CBP Issues Interim Final Rule on “10+2” Importer Security Filing and Additional Carrier Requirements
11/25/08 09:08 PM
On
November 25, 2008, the U.S. Customs and Border Protection (CBP)
issued an
interim final rule
in
the Federal Register on the Importer Security Filing and Additional
Carrier Requirements, also known as the “10+2” Rule. The 10+2 Rule
requires importers and carriers to report additional data to CBP
for all vessel cargo headed for the U.S.
Effective January 26, 2009, the Importer Security Filing will require carriers to provide CBP with vessel stow plans and container status messages, while importers must report to CBP the following 10 data elements:
The 10+2 Rule requires that importers transmit an importer security filing no later than 24 hours prior to lading at the foreign port. This information must be submitted to CBP via a CBP-approved electronic data system. The container stuffing location and consolidator date may be filed no later than 24 hours before arrival at a U.S. port.
Under the new rule, importers will be legally responsible for the accuracy and timeliness of the Import Security Filing, regardless of whether a broker or other agent actually filed it. CBP has also revised the sanctions for failure to comply with the reporting requirements. Under the new rule, liquidated damages for violations of the Importer Security Filing requirements are changed from the value of merchandise to $5,000 per violation.
Effective January 26, 2009, the Importer Security Filing will require carriers to provide CBP with vessel stow plans and container status messages, while importers must report to CBP the following 10 data elements:
- Seller,
- Buyer,
- Importer of record number / Foreign trade zone applicant identification number,
- Consignee number,
- Manufacturer (or supplier),
- Ship to party,
- Country of origin,
- Commodity Harmonized Tariff Schedule of the United States (HTSUS) number,
- Container stuffing location, and
- Consolidator (stuffer).
The 10+2 Rule requires that importers transmit an importer security filing no later than 24 hours prior to lading at the foreign port. This information must be submitted to CBP via a CBP-approved electronic data system. The container stuffing location and consolidator date may be filed no later than 24 hours before arrival at a U.S. port.
Under the new rule, importers will be legally responsible for the accuracy and timeliness of the Import Security Filing, regardless of whether a broker or other agent actually filed it. CBP has also revised the sanctions for failure to comply with the reporting requirements. Under the new rule, liquidated damages for violations of the Importer Security Filing requirements are changed from the value of merchandise to $5,000 per violation.
2008 CBP Trade Symposium Materials Posted
10/31/08 12:39 AM
U.S. Customs and Border
Protection (CBP) hosted its 2008 Trade Symposium in Washington,
D.C. on October 29 - 31, 2008. CBP posted remarks
by CBP
Commissioner W. Ralph Basham and event materials on its website.
The agenda for the symposium is
also available.
CBP To Permit Third Party Logistics Providers to Enroll in C-TPAT Starting January 2009
10/01/08 12:30 AM
On
September 30, 2008, U.S. Customs and Border Protection (CBP)
announced that
it will permit Third Party Logistics Providers (3PLs) to enroll in
the Customs-Trade Partnership Against Terrorism
(C-TPAT)
program starting in January 2009.
A 3PL is a firm that provides outsourced or “third party” logistics services to some, or sometimes all of a company’s supply chain management functions. 3PLs typically specialize in integrated warehousing and transportation services that can be customized to a customer’s needs based on market conditions and the demands and delivery service requirement for their products and materials. Typical outsourced logistics functions include inbound freight, customs and freight consolidation, and warehousing.
C-TPAT will provide for an implementation period to accept applications. The automated application process will take approximately 90 days to be available on-line. 3PLs interested in applying for C-TPAT can review the minimum-security criteria here.
The regulated minimum-security criteria areas include:
Effective January 1, 2009, these new minimum-security criteria establish the baseline level of security measures. All eligibility requirements must be met or exceeded for a 3PL to enroll in C-TPAT. CBP will continue to use validations to determine whether 3PLs have adopted these security criteria. Those 3PLs found to be deficient, may be suspended, or be removed from the program entirely.
