CBP to Revise Policy on the Use of CF 28s as Start of Formal Investigation
06/10/10 11:48 AM
On
June 10, 2010, during the Customs Lawyers
Association Annual meeting in Washington, DC,
Charles Ressin, Chief of the Penalties Branch,
Regulations & Rulings at the CBP’s Office of
International Trade, stated that CBP intends to
revise and publish policy concerning Request for
Information (CBP Form 28) as beginning of formal
investigation for purposes of customs enforcement.
Mr. Ressin stated that CBP’s issuance of a CBP Form
28 alone does not preclude the importer from filing
a prior disclosure unless express notice of
investigation is included in the form.
CBP Signs Agreement with China on Supply Chain Security
05/26/10 11:30 PM
On May
26, 2010, U.S. Customs and Border Protection
(CBP) announced the signing of
a Memorandum of Understanding with the General
Administration of Customs of the People’s
Republic of China on Supply Chain Security and
Facilitation. CBP considers the CBP-China
Customs Memorandum of Understanding to be a key
component of a cooperative security and trade
relationship between the two nation’s customs
agencies.
“This memorandum will create a cooperative mechanism for CBP and the General Administration of Customs to collaborate on supply chain security standards and enhance CBP’s implementation of a layered enforcement strategy,” said Deputy Commissioner David Aguilar, who signed the MOU on behalf of CBP.
The MOU was signed during the Strategic and Economic Dialogue, which took place in Beijing May 24 – 25. The Strategic and Economic Dialogue is an ongoing mechanism for addressing the challenges and opportunities that the U.S. and China share on a wide range of bilateral, regional, and global areas of immediate and long-term strategic and economic interest.
“This memorandum will create a cooperative mechanism for CBP and the General Administration of Customs to collaborate on supply chain security standards and enhance CBP’s implementation of a layered enforcement strategy,” said Deputy Commissioner David Aguilar, who signed the MOU on behalf of CBP.
The MOU was signed during the Strategic and Economic Dialogue, which took place in Beijing May 24 – 25. The Strategic and Economic Dialogue is an ongoing mechanism for addressing the challenges and opportunities that the U.S. and China share on a wide range of bilateral, regional, and global areas of immediate and long-term strategic and economic interest.
CBP Providing Free Webinars in Trade Outreach Efforts
05/25/10 09:21 AM
On May
25, 2010, CBP announced that it is
hosting trade outreach events via free webinars
to provide more timely and up-to-date
information to the international trade community
on CBP trade policy, as established by the
agency.
CBP will begin a series of live webinars that will be recorded and available for subsequent on-demand viewing over the Internet. The programs will consist of a high-level overview of the initiative, policy, or other topic; and will conclude with an opportunity for the trade to ask pertinent questions. To maximize the trade community’s ability to ask questions during the webinars, the presentation portion will be limited to approximately 30 minutes.
Space is limited per webinar, so please pre-register using the CBP on-line registration process listed. CBP states that although the trade outreach webinars are provided free of charge, CBP incurs a penalty fee for unused telephone lines per event. Thus, if for any reason you must cancel your registration, please submit your notice of cancellation via the on-line cancellation form 48 hours prior to the event.
Future CBP Trade Outreach Webinars:
CPSC Notices of Detention
Wednesday, June 2, 2010
2:00 – 3:00 p.m. (EDT)
(CPSC Notices Registration Form)
(CPSC Notices Cancellation Request Form)
CBP Outbound Issues
Thursday, June 10, 2010
2:00 – 3:00 p.m. (EDT)
(Webinar Registration – CBP Outbound)
(Cancellation Request Form – CBP Outbound)
CBP will begin a series of live webinars that will be recorded and available for subsequent on-demand viewing over the Internet. The programs will consist of a high-level overview of the initiative, policy, or other topic; and will conclude with an opportunity for the trade to ask pertinent questions. To maximize the trade community’s ability to ask questions during the webinars, the presentation portion will be limited to approximately 30 minutes.
Space is limited per webinar, so please pre-register using the CBP on-line registration process listed. CBP states that although the trade outreach webinars are provided free of charge, CBP incurs a penalty fee for unused telephone lines per event. Thus, if for any reason you must cancel your registration, please submit your notice of cancellation via the on-line cancellation form 48 hours prior to the event.
Future CBP Trade Outreach Webinars:
CPSC Notices of Detention
Wednesday, June 2, 2010
2:00 – 3:00 p.m. (EDT)
(CPSC Notices Registration Form)
(CPSC Notices Cancellation Request Form)
CBP Outbound Issues
Thursday, June 10, 2010
2:00 – 3:00 p.m. (EDT)
(Webinar Registration – CBP Outbound)
(Cancellation Request Form – CBP Outbound)
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U.S. Nominates Sandra Bell for WCO Director
04/22/10 11:59 PM
On
April 22, 2010, the U.S. Customs and Border
Protection (CBP) announced the nomination of Ms.
Sandra L. Bell for the post of Director, Compliance
and Facilitation for the World Customs
Organization.
Ms. Bell, a member of the Senior Executive Service within the U.S. Government, is currently Executive Director for Regulations and Rulings within CBP’s Office of International Trade. She has 31 years of experience in her field.
Ms. Bell, a member of the Senior Executive Service within the U.S. Government, is currently Executive Director for Regulations and Rulings within CBP’s Office of International Trade. She has 31 years of experience in her field.
Customs Broker Sentenced in a Fraud Scheme
02/18/10 10:42 PM
On
February 18, 2010, the U.S. Department of Justice
(DOJ) announced the sentencing
of a Long Island customs broker who defrauded a
Massachusetts medical equipment distributor out
of $1.2 million.
Gregory Manuelian (Manuelian) of Manhasset, N.Y, was sentenced to 24 months in prison, followed by 3 years of supervised release and ordered to pay almost $1.2 million in restitution based on charges that he defrauded his client, B-K Medical Systems, by repeatedly submitting falsified customs documents indicating that B-K owed customs duties on goods that were actually duty-free.
Manuelian operated Marquis Clearance, Ltd., a customs brokerage in Jamaica, N.Y. and served as B-K’s customs broker since 1980. On B-K’s goods entering the U.S., Manuelian ordinarily paid the duties and then faxed the invoices to the client. B-K reimbursed Manuelian for the duties and paid him a brokerage fee. In 1996, the U.S. Department of Commerce began to phase out the duties on the types of goods imported by B-K; by 1999, the imports of the goods imported by B-K were duty free.
Throughout the duty phase-out program and when the imports became duty-free, Manuelian continued to bill its client for supposedly pre-paid duties on the equipment. To support the claims, Manuelian mailed its client falsified customs forms which showed a duty owed on the imported equipment, usually set at 5.3% of the equipment’s value. By the time B-K discovered its loss in 2006, Manuelian had defrauded it out of approximately $1.2 million.
Gregory Manuelian (Manuelian) of Manhasset, N.Y, was sentenced to 24 months in prison, followed by 3 years of supervised release and ordered to pay almost $1.2 million in restitution based on charges that he defrauded his client, B-K Medical Systems, by repeatedly submitting falsified customs documents indicating that B-K owed customs duties on goods that were actually duty-free.
Manuelian operated Marquis Clearance, Ltd., a customs brokerage in Jamaica, N.Y. and served as B-K’s customs broker since 1980. On B-K’s goods entering the U.S., Manuelian ordinarily paid the duties and then faxed the invoices to the client. B-K reimbursed Manuelian for the duties and paid him a brokerage fee. In 1996, the U.S. Department of Commerce began to phase out the duties on the types of goods imported by B-K; by 1999, the imports of the goods imported by B-K were duty free.
Throughout the duty phase-out program and when the imports became duty-free, Manuelian continued to bill its client for supposedly pre-paid duties on the equipment. To support the claims, Manuelian mailed its client falsified customs forms which showed a duty owed on the imported equipment, usually set at 5.3% of the equipment’s value. By the time B-K discovered its loss in 2006, Manuelian had defrauded it out of approximately $1.2 million.
U.S. Court of Appeals Dismisses Totes-Isotoner Equal Protection Claim
02/05/10 11:13 PM
On
February 5, 2010, the U.S. Court of Appeals for the
Federal Circuit (CAFC) issued its decision
in Totes-Isotoner Corporation v.
United States, upholding the
U.S. Court of International Trade (CIT) decision
to dismiss the complaint for failure to state a
claim.
Totes-Isotoner (Totes) appealed from a judgment of the CIT dismissing its complaint against the U.S. for failure to state a claim. Totes alleged that the Harmonized Tariff Schedule of the United States (HTSUS), by imposing different rates of duty on leather gloves “for men” and leather gloves “for other persons,” unconstitutionally denies the equal protection of the laws.
CAFC upheld the CIT’s judgment that (1) it had jurisdiction under 28 U.S.C. §1581(i); (2) Totes had standing to bring its claims; and (3) Totes’ equal protection claims were justiciable. On the merits, CAFC affirmed CIT’s decisions that Totes has failed to establish an equal protection claim due to its failure to plead facts sufficient to allege a claim of unconstitutional discrimination.
Specifically, Totes argued that the tariff provisions at issue unconstitutionally discriminate based on the sex of users of gloves. CAFC noted that because tariff rates applicable to different product classifications under the HTS are “the result of multilateral international trade negotiations and reflect reciprocal trade concessions and particularized trade preferences,” and that reasons behind different tariff rates depend on several factors, including country of origin, the type of product, the circumstances under which the products are imported, and the state of the domestic manufacturing industry. As a result, the Court reasoned that it was quite possible that the different tariff rates for men’s and other gloves reflected the fact that the gloves are different products the rates of which may be the result of trade concessions made by the U.S. in return for unrelated trade concessions. Accordingly, to prove an equal protection claim, Totes would have to establish that, “Congress intended to discriminate against men in the tariff schedules.” Absent such showing, CAFC refused to find discrimination based on disparate impact on purchasers alone.
In a concurring opinion, Judge Prost held that the proper reason to dismiss Totes’ claim was that the tariff classification was not facially discriminatory, pointing out that tariff rates at issue only imposed a burden on importers, and not on gender- or age-based categories of people. Absent a showing of disparate impact on consumers based on their sex, Justice Prost concluded that Totes’ failed to establish their equal protection claim.
Totes-Isotoner (Totes) appealed from a judgment of the CIT dismissing its complaint against the U.S. for failure to state a claim. Totes alleged that the Harmonized Tariff Schedule of the United States (HTSUS), by imposing different rates of duty on leather gloves “for men” and leather gloves “for other persons,” unconstitutionally denies the equal protection of the laws.
CAFC upheld the CIT’s judgment that (1) it had jurisdiction under 28 U.S.C. §1581(i); (2) Totes had standing to bring its claims; and (3) Totes’ equal protection claims were justiciable. On the merits, CAFC affirmed CIT’s decisions that Totes has failed to establish an equal protection claim due to its failure to plead facts sufficient to allege a claim of unconstitutional discrimination.
Specifically, Totes argued that the tariff provisions at issue unconstitutionally discriminate based on the sex of users of gloves. CAFC noted that because tariff rates applicable to different product classifications under the HTS are “the result of multilateral international trade negotiations and reflect reciprocal trade concessions and particularized trade preferences,” and that reasons behind different tariff rates depend on several factors, including country of origin, the type of product, the circumstances under which the products are imported, and the state of the domestic manufacturing industry. As a result, the Court reasoned that it was quite possible that the different tariff rates for men’s and other gloves reflected the fact that the gloves are different products the rates of which may be the result of trade concessions made by the U.S. in return for unrelated trade concessions. Accordingly, to prove an equal protection claim, Totes would have to establish that, “Congress intended to discriminate against men in the tariff schedules.” Absent such showing, CAFC refused to find discrimination based on disparate impact on purchasers alone.
In a concurring opinion, Judge Prost held that the proper reason to dismiss Totes’ claim was that the tariff classification was not facially discriminatory, pointing out that tariff rates at issue only imposed a burden on importers, and not on gender- or age-based categories of people. Absent a showing of disparate impact on consumers based on their sex, Justice Prost concluded that Totes’ failed to establish their equal protection claim.
CBP To Begin Full Enforcement of ISF on January 26, 2010
01/26/10 11:11 PM
On
January 26, 2010, U.S. Customs and Border
Protection (CBP) began full enforcement of Importer
Security Filing (ISF), also known as 10+2. The new
policy requires maritime importers and vessel
operating ocean carriers to provide CBP with
advance notification for all U.S.-bound ocean
vessel cargo. CBP will conduct gradual enforcement
of ISF during 2010, with the beginning of new
quarter marking a new phase of enforcement.
During the first quarter of 2010, CBP will monitor the flow of ISF filings, including completeness and accuracy of the ISF filings, as well as noting which importers are not filing the 10+2. Importers that are not filing can expect their imports to be subject to deeper scrutiny, with CBP requesting document review, non-intrusive inspections or intensive examinations of the cargo. CBP will notify importers who are not filing and those that have errors in their filing and work with them to bring the imports into compliance.
During the second and third quarters of 2010, ISF enforcement will tighten. CBP intends to delay and hold for examinations those imports that have no associated ISF or those that have serious discrepancies in them. However, with the exception of fraud, smuggling, or terrorism in connection with the ocean imports or egregious violations of ISF requirements, CBP does not intend to penalize or assess liquidated damages for ISF violations during the first three quarters of 2010 or for imports that occurred prior to January 26, 2010.
CBP will begin issuing liquidated damages at the start of a fourth quarter on October 1, 2010. Ports of entry will initiate proposed assessments of liquidated damages, and will forward them on to CBP Headquarters for review. CBP Headquarters making final decisions on damages will ensure uniform enforcement across the country. CBP Headquarters are authorized to approve the proposed assessment or send it back to the originating port recommending that the matter be disposed of in a different way. Those liquidated damage assessments that are approved by CBP headquarters will be forwarded on to importers.
CBP plans to use this method of instituting penalties for at least a year, after which it will either be extended or the ports of entry will be authorized to issue final penalty decisions.
Importers must also note that, beginning 26, 2010, they are required to have a bond as security for the ISF filing.
The bond must be secured 24 hours prior to vessel departure and will terminate when goods enter the port of entry if there is no ISF violation. In case of violations, most penalties will be issued within a year, however, Customs has 6 years to assess a liquidated damages claim.
If an importer elects to secure a continuous bond, it will cover the ISF. Those ISF importers that do not have a continuous bond on file with CBP are required to secure a single entry bond (SEB) in the amount of $10,000, which is the maximum penalty that can be imposed for a late, incomplete, or inaccurate ISF. SEBs should be used by importers with single or infrequent shipments.
The SEB must be created before ISF is transmitted, because the filing requires that bond reference number be included. When the ISF transaction number is received, it must be entered on the SEB and e-mailed in a pdf file to CBP at ISF_Bond@cbp.dhs.gov.
With the exception of surety companies that have stricter rules for late filings or not filing at all, SEBs for timely submission of ISF are readily available. Surety companies require a cash deposit for the full amount of the bond for transactions deemed to be at risk because of late filing of the ISF transmission. Surety companies will hold cash deposits for six years and will refund them to the importer of record when the bond obligation terminates.
More detail on ISF and associated bond requirements can be found in ISF Program’s Frequently Asked Questions (FAQs).
During the first quarter of 2010, CBP will monitor the flow of ISF filings, including completeness and accuracy of the ISF filings, as well as noting which importers are not filing the 10+2. Importers that are not filing can expect their imports to be subject to deeper scrutiny, with CBP requesting document review, non-intrusive inspections or intensive examinations of the cargo. CBP will notify importers who are not filing and those that have errors in their filing and work with them to bring the imports into compliance.
During the second and third quarters of 2010, ISF enforcement will tighten. CBP intends to delay and hold for examinations those imports that have no associated ISF or those that have serious discrepancies in them. However, with the exception of fraud, smuggling, or terrorism in connection with the ocean imports or egregious violations of ISF requirements, CBP does not intend to penalize or assess liquidated damages for ISF violations during the first three quarters of 2010 or for imports that occurred prior to January 26, 2010.
