Thursday, September 27, 2007

Border Fails the Test of Undercover U.S. Investigators

(CBC News – Associated Press)

Undercover American investigators who snuck duffel bags across the U.S.-Canada border have concluded that a smuggler could easily carry radioactive material or other contraband from one country to the other.

The Government Accountability Office, an investigative branch of the U.S. Congress, sent out investigators to test how hard it would be to transfer large red duffel bags at unguarded and unmonitored spots along the 8,000-kilometre border.

The tests were done from four northern states, which were not identified. The exercises were videotaped and photographed.

During one of the tests, a citizen noticed the unusual activity and alerted a border official, but by the time authorities came to the scene, they could not locate the undercover investigators.

“Our work shows that a determined cross-border violator would likely be able to bring radioactive materials or other contraband undetected into the United States by crossing the U.S.-Canada border at any of the locations we investigated,” the accountability office report states.

The details of the investigation were outlined in a 13-page report that was given to Congress on Thursday.

“It’s extremely troubling,” said New York Senator Chuck Schumer during a U.S. Senate hearing into the report’s findings.

‘Obviously, we have to be concerned’: Harper
Investigators determined that the Canadian border with the United States “presents more of a challenge” than the U.S.-Mexico border.

When asked Thursday about the report, Prime Minister Stephen Harper said his government has made significant investments in border security through increasing the number of border guards and boosting co-operation with their U.S. counterparts.

“As you know, the particular materials were admitted through American security on the American side of the border,” the prime minister told reporters.

“But obviously, we have to be concerned. We work hand in glove with American authorities dealing with any kind of threats.”

The report notes that as of May, there were only 972 U.S. Border Patrol agents on the Canadian border, while 11,986 agents patrolled the Mexican border.

Investigators examined the southern border and said they observed a significant number of U.S. National Guard troops and U.S. Border Patrol personnel while driving on state roads, but found little law-enforcement presence on vast stretches of surrounding lands managed by the U.S. government.

Investigators said for security reasons they did not conduct the duffel bag tests at the U.S.-Mexico border.

It is illegal to cross the border at any place other than an official port of entry.

Video: CBC News Report (Real Audio Format: 4:10 min.)

Customs Union Wants Changes After One in Five Border Guards Flunk Firearms Course

(Canadian Press)

The union representing Canada’s border guards says it is concerned about the relatively high number of officers who are flunking the firearms training program.

Ron Moran, national president of the Customs and Excise Union, said slightly more than 20 per cent of the guards who have taken the course on precision shooting have failed, possibly jeopardizing their careers with the Canada Border Services Agency.

“As it stands now, a little more than one in five don’t pass,” Moran said in an interview.

“It’s a huge concern for those who are next in line for those classes and basically see their employment hanging in the balance.”

Moran said the union has hired an expert to review the training program, which he described as a condensed version of the same course given to RCMP recruits.

The border guards are being asked to master precision shooting in just eight days, compared with the 16 weeks RCMP recruits have to achieve the same level of accuracy, he said.

“They (the border guards) have to qualify at 25 metres and shoot, I think, it’s 250 rounds and hit the target with 80 per cent accuracy - it’s something along those lines,” Moran explained.

“It becomes an endurance challenge. Some of our people don’t have the physical endurance to keep their arms straight with the weight of the sidearm when they get into second half of shooting their rounds. They lose their precision.”

He said the failure rate is making guards who have yet to take the course nervous.

The federal government has announced that about 4,800 border officers - including those working at land and marine ports of entry, and inland enforcement officers - will be trained and equipped with firearms over the next few years.

Melisa Leclerc, a spokeswoman for Public Safety Minister Stockwell Day, said the department will be interested in any recommendations the union’s expert makes about the firearms training program.

But she said Monday improvements already have been made to the program as a result of the first two groups of trainees who went through the course.

One hundred and four volunteer trainees took the course in July and August and there are now 80 armed border guards at some of Canada’s busiest crossings.

Ottawa hopes to have at least 350 guards manning ports of entry by this time next year.
“We have made some adjustments,” Leclerc said in an interview.

“Some more will graduate at the end of this month and we will gather feedback from them. We’re always looking at ways to improve it.”