A 3PL is a firm that provides outsourced or “third party” logistics services to some, or sometimes all of a company’s supply chain management functions. 3PLs typically specialize in integrated warehousing and transportation services that can be customized to a customer’s needs based on market conditions and the demands and delivery service requirement for their products and materials. Typical outsourced logistics functions include inbound freight, customs and freight consolidation, and warehousing.
C-TPAT will provide for an implementation period to accept applications. The automated application process will take approximately 90 days to be available on-line. 3PLs interested in applying for C-TPAT can review the minimum-security criteria here.
The regulated minimum-security criteria areas include:
- Business partner requirements (service provider screening; customer selection)
- Security procedures
- Container/trailer inspection, seals, storage, security (where applicable)
- Physical security and access controls
- Procedural security (document processing, manifesting, shipping & receiving)
- Information Technology (IT) security
- Security training and threat awareness
Effective January 1, 2009, these new minimum-security criteria establish the baseline level of security measures. All eligibility requirements must be met or exceeded for a 3PL to enroll in C-TPAT. CBP will continue to use validations to determine whether 3PLs have adopted these security criteria. Those 3PLs found to be deficient, may be suspended, or be removed from the program entirely.
CBP Extends Comment Period for Proposed Uniform Rules of Origin
09/10/08 10:54 PM
On September 8, 2008, U.S. Bureau
of Customs and Border Protection (CBP) announced that the comment period on the
proposed uniform rules of origin for imported merchandise has been
extended. Interested parties may submit their comments to CBP on or
before October 23, 2008.
On July 25, 2008, CBP published a notice proposing to amend the CBP regulations to establish uniform rules of origin for imported merchandise. Under the proposal, application of the country of origin rules codified in 19 CFR Part 102 will be extended to all imported merchandise.
All merchandise imported into the U.S. undergoes country of origin determination. Under current regulations, CBP uses two primary methods to determine the country of origin of imported goods that contain material from, or were processed in, more than one country. To determine whether goods have been "substantially transformed" in a particular country, one method employs case-by-case analysis while the other primarily uses 19 CFR Part 102 rules detailing change in tariff classification.
Under the proposed regulations, CBP intends to eliminate the “substantial transformation” test codified in Part 134 of the CBP regulations, and adapt the Part 102 rules that currently apply to textiles (with some exceptions) and to products originating in the NAFTA region.
On July 25, 2008, CBP published a notice proposing to amend the CBP regulations to establish uniform rules of origin for imported merchandise. Under the proposal, application of the country of origin rules codified in 19 CFR Part 102 will be extended to all imported merchandise.
All merchandise imported into the U.S. undergoes country of origin determination. Under current regulations, CBP uses two primary methods to determine the country of origin of imported goods that contain material from, or were processed in, more than one country. To determine whether goods have been "substantially transformed" in a particular country, one method employs case-by-case analysis while the other primarily uses 19 CFR Part 102 rules detailing change in tariff classification.
Under the proposed regulations, CBP intends to eliminate the “substantial transformation” test codified in Part 134 of the CBP regulations, and adapt the Part 102 rules that currently apply to textiles (with some exceptions) and to products originating in the NAFTA region.
CBP Proposes New Uniform Rules of Origin for Imported Products
07/26/08 09:59 PM
On July 25, 2008, U.S. Customs and
Border Protection (CBP) issued a proposed rule in the Federal
Register,
which would be a radical departure from its current rules of origin
for imported products. The proposed rule would extend the
application of the NAFTA-style tariff shift country of origin rules
of 19 CFR § 102 to instances when the general
"substantial transformation" rules or origin currently apply.
Comments on the proposed rule must be received by CBP by September
23, 2008.
CBP states that under the current regulations, there are two primary methods that CBP uses to determine the country of origin of imported goods that are processed in, or contain materials from, more than one country. CBP states that one method employs a case-by-case adjudication to determine whether goods have been "substantially transformed" in a particular country. CBP states that the other method employs codified rules, also used to determine whether a good has been "substantially transformed" primarily expressed through changes in tariff classification.