CBP will begin issuing liquidated damages at the start of a fourth quarter on October 1, 2010. Ports of entry will initiate proposed assessments of liquidated damages, and will forward them on to CBP Headquarters for review. CBP Headquarters making final decisions on damages will ensure uniform enforcement across the country. CBP Headquarters are authorized to approve the proposed assessment or send it back to the originating port recommending that the matter be disposed of in a different way. Those liquidated damage assessments that are approved by CBP headquarters will be forwarded on to importers.
CBP plans to use this method of instituting penalties for at least a year, after which it will either be extended or the ports of entry will be authorized to issue final penalty decisions.
Importers must also note that, beginning 26, 2010, they are required to have a bond as security for the ISF filing.
The bond must be secured 24 hours prior to vessel departure and will terminate when goods enter the port of entry if there is no ISF violation. In case of violations, most penalties will be issued within a year, however, Customs has 6 years to assess a liquidated damages claim.
If an importer elects to secure a continuous bond, it will cover the ISF. Those ISF importers that do not have a continuous bond on file with CBP are required to secure a single entry bond (SEB) in the amount of $10,000, which is the maximum penalty that can be imposed for a late, incomplete, or inaccurate ISF. SEBs should be used by importers with single or infrequent shipments.
The SEB must be created before ISF is transmitted, because the filing requires that bond reference number be included. When the ISF transaction number is received, it must be entered on the SEB and e-mailed in a pdf file to CBP at ISF_Bond@cbp.dhs.gov.
With the exception of surety companies that have stricter rules for late filings or not filing at all, SEBs for timely submission of ISF are readily available. Surety companies require a cash deposit for the full amount of the bond for transactions deemed to be at risk because of late filing of the ISF transmission. Surety companies will hold cash deposits for six years and will refund them to the importer of record when the bond obligation terminates.
More detail on ISF and associated bond requirements can be found in ISF Program’s Frequently Asked Questions (FAQs).
USITC Publishes 2010 Version of HTSUS; Census Posts Tariff Numbers Invalid on AES
01/01/10 09:38 PM
The
2010 version
of
the Harmonized
Tariff Schedule of the United States
(HTSUS) that
took effect on January 1, 2010, has been
published on the U.S. International Trade
Commission (ITC) website. Tariff information
from previous years can be accessed on the
Harmonized Tariff Schedule of the United States
Annotated (HTSA), which provides applicable
tariff rates and statistical categories for all
merchandise imported into the U.S.
In addition, the U.S. Census Bureau (Census) has posted a list of tariff numbers that are invalid for use in the Automated Export System (AES) as of January 1, 2010. The list is exclusive of HTSUS Chapter 98 codes, none of which may be used in AES.
In addition, the U.S. Census Bureau (Census) has posted a list of tariff numbers that are invalid for use in the Automated Export System (AES) as of January 1, 2010. The list is exclusive of HTSUS Chapter 98 codes, none of which may be used in AES.
2009 CBP Trade Symposium Recap
12/30/09 10:51 PM
The
U.S. Customs and Border Protection (CBP) held its
2009 Trade Symposium was from December 8 -10, 2009
in Washington D.C. The symposium, titled "A Decade
of Progress through Partnership," marked the 10th
anniversary of this event.
The symposium was organized in a workshop setting and also included a number of lectures and presentations. Some of the most important topics included Importer Security Filing (ISF), shared border issues between the U.S., Canada, and Mexico, Customs’ intellectual property rights (IPR) policy, and Customs’ rulings process.
Regarding the ISF process, CBP reported that from January 2009 through December 2009 it received 3.65 million filings from more than 100,000 ISF importers. CBP reminded that it will begin enforcing ISF requirements beginning January 26, 2010. It was clear from the discussions that Customs has no intention of delaying the enforcement of mandatory ISF filing past the intended enforcement date. However, CBP plans to adopt, at least initially, an informed compliance approach, which, at first, will include use of the least punitive measures.
At the beginning of the ISF enforcement period, Customs expects to use Do Not Load Directives only in the most serious cases. Customs is most interested in receiving the necessary ISF data rather than holding back the cargo or issuing monetary penalties, which range from $5,000 for ISF transmission violations and are capped at $10,000 per filing. The importers must also consider that the cost of Customs withholding cargo is likely to exceed the penalty of $5,000 or $10,000.
The ISF penalty process will be, for now, centralized at the Customs’ Headquarters (HQ) level. Individual ports will initiate the penalty proceedings but the review and handling of the violation will be forwarded to Customs HQ.
On the border issues, a panel of Customs officials from the U.S., Mexico and Canada stressed the importance of harmonizing countries’ customs processes, including requirements for advance data submission otherwise known as 10+2. The U.S. and Canada continue to work on harmonizing partnership programs like C-TPAT. Mexico will be initiating its own Authorized Economic Operator (AEO) program in 2010.
Overall, the discussions stressed the importance of developing businesses’ risk management programs including integration of internal controls related to trade and those involving key business and financial operations.
Regarding Customs’ IPR policy, CBP issued over 1,000 fine notices totaling $94 million against importers attempting to import counterfeit merchandise. Of that amount, CBP was able to collect only $2 million from the violators. Therese Randazzo, Customs’ IPR Policy and Programs Division Director, indicated that the U.S. Attorney Office is hesitant to bring cases against violators since adding a fine in addition to the seizure and forfeiture of goods may be considered an excessive fine under U.S. law.
With respect to the Customs Rulings process, Customs reminded importers to submit Ruling Requests via CBP’s new e-Rulings system (except the Ruling Requests must be submitted by paper if a physical sample is submitted to CBP). Advance Ruling Requests still remain the best way of predicting proper import requirements, including proper classification and valuation.
Customs’ failure to timely process ruling requests has been a constant complaint among the practitioners. Headquarters rulings should be issued in 90 days, while New York rulings should be issued in 30 days. While the average ruling processing time at New York port is 22 days, there still remains a significant backlog of the requests.
The event highlights can be accessed on U.S. Customs’ website here. Presentations from the trade symposium can be found here.
The symposium was organized in a workshop setting and also included a number of lectures and presentations. Some of the most important topics included Importer Security Filing (ISF), shared border issues between the U.S., Canada, and Mexico, Customs’ intellectual property rights (IPR) policy, and Customs’ rulings process.
Regarding the ISF process, CBP reported that from January 2009 through December 2009 it received 3.65 million filings from more than 100,000 ISF importers. CBP reminded that it will begin enforcing ISF requirements beginning January 26, 2010. It was clear from the discussions that Customs has no intention of delaying the enforcement of mandatory ISF filing past the intended enforcement date. However, CBP plans to adopt, at least initially, an informed compliance approach, which, at first, will include use of the least punitive measures.
At the beginning of the ISF enforcement period, Customs expects to use Do Not Load Directives only in the most serious cases. Customs is most interested in receiving the necessary ISF data rather than holding back the cargo or issuing monetary penalties, which range from $5,000 for ISF transmission violations and are capped at $10,000 per filing. The importers must also consider that the cost of Customs withholding cargo is likely to exceed the penalty of $5,000 or $10,000.
The ISF penalty process will be, for now, centralized at the Customs’ Headquarters (HQ) level. Individual ports will initiate the penalty proceedings but the review and handling of the violation will be forwarded to Customs HQ.
On the border issues, a panel of Customs officials from the U.S., Mexico and Canada stressed the importance of harmonizing countries’ customs processes, including requirements for advance data submission otherwise known as 10+2. The U.S. and Canada continue to work on harmonizing partnership programs like C-TPAT. Mexico will be initiating its own Authorized Economic Operator (AEO) program in 2010.
Overall, the discussions stressed the importance of developing businesses’ risk management programs including integration of internal controls related to trade and those involving key business and financial operations.
Regarding Customs’ IPR policy, CBP issued over 1,000 fine notices totaling $94 million against importers attempting to import counterfeit merchandise. Of that amount, CBP was able to collect only $2 million from the violators. Therese Randazzo, Customs’ IPR Policy and Programs Division Director, indicated that the U.S. Attorney Office is hesitant to bring cases against violators since adding a fine in addition to the seizure and forfeiture of goods may be considered an excessive fine under U.S. law.
With respect to the Customs Rulings process, Customs reminded importers to submit Ruling Requests via CBP’s new e-Rulings system (except the Ruling Requests must be submitted by paper if a physical sample is submitted to CBP). Advance Ruling Requests still remain the best way of predicting proper import requirements, including proper classification and valuation.
Customs’ failure to timely process ruling requests has been a constant complaint among the practitioners. Headquarters rulings should be issued in 90 days, while New York rulings should be issued in 30 days. While the average ruling processing time at New York port is 22 days, there still remains a significant backlog of the requests.
The event highlights can be accessed on U.S. Customs’ website here. Presentations from the trade symposium can be found here.
President Obama Signs GSP and ATPA Bill into Law President Signs GSP and ATPA Bill into Law President Obama Signs GSP and ATPA Bill into Law
12/28/09 10:49 PM
On
December 28, 2009, President Obama
signed into law H.R.
4284, which extends the Generalized System of
Preferences (GSP) and the Andean Trade
Preference Act (ATPA) for one year, through
December 31, 2010. Under the GSP treatment,
beneficiary developing countries receive certain
trade benefits.
According to the Presidential Proclamation, effective January 1, 2011, Croatia and Equatorial Guinea will no longer receive the GSP treatment as they have achieved “high income” classification. Cape Verde will be removed from the list of least-developed beneficiary countries under GSP effective January 1, 2010.
According to the Presidential Proclamation, effective January 1, 2011, Croatia and Equatorial Guinea will no longer receive the GSP treatment as they have achieved “high income” classification. Cape Verde will be removed from the list of least-developed beneficiary countries under GSP effective January 1, 2010.
CBP Trade Symposium 2009 Available via Webcast
11/10/09 03:01 PM
U.S.
Customs and Border Protection (CBP) has
announced the
availability of its Trade Symposium 2009 via
webcast. Participation via live Webcast on
December 8-10, 2009 is available with
registration
and
payment of a $35 fee. Participants will also be
provided with 30-day on-demand access of the
Webcast free of charge. CBP will select three
breakout sessions that will be shown during the
live webcast. The general sessions and eight
breakout sessions will be available during the
30-day on-demand access.
The agenda for the Symposium is available here.
The agenda for the Symposium is available here.
Customs Classification Ruling Featured in New York Times Article
09/30/09 05:01 PM
On
September 30, 2009, the New York
Times published
an article highlighting
the importance of a tariff classification
ruling issued by
Customs and Border Protection's (CBP) Office of
Regulations and Rulings, National Commodity
Specialist Division in New York, concerning the
tariff classification of a solar module
consisting of 72 interconnected monocrystalline
silcon cells. In the ruling, issued on January
9, 2009, CBP held that the solar module was
dutiable at 2.5% ad
valorem, and not
duty-free as argued.
The New York Times article states that although the ruling is legally binding on most solar panels imported into the United States, the ruling only came to the attention of the solar energy industry in recent weeks. The articles provides:
CBP stated that, "EN 85.41(B)(i) states that heading 8541 does not cover panels or modules equipped with elements, however simple, i.e. diodes to control the direction of the current." Because the solar module at issue does contain diodes, CBP stated that the applicable subheading for the product will be HTSUS subheading 8501.31.8000, which provides for "Electric motors and generators: Other DC motors; DC generators: Of an output not exceeding 750 W: Generators," dutiable at 2.5% ad valorem.
Rhone Resch, the chief executive and president of the Solar Energy Industries Association (a coalition of domestic and foreign companies) estimates that the duty would cost the industry $70 million this year, assuming importers will be found negilgent for not properly classifying and paying the duties since January when the ruling was issued and will be assessed the penalty of doubled duties.
The New York Times article states that although the ruling is legally binding on most solar panels imported into the United States, the ruling only came to the attention of the solar energy industry in recent weeks. The articles provides:
The ruling was obtained by the small American subsidiary of a Spanish energy company, GES USA, in preparation for a project that never went through. In the ruling, CBP stated that although the importer argued that the solar module was classifiable under subheading 541.40.6020 of the Harmonized Tariff Schedule of the United States (HTSUS), which provides for "Diodes, transistors and similar semiconductor devices; photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules…: Photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels…: Other diodes: Other: Solar cells: Assembled into modules or made up into panels," the Explanatory Note (EN) 85.41(B)(i) persuaded CBP that classification under that subheading was inapplicable.The United States exported almost as much solar panel equipment as it imported in the first seven months of this year — $605 million in imports and $555 million in exports, according to Commerce Department data. The Solar Energy Industries Association, a coalition of domestic and foreign companies, argues that American tariffs on solar panels could lead other countries to impose tariffs on American exports. The customs decision is dividing the industry between importers and companies that produce solar equipment in the United States. And with China accounting for a rising share of American imports, the tariff could become a sticking point in bilateral trade relations already troubled by the dispute over tires, autos and chicken parts. Some Chinese solar panel manufacturers are already planning to move final assembly of solar modules to plants in the United States, a step that could allow them to avoid the duty someday, said Rhone Resch, the chief executive and president of the industry association.
CBP stated that, "EN 85.41(B)(i) states that heading 8541 does not cover panels or modules equipped with elements, however simple, i.e. diodes to control the direction of the current." Because the solar module at issue does contain diodes, CBP stated that the applicable subheading for the product will be HTSUS subheading 8501.31.8000, which provides for "Electric motors and generators: Other DC motors; DC generators: Of an output not exceeding 750 W: Generators," dutiable at 2.5% ad valorem.
Rhone Resch, the chief executive and president of the Solar Energy Industries Association (a coalition of domestic and foreign companies) estimates that the duty would cost the industry $70 million this year, assuming importers will be found negilgent for not properly classifying and paying the duties since January when the ruling was issued and will be assessed the penalty of doubled duties.
President Obama Increases Duties on Tires Imported from China
09/11/09 05:27 PM
On
September 11, 2009, President Obama
announced that the United
States will impose a 35 percent tariff on
passenger vehicle and light truck tires imported
from China for a period of three years in order
to remedy a market disruption caused by a surge
in time imports. The White House stated that:
The ITC determined that Chinese tire imports were disrupting the $1.7 billion market and recommended that the President impose the new tariffs on June 29, 2009. President Obama had until September 17, 2009 to make his decision.
The New York Times reported that the decision is the first time the United States has invoked the special safeguard provision of China's WTO entry and is a break from the previous administration's practices. Under the safeguard provision, American companies or workers harmed by imports from China can ask the International Trade Commission (ITC) for protection by demonstrating that American producers have suffered a "market disruption" or a "surge" in imports from China. Unlike traditional antidumping cases, the ITC does not have to determine that the country is selling its products at less than fair market value or that the country is competing unfairly.As part of its accession to the World Trade Organization (WTO), China agreed to a special safeguard mechanism that would allow its trading partners to implement remedies in response to import surges and under other circumstances. The President decided to remedy the clear disruption to the U.S. tire industry based on the facts and the law in this case. The additional duty to passenger vehicle and light truck tires – complementing the existing 4 percent duty– will be set at 35 percent ad valorem for the first year, 30 percent ad valorem the second year, and 25 percent ad valorem the third year.
The ITC determined that Chinese tire imports were disrupting the $1.7 billion market and recommended that the President impose the new tariffs on June 29, 2009. President Obama had until September 17, 2009 to make his decision.
Previous Versions of CBP Form 7501 to be Discontinued After November 3, 2009
08/15/09 08:15 AM
Beginning November
3, 2009, the U.S. Customs and Border Protection
(CBP) will no longer accept versions of CBP Form
7501 dated before June 2009. While the June 2009
CBP Form 7501 does not contain any substantial
changes from the previous versions, CBP seeks to
ensure in particular that forms dated before April
2005 are no longer used.
CBP forms and their instructions can be accessed here.
CBP forms and their instructions can be accessed here.
