasedon advancebookings. The information includesnot only overall steelimports but is broken down. by product categories. The system has been in operalioJl long enough 10 demonstratea high d.cgrecof accuracy in predicting import volmne and pricing, accordingly making trend infonnati.on available on a reliable basismuch earlier than even a revised version of SIMA could do. AIlS continu~sto believe that the time and cost burdenof reporting in the SIMA system, even though kept as minimal as possible; combined with the widespread availability of essentially identical infonnation, and better predictive tools; supports the conclusion that the licensing system is an wmecessaryex1rabUlden on international trade, and should either be discontinuedor allowed to expire on March 21. 2005. IssuesADDlic~ble all ExtendedIRevised to SIMA ProductCoverage The products covered in the SIMA systemare th05Cinchaded the Global Steel 201 of in which it was part. There is no specific reason.as the remedy to which it was attachedhasbeen terminated,to continue with the sameproduct coverage. There is, however, no basis for any significant expansionof product coverage,as the systemalreadyincludes tbose products found sufficiently sensitiveto be included in the 201 action.

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Timin~ of the License Application This issue causedconsiderablecontroversy and discussion at the time that SIMA was first implemented. One of the points made by AllS at that time, which we believe is slm importantand valid, is the link betweenthe information provided with the import ticen$t andthat set tanh on the Cl\~tomsEntry Summary. Without that link, it would becomeextremelydifficult to colTclateand validate information betWeen SIMA systemand the data gatheredon actual the importations by Census. Any attempt to requite the filing of import license applications significantly.pri.orto the entry, and not tied to specific entries,would tend to createsomewhat speculativedata, as trmlsactions are often subject to changeuntlJ very close to their shipping dates. The AIlS survey system,describedabove,works, and has proved to be a valid pr~dictot, because addresses it price and volume trends,andmakesno attemptto tie specific transactions to specific enl"ries. Any attempt to changeSIMA into a more long term predictive systemwould, unlessit adoptedproceduressimilar to the AIIS SUf'ley,most likely have too many uncontrolled fluctuations due to changesin specific transactionsover time. Shifting SJMA to this type of predictive systemwould also be duplicative of a servicealreadyprovided in the private sectorby AIIS. It is our \U1derstanding that the majority of import license applications are filed at or immediate1yprior to the filing of the Entry or Entry Swnmary with Customs. The system allowiug filing up to two months prior to entry for thosedesiringto do so a11ows thosecertainof their transaction data to enter them at an early time, while not requiring companiesto input somewhatspeculativedata before transactions have actually beenfmalizecL Becausethere is no .re<1sonable method. other than the link to the CustomsEntry Summary,to verify data accuracy for specific transactions(without e5tablishingan extremelyburdensomeand complex process), no changeshould be made in the throng of the license application from that cxjsting in the current system. We also note that the current systemlw been acceptedby Customsas there is Httle administrativeburden placedon that agency. Irnport Monitor The data available in the import moni.tor bas been foW\d useful by some traders (al.tbough.as noted above, not enough to warrant the burden of the entire reporting system). Should SIMA be extended,care should be taken in any revisions or expansionsof the import monitor to avoid data disclosure or analysis which could allow improper identification of individual firms and specific transactions. This will requireutilizing the sametype of restrictions
nn /!iC!t"ln.::nr,. nf' .C!'I1r.h r1nminr'.nrnnrn1,." in thl". f'.1'!I'!I;'I!!:. OPJl\Mtment 1'~nrtq

Conclusion
A11~connnuesto nelleve toat the ~1MJ\ system1S unnecessary an aoamonal DUMen on the import steel trade. requiring the expenditureof time and money, and exposureto possible penalty liability. completely out of proportion to the small benefits gained by some of the data presen1ation modes. Becausethe infonnation supplied through SIMA is generally available in abnost identical compilations wi1hin similar time [Tames.and other sources provide better

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predictive data,the SIMA systemis no longer neces$ary, shouldbe tenninated. allowed to and or expue. Jf the SIMA system is extended and/or modified. product coverage should not be expanded. The current administrative processfor flUng for licenses.including the timing of the licenl>e application.hasproveDto be minimally intrusive (although,as noted above,cumulatively requUingsignificant resources),and should be continuedessentiallyunchanged.

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