CBP states that the case-by-case substantial transformation standard has developed from federal court decisions issued over many years and was first applied by the U.S. Supreme Court in the case of Anheuser-Busch Brewing Association v. United States 207 U.S. 556 (1908). In a drawback decision, the Court held that manufacture requires a "transformation; a new and different article must emerge, 'having a distinctive name, character or use.'" Id. at 562 (quoting Hartranft v. Wiegmann, 121U.S. 609, 615 (1887)).
CBP states:
CBP goes on to state:
After going through the history of Part 102 of the CFR, CBP states that since 1996, the Part 102 rules have applied to all imports from Canada and Mexico, and nearly all textile product, accounting for approximately 40 percent of total U.S. imports. CBP states that it and the trade community have had extensive experience in applying Part 102 origin rules and in CBP's experience administering these rules, it has found that "by virtue of their greater specificity and transparency, codified rules result in determinations that are more objective and predictable than under the case-by-case adjudication method."
Therefore, CBP is proposing "to extend by application of the Part 102 rules of origin to all country of origin determinations made under the customs and related laws and the navigation laws of the United States, unless otherwise specified."
CBP states that under the current regulations, there are two primary methods that CBP uses to determine the country of origin of imported goods that are processed in, or contain materials from, more than one country. CBP states that one method employs a case-by-case adjudication to determine whether goods have been "substantially transformed" in a particular country. CBP states that the other method employs codified rules, also used to determine whether a good has been "substantially transformed" primarily expressed through changes in tariff classification.
CBP states that the case-by-case substantial transformation standard has developed from federal court decisions issued over many years and was first applied by the U.S. Supreme Court in the case of Anheuser-Busch Brewing Association v. United States 207 U.S. 556 (1908). In a drawback decision, the Court held that manufacture requires a "transformation; a new and different article must emerge, 'having a distinctive name, character or use.'" Id. at 562 (quoting Hartranft v. Wiegmann, 121U.S. 609, 615 (1887)).
CBP states:
Despite its heritage and apparent straightforwardness, administration of the substantial transformation standard has not been without problems. These problems derive in large part from the inherently subjective nature of judgements made in case-by-case adjudications as to what constitutes a new and different article and whether processing has resulted in a new name, character, and use. The substantial transformation standard has evolved over many years through numerous court decisions and CBP administrative rulings. Because the rule has been applied on a case-by-case basis to a wide range of scenarios and has frequently involved consideration of multiple criteria, the substantial transformation has been difficult for the courts and CBP to apply consistently and has often resulted in a lack of predictability and certainty for both CBP and the trade community.
CBP goes on to state:
In an effort to simplify and standardize country of origin determinations, Customs developed a codified method that uses specified changes in tariff classification (tariff shifts) and other rules to express the substantial transformation concept. Under this codified method, the substantial transformation that an imported good must undergo in order to be deemed a good of the country where the change occurred is usually expressed in terms of a specified tariff shift as a result of further processing.
After going through the history of Part 102 of the CFR, CBP states that since 1996, the Part 102 rules have applied to all imports from Canada and Mexico, and nearly all textile product, accounting for approximately 40 percent of total U.S. imports. CBP states that it and the trade community have had extensive experience in applying Part 102 origin rules and in CBP's experience administering these rules, it has found that "by virtue of their greater specificity and transparency, codified rules result in determinations that are more objective and predictable than under the case-by-case adjudication method."
Therefore, CBP is proposing "to extend by application of the Part 102 rules of origin to all country of origin determinations made under the customs and related laws and the navigation laws of the United States, unless otherwise specified."
CBP Commissioner Testifies re: Laptop Border Searches
07/14/08 04:07 PM
On June 25, 2008, Jayson P. Ahern,
Deputy Commissioner of U.S. Customs and Border Protection (CBP),
testified before the Senate Committee on the Judiciary Constitution
Subcommittee in a hearing entitled, "Laptop Searches and Other
Violations of Privacy Faced by Americans Returning from Overseas
Travel." His testimony can be found here.