CBP Implements Changes to 10+2 Processing Effective August 15, 2009
08/13/09 08:29 AM
On
July 12, 2009, the U.S. Customs and Border
Protection (CBP) implemented
a
number of changes to the processing of the
Importer Security Filing (ISF), also known as
10+2. Accordingly, the transaction sets on the
Security Filing page were updated to reflect
these changes.
CBP issued a reminder that beginning August 15, 2009, the following data edits in ISF were switched from “ISF ACCEPTED WITH WARNINGS” to “ISF REJECTED:”
1. Edit for missing Importer of Record
a. CATAIR / CAMIR - Error Code 302, Error Message 'Importer Required”
b. X.12 – Error Message “485 NM1 Missing Importer”
2. Edit for incorrect Action Reason Code
a. CATAIR / CAMIR – Error Code 132, Error Message “Invalid Action Reason Code”
b. X.12 – Error Message “470 M1016 Invalid Value”
On August 12, 2009 CBP added an additional data element to the list of fatal errors. Effective August 15, 2009, reporting a party using an identification number (IRS number or Social Security Number) that is not currently on file with CBP will be rejected.
Questions should be directed to your assigned Client Representative or by calling (703) 650-3500.
CBP issued a reminder that beginning August 15, 2009, the following data edits in ISF were switched from “ISF ACCEPTED WITH WARNINGS” to “ISF REJECTED:”
1. Edit for missing Importer of Record
a. CATAIR / CAMIR - Error Code 302, Error Message 'Importer Required”
b. X.12 – Error Message “485 NM1 Missing Importer”
2. Edit for incorrect Action Reason Code
a. CATAIR / CAMIR – Error Code 132, Error Message “Invalid Action Reason Code”
b. X.12 – Error Message “470 M1016 Invalid Value”
On August 12, 2009 CBP added an additional data element to the list of fatal errors. Effective August 15, 2009, reporting a party using an identification number (IRS number or Social Security Number) that is not currently on file with CBP will be rejected.
Questions should be directed to your assigned Client Representative or by calling (703) 650-3500.
Court Rules CBP Must Follow Regulations in Determining Broker's Exercise of Supervision
08/12/09 08:29 AM
On
August 11, 2009, the U.S. Court of Appeals for the
Federal Circuit (CAFC) issued a decision in
U.S. v. UPS Customhouse
Brokerage, Inc., remanding the
case to the U.S. Court of International Trade
(CIT) for further proceedings. The case involved
the Bureau of Customs and Border Protection’s
(Customs) action against UPS Customhouse
Brokerage, Inc. (UPS).
In 2000, Customs initiated eight penalty actions against UPS for misclassifying the goods on customs entry documents on behalf of its clients. The pre-penalty notices in all eight cases alleged that UPS failed to exercise responsible supervision and control required by 19 USC §1641 by repeatedly misclassifying parts under subheading HTSUS 8473.30.9000.
In 2004, Customs brought suit against UPS in the CIT seeking the unpaid portion of the penalties totaling $75,000. The CIT ruled in favor of Customs and ordered payment of penalties.
On appeal, CAFC affirmed CIT’s holding that UPS misclassified certain parts under subheading HTSUS 8473.30.9000.
On the issue of whether the broker exercised responsible supervision and control under 19 CFR §111.1, CAFC agreed with Customs that an agency has discretion in interpreting its own regulations, but pointed out that in this case, the Customs’ interpretation of 19 CFR §111.1 was inconsistent with the regulation itself. The Court stated:
As a result of Customs’ failure to consider all ten factors listed in 19 CFR §111.1 in evaluating the exercise of reasonable supervision and control, the Court vacated that portion of the CIT’s judgment and remanded the case for further proceedings.
In 2000, Customs initiated eight penalty actions against UPS for misclassifying the goods on customs entry documents on behalf of its clients. The pre-penalty notices in all eight cases alleged that UPS failed to exercise responsible supervision and control required by 19 USC §1641 by repeatedly misclassifying parts under subheading HTSUS 8473.30.9000.
In 2004, Customs brought suit against UPS in the CIT seeking the unpaid portion of the penalties totaling $75,000. The CIT ruled in favor of Customs and ordered payment of penalties.
On appeal, CAFC affirmed CIT’s holding that UPS misclassified certain parts under subheading HTSUS 8473.30.9000.
On the issue of whether the broker exercised responsible supervision and control under 19 CFR §111.1, CAFC agreed with Customs that an agency has discretion in interpreting its own regulations, but pointed out that in this case, the Customs’ interpretation of 19 CFR §111.1 was inconsistent with the regulation itself. The Court stated:
Customs, of course, has discretion in how it weighs each of the factors listed in §111.1. Additionally, the regulation makes clear that Customs is free to consider other factors in addition to those listed. However, this discretion does not absolve Customs of its obligation under the regulation to consider at the least the ten listed factors.
As a result of Customs’ failure to consider all ten factors listed in 19 CFR §111.1 in evaluating the exercise of reasonable supervision and control, the Court vacated that portion of the CIT’s judgment and remanded the case for further proceedings.
SEC Imposes Control Person Liability on Corporate Officers of Public Companies for Foreign Corrupt Practices
08/01/09 08:31 PM
On Jul
31, 2009 the U.S. Securities and Exchange
Commission (SEC) filed a settled
enforcement of $600,000 against Nature's
Sunshine Products Inc. (NSP) and $25,000 against
NSP Chief Executive Officer Douglas Faggioli and
former Chief Financial Officer Craig D. Huff.
NSP’s Brazilian subsidiary allegedly paid the
Brazilian custom officials to import
unregistered products into Brazil and
subsequently falsified its books and records to
conceal the payments.
The SEC based its charge on NSP’s violations of the anti-bribery provision of the Foreign Corrupt Practices Act (FCPA). But, according to Philip Urofsky, a former federal prosecutor of FCPA claims, the SEC also invoked, for the first time, Section 20(a) of the Securities Exchange Act of 1934 to hold NSP’s officers liable.
In an interview with the National Law Journal on Control Person Liability theory, Mr. Urofsky, who now is a partner in the Washington office of New York's Shearman & Sterling, described this theory as an easy way to hold corporate individuals: the executives, directors, and accountants liable for the corporation’s books, records and internal controls violations “without pleading any knowledge or culpable involvement in the underlying bribes or accounting issues.”
The SEC based its charge on NSP’s violations of the anti-bribery provision of the Foreign Corrupt Practices Act (FCPA). But, according to Philip Urofsky, a former federal prosecutor of FCPA claims, the SEC also invoked, for the first time, Section 20(a) of the Securities Exchange Act of 1934 to hold NSP’s officers liable.
In an interview with the National Law Journal on Control Person Liability theory, Mr. Urofsky, who now is a partner in the Washington office of New York's Shearman & Sterling, described this theory as an easy way to hold corporate individuals: the executives, directors, and accountants liable for the corporation’s books, records and internal controls violations “without pleading any knowledge or culpable involvement in the underlying bribes or accounting issues.”
CBP Publishes Liquidated Damages Guidelines for Failure to Comply with Importer Security Filing Requirements
07/18/09 10:47 PM
On
July 17, 2009, U.S. Customs and Border Protection
(CBP) published its Guidelines for the Assessment
and Cancellation of Claims for Liquidated Damages
for Failure to Comply with Importer Security Filing
Requirements. (CBP Dec. 09-26).
In addition to liquidated damages, a carrier or ISF Importer may be issued a do not load (DNL) hold, the delay or denial of a vessel carrier’s preliminary entry- permit/special license to unlade and/or the assessment of any applicable statutory penalty. CBP may also withhold the release or transfer of the cargo until CBP receives the required information and has had the opportunity to review the documentation. Liquidated damages may be assessed in the following circumstances:
Late Filing – If an ISF Importer submits a late ISF, CBP may assess a claim for liquidated damages in the amount of $5,000 per late ISF.
Inaccurate Filing – CBP may assess liquidated damages in the amount of $5000 per inaccurate ISF.
Updates – CBP may assess a claim for liquidated damages against the importer for the first inaccurate ISF update in the amount of $5000.
Withdrawals – CBP may assess a claim for liquidated damages in the amount of $5000 if an ISF importer fails to withdraw an ISF.
Additional penalties under 19 U.S.C. § 1595a(b) may be assessed for serious or repetitive violations.
The Guidelines also discuss the cancellation of liquidated damages and mitigating and aggravating factors to consider. In the case of a first time violation, the liquidated damages claim may be cancelled upon payment of an amount between $1000 and $2000 depending on the presence of mitigating and aggravating factors. Subsequent violations may be cancelled upon payment of an amount not less than $2,500 if CBP determines that law enforcement goals were not compromised.
Mitigating factors include evidence of progress in the implementation of the ISF requirement during the flexible enforcement period (January 26, 2009 to January 26, 2010); small number of violations compared to the number of shipments for which ISFs were required; an ISF Importer which is a certified Tier 2 or Tier 3 C-TPAT member; demonstrated remedial action; ISF information was filed late because of vessel diversion due to factors outside of the ISF Importer’s control; the presenting party acquired the information from another party in accordance with ordinary commercial practices and can demonstrate that it reasonably believed the information to be true and it was not reasonably able to verify the information.
Aggravating factors include lack of cooperation with CBP; evidence of smuggling or attempt to introduce merchandise contrary to law; multiple errors on the ISF; and rising error rate which is indicative of deteriorating performance in the transmission of ISF information.
In addition to liquidated damages, a carrier or ISF Importer may be issued a do not load (DNL) hold, the delay or denial of a vessel carrier’s preliminary entry- permit/special license to unlade and/or the assessment of any applicable statutory penalty. CBP may also withhold the release or transfer of the cargo until CBP receives the required information and has had the opportunity to review the documentation. Liquidated damages may be assessed in the following circumstances:
Late Filing – If an ISF Importer submits a late ISF, CBP may assess a claim for liquidated damages in the amount of $5,000 per late ISF.
Inaccurate Filing – CBP may assess liquidated damages in the amount of $5000 per inaccurate ISF.
Updates – CBP may assess a claim for liquidated damages against the importer for the first inaccurate ISF update in the amount of $5000.
Withdrawals – CBP may assess a claim for liquidated damages in the amount of $5000 if an ISF importer fails to withdraw an ISF.
Additional penalties under 19 U.S.C. § 1595a(b) may be assessed for serious or repetitive violations.
The Guidelines also discuss the cancellation of liquidated damages and mitigating and aggravating factors to consider. In the case of a first time violation, the liquidated damages claim may be cancelled upon payment of an amount between $1000 and $2000 depending on the presence of mitigating and aggravating factors. Subsequent violations may be cancelled upon payment of an amount not less than $2,500 if CBP determines that law enforcement goals were not compromised.
Mitigating factors include evidence of progress in the implementation of the ISF requirement during the flexible enforcement period (January 26, 2009 to January 26, 2010); small number of violations compared to the number of shipments for which ISFs were required; an ISF Importer which is a certified Tier 2 or Tier 3 C-TPAT member; demonstrated remedial action; ISF information was filed late because of vessel diversion due to factors outside of the ISF Importer’s control; the presenting party acquired the information from another party in accordance with ordinary commercial practices and can demonstrate that it reasonably believed the information to be true and it was not reasonably able to verify the information.
Aggravating factors include lack of cooperation with CBP; evidence of smuggling or attempt to introduce merchandise contrary to law; multiple errors on the ISF; and rising error rate which is indicative of deteriorating performance in the transmission of ISF information.
CBP Issues Correcting Amendments to 10+2 Rule
07/15/09 10:41 PM
On
July 14, 2009, the Bureau of Customs and Border
Protection (CBP) issued correcting amendments
to
the interim final rule entitled “Importer
Security Filing and Additional Carrier
Requirements” originally published in the
Federal Register on November 25, 2008.
Pursuant to the interim final rule, commonly known as the 10+2 rule, an Importer Security Filing (ISF) must be filed for cargo arriving into a U.S. port generally no later than 24 hours before the cargo is laden aboard a vessel at a foreign port.
The new correcting amendment added a new paragraph (b)(5) to 19 C.F.R. §149.2 to clarify that ISFs for shipments intended to be transported in-bond as immediate exportations (I&Es) or transportation and exportations (T&Es) must be transmitted no later than 24 hours before the cargo is laden aboard a vessel that is destined to the U.S.
With respect to the obligation to amend the ISF, CBP specified that the ISF must be updated if there is a change to any of the ISF data elements before the goods enter the boundaries of the first port of arrival in the U.S. Amendments to the ISF are accepted at any time after the goods arrive in a U.S. port.
Pursuant to the interim final rule, commonly known as the 10+2 rule, an Importer Security Filing (ISF) must be filed for cargo arriving into a U.S. port generally no later than 24 hours before the cargo is laden aboard a vessel at a foreign port.
The new correcting amendment added a new paragraph (b)(5) to 19 C.F.R. §149.2 to clarify that ISFs for shipments intended to be transported in-bond as immediate exportations (I&Es) or transportation and exportations (T&Es) must be transmitted no later than 24 hours before the cargo is laden aboard a vessel that is destined to the U.S.
With respect to the obligation to amend the ISF, CBP specified that the ISF must be updated if there is a change to any of the ISF data elements before the goods enter the boundaries of the first port of arrival in the U.S. Amendments to the ISF are accepted at any time after the goods arrive in a U.S. port.
Dates Announced for CBP Trade Symposium 2009
06/30/09 02:47 PM
On June 29, 2009, U.S. Customs and Border
Protection (CBP)
announced
the dates for the CBP Trade Symposium 2009, which
will be held from December 8 - 10, 2009 at
the
Walter E. Washington Convention
Center
in Washington, D.C.
CBP will provide further information regarding registration procedures and symposium details in early fall.
A block of rooms for Trade Symposium attendees at the Grand Hyatt at the price of $214 per night including internet has been reserved. Details will be posted on CBP.gov when this room block is open for reservations.
CBP will provide further information regarding registration procedures and symposium details in early fall.
A block of rooms for Trade Symposium attendees at the Grand Hyatt at the price of $214 per night including internet has been reserved. Details will be posted on CBP.gov when this room block is open for reservations.
PRC Revises Customs Enforcement of Intellectual Property Measures
06/30/09 02:08 PM
On July 1, 2009, the revised
Implementing Measures for Customs
Protection of Intellectual
Property
will go into effect in China.
Updated in March 2009, the revised measures enable intellectual property (IP) owners to settle disputes with consignors and consignees after the seizure but before the penalty decision in a case is issued. Because the resolution of IP infringement cases by Chinese customs can take months and even years and infringers are rarely willing to disclose the source of the goods, it is expected that the new settlement provisions will provide a helpful tool to IP rights holders to obtain information on the true identity of the sellers and buyers of the goods.
The new rules allow IP holders to withdraw an IP rights enforcement complaint only when the owners submit to customs a copy of the settlement agreement and an application for the withdrawal of the complaint. Upon receipt of the settlement agreement, Chinese Customs will be able to terminate its investigation except in cases where a criminal offense is suspected.
The new regulations adopt China’s General Administration of Customs (GAC) and the Ministry of Public Security (MPS) rules that require transfer of suspected criminal cases to Chinese police (PSB). As stated by both China’s Supreme People’s Court and Supreme People’s Procuratorate, counterfeiting may be deemed a criminal offense where the case value in question exceeds RMB50,000, or about $7,300.
The updated regulations impose a 10-day deadline for the GAC to issue a decision on whether an application of customs recordal will be renewed, and permits the GAC to cancel recordals in cases whether an IP rights holder has failed to update its recordal in a timely fashion.
Under the new notificaton provisions, Chinese Customs are no longer required to first notify the IP owner upon detecting a shipment suspected to infringe IP rights, and instead will have discretion to approach the consignor or consignee of the goods for proof that IP was used with the owner’s permission.
The new regulations also require Chinese Customs to obtain the IP rights holder’s permission prior to auctioning off the infringing goods.