Leclerc said the Canada Border Services Agency has taken several measures to improve the training program, including more coaching on shooting fundamentals to better prepare guards for their qualification sessions.

As well, she said the program has been adjusted to provide 12 additional hours of range time spread out over 14 days.

The guards who failed will have a second opportunity to pass the shooting test, but Moran believes they should have at least two more chances since he does not believe they were properly prepared for the rigorous course.

“They were guinea pigs,” he said.

Moran said the border guards are pleased to see the training program finally underway. It is something many of them have wanted for a long time, he said.

The move to arm Canadian border guards grew after a spate of incidents where agents were forced to flee their posts after warnings of armed criminals approaching the border from the U.S. side.

Last September, about 60 border guards in B.C.’s Lower Mainland fled their posts after it was rumoured armed fugitives were heading from the U.S. into Canada.

U.S. border guards have been armed for many years.

Full implementation of the initiative is expected to take place over a period of 10 years.

Wednesday, September 26, 2007

Deal Ends GM Strike

(Guardian Unlimited)

General Motors resumed production in the US today after round-the-clock negotiations led to a pre-dawn deal ending a two-day strike by 73,000 workers.

In Detroit, the United Auto Workers’ Union emerged from talks at 3.05am to declare that it had secured sufficient concessions for its members to return to their jobs.

Key to the agreement is the establishment of an independent trust that will shoulder the burden of more than $50bn in healthcare liabilities for retired workers. The trust will cover medical costs for 80 years and GM will contribute 70 cents for every dollar of funding.

Although details were held back, the UAW also said it had secured “job security guarantees” - a major sticking point in an industry that has shed more than 268,000 jobs in six years. Industry commentators suggested that GM may have pledged that production of certain new vehicles would be in US plants.

If the deal is approved in a ballot this weekend, every worker will receive a $3,000 bonus.

“It’s an agreement we’re proud to recommend to our membership,” the UAW’s president, Ron Gettelfinger, told a hastily convened press conference in the early hours. “This contract will be better in some ways; it will be different in some ways. Our retirees will be exceptionally pleased with this contract.”

Among the declarations of support for the US’s biggest strike in seven years was a message of solidarity from Britain’s Unite union, which represents some of the 5,500 people employed at GM’s Vauxhall factories in Luton and Ellesmere Port.

Neither GM nor the union made an all-out declaration of victory after a stoppage that added to the financial problems of an already cash-strapped industry. GM made a $2.2bn (£1.1bn) loss last year and this week Mr Gettelfinger admitted that the strike was a sign that “both sides have failed at the bargaining table”.

GM has been anxious to close a chasm between its costs and those of Asian rivals such as Toyota, which recently overtook GM to become the world’s biggest carmaker.

Rebecca Lindland, an analyst at Global Insight, estimated that the creation of a healthcare trust would close about half of a $25-an-hour production disparity with Toyota. She said Wall Street would expect GM to show the benefits.

“This means GM doesn’t have a lot of excuses any more,” she said. “They can’t point to spiralling healthcare costs or a disparity in retirement benefits. They have to perform.”

The strike was costing GM an estimated $100m a day and knock-on effects were already causing the closure of plants in Canada that rely on US supplies. Independent companies supplying parts to GM were also feeling the pinch.

Some labour experts suggested that the UAW never anticipated a long strike and was engaging in “theatre” to win a final few concessions. The nationwide stoppage was eating into the union’s strike fund at a rate of $14.6m a week and experts suggested that if the leadership anticipated digging in they would have chosen to strike at only certain targeted factories.

GM’s chief executive, Rick Wagoner, said the deal would close “fundamental competitive gaps”. “The projected competitive improvements in this agreement will allow us to maintain a strong manufacturing presence in the United States along with significant future investments.”

Monday, September 24, 2007

GM Workers Strike in U.S.

More than 73,000 unionized workers at General Motors have gone on strike in the United States.

United Auto Workers (UAW) workers launched the strike at noon today after an 11 a.m. deadline passed to reach a settlement with management at GM. The strike affects every GM plant in the U.S.

About 19,000 GM workers in Canada will be affected by the strike action as well, as vehicle parts south of the border stop arriving to car and truck assembly plants in Windsor, St. Catharines and Oshawa.