At the outset, the Deputy Commissioner objected to the title of the hearing and stated that, "CBP's efforts do not infringe on Americans' privacy." He stated that CBP is responsible for enforcing over 600 laws at the border, including those related to narcotics, intellectual property, child pornography and other contraband, and terrorism. He stated that CBP's ability to examine what is coming into the country is crucial to its ability to enforce these laws and keep the country safe from terrorism.
Mr. Ahern then discussed the recent Federal Court of Appeals cases from the 9th and 4th Circuits that upheld CBP's suspicionless search of an international traveler's laptop computer that uncovered child pornography. He stated that not only has CBP uncovered child pornography in conducting such searches of computers and electronic devices, but CBP has also limited the movement of terrorists, individuals who support terrorist activities, and threats to national security, stating that CBP has found "violent jihadist material, information about cyanide and nuclear material, video clips of Improvised Explosive Devices (IEDs) being exploded, pictures of various high-level Al-Qaida officials and other material associated with people seeking to do harm to U.S. and its citizens."
He then recounted an investigation where Immigration and Customs Enforcement (ICE) agents worked with CBP to conduct a border search of a laptop computer belonging to a Canadian national who was suspected of stealing ITAR-controlled software from a U.S. company with the intent to sell it to the Chinese. Mr. Ahern stated that the initial border search made possible the joint ICE and FBI investigation which led to the criminal prosecution of this individual.
Mr. Ahern continued to discuss how CBP's ability to search laptop computers and other electronic devices is essential to CBP's ability to ensure that a person entering the United States does not pose a threat to the safety and welfare of the country. He described certain factors that CBP uses to determine whether a search is necessary, such as the individual's travel history to countries with significant terrorist activity, narcotics smuggling or child exploitation or their physical description and behavior (e.g., in response to questioning). In addition, he stated that:
At the outset, the Deputy Commissioner objected to the title of the hearing and stated that, "CBP's efforts do not infringe on Americans' privacy." He stated that CBP is responsible for enforcing over 600 laws at the border, including those related to narcotics, intellectual property, child pornography and other contraband, and terrorism. He stated that CBP's ability to examine what is coming into the country is crucial to its ability to enforce these laws and keep the country safe from terrorism.
Mr. Ahern then discussed the recent Federal Court of Appeals cases from the 9th and 4th Circuits that upheld CBP's suspicionless search of an international traveler's laptop computer that uncovered child pornography. He stated that not only has CBP uncovered child pornography in conducting such searches of computers and electronic devices, but CBP has also limited the movement of terrorists, individuals who support terrorist activities, and threats to national security, stating that CBP has found "violent jihadist material, information about cyanide and nuclear material, video clips of Improvised Explosive Devices (IEDs) being exploded, pictures of various high-level Al-Qaida officials and other material associated with people seeking to do harm to U.S. and its citizens."
He then recounted an investigation where Immigration and Customs Enforcement (ICE) agents worked with CBP to conduct a border search of a laptop computer belonging to a Canadian national who was suspected of stealing ITAR-controlled software from a U.S. company with the intent to sell it to the Chinese. Mr. Ahern stated that the initial border search made possible the joint ICE and FBI investigation which led to the criminal prosecution of this individual.
Mr. Ahern continued to discuss how CBP's ability to search laptop computers and other electronic devices is essential to CBP's ability to ensure that a person entering the United States does not pose a threat to the safety and welfare of the country. He described certain factors that CBP uses to determine whether a search is necessary, such as the individual's travel history to countries with significant terrorist activity, narcotics smuggling or child exploitation or their physical description and behavior (e.g., in response to questioning). In addition, he stated that:
In regards to the privacy of these searches, CBP officers conduct their work in a manner designed to adhere to all constitutional and statutory requirements, including those that are applicable to privileged, personal, and business confidential information. The Trade Secrets Act prohibits federal employees from disclosing, without lawful authority, business confidential information to which they obtain access as part of their official duties. Moreover, CBP has strict policies and procedures that implement constitutional and statutory safeguards through internal policies that compel regular review and purging of information that is no longer relevant. CBP will protect information that may be discovered during the examination process, as well as private information of a personal nature that is not in violation of any law.