Finally, the new regulations adopt the GAC’s May 2006 provisions that permit the trademark owners experiencing high levels of infringement to provide to customs a renewable guarantee, calculated as the total costs of warehousing and handling fees paid for customs in the prior year, set at a minimum of RMB200,000, instead of paying a customs bonds in every case.
Updated in March 2009, the revised measures enable intellectual property (IP) owners to settle disputes with consignors and consignees after the seizure but before the penalty decision in a case is issued. Because the resolution of IP infringement cases by Chinese customs can take months and even years and infringers are rarely willing to disclose the source of the goods, it is expected that the new settlement provisions will provide a helpful tool to IP rights holders to obtain information on the true identity of the sellers and buyers of the goods.
The new rules allow IP holders to withdraw an IP rights enforcement complaint only when the owners submit to customs a copy of the settlement agreement and an application for the withdrawal of the complaint. Upon receipt of the settlement agreement, Chinese Customs will be able to terminate its investigation except in cases where a criminal offense is suspected.
The new regulations adopt China’s General Administration of Customs (GAC) and the Ministry of Public Security (MPS) rules that require transfer of suspected criminal cases to Chinese police (PSB). As stated by both China’s Supreme People’s Court and Supreme People’s Procuratorate, counterfeiting may be deemed a criminal offense where the case value in question exceeds RMB50,000, or about $7,300.
The updated regulations impose a 10-day deadline for the GAC to issue a decision on whether an application of customs recordal will be renewed, and permits the GAC to cancel recordals in cases whether an IP rights holder has failed to update its recordal in a timely fashion.
Under the new notificaton provisions, Chinese Customs are no longer required to first notify the IP owner upon detecting a shipment suspected to infringe IP rights, and instead will have discretion to approach the consignor or consignee of the goods for proof that IP was used with the owner’s permission.
The new regulations also require Chinese Customs to obtain the IP rights holder’s permission prior to auctioning off the infringing goods.
Finally, the new regulations adopt the GAC’s May 2006 provisions that permit the trademark owners experiencing high levels of infringement to provide to customs a renewable guarantee, calculated as the total costs of warehousing and handling fees paid for customs in the prior year, set at a minimum of RMB200,000, instead of paying a customs bonds in every case.
CBP Proposes Revocation of Tariff Classification of Photosensitive Sensors
06/03/09 03:13 PM
On June 2, 2009, the U.S. Customs and Border
Protection (CBP) published a
notice
of proposed revocation of two ruling letters and
treatment relating to the tariff classification of
photosensitive sensors. Comments must be received
by CBP on or before July 26, 2009.
In New York Ruling Letters (“NYRL&rdquo
K86469 (dated June 21, 2004) and
I87325 (dated October 25, 2002), CBP
classified certain photosensitive sensors in
heading 8541, HTSUS, specifically subheading
8541.40.80, HTSUS, as: “[p]hotosensitive
semiconductor devices: Other: Optical coupled
isolators,” duty-free. It is now CBP’s
position that the photosensitive sensors are
classified in heading 8543, HTSUS,
specifically under subheading 8543.70.96,
HTSUS, which provides for ‘‘[e]lectrical
machines and apparatus, having individual
functions, not specified or included elsewhere
in this chapter; parts thereof: Other machines
and apparatus: Other: Other: Other. . .,“
dutiable at 2.6%
ad valorem.
Pursuant to 19 U.S.C. §1625(c)(1), CBP intends to revoke NY K86469, and NY I87325, and revoke or modify any other ruling not specifically identified in order to reflect the proper classification of the merchandise pursuant to the analysis set forth in proposed Headquarters Ruling (HQ) HQ H044701. Additionally, pursuant to 19 U.S.C. §1625(c)(2), CBP intends to revoke any treatment previously accorded by CBP to substantially identical transactions.
Before taking this action, CBP will give consideration to any written comments timely received.
In New York Ruling Letters (“NYRL&rdquo
K86469 (dated June 21, 2004) and
I87325 (dated October 25, 2002), CBP
classified certain photosensitive sensors in
heading 8541, HTSUS, specifically subheading
8541.40.80, HTSUS, as: “[p]hotosensitive
semiconductor devices: Other: Optical coupled
isolators,” duty-free. It is now CBP’s
position that the photosensitive sensors are
classified in heading 8543, HTSUS,
specifically under subheading 8543.70.96,
HTSUS, which provides for ‘‘[e]lectrical
machines and apparatus, having individual
functions, not specified or included elsewhere
in this chapter; parts thereof: Other machines
and apparatus: Other: Other: Other. . .,“
dutiable at 2.6%
ad valorem.
Pursuant to 19 U.S.C. §1625(c)(1), CBP intends to revoke NY K86469, and NY I87325, and revoke or modify any other ruling not specifically identified in order to reflect the proper classification of the merchandise pursuant to the analysis set forth in proposed Headquarters Ruling (HQ) HQ H044701. Additionally, pursuant to 19 U.S.C. §1625(c)(2), CBP intends to revoke any treatment previously accorded by CBP to substantially identical transactions.
Before taking this action, CBP will give consideration to any written comments timely received.
Deadline Set for Importers to Request Duty-Free Treatment under GSP
05/28/09 01:02 AM
On May
28, 2009, the U.S. Trade Representative (USTR)
issued a notice in the Federal
Register announcing it has set June 24 as the
deadline for its 2009 Annual Generalized System
of Preferences (GSP) Product and Country
Practices Eligibility Review. During the Annual
Review, USTR assesses petitions to modify the
list of products and countries that receive
duty-free treatment under the GSP.
By utilizing GSP, which provides duty-free treatment to a range of products from over 100 developing and lesser developed countries, U.S. importers can better control the cost of inputs.
Interested parties must submit petitions to modify the GSP products and country status by June 24, 2009. Petitions for products to continue receiving GSP treatment will be accepted starting June 24 and November 17, 2009.
By utilizing GSP, which provides duty-free treatment to a range of products from over 100 developing and lesser developed countries, U.S. importers can better control the cost of inputs.
Interested parties must submit petitions to modify the GSP products and country status by June 24, 2009. Petitions for products to continue receiving GSP treatment will be accepted starting June 24 and November 17, 2009.
Importer Sentenced For Customs Fraud
05/15/09 01:09 AM
On May
15, 2009, the U.S. Department of Justice
announced that Paul
Kotsakos of Biloxi, Mississippi, was sentenced
to nine months in prison and ordered to pay
restitution in the amount of $10,403 and $3,000
fines for customs fraud.
In January, Kotsakos pleaded guilty to a 16-count indictment, charging him with conspiracy to commit customs violations and wire fraud. Kotsakos operated an import company PK Promotions, Inc., in Biloxi. The company provided promotional items to casinos, restaurants, sports teams, and wholesalers, and imported items, including bags, beads, cups, and shirts from China.
According to the indictment, Kotsakos submitted fraudulent invoices to U.S. Customs and arranged to give parts false HTS classifications. In furtherance of the conspiracy, Kotsakos e-mailed the foreign manufacturers to request that they prepare fraudulent invoices reflecting a lower price for goods sold or different classification of the goods. By requesting falsified invoices and wrong classifications for the imports, Kotsakos sought to avoid paying the full amount of duty on imported goods.
After his release, Kotsakos will have to serve three years of supervised release.
In January, Kotsakos pleaded guilty to a 16-count indictment, charging him with conspiracy to commit customs violations and wire fraud. Kotsakos operated an import company PK Promotions, Inc., in Biloxi. The company provided promotional items to casinos, restaurants, sports teams, and wholesalers, and imported items, including bags, beads, cups, and shirts from China.
According to the indictment, Kotsakos submitted fraudulent invoices to U.S. Customs and arranged to give parts false HTS classifications. In furtherance of the conspiracy, Kotsakos e-mailed the foreign manufacturers to request that they prepare fraudulent invoices reflecting a lower price for goods sold or different classification of the goods. By requesting falsified invoices and wrong classifications for the imports, Kotsakos sought to avoid paying the full amount of duty on imported goods.
After his release, Kotsakos will have to serve three years of supervised release.
CBP Updates Guidance on the Lacey Act Declaration
05/06/09 02:43 PM
The U.S. Customs and Border Protection (CBP)
recently updated its
guidance
on the Lacey Act declaration. The update emphasized
that enforcement of the data collection
requirements under the Lacey Act began on May 1,
2009, and also included information regarding a
pilot program involving entities participating in
CBP’s expedited border release programs.
On May 1, 2009, CBP began a pilot program for entities involved in Automated Line Release (ALR) or Border Release Advance Screening and Selectivity (BRASS) expedited border release programs whose products require a Lacey Act declaration during the current phase of enforcement. The pilot program is intended to test the feasibility of collecting the information using periodic declarations with follow-up reconciliation reports.
Under the pilot, participants must chose to remain or be removed from the program. If a participant wishes to opt out from the expedited program, their C4 code is deactivated effective June 1, 2009 and no further action is required. If a participant opts to remain in the program, they must complete a two-step process.
First, the participant must file with the U.S. Department of Agriculture (USDA) Animal and Plant Health Inspection Service (APHIS) an advance PPQ 505 form, initially on a monthly basis, that includes genus, species, value, and quantity elements based on estimated imports during the next calendar month. The initial estimate had to be submitted by May 15, 2009, covering the expedited release shipments planned for June 2009.
During stage two of the process, the participant must file a reconciliation report with APHIS within 15 days after the month’s end. This report must provide the actual shipment information made during the previous month. The deadline for the first reconciliation reports is set for July 15, 2009.
This process must be repeated each month while the pilot program is in effect.
CBP also urged the importers to use the electronic system to file the declaration. When an entry package is presented to CBP to obtain release, the CBP 3461 will be annotated in Box 29 to indicate “PPQ 505-Paper” if the declaration is presented in paper and “PPQ 505–ABI” if the declaration information was submitted electronically.
On May 1, 2009, CBP began a pilot program for entities involved in Automated Line Release (ALR) or Border Release Advance Screening and Selectivity (BRASS) expedited border release programs whose products require a Lacey Act declaration during the current phase of enforcement. The pilot program is intended to test the feasibility of collecting the information using periodic declarations with follow-up reconciliation reports.
Under the pilot, participants must chose to remain or be removed from the program. If a participant wishes to opt out from the expedited program, their C4 code is deactivated effective June 1, 2009 and no further action is required. If a participant opts to remain in the program, they must complete a two-step process.
First, the participant must file with the U.S. Department of Agriculture (USDA) Animal and Plant Health Inspection Service (APHIS) an advance PPQ 505 form, initially on a monthly basis, that includes genus, species, value, and quantity elements based on estimated imports during the next calendar month. The initial estimate had to be submitted by May 15, 2009, covering the expedited release shipments planned for June 2009.
During stage two of the process, the participant must file a reconciliation report with APHIS within 15 days after the month’s end. This report must provide the actual shipment information made during the previous month. The deadline for the first reconciliation reports is set for July 15, 2009.
This process must be repeated each month while the pilot program is in effect.
CBP also urged the importers to use the electronic system to file the declaration. When an entry package is presented to CBP to obtain release, the CBP 3461 will be annotated in Box 29 to indicate “PPQ 505-Paper” if the declaration is presented in paper and “PPQ 505–ABI” if the declaration information was submitted electronically.
CBP Announces Broker Self-Assessment Outreach Pilot
04/27/09 08:54 PM
On
April 27, 2009, the Customs and Border Protection
(CBP) announced the commencement of the Broker
Self-Assessment (BSA) Outreach Pilot (BSA Pilot) in
a general notice published in
the Federal Register. Modeled after the Importer
Self Assessment (ISA) Program, the BSA Pilot is
a voluntary program that CBP intends to be a
partnership between itself and participating
customs brokers. CBP states that the primary
goal of the program is to facilitate a higher
level of broker compliance with CBP laws and
regulations. CBP states that:
The Federal Register notice provides details on the application process and the requirements for participation in the BSA Pilot.[T]he BSA Pilot will allow for customs brokers to ascertain voluntarily with CBP how well they comply with their broker requirements, provide recognition and support to participating brokers, and facilitate legitimate trade so that CBP can focus on higher-risk trade enforcement issues. Under this program test, participating customs brokers will update and improve internal controls, perform periodic testing of these internal controls, and disclose to CBP deficiencies discovered through the testing. Any licensed customs broker who is a member of the Customs-Trade Partnership Against Terrorism (C-TPAT) and who meets the other eligibility requirements of the pilot, may apply to participate. After closure of the application period and review of the applications received, CBP will select a limited number of customs brokers to participate in the BSA Pilot.
Customs Proposes Changes to 9802 Calculations
03/13/09 05:26 PM
On
March 12, 2009, the Customs and Border Protection
(CBP) proposed
changes to the
Customs Regulations with regard to to exclude from
the dutiable value of repairs, alterations, or
processing performed abroad on articles exported
from the United States and returned under
subheading 9802.00.40, 9802.00.50, or 9802.00.60,
Harmonized Tariff Schedule of the United States
(HTSUS), the value of U.S.-origin parts used in the
foreign repairs, alterations, or processing. The
proposed changes would provide an incentive to use
U.S.-origin parts in the foreign repairs,
alterations, or processing of articles entered
under the above-referenced HTSUS provisions.
Comments on the proposed change must be received on or before May 12, 2009.
Subheadings 9802.00.40 and 9802.00.50, HTSUS, provide a partial duty exemption for articles returned to the United States after having been exported to be advanced in value or improved in condition by repairs or alterations. Subheading 9802.00.40 encompasses articles repaired or altered abroad pursuant to a warranty, while subheading 9802.00.50 encompasses articles repaired or altered abroad other than pursuant to a warranty. Articles entitled to classification under these tariff provisions are assessed duty based upon the value of the repairs or alterations.
Subheading 9802.00.60, HTSUS, provides a partial duty exemption for articles of metal manufactured in the United States that are exported for further processing and then returned to the United States for further processing. Articles entitled to classification under this tariff provision are assessed duty based upon the value of the processing performed outside the United States.
Currently, under both U.S. Note 3(a), subheading II, Chapter 98 and section 10.9 of the Customs Regulations, include in the cost or value of the repairs performed abroad the domestic value of any articles furnished for the repairs or alterations. The proposed changes would remove the domestic articles from such a calculation.
Comments on the proposed change must be received on or before May 12, 2009.
Subheadings 9802.00.40 and 9802.00.50, HTSUS, provide a partial duty exemption for articles returned to the United States after having been exported to be advanced in value or improved in condition by repairs or alterations. Subheading 9802.00.40 encompasses articles repaired or altered abroad pursuant to a warranty, while subheading 9802.00.50 encompasses articles repaired or altered abroad other than pursuant to a warranty. Articles entitled to classification under these tariff provisions are assessed duty based upon the value of the repairs or alterations.
Subheading 9802.00.60, HTSUS, provides a partial duty exemption for articles of metal manufactured in the United States that are exported for further processing and then returned to the United States for further processing. Articles entitled to classification under this tariff provision are assessed duty based upon the value of the processing performed outside the United States.
Currently, under both U.S. Note 3(a), subheading II, Chapter 98 and section 10.9 of the Customs Regulations, include in the cost or value of the repairs performed abroad the domestic value of any articles furnished for the repairs or alterations. The proposed changes would remove the domestic articles from such a calculation.
USDA Country of Origin Labeling Rule to Take Effect March 16
02/21/09 05:27 PM
Agriculture
Secretary Tom Vilsack
announced February 20, 2009
that the USDA's
January 15, 2009 final rule
on
mandatory country of origin labeling will go into
effect as scheduled March 16, 2009. Under the COOL
regulation, muscle cuts and ground beef, pork,
lamb, goat, and chicken, wild and farm-raised fish
and shellfish, fresh and frozen fruits and
vegetables, peanuts, pecans, macadamia nuts and
ginseng must be labeled at retail to indicate their
country of origin. The final rule outlines
requirements for labeling covered commodities and
the recordkeeping requirements for retailers and
suppliers, prescribes specific criteria that must
be met for a commodity to bear a "United States
Country of Origin" declaration and contains
provisions for labeling covered commodities of
foreign origin.