Canadian Auto Workers (CAW) president Buzz Hargrove will discuss the potential implications for the Canadian industry later on Monday. He is expected to meet with the media in Toronto today at 1:30 p.m.

It is the first national strike by UAW since 1976. GM, thought to be in the best shape of the Big Three North American manufacturers, nevertheless exemplifies the state of the domestic car industry, reporting losses of $12.3 billion over the past two years.

AAEI ACE e-Manifest Seminar

ACE e-Manifest: Policy and Operations
Warren, Michigan — October 17, 2007

The American Association of Exporters & Importers is holding an ACE/e-Manifest Seminar in Warren Michigan on October 17, 2007. This is a unique opportunity to hear from Customs and Border Protection (CBP), Canadian trade experts, and both Importers/Exporters and service providers all in one place!

The luncheon keynote speaker will be James Swanson, Chief, Cargo Release Branch, U.S. Customs and Border Protection.

There is still space left to register for AAEI’s upcoming seminar “ACE e-Manifest: Policy and Operations” at The registration fee is $300 for AAEI members and $450 for non-members. Any questions should be directed to AAEI’s Director of Government Affairs, Megan Wilson, at or (202) 857-8009 x 102.

Sunday, September 23, 2007

Pitfalls in Shopping for Car Deals in U.S.

(Derrick Penner – CanWest News/Vancouver Sun)

Canadian Gerry Pyke is being stymied in his efforts to engage in a bit of freelance “free trade” by buying a new Toyota Tacoma pickup truck in Washington state and saving himself, in his estimation, about $6,000.

It’s not because there is a ban on purchasing and importing autos from the United States - with the Canadian dollar hitting par with U.S. currency, the number of Canadians car shopping across the border is skyrocketing.

The roadblock is Toyota’s regional distribution agreements, which forbid dealers in one region from selling to customers who are going to register their cars in another dealer’s territory.

That policy doesn’t sit well with Pyke, of Delta, B.C.. He said that Toyota enjoys the benefits of the North American Free Trade Agreement, which allows it to manufacture cars in Canada and the U.S. and ship them across the border in either direction without tariffs, “while not giving us the benefits of an equalizing dollar.”

It may be “unfair,” as Pyke puts it - but it’s not unique to Toyota.

Manufacturers can’t stop Canadians from buying used cars and importing them. But several manufacturers ban dealers from selling to customers who plan on registering their vehicles in Canada, preventing Canadians from taking advantage of lower list prices in the U.S..

Glen Ringdal, CEO of the New Car Dealers Association of B.C., said while cross-border sales may look attractive in price, they aren’t always easy to pursue, and come with their own pitfalls.

For new sales, he said, Canadians who buy in the U.S. often run into problems getting warranties honoured. Also, if they run into difficulties that require going back to the dealer, “they have a long way to go to see him.”

When buyers import cars, he said, they also have to spend money making modifications to ensure they comply with Canadian vehicle safety laws.

Along with Toyota, both GM and Acura refuse to let new cars sold in the U.S. cross the border into Canada. But Canadians should have no problems buying Fords, Subarus or Nissans for import.

At Skagit Subaru in Burlington, Wash., Canadian sales “have been a lot more active recently,” according to Joe Thurmond, the dealership’s sales manager. “We’ve seen a few (Canadians) each week.”

Randy Carlton, sales manager at Lynwood Acura, said he sees a lot of Canadians too, but directs their attention to the used-car side of his lot. Selling new vehicles across the border has always been a violation of his dealership’s sales agreement.

“We didn’t realize it until it was brought to our attention,” Carlton said.

The cross-border market is growing as the value of the Canadian dollar remains high against U.S. dollar. Canadians bought a record 112,826 cars in the U.S. during 2006, according to the North American Automobile Trade Association, and the trend is still on the upswing.

However, brokers in the business of importing vehicles for Canadians report that the manufacturers are getting more strict about clamping down on sales to Canadians.

“It is getting harder for people to buy new (cars to import),” Randal Reid, owner of Kelowna-based PNT Registered Importers Inc. “The manufacturers are stepping up to the program a little more, making sure there’s not a carte blanche influx (of cars into Canada).”