Laptop Searches Criticized at Senate Hearing
06/27/08 04:51 PM
On June 25, 2008, the Senate
Judiciary Committee (Subcommittee on the Constitution, Civil Rights
and Property Rights) held a hearing on "Laptop Searches and Other
Violations of Privacy Faced by Americans Returning from Overseas
Travel." At the hearing, advocacy groups and some legal experts
stated that it was unreasonable for federal officials to search the
laptops of U.S. citizens when returning from traveling
abroad.
In April, the U.S. Court of Appeals for the Ninth Circuit ruled that U.S. Customs and Border Protection (CBP) could conduct searches of electronic devices such as laptops without reasonable suspicion. Specifically, the court ruled that border control agents who found child porn on a traveler's laptop didn't violate the man's right to be free from unreasonable searches. Judge Diarmuid O'Scannlain wrote, "We are satisfied that reasonable suspicion is not needed for customs officials to search a laptop or other personal electronic storage devices at the border." In 2005, the U.S. Court of Appeals for the Fourth Circuit upheld computer searches by border guard when a man drove from Canada to the U.S. with child porn on his computer.
As reported by the New York Times:
In April, the U.S. Court of Appeals for the Ninth Circuit ruled that U.S. Customs and Border Protection (CBP) could conduct searches of electronic devices such as laptops without reasonable suspicion. Specifically, the court ruled that border control agents who found child porn on a traveler's laptop didn't violate the man's right to be free from unreasonable searches. Judge Diarmuid O'Scannlain wrote, "We are satisfied that reasonable suspicion is not needed for customs officials to search a laptop or other personal electronic storage devices at the border." In 2005, the U.S. Court of Appeals for the Fourth Circuit upheld computer searches by border guard when a man drove from Canada to the U.S. with child porn on his computer.
As reported by the New York Times:
“If you asked most Americans whether the government has the right to look through their luggage for contraband when they are returning from an overseas trip, they would tell you ‘yes, the government has that right,’ ” Senator Russ Feingold, Democrat of Wisconsin, said Wednesday at the hearing of a Senate Judiciary subcommittee.
“But,” Mr. Feingold continued, “if you asked them whether the government has a right to open their laptops, read their documents and e-mails, look at their photographs and examine the Web sites they have visited, all without any suspicion of wrongdoing, I think those same Americans would say that the government absolutely has no right to do that.”
CBP Develops New Online Trade Violation Reporting System
06/18/08 10:53 AM
On June 17, 2008, U.S. Customs and
Border Protection (CBP) announced
the development of a
new online trade violation reporting system called
eAllegations
to provide concerned
members of the public a means to confidentially report suspected
trade violations to CBP. eAllegations is open for public use as of
June 17, 2008.
CBP states that eAllegations is not intended to be used for reporting security issues such as terrorism or weapons of mass destruction, but rather is intended for trade violations such as misclassification, under valuation, country of origin markings, health and safety violations, intellectual property rights violations, and/or textile or other trade violations. CBP provided the following example --
To report a possible violation, the following information must be submitted via eAllegations: the type of trade violation, description of what has occurred, the products or goods involved in the violation, and the alleged violator's name and/or company. Other information may be provided on a voluntary basis.
CBP has provided frequently asked questions (FAQ) here.
CBP states that eAllegations is not intended to be used for reporting security issues such as terrorism or weapons of mass destruction, but rather is intended for trade violations such as misclassification, under valuation, country of origin markings, health and safety violations, intellectual property rights violations, and/or textile or other trade violations. CBP provided the following example --
eAllegations will provide a means to report a possible violator who is importing substandard steel, claiming that it is of a higher grade, therefore creating a potential safety issue. Other possible violations that can be reported include a company claiming a lower than actual value on a product they are importing to pay less duty or a company who is importing textiles from one country to avoid quota restrictions.
To report a possible violation, the following information must be submitted via eAllegations: the type of trade violation, description of what has occurred, the products or goods involved in the violation, and the alleged violator's name and/or company. Other information may be provided on a voluntary basis.
CBP has provided frequently asked questions (FAQ) here.