Oman and Peru Removed from GSP Program
02/04/09 05:31 PM
On
February 3, 2009, Customs
announced that “goods from
Oman and Peru are no longer eligible for GSP
preferences due to the implementation of bilateral
trade agreements with these countries.” The Oman
FTA took effect on January 1, 2009 and the Peru TPA
on February 1, 2009. GSP claims from these
countries will not be accepted on or after these
dates.
New Importer Security Filing Rule ("10+2") Goes Into Effect
01/27/09 05:34 PM
On
January 26, 2009, the
new importer security filing rule
(commonly known as
"10+2" due to the additional 10 data elements that
importers must provide to the government and 2
additional data elements that carriers must
provide) went into effect. The
rule was implemented as
scheduled despite the new administrations request
to delay any new or pending regulations for 60
days.
The new rule is subject to a "structured review and flexible enforcement period" of one year. As such, bonds for the importer security filing (ISF) will not be required and liquidated damages or do not load messages will not be issued for the simple failure to file the ISF until after January 26, 2010.
Customs and Border Protection (CBP) has provided outreach informational sessions to importers across the country and has posted a 36 page FAQ document, as well as other helpful information, on its website.
The new rule is subject to a "structured review and flexible enforcement period" of one year. As such, bonds for the importer security filing (ISF) will not be required and liquidated damages or do not load messages will not be issued for the simple failure to file the ISF until after January 26, 2010.
Customs and Border Protection (CBP) has provided outreach informational sessions to importers across the country and has posted a 36 page FAQ document, as well as other helpful information, on its website.
President Issues FOIA Executive Order
01/22/09 05:35 PM
On
January 21, 2009, President Obama issued a Freedom
of Information Act (FOIA)
memorandum instructing the
federal government to operate under the principles
of openness and transparency.
The memo instructs all agencies to act promptly and openly when responding to requests for information under FOIA. Furthermore, the memo states that agencies should adopt a presumption in favor of disclosure, meaning that agencies should take affirmative steps to make the information public in a timely manner and not wait for specific requests from the public.
In the past, FOIA requests have been perceived by companies as virtually useless because it took so long for the government to process and the information received was so redacted that it was meaningless. Therefore, a FOIA request may now provide a useful tool for importers and exporters in the collection of information. CBP may now be willing to provide relevant background information regarding rulings and penalties.
In a separate memo regarding government transparency, President Obama instructed the heads of the Office of Management and Budget (OMB) and the General Services Administration to issue an Open Government Directive implementing the principles of government’s transparency, public participation, and collaboration, within 120 days.
The memo instructs all agencies to act promptly and openly when responding to requests for information under FOIA. Furthermore, the memo states that agencies should adopt a presumption in favor of disclosure, meaning that agencies should take affirmative steps to make the information public in a timely manner and not wait for specific requests from the public.
In the past, FOIA requests have been perceived by companies as virtually useless because it took so long for the government to process and the information received was so redacted that it was meaningless. Therefore, a FOIA request may now provide a useful tool for importers and exporters in the collection of information. CBP may now be willing to provide relevant background information regarding rulings and penalties.
In a separate memo regarding government transparency, President Obama instructed the heads of the Office of Management and Budget (OMB) and the General Services Administration to issue an Open Government Directive implementing the principles of government’s transparency, public participation, and collaboration, within 120 days.
U.S.-Peru Free Trade Agreement to be Implemented on Feb. 1, 2009
01/17/09 05:36 PM
On
January 16, 2009, U.S. Trade Representative Susan
Schwab issued a
statement regarding the
entry into force of the U.S. – Peru FTA on February
1, 2009. Schwab noted that “[t]his is the first
free trade agreement (FTA) in force that will
reflect the enhanced labor and environmental
standards set out in the May 10, 2007, agreement
between the Administration and the congressional
leadership.” The FTA is expected to support
existing and prospective American jobs in the
manufacturing and agriculture industries.
The United States and Peru already enjoy a two-way trade relationship of nearly $9.4 billion annually. Prior to the U.S.-Peru FTA, Peru benefited from temporary trade preferences extended under the Andean Trade Preferences Act. The implementation of the FTA will build upon these preferences and make them permanent.
The USTR states that the agreement will open up a growing market of 28 million Peruvian consumers to U.S. business interests. Specifically, Schwab noted that “[o]n the first day this agreement enters into force, 80 percent of U.S. industrial and consumer products and more than two-thirds of current U.S. farm exports will enter Peru duty-free.”
The majority of U.S. exports that will receive the duty-free treatment are technology products; mining, agricultural, and construction equipment; and agricultural products (i.e. wheat, beef, fruits and vegetables), and other processed foods.
The United States and Peru already enjoy a two-way trade relationship of nearly $9.4 billion annually. Prior to the U.S.-Peru FTA, Peru benefited from temporary trade preferences extended under the Andean Trade Preferences Act. The implementation of the FTA will build upon these preferences and make them permanent.
The USTR states that the agreement will open up a growing market of 28 million Peruvian consumers to U.S. business interests. Specifically, Schwab noted that “[o]n the first day this agreement enters into force, 80 percent of U.S. industrial and consumer products and more than two-thirds of current U.S. farm exports will enter Peru duty-free.”
The majority of U.S. exports that will receive the duty-free treatment are technology products; mining, agricultural, and construction equipment; and agricultural products (i.e. wheat, beef, fruits and vegetables), and other processed foods.
CBP Publishes Increased AES Penalties
01/03/09 05:40 PM
On
January 2, 2009, CBP
published increased AES
penalty guidelines effective February 1, 2009, for
enforcing recent Census Bureau rules requiring
exporters and forwarders to electronically file
export declarations before cargo is loaded for
transport.
The regulation requiring use of AES of the web-based AESDirect went into effect on July 2, 2008, enforcement began on September 30, 2008, but penalty assessment was postponed. The new rules increase the maximum fine for failure to file, late or incomplete filing or submitting false information to $10,000 per violation.
CBP said that first time violators are likely to receive a warning or informational letter reminding the company of the new rules. Penalty ranges can be lower based on mitigating factors such as, inter alia, self-disclosure.
The regulation requiring use of AES of the web-based AESDirect went into effect on July 2, 2008, enforcement began on September 30, 2008, but penalty assessment was postponed. The new rules increase the maximum fine for failure to file, late or incomplete filing or submitting false information to $10,000 per violation.
CBP said that first time violators are likely to receive a warning or informational letter reminding the company of the new rules. Penalty ranges can be lower based on mitigating factors such as, inter alia, self-disclosure.
CBP Issues Guidelines For Assessment & Mitigation of Claims for Liquidated Damages
10/17/08 12:10 AM
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.
Retroactive Filing of First Sale Declaration Extended
10/15/08 11:50 PM
On October 15, 2008, the U.S. Customs and Border
Protection (CBP) issued a notice to extend the last
filing date for retroactive First Sale declarations
until October 17, 2008, which was effective August
20, 2008.
The First Sale declaration requires that importers of merchandise enter an “F” next to the declared value at the line level on CBP Form 7501, or the electronic filing equivalent, when the declared transaction value is based on the First Sale. Under the First Sale method, the value of imported merchandise is determined on the basis of the earlier than the last sale prior to the introduction of the merchandise into the U.S.
Due to the short notice of the implementation of the First Sale declaration requirement, CBP allowed the trade a 30-day grace period to comply with the first sale requirements, covering entries filed between August 20, 2008 and September 19, 2008. Importers were allowed to submit spreadsheets listing entry summary lines that needed an “F” indicator added or removed to the ports of entry where the entry summaries were filed. A sample spreadsheet can be found here.
These corrections, originally to be submitted to CBP no later than September 26, 2008, can now be submitted to CBP until October 17, 2008. The period covered remains August 20, 2008, through September 19, 2008.
The First Sale declaration requires that importers of merchandise enter an “F” next to the declared value at the line level on CBP Form 7501, or the electronic filing equivalent, when the declared transaction value is based on the First Sale. Under the First Sale method, the value of imported merchandise is determined on the basis of the earlier than the last sale prior to the introduction of the merchandise into the U.S.
Due to the short notice of the implementation of the First Sale declaration requirement, CBP allowed the trade a 30-day grace period to comply with the first sale requirements, covering entries filed between August 20, 2008 and September 19, 2008. Importers were allowed to submit spreadsheets listing entry summary lines that needed an “F” indicator added or removed to the ports of entry where the entry summaries were filed. A sample spreadsheet can be found here.
These corrections, originally to be submitted to CBP no later than September 26, 2008, can now be submitted to CBP until October 17, 2008. The period covered remains August 20, 2008, through September 19, 2008.
CBP Issues Softwood Lumber Act Interim Rule CBP Issues Softwood Lumber Act Interim Rule
09/23/08 07:26 PM
On
September 22, 2008, the U.S. Customs and Border
Protection (CBP) has issued
an interim rule with
instructions on implementation of the Softwood
Lumber Act of 2008 (SLA).
Enacted on June 18, 2008, SLA applies to softwood lumber products that are imported into the United States from any country on or after September 18, 2008. For purposes of determining if a product is within the scope of SLA, merchandise descriptions should be used.
Entry Summary (CBP 7501) Requirements:
For products within the scope of SLA, importers must provide the following information at the time of entry summary filing:
The export price and the estimated export charge must always be expressed in U.S. dollars.
If an importer claims that a shipment of softwood lumber home packages or kits is exempt from SLA per § 804(c)(7), the importer is required to retain, and produce upon request by CBP:
The SLA does not provide for a de minimis provision. Thus, all shipments of softwood lumber products as defined in the SLA, regardless of value, must comply with these requirements.
A sample entry summary form (CBP 7501) with instructions of entries for purposes of SLA, can be found here.
Enacted on June 18, 2008, SLA applies to softwood lumber products that are imported into the United States from any country on or after September 18, 2008. For purposes of determining if a product is within the scope of SLA, merchandise descriptions should be used.
Entry Summary (CBP 7501) Requirements:
For products within the scope of SLA, importers must provide the following information at the time of entry summary filing:
- Export price;
- Estimated Export charge – if any, calculated by applying the percentage determined and published by Department of Commerce, found here, to the export price; and
- Importer declaration – each importer must provide a softwood lumber declaration on the electronic entry summary by entering the letter code “Y” on the relevant line of the entry summary. By entering “Y” on the import declaration, the importer will represent to CBP that the importer has made an inquiry (including seeking appropriate documentation from the exporter and consulting the determinations published by the Department of Commerce). Furthermore, the declaration serves to show that the information provided was to the best of the person’s knowledge and belief that: (a) the export price provided is determined in accordance with the definition set forth in SLA, and is consistent with the export price provided on the export permit, if any, granted by the country of export; and (b) the exporter has paid, or committed to pay, all export charges dues in accordance with the volume, export price, and export charge rate or rates.
The export price and the estimated export charge must always be expressed in U.S. dollars.
If an importer claims that a shipment of softwood lumber home packages or kits is exempt from SLA per § 804(c)(7), the importer is required to retain, and produce upon request by CBP:
- A copy of the appropriate home design, plan, or blueprint matching the customs entry in the United States;
- A purchase contract from a retailer of home kits or packages signed by customers not affiliated with the importer;
- A listing of all parts in the package or kit being entered into the United States that conforms to the home design, plan, or blueprint for which such parts are being imported; and
- If a single contract involves multiple entries, a listing of all items included in each individual shipment.
The SLA does not provide for a de minimis provision. Thus, all shipments of softwood lumber products as defined in the SLA, regardless of value, must comply with these requirements.
A sample entry summary form (CBP 7501) with instructions of entries for purposes of SLA, can be found here.
New Customs Declaration Requirements for Imported Plants and Wood Products
09/16/08 08:39 AM
With
enactment of the 2008 Farm Bill, the Lacey Act was
amended with a purpose to prevent illegal
harvesting and commerce of protected plants and
trees. As amended, the Lacey Act expands the scope
of covered products to include trees in the
definition of a plant, and adding products made
from plants or trees.
Moreover, prior to the amendment, the Lacey Act covered only plants native to the U.S. that are protected by a U.S. State law conserving species threatened with extinction. After the amendment, the Lacey Act extends the scope of coverage to any plants under protection of a U.S. State or any foreign law.
The amended Lacey Act prohibits the import, export, transport, sale, receipt, acquisition, or purchase in interstate or foreign commerce of any plants that were harvested in violation of a U.S. State, or any foreign laws protecting those plants. Furthermore, the Lacey Act makes it unlawful to produce or submit any records that falsely identify any plant.
The Lacey Act, as amended, defines “plant” as any wild member of the plant kingdom, including roots, seeds, parts, or products thereof, and including trees from either natural or planted forest stands.” Excluded from the definition of “plant” are: (1) common cultivars (except trees) and common food crops; (2) live plants that are to remain, be planted, or replanted; and (3) scientific specimens of plant genetic material to be used for research (with some exceptions).
One new feature of the Lacey Act is the new import declaration requirement. Beginning December 15, 2008, the Lacey Act requires an import declaration for plants and plant products, except for plant-based packaging materials used to pack the merchandise being imported. Such import declaration must contain:
(a) the scientific name of any plant (including the genus and species of the plant contained in the importation);
(b) a description of the value of the importation and the quantity, including the unit of measure, of the plant; and
(c) the name of the country from which the plant was harvested.
The Lacey Act provides that violations may be prosecuted through either civil or criminal enforcement actions. The penalties for knowing violations of the Act may result in civil fines of $10,000 per violation. Criminal penalties under the Act may result in up to five years incarceration. Finally, imports in violation of the Lacey Act are subject to forfeiture.
Moreover, prior to the amendment, the Lacey Act covered only plants native to the U.S. that are protected by a U.S. State law conserving species threatened with extinction. After the amendment, the Lacey Act extends the scope of coverage to any plants under protection of a U.S. State or any foreign law.
The amended Lacey Act prohibits the import, export, transport, sale, receipt, acquisition, or purchase in interstate or foreign commerce of any plants that were harvested in violation of a U.S. State, or any foreign laws protecting those plants. Furthermore, the Lacey Act makes it unlawful to produce or submit any records that falsely identify any plant.
The Lacey Act, as amended, defines “plant” as any wild member of the plant kingdom, including roots, seeds, parts, or products thereof, and including trees from either natural or planted forest stands.” Excluded from the definition of “plant” are: (1) common cultivars (except trees) and common food crops; (2) live plants that are to remain, be planted, or replanted; and (3) scientific specimens of plant genetic material to be used for research (with some exceptions).
One new feature of the Lacey Act is the new import declaration requirement. Beginning December 15, 2008, the Lacey Act requires an import declaration for plants and plant products, except for plant-based packaging materials used to pack the merchandise being imported. Such import declaration must contain:
(a) the scientific name of any plant (including the genus and species of the plant contained in the importation);
(b) a description of the value of the importation and the quantity, including the unit of measure, of the plant; and
(c) the name of the country from which the plant was harvested.
The Lacey Act provides that violations may be prosecuted through either civil or criminal enforcement actions. The penalties for knowing violations of the Act may result in civil fines of $10,000 per violation. Criminal penalties under the Act may result in up to five years incarceration. Finally, imports in violation of the Lacey Act are subject to forfeiture.
CBP Publishes COAC Quarterly Meeting Minutes CBP Publishes COAC Quarterly Meeting Minutes CBP Publishes COAC Quarterly Meeting Minutes
09/15/08 07:45 AM
U.S.
Customs and Border Protection (CBP) has posted on
its website the
minutes
from the August
7, 2008 quarterly meeting of the
Departmental Advisory Committee on Commercial
Operations of Customs and Border Protection and
Related Homeland Security Functions (COAC). The
discussion included the following:
1. C-TPAT Partners. As of July 21, 2008, there were 8,527 certified C-TPAT Partners, of which 600 are new companies. Buffalo and Houston were added to the C-TPAT field offices with focus primarily on Canadian and Mexican supply chains. A total of 8,519 C-TPAT validations were conducted, with 1,916 validations conducted this year. CBP is taking actions to suspend companies that fail the validation process. Of the 593 members that failed the validation, half were highway carriers. Mexico’s highway carriers are revalidated annually to ensure their improvement. The validation cycle time has improved according to latest information, and is currently at 60 days. CBP has reduced the cycle time it takes to issue reports to a partner from 100 days to 45 days.
