CBP Issues Guidelines For Assessment & Mitigation of Claims for Liquidated Damages
On
October 17, 2008, the U.S. Customs and Border Protection (CBP)
issued a
general notice announcing
guidelines for the assessment of liquidated damages claims as an
alternative sanction to counter late payment of entry duties and
fees.
Under the current procedure, if a bond principal fails to pay Periodic Monthly Payment Statement estimated duties in a timely fashion, CBP requires the bond principal to file entry summary documentation with estimated duties and fees attached before its merchandise may be released from any CBP port.
Under the new guidelines, when a Periodic Monthly Statement estimated duty payment is not paid in full on or before the 15th of the working day after the month in which the entry or release of the merchandise has occurred, CBP has the authority to jointly and severally assess liquidated damages against the bond principal and surety.
Before issuing any claims for liquidated damages, CBP will notify the statement filer electronically or by paper notice on or before the first day of the month following the month that the payment was due that those estimated duties and fees have not been paid. The statement filer will have two working days from the date of notification to pay the estimated duties and fees or correct the situation. If the late fees are not paid after the two-working day period, the CBP will issue a liquidated damages claim to bond principals and sureties, jointly and severally, for non-payment of the estimated duties and fees.
If the estimated duties and fees are paid in an untimely manner, CBP may issue a liquidated damages claim or a broker penalty claim. Payment of the estimated duties and fees within the two-working day period does not relieve any charged party from incurring a claim for late payment of those estimated duties and fees.
Furthermore, CBP may exercise its authority to suspend any bond principal (the importer of record) from participating in the Periodic Monthly Payment Statement test and require that the bond principal pay estimated duties and fees on an entry-by-entry basis. CBP may also exercise its authority to require the bond principal to file entry summary documentation with estimated duties and fees attached before merchandise is released from any CBP port.
Under the current procedure, if a bond principal fails to pay Periodic Monthly Payment Statement estimated duties in a timely fashion, CBP requires the bond principal to file entry summary documentation with estimated duties and fees attached before its merchandise may be released from any CBP port.
Under the new guidelines, when a Periodic Monthly Statement estimated duty payment is not paid in full on or before the 15th of the working day after the month in which the entry or release of the merchandise has occurred, CBP has the authority to jointly and severally assess liquidated damages against the bond principal and surety.
Before issuing any claims for liquidated damages, CBP will notify the statement filer electronically or by paper notice on or before the first day of the month following the month that the payment was due that those estimated duties and fees have not been paid. The statement filer will have two working days from the date of notification to pay the estimated duties and fees or correct the situation. If the late fees are not paid after the two-working day period, the CBP will issue a liquidated damages claim to bond principals and sureties, jointly and severally, for non-payment of the estimated duties and fees.
If the estimated duties and fees are paid in an untimely manner, CBP may issue a liquidated damages claim or a broker penalty claim. Payment of the estimated duties and fees within the two-working day period does not relieve any charged party from incurring a claim for late payment of those estimated duties and fees.
Furthermore, CBP may exercise its authority to suspend any bond principal (the importer of record) from participating in the Periodic Monthly Payment Statement test and require that the bond principal pay estimated duties and fees on an entry-by-entry basis. CBP may also exercise its authority to require the bond principal to file entry summary documentation with estimated duties and fees attached before merchandise is released from any CBP port.