Protective "First Sale" Language Included in Farm Bill
05/29/08 11:53 PM
On May 22, 2008, the
U.S. Senate voted 82-13 and joined the U.S. House of
Representatives in voting 306-110 to overturn the President's veto
of the Food, Conservation, and Energy Act of 2008 (also known as
"the farm bill"). Of importance to the international trade
community is protective first sale language that was added to the
farm bill by Sen. Max Baucus (D. - Mont.), Rep. Charles Rangel
(D.-NY) and other key lawmakers. This language was not subject to
any hearings and was not considered in committee.
On January 24, 2008, U.S. Customs and Border Protection (CBP) published a notice in the Federal Register setting forth its proposed interpretation of the phrase "sold for exportation to the United States," which would effectively eliminate the use of "first sale" valuation. CBP's proposed interpretation has drawn bipartisan opposition in the House, where 51 members wrote Department of Homeland Security Secretary Michael Chertoff in an April 18 letter to ask that the CBP proposal be "immediately withdrawn."
The Senate summarizes the protective first sale language as follows:
Thus, while the language in the farm bill does not prevent CBP from eliminating first sale, it does require CBP to study the change to determine how much more revenue it would collect and companies would be affected. It also includes non-binding "sense of Congress" language that the change should not be implemented until 2011.
On January 24, 2008, U.S. Customs and Border Protection (CBP) published a notice in the Federal Register setting forth its proposed interpretation of the phrase "sold for exportation to the United States," which would effectively eliminate the use of "first sale" valuation. CBP's proposed interpretation has drawn bipartisan opposition in the House, where 51 members wrote Department of Homeland Security Secretary Michael Chertoff in an April 18 letter to ask that the CBP proposal be "immediately withdrawn."
The Senate summarizes the protective first sale language as follows:
First Sale. The longstanding practice of “first sale” allows an importer to assess the value of imported goods based on the first sale of goods destined for the United States, regardless of when that sale occurred. Without consulting Congress or the importing industry, U.S. Customs and Border Protection (CBP) has proposed regulatory changes to assess duties on the “last sale” rather than the “first sale” value of goods. Such a change could increase significantly the duties paid by American importers. The farm bill (1) requires CBP to collect information on the number of importers that value imports using the “first sale” methodology; (2) requires the United States International Trade Commission to provide Congress with a report on the number of importers using “first sale” methodology, and the value of those imports; and (3) expresses a sense of Congress that CBP should not implement its change in interpretation until at least January 1, 2011.
Thus, while the language in the farm bill does not prevent CBP from eliminating first sale, it does require CBP to study the change to determine how much more revenue it would collect and companies would be affected. It also includes non-binding "sense of Congress" language that the change should not be implemented until 2011.
Civil Liberties Groups Sue Department of Homeland Security over Searches and Harassment at U.S. Borders
02/11/08 05:33 PM
On February 7, 2008, the
Electronic Frontier
Foundation and the Asian Law Caucus, both civil liberty groups based
in San Francisco, filed suit against the U.S. Department of
Homeland Security (DHS) for denying access to public records on the
questioning and searches of travelers at U.S. borders. Filed under
the Freedom of Information Act (FOIA), the suit claims to respond
to growing complaints by U.S. citizens and immigrants of excessive
or repeated screenings by U.S. Customs and Border Protection (CBP)
agents. The compliant can be found here.
ALC states that it has received more than 20 complaints from Northern California residents last year who said they were grilled about their families, religious practices, volunteer activities, political beliefs, or associations when returning to the United States from travels abroad. In addition, customs agents examined travelers' books, business cards collected from friends and colleagues, handwritten notes, personal photos, laptop computer files, and cell phone directories, and sometimes made copies of this information. When individuals complained, they were told, "This is the border, and you have no rights."
"When the government searches your books, peers into your computer, and demands to know your political views, it sends the message that free expression and privacy disappear at our nation's doorstep," said Shirin Sinnar, staff attorney at ALC. "The fact that so many people face these searches and questioning every time they return to the United States, not knowing why and unable to clear their names, violates basic notions of fairness and due process."