2. Mutual Recognition (MR) Arrangements. CBP Commissioner has signed new MR arrangements with Jordon and Canada. CBP continues to work with the European Union (EU) on supply chain security and hopes to sign an MR arrangement with the EU by next year. CBP has been working with Japan on joint validations and hopes to have an MR agreement completed by the end of this year. CBP is working with Canadian Customs on a single set of rules that would be applicable to companies common to both the U.S. and Canadian Supply Chain Security Programs; there are about 1,000 such companies.
3. Automated Commercial Environment (ACE) Program Status and Int’l Trade Data System (ITDS). CBP had expected to replace the Vessel and Rail e-manifest system by October of 2008. Issues with testing the new software have delayed the implementation of the e-system. CBP hopes to have a system in place by December 2008, which the Trade can participate in testing. The Entry Summary Processing deployment from January 2009 is also pushed into the future, probably one month after the Rail and Vessel elements are completed.
4. Import Safety Initiatives. Import Safety and Intra-Agency Requirements, Office of Int’l Trade (OT) of CBP, addressed the effort of the interagency working group. The initiative is active and will implement the Import Safety Action plan. The Consumer Product Safety Commission (CPSC) Reauthorization Bill is expected to be signed by the President in the near future. Importer Self Assessment (ISA) Module will include a Product Safety Component. Work is being done to identify good safety practices. It is desirable that the practices be administered on a company, rather than a commodity, basis. CPSC has conducted several foreign factory visits. CPSC only has 9 officers in the field but this number will be increased to 50 officers.
5. Lacey Act Amendments. The effective date of the Lacey Act Amendments is December 15, 2008. The Act requires that the name of the plant, the value, the quantity of the plant and the Country of Origin (COO) of the plant must all be declared at entry. The schedule that identifies the Harmonized Tariff Schedule (HTS) chapters that will be affected by the Act will be available in the near future. There are 8,000 lines that come in daily that will be required to submit the Import Declaration. If actual COO is not known at the time of entry, the Import Declaration must state all possible COOs. The COO form is currently a paper form, and so all 8,000 lines that were paperless will now require a paper form. The United States Department of Agriculture (USDA) does not have an automated feed into CBP’s system as Food and Drug Administration (FDA) does. Development of an electronic method to add the name into the system will be difficult because of the length of the plant genus or species name. There are over 1,500 genus and species of tress in the world that could potentially be recorded.
6. Agricultural Program Update. Wood boring insect. – an emerald ash borer – was found in Virginia. The insect is established in the Midwest and has, so far, killed 20 million trees and has endangered millions more. Enforcement of wood packing requirements needs to be increased.
7. 10+2. First Data Format was distributed in May 2008 and comments in response were received. Second version was distributed on July 17, 2008, and comments are still being accepted. Industry Working Group introduced account-based filing for 10+2 and the way it would work. This will be shared with CBP and on the November meeting agenda.
8. Secure Freight Initiative (SFI). SFI of CBP’s Office of Field Operations is facing challenges with the initiative, largely because the technology for anomaly detection is not available. Equipment has not been used in high-volume ports yet. Issues also arise with respect to space and trade flows at various ports. Setting up a lane to use the equipment is difficult when land is scarce. The system is already operational in Hong Kong, and should become operational in Oman and Korea.
9. CBP Trade Strategy. CBP has introduced, in the May meeting, the CBP Trade Strategy in a multi-level approach. CBP has provided the Trade Strategy report to COAC and is expecting comments. The implementation of the Strategy is expected October 1, 2008.
10. Proposed Rules of Origin. Currently, CBP is running two systems: one is a case-by-case analysis of past legal cases, which has been done for the past 200 years; another is based on Decision Tree, which codifies inputs and existing body of law, which has been in existence for the past 15 years. The traditional system is problematic because it is subjective, and therefore the Court has difficulty applying the decisions consistently. Similarly, the Trade faces issues of certainty and predictability as well as the reasonable care requirements. The new system, on the other hand, has yielded terrific results: less than 1% of the decisions are revised. Thus, decision has been made to move to the more modern system, which already applies to 40% of the Trade. 60-day comment period was opened since the Issue Date.
11. First Sale. Office of Int’l Trade is withdrawing the First Sale Proposal because they need to focus on the Farm Bill Act. CBP is working on a yes/no question with respect to whether the valuation is based on the first sale. The yes / no answer will be required at the entry line level and will become electronic. If it is first sale, CBP form 7501 on the Automated Broker Interface (ABI) will simply need to be marked “F” and left blank, if the entry valuation is not on first sale basis.
12. Proposed Closure of the Los Angeles Drawback Center. The question is raised whether to reassign the Los Angeles drawback officers to the San Francisco Office. The number of drawback specialists would not be reduced. CBP will issue a Federal Register Notice before the office is closed and will provide the public with opportunity to comment.
The next COAC meeting is schedule for November 20, 2008 in Washington, DC.
1. C-TPAT Partners. As of July 21, 2008, there were 8,527 certified C-TPAT Partners, of which 600 are new companies. Buffalo and Houston were added to the C-TPAT field offices with focus primarily on Canadian and Mexican supply chains. A total of 8,519 C-TPAT validations were conducted, with 1,916 validations conducted this year. CBP is taking actions to suspend companies that fail the validation process. Of the 593 members that failed the validation, half were highway carriers. Mexico’s highway carriers are revalidated annually to ensure their improvement. The validation cycle time has improved according to latest information, and is currently at 60 days. CBP has reduced the cycle time it takes to issue reports to a partner from 100 days to 45 days.
2. Mutual Recognition (MR) Arrangements. CBP Commissioner has signed new MR arrangements with Jordon and Canada. CBP continues to work with the European Union (EU) on supply chain security and hopes to sign an MR arrangement with the EU by next year. CBP has been working with Japan on joint validations and hopes to have an MR agreement completed by the end of this year. CBP is working with Canadian Customs on a single set of rules that would be applicable to companies common to both the U.S. and Canadian Supply Chain Security Programs; there are about 1,000 such companies.
3. Automated Commercial Environment (ACE) Program Status and Int’l Trade Data System (ITDS). CBP had expected to replace the Vessel and Rail e-manifest system by October of 2008. Issues with testing the new software have delayed the implementation of the e-system. CBP hopes to have a system in place by December 2008, which the Trade can participate in testing. The Entry Summary Processing deployment from January 2009 is also pushed into the future, probably one month after the Rail and Vessel elements are completed.
4. Import Safety Initiatives. Import Safety and Intra-Agency Requirements, Office of Int’l Trade (OT) of CBP, addressed the effort of the interagency working group. The initiative is active and will implement the Import Safety Action plan. The Consumer Product Safety Commission (CPSC) Reauthorization Bill is expected to be signed by the President in the near future. Importer Self Assessment (ISA) Module will include a Product Safety Component. Work is being done to identify good safety practices. It is desirable that the practices be administered on a company, rather than a commodity, basis. CPSC has conducted several foreign factory visits. CPSC only has 9 officers in the field but this number will be increased to 50 officers.
5. Lacey Act Amendments. The effective date of the Lacey Act Amendments is December 15, 2008. The Act requires that the name of the plant, the value, the quantity of the plant and the Country of Origin (COO) of the plant must all be declared at entry. The schedule that identifies the Harmonized Tariff Schedule (HTS) chapters that will be affected by the Act will be available in the near future. There are 8,000 lines that come in daily that will be required to submit the Import Declaration. If actual COO is not known at the time of entry, the Import Declaration must state all possible COOs. The COO form is currently a paper form, and so all 8,000 lines that were paperless will now require a paper form. The United States Department of Agriculture (USDA) does not have an automated feed into CBP’s system as Food and Drug Administration (FDA) does. Development of an electronic method to add the name into the system will be difficult because of the length of the plant genus or species name. There are over 1,500 genus and species of tress in the world that could potentially be recorded.
6. Agricultural Program Update. Wood boring insect. – an emerald ash borer – was found in Virginia. The insect is established in the Midwest and has, so far, killed 20 million trees and has endangered millions more. Enforcement of wood packing requirements needs to be increased.
7. 10+2. First Data Format was distributed in May 2008 and comments in response were received. Second version was distributed on July 17, 2008, and comments are still being accepted. Industry Working Group introduced account-based filing for 10+2 and the way it would work. This will be shared with CBP and on the November meeting agenda.
8. Secure Freight Initiative (SFI). SFI of CBP’s Office of Field Operations is facing challenges with the initiative, largely because the technology for anomaly detection is not available. Equipment has not been used in high-volume ports yet. Issues also arise with respect to space and trade flows at various ports. Setting up a lane to use the equipment is difficult when land is scarce. The system is already operational in Hong Kong, and should become operational in Oman and Korea.
9. CBP Trade Strategy. CBP has introduced, in the May meeting, the CBP Trade Strategy in a multi-level approach. CBP has provided the Trade Strategy report to COAC and is expecting comments. The implementation of the Strategy is expected October 1, 2008.
10. Proposed Rules of Origin. Currently, CBP is running two systems: one is a case-by-case analysis of past legal cases, which has been done for the past 200 years; another is based on Decision Tree, which codifies inputs and existing body of law, which has been in existence for the past 15 years. The traditional system is problematic because it is subjective, and therefore the Court has difficulty applying the decisions consistently. Similarly, the Trade faces issues of certainty and predictability as well as the reasonable care requirements. The new system, on the other hand, has yielded terrific results: less than 1% of the decisions are revised. Thus, decision has been made to move to the more modern system, which already applies to 40% of the Trade. 60-day comment period was opened since the Issue Date.
11. First Sale. Office of Int’l Trade is withdrawing the First Sale Proposal because they need to focus on the Farm Bill Act. CBP is working on a yes/no question with respect to whether the valuation is based on the first sale. The yes / no answer will be required at the entry line level and will become electronic. If it is first sale, CBP form 7501 on the Automated Broker Interface (ABI) will simply need to be marked “F” and left blank, if the entry valuation is not on first sale basis.
12. Proposed Closure of the Los Angeles Drawback Center. The question is raised whether to reassign the Los Angeles drawback officers to the San Francisco Office. The number of drawback specialists would not be reduced. CBP will issue a Federal Register Notice before the office is closed and will provide the public with opportunity to comment.
The next COAC meeting is schedule for November 20, 2008 in Washington, DC.
FTZ Board Revises Proposal for Site-Designation and Management Framework
09/13/08 07:12 PM
On
September 11, 2008, the Foreign-Trade Zones (FTZ)
Board published a notice in the Federal
Register that modifies
its proposal to make available an alternative
framework for designation and management of the
general purpose FTZ sites. In response to the
comments received to an earlier notice, the key
proposal revisions include allowance for a
special transitional phase for each grantee
applying to transfer to the alternative
framework, elimination of a general initial
limit on the number of “usage-driven” sites,
elimination of an “anchor” site concept, and the
sunset limits duration flexibility for “magnet”
sites – with five years established as a minimum
rather than a fixed standard.
The FTZ Board proposed framework includes:
Under the proposed plan, existing FTZ grantees will have the option to reorganize their FTZ by incorporating the proposed elements. Comments on this proposal are due by October 31, 2008.
The FTZ Board proposed framework includes:
- The “service area,” housing general-purpose FTZ sites, is required to comply with the adjacency requirement of the FTA Board’s regulations (60 miles / 90 minutes driving time from Customs Port of Entry boundaries), the enabling legislation, and the grantee organization’s charter. The FTZ Board evaluation of the proposed service area could potentially involve the convenience of commerce factor.
- An initial limit of up to 2,000 acres of designated FTZ space within the service area. Acreage within the 2,000-acre limit not applied to specifically designated sites would effectively be “reserve” acreage available for future FTZ designation.
- The usefulness of the 2,000 available acres would be enhanced by emphasizing “floating” or, available for activation, acreage within an individual site’s boundaries.
- Designation of a limited number of “magnet” sites selected by the grantee for ability and readiness to attract multiple FTZ uses.
- Possible designation of “usage-driven” sites to serve companies which are not located in a magnet site but which are ready to pursue conducting activity under FTZ procedures.
- Unlike magnet sites, usage driven sites could be designated through the current minor boundary modification (MBM) mechanism in addition to FTZ Board action.
- No specific limit on the number of usage-driven sites.
- Regarding numbers of magnet sites, the framework would reflect a general goal of focusing each FTZ on six or fewer simultaneously existing magnet sites.
- Magnet sites and usage-driven sites would be subject to “sunset” time limits, which would self-remove FTZ designation from a site not used for FTZ purposes before the site’s sunset date. For magnet sites, the default sunset period would be five years with sunset based on whether a site had been activated with CBP. For a usage-driven site, the sunset limit would require within five years of approval admission into the site of foreign non-duty paid material for a bona fide customs purpose.
- Magnet sites and usage-driven sites would also be subject to ongoing “recycling” where activation at a site during the site’s initial sunset period would serve to push back the sunset date by another five years (the sunset test would then apply again).
- An optional five year transitional phase would be available for grantees of zones with existing configurations that differ from the general parameters envisioned in the proposal.
- For the transitional phase for a particular zone, the grantee would have the option of requesting usage-driven designation for any site where a single entity is conducting FTZ activity.
- The five-year transition period for a specific grantee would begin with approval of the grantee’s reorganization application by the FTZ board.
- The transitional phase for any zone would be limited by the defining 2,000 acre limit inherent in the proposed framework.
Under the proposed plan, existing FTZ grantees will have the option to reorganize their FTZ by incorporating the proposed elements. Comments on this proposal are due by October 31, 2008.
First Sale Declaration Requirement Effective August 20, 2008
08/26/08 10:04 PM
Starting August
20, 2008 and effective for a one year period, all
importers are required at the time of
entry to provide the United States Customs and
Border Protection (CBP) with a declaration as to
whether the transaction value of the imported
merchandise is calculated on the basis of the
First Sale Rule. Under the Rule, when the
merchandise is introduced into the United States
as a result of a series of sales, the
transaction value is calculated based on the
first or earlier, rather than later sale.
However, this rule will not be enforced until
September 20, 2008.
The First Sale Declaration Requirement was established under § 15422(a) of the Food, Conservation and Energy Act of 2008, commonly referred to as the Farm Bill. To meet the Requirement, an importer must enter “F” next to the declared value of the merchandise on CBP Form 7501, or its electronic filing equivalent, if the declared transaction value of the imported merchandise is determined on the First Sale basis. If First Sale is not the basis for the transaction valuation, the box will remain blank.
The trade community has advised CBP that it would not be ready to comply with the Declaration Requirement by August 20, 2008 because of the complex programming changes required. In response, to permit the community sufficient time to comply, CBP has delayed enforcement of First Sale Declaration Requirements for 30 days until September 20, 2008. Thus, imports made between August 20 and September 19, 2008 will not be rejected based on the First Sale Declaration Requirement; however, these entries will require amendment. Information on the amendment requirements will be forthcoming.
The First Sale Declaration Requirement will enable CBP to gather information on the frequency of the first sale valuation, which will be reported to the International Trade Commission.
The First Sale Declaration Requirement was established under § 15422(a) of the Food, Conservation and Energy Act of 2008, commonly referred to as the Farm Bill. To meet the Requirement, an importer must enter “F” next to the declared value of the merchandise on CBP Form 7501, or its electronic filing equivalent, if the declared transaction value of the imported merchandise is determined on the First Sale basis. If First Sale is not the basis for the transaction valuation, the box will remain blank.
The trade community has advised CBP that it would not be ready to comply with the Declaration Requirement by August 20, 2008 because of the complex programming changes required. In response, to permit the community sufficient time to comply, CBP has delayed enforcement of First Sale Declaration Requirements for 30 days until September 20, 2008. Thus, imports made between August 20 and September 19, 2008 will not be rejected based on the First Sale Declaration Requirement; however, these entries will require amendment. Information on the amendment requirements will be forthcoming.