Reid said for Canadians, finding an American dealer can be hit or miss, and depends on whether they find a “friendly dealer.” He added that his company used to work with a friendly Toyota dealer in Montana until a while ago, when Toyota stepped in and stopped the practice.

Toyota U.S.A. spokesman Xavier Dominicis said the border ban has been a long-standing company policy.

“This isn’t a Canada-specific directive,” Dominicis said. “This is the way our distributorships work throughout the world.”

“The purpose... is the efficiency of allocation of product. Each distributorship has its own territory that it services, and you have to maintain the integrity of the territory, or distributorship.”

Toyota Canada spokeswoman Nicole Grant added that on pricing, “in the long run, it’s always our goal to be as competitive as we can in the marketplace.”

She added that often “unseen differences” between components in Canadian and U.S. models will influence some of the difference in price.

GM Canada spokeswoman Patty Faith said GM doesn’t encourage people to buy vehicles in the U.S. and take them north. GM won’t honour a vehicle’s warranty for six months after it crosses the border.

“We price to the Canadian marketplace,” she added.

While GM does monitor the exchange rate, “it’s not something we would look at in determining prices. Exchange rates are volatile. They go up and down on a regular basis. You wouldn’t have seen prices change the other way when the Canadian dollar was low.”

NAATA president Brian Osler said that, generally, manufacturers will tell their dealers in the U.S. not to sell new cars to Canadians.

There is a way for Canadian buyers to get around that rule. Osler said that there are brokers, or independent auto dealers, with operations based in the U.S. that will buy new cars from American dealers. Those cars are registered in the U.S., Osler said, effectively making them used cars that the broker or dealer can pass on to a Canadian buyer.

But Ringdal said many states “don’t have anywhere near the used-vehicle history reporting that we have here,” which can cause buyers difficulties.

Saturday, September 22, 2007

Canada, US Trim Cross-Border Taxes

(Associated Press)

Canada and the U.S. formally agreed Friday to eliminate the so-called withholding tax on investment interest that businesses have long said curtails investment between the two countries.

U.S. Treasury Secretary Henry Paulson and Canadian Finance Minister Jim Flaherty praised the initiative, which they said had been 10 years in the making, saying it will further trade as well as investment.

The change eliminates the 10 percent tax on interest paid by borrowers in one country to lenders across the border in arm’s-length transactions.

“We share not only a 5,500-mile border, we share a commitment to trade and open investment,” Paulson said. “By further reducing barriers to cross-border activities for U.S. and Canadian taxpayers, this updating of our treaty enables to us to move even more swiftly in the dynamic global economy.”

The update to the Canada-U.S. tax treaty was promised in Canada’s last federal budget and estimated to cost Ottawa $70 million in the current fiscal year and $180 million in 2008-2009.

The withholding tax in non-arm’s-length arrangements — usually between corporate subsidiaries — also will be phased out over three years.

CBP Opens Fourth Northern Border Air Branch

North Dakota-Based Aircraft will Support Homeland Security Operations

U.S. Customs and Border Protection officially opened the North Dakota Air Branch last Friday at Grand Forks International Airport. As part of a northern border security strategy, this is the forth of five planned new facilities to augment CBP’s northern border capabilities with air and marine law enforcement, surveillance and airspace security.

“With the opening of this air branch in North Dakota, CBP takes another step toward the consolidation and modernization of the largest civilian law enforcement air force in the world,” said Jayson Ahern CBP deputy commissioner. “I commend all those who worked so hard to make this Air Branch operational and the air interdiction agents and mission support personnel based here to secure America’s northern border.”

At full capacity, the Air Branch will consist of up to 50 air interdiction agents (pilots), air enforcement agents and mission support personnel. Air Branch assets will include: two UH-60 Blackhawk interdiction and apprehension helicopters, two EC-120 light observation helicopters, one AS 350B3 helicopter, two Cessna 206 surveillance and training aircraft, two Cessna 550 Citation II intercept aircraft, one Pilatus PC-12 surveillance and tracking aircraft, and Predator B unmanned aircraft systems providing high altitude detection and surveillance support capabilities. The

Air Branch will support border security operations and conduct regular mission patrols and is equipped for rapid incident response.