ALC and EFF asked DHS to disclose its policies on questioning travelers on First Amendment-protected activities, photocopying individuals' personal papers, and searching laptop computers and other electronic devices. The agency failed to meet the 20-day time limit that Congress has set for responding to public information requests, prompting the lawsuit.
"The public has the right to know what the government's standards are for border searches," said EFF Staff Attorney Marcia Hofmann. "Laptops, phones, and other gadgets include vast amounts of personal information. When will agents read your email? When do they copy data, where is it stored, and for how long? How will this information follow you throughout your life? The secrecy surrounding border search policies means that DHS has no accountability to America's travelers."
Interesting news articles on the suit have appeared in the Washington Post and the San Francisco Chronicle. Both of these articles regard the search and seizure of electronics. The search and possible seizure of laptops and other computer devices without suspicion or any articulated explanation is particularly troublesome to business travelers. The question of whether Customs inspectors have a right to search laptops and electronic devices without reasonable suspicion of a crime has already been under review in both the Fourth and Ninth Circuits. (See, United States v. Ickes, 393 F. 3d 501 (4th Cir. 2005) (did not directly address the level of suspicion required to search laptops but did rule that laptops fall within border search authority); United States v. Arnold, 454 F. Supp. 2d 999 (N.D. Cal. 2006) (reasonable suspicion required to search computers)).
Border searches are a well-recognized and long established exception to the probable cause and warrant requirements of the Fourth Amendment. Even so, the conduct of such searches, as with any search, must be reasonable. Sections 482 and section 1582, Title 19 of the United States Code authorize Customs officers to search and seize (detain) persons at the border. Removal of an outer coat such as a sport jacket or suit coat or the examination of a handbag are not considered searches of the person and are treated as searches of containers. Section 1496, Title 19 of the United States Code authorizes the examination of baggage of any person "arriving in the United States" without any suspicion.
Reasonable suspicion means that the facts known to the customs agents at the time of the search, combined with the agent's reasonable inferences from those facts, provides the agent with a particularized and objective basis for suspecting that the search will reveal contraband or a crime. (United States v. Montoya de Hernandez, 473 U.S. 531, 105 S.Ct. 3304 (1985)).
In recent years, CBP has argued that its authority to protect the country's border extends to looking at information stored on electronic devices such as laptops without any suspicion of a crime. CBP is taking the position that a laptop is the equivalent of a suitcase or container with the information stored on the laptop as the equivalent of physical merchandise packed in luggage. The question is whether the Courts will agree. We will follow this issue and keep you updated of any developments.
ALC states that it has received more than 20 complaints from Northern California residents last year who said they were grilled about their families, religious practices, volunteer activities, political beliefs, or associations when returning to the United States from travels abroad. In addition, customs agents examined travelers' books, business cards collected from friends and colleagues, handwritten notes, personal photos, laptop computer files, and cell phone directories, and sometimes made copies of this information. When individuals complained, they were told, "This is the border, and you have no rights."
"When the government searches your books, peers into your computer, and demands to know your political views, it sends the message that free expression and privacy disappear at our nation's doorstep," said Shirin Sinnar, staff attorney at ALC. "The fact that so many people face these searches and questioning every time they return to the United States, not knowing why and unable to clear their names, violates basic notions of fairness and due process."
ALC and EFF asked DHS to disclose its policies on questioning travelers on First Amendment-protected activities, photocopying individuals' personal papers, and searching laptop computers and other electronic devices. The agency failed to meet the 20-day time limit that Congress has set for responding to public information requests, prompting the lawsuit.
"The public has the right to know what the government's standards are for border searches," said EFF Staff Attorney Marcia Hofmann. "Laptops, phones, and other gadgets include vast amounts of personal information. When will agents read your email? When do they copy data, where is it stored, and for how long? How will this information follow you throughout your life? The secrecy surrounding border search policies means that DHS has no accountability to America's travelers."