The First Sale Declaration Requirement will enable CBP to gather information on the frequency of the first sale valuation, which will be reported to the International Trade Commission.
CBP Announces Trade Symposium 2008 Details
08/25/08 10:15 PM
On
August 25, 2008, Customs and Border
Protection announced the dates and
topic for its Trade Symposium 2008, The topic of
this year’s symposium is "Global Trade:
Continuity Through Transition.'' The Symposium
will focus on U.S. Customs and Border
Protection’s (CBP) commitment to security and
trade programs amidst transition within the
administration. Sessions will include:
The symposium will be held at the JW Marriott Hotel, 1331 Pennsylvania Avenue N.W., Washington, DC 20004. Registration is expected to open September 2, 2008, and must be made on-line. The registration fee is $250.
- CBP Trade Strategy
- Importer Security Filing
- Import Safety
- Automated Commercial Environment
- Trade Partnerships
- Regulatory Changes
- World Customs Organization
- CBP Agriculture Mission
The symposium will be held at the JW Marriott Hotel, 1331 Pennsylvania Avenue N.W., Washington, DC 20004. Registration is expected to open September 2, 2008, and must be made on-line. The registration fee is $250.
CIT Dismisses Gender Discrimination in Tariff Classifications Case
07/07/08 12:50 PM
On
July 3, 2008, the U.S. Court of International Trade
(CIT) dismissed the lead gender discrimination in
tariff classifications case, Totes-Isotoner
Corporation v. United States,
Slip Op. 08-73
(July 3, 2008).
In the case, the Totes-Isotoner, an importer of
men's gloves, claimed that by setting out
different tariff rates for certain men's and
other gloves (i.e., 14% duty for men's gloves
and 12.6% duty for gloves "for other persons")
the Harmonized Tariff Schedule of the United
States (HTSUS) violates Totes' right to equal
protection under the law because it
discriminates on the basis of gender and/or age.
A three judge panel decided the case.
The government sought to dismiss the case on the basis of three claims: (1) the complaint presented a political question that was non-justiciable; (2) Totes did not have a sufficient stake in the matter so as to possess standing to bring an equal protection claim; and (3) Totes failed to state a claim upon which relief could be granted. The CIT denied the government's motion to dismiss for lack of jurisdiction on the first two claims, but dismissed the case without prejudice because it found that Totes did not plead sufficient facts to state a claim of unconstitutional jurisdiction.
Specifically, the court found that the case did not involve a non-justiciable political question as ". . . Totes' challenge to the discriminatory operation of the HTSUS properly invokes the Court's traditional role of--and standards for--constitutional review." Thereafter, the court found that Totes had sufficient standing to raise its claim by having both constitutional standing as the payor of an allegedly discriminatory tax and prudential standing as Totes' claim is within the zone of interests protected by the Constitution's Equal Protection guarantee.
Finally, the court found that Totes failed to state a claim upon which relief could be granted. Specifically, the court stated:
Slip Op. 08-73 at 14 [citations omitted]. The court found that because the tariff provisions Totes challenged were not "actual use" provisions that require the imported gloves to be actually sold or used by people of the same sex or of some age category, but were "chief" or "principal use" provisions, the complaint did not allege sufficient facts to establish the government had engaged in gender-based discrimination. The court stated:
Moreover, the discrimination alleged in Totes' Complaint, results from the imposition of the duty, or tax, imposed by tariff classifications. But, as alleged by the Compliant, that duty or tax falls on importers, and there is not factual indication in the Complaint that the classification results in discriminatory application of the tax. Therefore, Totes' additional allegation of discrimination "on the basis of sex" is simply conclusory . . . .
Slip Op. 08-73 at 17 [citations omitted].
Since the court dismissed the claim without prejudice, Totes may revise the case and re-file with the CIT or appeal the CIT decision to the Court of Appeals for the Federal Circuit. We will keep you all posted!
The government sought to dismiss the case on the basis of three claims: (1) the complaint presented a political question that was non-justiciable; (2) Totes did not have a sufficient stake in the matter so as to possess standing to bring an equal protection claim; and (3) Totes failed to state a claim upon which relief could be granted. The CIT denied the government's motion to dismiss for lack of jurisdiction on the first two claims, but dismissed the case without prejudice because it found that Totes did not plead sufficient facts to state a claim of unconstitutional jurisdiction.
Specifically, the court found that the case did not involve a non-justiciable political question as ". . . Totes' challenge to the discriminatory operation of the HTSUS properly invokes the Court's traditional role of--and standards for--constitutional review." Thereafter, the court found that Totes had sufficient standing to raise its claim by having both constitutional standing as the payor of an allegedly discriminatory tax and prudential standing as Totes' claim is within the zone of interests protected by the Constitution's Equal Protection guarantee.
Finally, the court found that Totes failed to state a claim upon which relief could be granted. Specifically, the court stated:
In order to state such a claim for violation of the equal protection clause based on gender, Totes must allege that the government has engaged in gender-based discrimination without an exceedingly persuasive justification, or in other words, that the government has used discriminatory means that are not substantially related to important government objectives. In so doing, Totes' complaint must include a factual allegation that demonstrates a governmental purpose to discriminate.
Slip Op. 08-73 at 14 [citations omitted]. The court found that because the tariff provisions Totes challenged were not "actual use" provisions that require the imported gloves to be actually sold or used by people of the same sex or of some age category, but were "chief" or "principal use" provisions, the complaint did not allege sufficient facts to establish the government had engaged in gender-based discrimination. The court stated:
Moreover, the discrimination alleged in Totes' Complaint, results from the imposition of the duty, or tax, imposed by tariff classifications. But, as alleged by the Compliant, that duty or tax falls on importers, and there is not factual indication in the Complaint that the classification results in discriminatory application of the tax. Therefore, Totes' additional allegation of discrimination "on the basis of sex" is simply conclusory . . . .
Slip Op. 08-73 at 17 [citations omitted].
Since the court dismissed the claim without prejudice, Totes may revise the case and re-file with the CIT or appeal the CIT decision to the Court of Appeals for the Federal Circuit. We will keep you all posted!
Applications for EU Duty Suspensions Due Mid-July
06/28/08 03:32 PM
Are
you importing products into the EU and paying
duties? It may be possible to have the duties
suspended on a particular product if the EU
Commission approves your application for duty
suspension. The EU Commission will allow the
suspension of customs duties to companies that
apply for the relief on the basis of a valid
economic argument as to why the import of
duty-suspended goods will benefit and stimulate
economic activity in the EU Community.
The EU Commission accepts duty suspension applications twice annually. The application process itself takes 12 months to complete. The current deadline for duty suspension applications is July 25, 2008 for applications that would take effect on July 1, 2009.
All current duty suspensions are listed by the EU Commission by EU Regulation. Normally, if a company succeeds in getting a duty suspension on a product, it remains on the list unless an objection is lodged at some point in the future.
Duty suspensions will not be granted where:
If you are interested in learning more about obtaining a duty suspension in the EU, please contact Global Trade Expertise or Eamonn Flood (eamonn@crannaghtrade.eu) or Carol Lynch (carol.lynch@crannaghtrade.eu) of Crannagh & Co. (www.crannaghtrade.eu).
The EU Commission accepts duty suspension applications twice annually. The application process itself takes 12 months to complete. The current deadline for duty suspension applications is July 25, 2008 for applications that would take effect on July 1, 2009.
All current duty suspensions are listed by the EU Commission by EU Regulation. Normally, if a company succeeds in getting a duty suspension on a product, it remains on the list unless an objection is lodged at some point in the future.
Duty suspensions will not be granted where:
- Identical, equivalent or substitute products are manufactured in sufficient quantities within the Community
- The goods in question are finished products intended for sale to end-consumers without further substantial processing or without forming an integral part of a bigger final product for whose functioning they are necessary
- The goods are covered by an exclusive trading agreement
- A suspension would entail a conflict with any other Community policy
- Uncollected customs duties of the goods in question is estimated to be less than ECU 20,000 per year
If you are interested in learning more about obtaining a duty suspension in the EU, please contact Global Trade Expertise or Eamonn Flood (eamonn@crannaghtrade.eu) or Carol Lynch (carol.lynch@crannaghtrade.eu) of Crannagh & Co. (www.crannaghtrade.eu).
First Sale Valuation to Remain Permissible Through At Least 2010 & "10+2" Rule May Be Finalized by End of Summer
06/26/08 04:36 PM
On
June 24, 2008, U.S. Customs and Border Protection
(CBP) Commissioner Ralph Basham testified before
the Senate Finance Committee regarding CBP's trade
functions and enforcement actions. (Basham's
written testimony can be found here.) Of great
interest to the trade community was Basham's
remarks regarding first sale valuation.
Specifically, Basham stated that in January of this year, CBP published in the Federal Register a Notice of Proposed Interpretation seeking public comment of the phrase "sold for exportation to the United States" for purposes of applying the transaction value method of valuation in a series of sales scenario. Under the proposed interpretation, transaction value would be based on the price paid by the buyer in the U.S. to the foreign manufacturer, which is a departure from the current application of the valuation statute, which allows importers to use the price paid by an intermediary to the foreign manufacturer as the basis for transaction value. Basham noted that the proposed re-interpretation of the valuation statute that would disallow "first sale" valuation has been "controversial."
Basham noted that the recently passed Farm Bill (Food, Conservation and Energy Act of 2008 (Pub. L. No. 110-246)) requires CBP to collect valuation information from importers and included a sense of Congress that CBP should not publish a final interpretative rule on this issue before January 1, 2011. He then stated that, "CBP does not intend to proceed further on the proposal on first sale before January 1, 2011. Nor will we change the current interpretation with respect to first sale without consulting with Congress and the private sector, or without the explicit approval of the Secretary of Treasury." With respect to first sale, Basham stated:
Other items of interest include the status of the proposed "10+2" rule or Importer Security Filing, which requires importers to provide CBP with 10 data elements plus 2 data elements from carriers electronically at least 24 hours prior to vessel loading at foreign ports of origin. The proposed ten data elements are:
The two additional elements required from carriers are: (1) a vessel stow plan used to transmit information about the physical location of cargo loaded aboard a vessel bound for the United States; and (2) container status messages, which report container movements and changes in status (e.g., empty or full).
It has been reported that in response to questioning by the committee, Basham stated that CBP hopes to submit the rule to the Office of Management and Budget (OMB) by the end of the week and have it ready for publication by the end of the summer.
Specifically, Basham stated that in January of this year, CBP published in the Federal Register a Notice of Proposed Interpretation seeking public comment of the phrase "sold for exportation to the United States" for purposes of applying the transaction value method of valuation in a series of sales scenario. Under the proposed interpretation, transaction value would be based on the price paid by the buyer in the U.S. to the foreign manufacturer, which is a departure from the current application of the valuation statute, which allows importers to use the price paid by an intermediary to the foreign manufacturer as the basis for transaction value. Basham noted that the proposed re-interpretation of the valuation statute that would disallow "first sale" valuation has been "controversial."
Basham noted that the recently passed Farm Bill (Food, Conservation and Energy Act of 2008 (Pub. L. No. 110-246)) requires CBP to collect valuation information from importers and included a sense of Congress that CBP should not publish a final interpretative rule on this issue before January 1, 2011. He then stated that, "CBP does not intend to proceed further on the proposal on first sale before January 1, 2011. Nor will we change the current interpretation with respect to first sale without consulting with Congress and the private sector, or without the explicit approval of the Secretary of Treasury." With respect to first sale, Basham stated:
-
The Farm Bill instructs CBP to require each importer of merchandise to declare whether the transaction value of the imported merchandise has been determined on the basis of a first or earlier sale.
-
CBP is required to submit a report that includes the number of importers that declare transaction value on the basis of first sale, the tariff classification of such merchandise and the value of the merchandise, on a monthly basis to the United States International Trade Commission (USITC).
-
We have had preliminary discussions with the trade and are examining the most efficient means of collecting the required information while minimizing the impact on the trade.
-
The Farm Bill also includes a sense of Congress that CBP should not proceed with its proposed interpretative rule until January 1, 2011 and upon certain coordination and consultation with Congress, the Commercial Operations Advisory Committee, the International Trade Commission, the Secretary of Treasury, and the trade. CBP does not intend to proceed further on the proposal on first sale before January 1, 2011. Nor will we change the current interpretation with respect to first sale without consulting with the Congress and the private sector, or without the explicit approval of the Secretary of Treasury.
Other items of interest include the status of the proposed "10+2" rule or Importer Security Filing, which requires importers to provide CBP with 10 data elements plus 2 data elements from carriers electronically at least 24 hours prior to vessel loading at foreign ports of origin. The proposed ten data elements are:
- Manufacturer (or supplier) name and address
- Seller (or owner) name and address
- Buyer (or owner) name and address
- Ship-to name and address
- Container stuffing location
- Consolidator (stuffer) name and address
- Importer of Record number/foreign trade zone (FTZ) applicant identification number
- Consignee number(s)
- Country of origin
- Commodity Harmonized Tariff Schedule number
The two additional elements required from carriers are: (1) a vessel stow plan used to transmit information about the physical location of cargo loaded aboard a vessel bound for the United States; and (2) container status messages, which report container movements and changes in status (e.g., empty or full).
It has been reported that in response to questioning by the committee, Basham stated that CBP hopes to submit the rule to the Office of Management and Budget (OMB) by the end of the week and have it ready for publication by the end of the summer.
GAO Issues Report Critical of C-TPAT Progress
05/27/08 08:17 PM
On April
25, 2008, the U.S. Office of Government
Accountability Office (GAO) issued a report on the
status of the Customs-Trade Partnership Against
Terrorism (C-TPAT) program entitled,
"U.S. Customs and
Border Protection Has Enhanced Its Partnership
with Import Trade Sectors, but Challenges Remain
in Verifying Security
Practices."
Highlights can be found here
and a
summary can be found here.
In 2005, GAO reviewed the C-TPAT program and noted operational challenges. Under the program, roughly 8,000 importers, port authorities and air, sea and land carriers are granted benefits such as reduced scrutiny of their cargo. In exchange, the companies submit a security plan that must meet U.S. Customs and Border Protection's minimum standards and allow officials to verify their measures are being followed. For this report, GAO was asked to assess the progress U.S. Customs and Border Protection (CBP) has made since 2005 in (1) improving its benefit award policies for C-TPAT members, (2) addressing challenges in validating members' security practices, and (3) addressing management and staffing challenges.
Among the problems the GAO found were:
"Until Customs overcomes these collective challenges, Customs will be unable to assure Congress and others that C-TPAT member companies that have been granted reduced scrutiny of their U.S.-bound containerized shipments actually employ adequate security practices," investigators wrote. "It is vital that Customs maintain adequate internal controls to ensure that member companies deserve these benefits."
Responding in part, CBP officials in the report agreed they could do more to follow up on suggested security improvements but noted that employees often use their expert discretion in assessing the potential danger before certifying a company. CBP also said the program overall has made the nation safer.
In sum, GAO recommends that CBP improve its electronic validation instrument, improve the validation process, enhance its records management system, and establish performance measures for improving supply chain security. CBP concurred with each of its recommendations.
In 2005, GAO reviewed the C-TPAT program and noted operational challenges. Under the program, roughly 8,000 importers, port authorities and air, sea and land carriers are granted benefits such as reduced scrutiny of their cargo. In exchange, the companies submit a security plan that must meet U.S. Customs and Border Protection's minimum standards and allow officials to verify their measures are being followed. For this report, GAO was asked to assess the progress U.S. Customs and Border Protection (CBP) has made since 2005 in (1) improving its benefit award policies for C-TPAT members, (2) addressing challenges in validating members' security practices, and (3) addressing management and staffing challenges.