Since 1956, the Border Patrol has maintained a small air detachment in North Dakota. In 2004, the Department of Homeland Security began the creation of a Northern Border Air Wing with the strong support from the U.S. Congress. This air wing was to have five air and marine branches in the northern border with the purpose of replicating on the U.S.-Canadian border the successful air and marine border security operations built over decades on the Southern Border.

In 2005, when CBP integrated all its air and marine assets under the CBP Office of Air and Marine, the site of the two-aircraft detachment in North Dakota was selected as the location for the expanded Air Branch.

“We’re excited about the new Customs and Border Protection Air Branch located in Grand Forks,” North Dakota Gov. John Hoeven said. “It brings both manned and unmanned aircraft, as well as high-tech surveillance equipment, to support the border mission in coordination with the Grand Forks Air Force Base, which will provide launch and recovery for Unmanned Aircraft Systems. We have supported, and will continue to support, this important mission with state resources as a part of our effort to build Grand Forks as a national center for Unmanned Aircraft Systems.”

“Strengthening our northern border and boosting our nation’s security is one of my top priorities,” Sen. Kent Conrad, (D-N.D.) said. “The tremendous work being done by the men and women at the Grand Forks Air Branch is vital to securing the northern border, adding another layer of security to the nation.”

Sen. Byron L. Dorgan, (D-N.D.), who could not attend the event, expressed his support stating “The Northern Border Air Branch at Grand Forks will be an important component of our effort to strengthen security at our border with Canada. I’ve long said that it’s important that we have more resources to control our northern border, and this air branch is an important step in that direction.”

As part of the DHS Northern Border Air Wing, CBP opened in 2004 the first two Air and Marine Branches at Bellingham, Wash. and Plattsburg, N.Y. The third branch was opened in 2006 in Great Falls, Mont. The fifth branch will be located in Detroit and is scheduled to open in spring 2008. Three older branches that are part of the air wing are in Spokane, Wash., Buffalo, N.Y. and Houlton, Maine.

The Air Branch expands capabilities across the North Dakota and Minnesota border with Canada. The expansion plays an important role in DHS efforts, in coordination with federal, state, local and Canadian law enforcement authorities, to dismantle human and narcotics smuggling networks.

“It is great to be back home.” said the CBP facility Director of Air Operations Mark Johnson, a Stanley, N.D. native. “I and all the employees of the North Dakota Air Branch are very excited to be here and to bring part of the largest law enforcement air force in the world to the North-Central Plains border region.”

Tuesday, September 18, 2007

CBP Clarifies Rules for NAFTA MPF Exemption and Certificate of Origin Requirements

U.S. Customs and Border Protection (CBP, Customs) issued a Federal Register notice on Monday, September 17, 2007 amending title 19 of the Code of Federal Regulations (19 CFR), to clarify declaration requirements for claiming Merchandise Processing Fee (MPF) exemptions for goods subject to the North American Free Trade Agreement (NAFTA). The notice also clarifies certain Certificate of Origin requirements for NAFTA goods.

Regarding MPF exemptions, the notice addresses “situations in which an importer of an originating good does not have a duty preference incentive to make the required NAFTA declaration upon entry because the Normal Trade Relations rate of duty on the good is free (i.e., the good is unconditionally duty free).”

According to 19 CFR 24.23(b)(1)(i)(B), all merchandise formally entered or released by Customs is subject to a minimum MPF of $25 unless otherwise exempted. Some NAFTA goods may qualify for exemptions identified in 19 CFR 24.23(c), and as stated in the register notice, “in order to claim the MPF exemption for unconditionally free goods from a NAFTA country, an importer of an originating good must place the appropriate special program indicator opposite the good on the entry form even if the importer is not actually claiming NAFTA preference for duty purposes.”

The Federal Register notice also explains that importers may be required to provide a Certificate of Origin for NAFTA-originating goods, unless the value of the shipment is $2,500 or less. It goes on to clarify that “the $2,500 value refers to the total value of a shipment and not the value of the individual goods in a shipment.” The full text of the Federal Register notice can be found here.