Interesting news articles on the suit have appeared in the Washington Post and the San Francisco Chronicle. Both of these articles regard the search and seizure of electronics. The search and possible seizure of laptops and other computer devices without suspicion or any articulated explanation is particularly troublesome to business travelers. The question of whether Customs inspectors have a right to search laptops and electronic devices without reasonable suspicion of a crime has already been under review in both the Fourth and Ninth Circuits. (See, United States v. Ickes, 393 F. 3d 501 (4th Cir. 2005) (did not directly address the level of suspicion required to search laptops but did rule that laptops fall within border search authority); United States v. Arnold, 454 F. Supp. 2d 999 (N.D. Cal. 2006) (reasonable suspicion required to search computers)).
Border searches are a well-recognized and long established exception to the probable cause and warrant requirements of the Fourth Amendment. Even so, the conduct of such searches, as with any search, must be reasonable. Sections 482 and section 1582, Title 19 of the United States Code authorize Customs officers to search and seize (detain) persons at the border. Removal of an outer coat such as a sport jacket or suit coat or the examination of a handbag are not considered searches of the person and are treated as searches of containers. Section 1496, Title 19 of the United States Code authorizes the examination of baggage of any person "arriving in the United States" without any suspicion.
Reasonable suspicion means that the facts known to the customs agents at the time of the search, combined with the agent's reasonable inferences from those facts, provides the agent with a particularized and objective basis for suspecting that the search will reveal contraband or a crime. (United States v. Montoya de Hernandez, 473 U.S. 531, 105 S.Ct. 3304 (1985)).
In recent years, CBP has argued that its authority to protect the country's border extends to looking at information stored on electronic devices such as laptops without any suspicion of a crime. CBP is taking the position that a laptop is the equivalent of a suitcase or container with the information stored on the laptop as the equivalent of physical merchandise packed in luggage. The question is whether the Courts will agree. We will follow this issue and keep you updated of any developments.
CBP Extends Comment Period for Proposed Interpretation re: "First Sale" Valuation
02/08/08 08:31 PM
On February 7, 2008, the U.S.
Customs and Border Protection ("CBP") published a
notice
in the
Federal
Register extending by 30 days the comment
period for its proposed interpretation of the phrase "sold for
exportation to the United States" for purposes of applying the
transaction value method of appraisement when a series of sales
exist prior to importation into the U.S.
CBP is proposing that the transaction value (or price paid or payable) for imported goods in a series of sales is the price paid or payable in the last sale occurring prior to the goods' importation into the United States, rather than the price in the first or earlier sale. CBP states that this is based on its proposed revised interpretation of the phrase "when sold for exportation to the United States" such that CBP no longer believes that the first (or earlier) sale qualifies as a sale for exportation to the United States. CBP states that this proposed interpretation is in line with the conclusions of the Technical Committee on Customs Valuation as set forth in Commentary 22.1, entitled, "Meaning of the Expression 'Sold for Export to the Country of Importation' in a Series of Sale."
On January 24, 2008, CBP published a notice in the Federal Register setting forth its proposed interpretation with a comment period to expire on March 24, 2008. CBP received correspondence requesting an extension of the comment period. Accordingly, CBP has decided to allow an additional 30 days for comments. Comments are now due on or before April 23, 2008.
CBP is proposing that the transaction value (or price paid or payable) for imported goods in a series of sales is the price paid or payable in the last sale occurring prior to the goods' importation into the United States, rather than the price in the first or earlier sale. CBP states that this is based on its proposed revised interpretation of the phrase "when sold for exportation to the United States" such that CBP no longer believes that the first (or earlier) sale qualifies as a sale for exportation to the United States. CBP states that this proposed interpretation is in line with the conclusions of the Technical Committee on Customs Valuation as set forth in Commentary 22.1, entitled, "Meaning of the Expression 'Sold for Export to the Country of Importation' in a Series of Sale."
On January 24, 2008, CBP published a notice in the Federal Register setting forth its proposed interpretation with a comment period to expire on March 24, 2008. CBP received correspondence requesting an extension of the comment period. Accordingly, CBP has decided to allow an additional 30 days for comments. Comments are now due on or before April 23, 2008.
For further information, contact: Lorrie Rodbart, Valuation and Special Programs Branch, Regulations and Rulings, Office of International Trade; Phone: (202) 572-8740.