Among the problems the GAO found were:
- A company is generally certified as safer based on its self-reported security information that Customs employees use to determine if minimum government criteria are met. But due partly to limited resources, the agency does not typically test the member company's supply-chain security practices and thus is "challenged to know that members' security measures are reliable, accurate and effective."
- Customs employees are not required to utilize third-party or other audits of a company's security measures as an alternative to the agency's direct testing, even if such audits exist.
- Companies can get certified for reduced Customs inspections before they fully implement any additional security improvements requested by the U.S. government. Under the program, Customs also does not require its employees to systematically follow up to make sure the requested improvements were made and that security practices remained consistent with the minimum criteria.
"Until Customs overcomes these collective challenges, Customs will be unable to assure Congress and others that C-TPAT member companies that have been granted reduced scrutiny of their U.S.-bound containerized shipments actually employ adequate security practices," investigators wrote. "It is vital that Customs maintain adequate internal controls to ensure that member companies deserve these benefits."
Responding in part, CBP officials in the report agreed they could do more to follow up on suggested security improvements but noted that employees often use their expert discretion in assessing the potential danger before certifying a company. CBP also said the program overall has made the nation safer.
In sum, GAO recommends that CBP improve its electronic validation instrument, improve the validation process, enhance its records management system, and establish performance measures for improving supply chain security. CBP concurred with each of its recommendations.
CBP Announces International Registered Traveler (IRT) Pilot Program
04/12/08 01:51 PM
On
April 11, 2008, Customs and Border Protection
(CBP) announced
in
the Federal Register a pilot International
Registered Traveler (IRT) program and requested
comments. The IRT program will allow for
expedited clearance of pre-approved low-risk air
travelers into the United States. The pilot
program will initially be conducted at three
airports: John F. Kennedy International Airport
in New York (JFK), the George Bush
Intercontinental Airport in Houston (IAH), and
Washington Dulles International Airport (IAD).
The program may be expanded to other locations
as announced.
Applications to be an initial participant in the pilot program should be submitted by May 12, 2008 and the pilot program will commence on June 10, 2008. Applications to participate will be accepted throughout the duration of the pilot and are available through the Global On-Line Enrollment System (GOES) at www.cbp.gov. At this point, applicants must be either a U.S. citizen, national, or lawful permanent resident (LPR).
Expedited clearance will be effected using automated kiosks located in the Federal Inspection Services (FIS) area of each participating airport. IRT uses fingerprint biometrics technology to verify a participant's identity and confirm his or her status as a IRT participant. After arriving at the FIS area, the participant will proceed directly to the IRT kiosk. A sticker affixed to the participant's passport at the time of acceptance into the IRT program will provide visual identification that the individual can be referred tot he IRT kiosk. IRT participants need not wait in the regular passport control primary inspection lines.
In the Federal Register notice, CBP invites public comments concerning any aspect of the pilot program, provides eligibility requirements for voluntary participation in the pilot program, describes the basis on which CBP will select participants, and describes how the IRT program will operate.
Applications to be an initial participant in the pilot program should be submitted by May 12, 2008 and the pilot program will commence on June 10, 2008. Applications to participate will be accepted throughout the duration of the pilot and are available through the Global On-Line Enrollment System (GOES) at www.cbp.gov. At this point, applicants must be either a U.S. citizen, national, or lawful permanent resident (LPR).
Expedited clearance will be effected using automated kiosks located in the Federal Inspection Services (FIS) area of each participating airport. IRT uses fingerprint biometrics technology to verify a participant's identity and confirm his or her status as a IRT participant. After arriving at the FIS area, the participant will proceed directly to the IRT kiosk. A sticker affixed to the participant's passport at the time of acceptance into the IRT program will provide visual identification that the individual can be referred tot he IRT kiosk. IRT participants need not wait in the regular passport control primary inspection lines.
In the Federal Register notice, CBP invites public comments concerning any aspect of the pilot program, provides eligibility requirements for voluntary participation in the pilot program, describes the basis on which CBP will select participants, and describes how the IRT program will operate.
CBP Publishes Current List of Priority Trade Issues
04/08/08 08:17 AM
U.S.
Customs and Border Protection (CBP) recently
published on its website it's current
list of Priority Trade Issues (PTIs). CBP states
that PTIs are "issues that cause significant
revenue loss, economic risk to U.S. industry or
represent health and safety concerns to
citizens." They are identified to be:
- Agriculture
- Antidumping and Countervailing Duties (ADCVD)
- Import Safety
- Intellectual Property Rights
- Penalties
- Revenue
- Textiles
- You can read more about each PTI by clicking on it at CBP's website.
CBP and EU Commission Adopt a Joint Roadmap Towards Mutual Recognition of Trade Partnership Programs
03/28/08 12:31 PM
On
March 27, 2008, U.S. Customs and Border
Protection announced the adoption of
the U.S.-EU Joint Customs Cooperation Committee
(JCCC) Roadmap towards Mutual Recognition of
Trade Partnership Programs. Mutual Recognition
of the U.S.'s Customs-Trade Partnership Against
Terrorism (C-TPAT) and the EU's Authorized
Economic Operator (AEO) supply chain security
programs would allow companies to receive
benefits similar to those conferred on companies
participating in the other country's program.
The Roadmap outlines six areas that the U.S. and the EU will address to achieve the goal of implementing Mutual Recognition: political, administrative, legal, policy, technical/operational, and evaluation. The Roadmap sets forth key benchmarks for measuring progress in each area.
The U.S. and EU began working towards implementing Mutual Recognition of C-TPAT and AEO in 2007. The initial steps consisted of completing an in-depth comparison of both the U.S. and EU programs and conducting a pilot program in which CBP observed security components of the EU's AEO audit process. The Roadmap was drafted and endorsed based on the conclusions drawn from the initial U.S.-EU effort.
CBP states that, "Throughout the upcoming year, the U.S. and EU will:
The Roadmap outlines six areas that the U.S. and the EU will address to achieve the goal of implementing Mutual Recognition: political, administrative, legal, policy, technical/operational, and evaluation. The Roadmap sets forth key benchmarks for measuring progress in each area.
The U.S. and EU began working towards implementing Mutual Recognition of C-TPAT and AEO in 2007. The initial steps consisted of completing an in-depth comparison of both the U.S. and EU programs and conducting a pilot program in which CBP observed security components of the EU's AEO audit process. The Roadmap was drafted and endorsed based on the conclusions drawn from the initial U.S.-EU effort.
CBP states that, "Throughout the upcoming year, the U.S. and EU will:
- Establish guidelines regarding information exchanges, including the exchange of validation/audit results and legalities associated with the disclosure of membership details
- Perform joint verifications to determine remaining gaps between AEO/C-TPAT and resolve any discrepancies
- Explore and test an export component for C-TPAT
- Exchange best practices through joint visits and conferences
- Continue dialogue on legal and policy developments under the respective administrations
- Endorse and sign a Mutual Recognition Arrangement
- Evaluate Mutual Recognition benefits for AEO/C-TPAT members
Update on Proposed Re-Interpretation of "First Sale" Valuation
03/27/08 12:20 PM
Comments for the
proposed interpretation of the "First Sale" rule
are due on April
23, 2008. To date,
17 comments have been posted. Two of the
comments support the proposed
change. Comments against the proposed
interpretation include Boeing, Wicked Fashions
Inc., RG Barry Corporation, Northern Tool and
Equipment Co., Inc., The New Zealand Manufacturers
and Exporters Association and COAC.
U.S. Customs and Border Protection ("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 Sales."
U.S. Customs and Border Protection ("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 Sales."
China and U.S. Launch Trade Security Pilot Program
03/25/08 10:01 AM
On March 24, 2008, U.S. Customs and Border
Protection (CBP)
announced
the start of a validation pilot program in China
made possible by cooperation between CBP and the
General Administration of China Customs. The pilot
program involved three Customs-Trade Partnership
Against Terrorism (C-TPAT) importer partners whose
supply chains predominately originate in China.
CBP states that the U.S. companies were invited to participate based upon several factors including volume, product type, and location of their supply chains in China. The companies voluntarily agreed to participate in the pilot program with the concurrence of both administrations.
China Customs led the validations based on C-TPAT minimum security criteria as a guide and with CBP supply chain specialists providing technical assistance. Prior to the validations, the companies were receiving minimal C-TPAT benefits due to CBP's inability to validate their security procedures in China. However, the information gathered during the validation will now allow CBP the ability to assess whether greater C-TPAT benefits are warranted. Both CBP and China Customs will evaluate the success of the pilot program and determine next steps.
C-TPAT Director Brad Skinner stated, "It took several months of intense discussions to get to this point and we look forward to continuing this effort as we explore future cooperation. It is a win-win for all. CBP and China Customs have the knowledge that all parties involved have good security practices in place and the companies can benefit by receiving fewer exams."
CBP states that the U.S. companies were invited to participate based upon several factors including volume, product type, and location of their supply chains in China. The companies voluntarily agreed to participate in the pilot program with the concurrence of both administrations.
China Customs led the validations based on C-TPAT minimum security criteria as a guide and with CBP supply chain specialists providing technical assistance. Prior to the validations, the companies were receiving minimal C-TPAT benefits due to CBP's inability to validate their security procedures in China. However, the information gathered during the validation will now allow CBP the ability to assess whether greater C-TPAT benefits are warranted. Both CBP and China Customs will evaluate the success of the pilot program and determine next steps.
C-TPAT Director Brad Skinner stated, "It took several months of intense discussions to get to this point and we look forward to continuing this effort as we explore future cooperation. It is a win-win for all. CBP and China Customs have the knowledge that all parties involved have good security practices in place and the companies can benefit by receiving fewer exams."
CBP Extends 10+2 Comment Period
02/06/08 04:09 PM
On February 1, 2008,
U.S. Customs and Border Protection (CBP) published
a notice in the Federal Register
extending the comment period for its proposed
"10+2" filing requirement for ocean cargo by 15
days until March 18, 2008. It is expected that
many interested parties will be filing comments
on the proposed rule.
On January 2, 2008, U.S. Customs and Border Protection (CBP) published a proposed rule regarding importer security filing and additional carrier requirements, also known as the "10+2" rule. The proposed rule will require that importers and carriers to submit additional information regarding cargo before the cargo is brought into the U.S. by vessel. The information must be provided 24 hours prior to loading of the cargo on the vessel and via a CBP-approved electronic data interchange system.
The proposed rule is intended to allow CBP to identify high-risk shipments to prevent smuggling and ensure cargo safety and security. The proposed regulations originate from the Security and Accountability for Every (SAFE) Port Act of 2006 and the Trade Act of 2002. CBP issued a news release about the rule here.
On January 2, 2008, U.S. Customs and Border Protection (CBP) published a proposed rule regarding importer security filing and additional carrier requirements, also known as the "10+2" rule. The proposed rule will require that importers and carriers to submit additional information regarding cargo before the cargo is brought into the U.S. by vessel. The information must be provided 24 hours prior to loading of the cargo on the vessel and via a CBP-approved electronic data interchange system.
The proposed rule is intended to allow CBP to identify high-risk shipments to prevent smuggling and ensure cargo safety and security. The proposed regulations originate from the Security and Accountability for Every (SAFE) Port Act of 2006 and the Trade Act of 2002. CBP issued a news release about the rule here.
Customs Proposes Eliminating "First Sale" Valuation
01/24/08 10:16 PM
CBP
Proposes Eliminating "First Sale"
Valuation
Proposed Change May Substantially Increase Duties and Fees for Importers
On January 24, 2008, U.S. Customs and Border Protection (CBP) published a notice in the Federal Register proposing to change its practices with regard to the proper customs valuation of imported products in multi-sale transactions.
Specifically, CBP is proposing rejecting the use of "first sale" valuation and instead requiring the use of the "last sale," i.e., the value paid by the U.S. buyer for the product, as the basis of transaction value for such products.
Under current conditions, importers may value imported products in situations involving multiple sales (e.g., those involving a sale from the manufacturer to a middleman overseas and a sale from the middleman to the buyer in the U.S.), at the "first sale" price between the manufacturer and the overseas middleman if certain conditions are met. Specifically, the first sale must be an arm's length sale and the goods must be clearly destined for export to the U.S.
CBP proposes changing its interpretation of the meaning of "sold for export to the United States" when determining the acceptability of transaction value in multi-sale transactions by accepting only the last sale to the U.S. in meeting this requirement of transaction value. CBP states this change is based on a report to the World Customs Organization (WCO) by the Technical Committee on Customs Valuation adopted in April 2007 -- Commentary 22.1, entitled, "Meaning of the Expression 'Sold for Exportation to the Country of Importation' in a Series of Sales" -- and would align CBP's treatment of such sales with most other World Trade Organization (WTO) members.
CBP's proposed action would overturn nearly 20 years of legal and administrative precedent and would cause importers to reevaluate their current customs valuations and abandon any current use of "first sale" valuations, resulting in the potential payment of additional duties and fees.
CBP is accepting comments on the proposed interpretation until March 24, 2008. Global Trade Expertise (GTE) can assist importers in determining the effect the proposed interpretation will have on an importer's customs valuations. GTE can also assist importers in drafting comments to CBP. Please contact us if you have any questions. We would be happy to discuss the matter with you at no charge.
Proposed Change May Substantially Increase Duties and Fees for Importers
On January 24, 2008, U.S. Customs and Border Protection (CBP) published a notice in the Federal Register proposing to change its practices with regard to the proper customs valuation of imported products in multi-sale transactions.
Specifically, CBP is proposing rejecting the use of "first sale" valuation and instead requiring the use of the "last sale," i.e., the value paid by the U.S. buyer for the product, as the basis of transaction value for such products.
Under current conditions, importers may value imported products in situations involving multiple sales (e.g., those involving a sale from the manufacturer to a middleman overseas and a sale from the middleman to the buyer in the U.S.), at the "first sale" price between the manufacturer and the overseas middleman if certain conditions are met. Specifically, the first sale must be an arm's length sale and the goods must be clearly destined for export to the U.S.
CBP proposes changing its interpretation of the meaning of "sold for export to the United States" when determining the acceptability of transaction value in multi-sale transactions by accepting only the last sale to the U.S. in meeting this requirement of transaction value. CBP states this change is based on a report to the World Customs Organization (WCO) by the Technical Committee on Customs Valuation adopted in April 2007 -- Commentary 22.1, entitled, "Meaning of the Expression 'Sold for Exportation to the Country of Importation' in a Series of Sales" -- and would align CBP's treatment of such sales with most other World Trade Organization (WTO) members.
CBP's proposed action would overturn nearly 20 years of legal and administrative precedent and would cause importers to reevaluate their current customs valuations and abandon any current use of "first sale" valuations, resulting in the potential payment of additional duties and fees.
CBP is accepting comments on the proposed interpretation until March 24, 2008. Global Trade Expertise (GTE) can assist importers in determining the effect the proposed interpretation will have on an importer's customs valuations. GTE can also assist importers in drafting comments to CBP. Please contact us if you have any questions. We would be happy to discuss the matter with you at no charge.
Customs Publishes Proposed "10+2" Rule for Ocean Cargo
01/03/08 08:37 AM
On
January 2, 2008, U.S. Customs and Border Protection
(CBP) published a proposed
rule regarding
importer security filing and additional carrier
requirements, also known as the "10+2" rule. The
proposed rule will require that importers and
carriers to submit additional information
regarding cargo before the cargo is brought into
the U.S. by vessel. The information must be
provided by way of a CBP-approved electronic
data interchange system and is intended to allow
CBP to identify high-risk shipments to prevent
smuggling and ensure cargo safety and security.
The proposed regulations originate from the
Security and Accountability for Every (SAFE)
Port Act of 2006 and the Trade Act of 2002. CBP
issued a news release about the rule
here.
The "10+2" name for the proposed rule refers to the 10 additional pieces of information the importer is required to provide to CBP as an "Importer Security Filing" plus 2 data elements to be provided to CBP by carriers/vessel operators prior to loading the cargo: (1) a vessel stow plan used to transmit information about the physical location of cargo loaded aboard a vessel bound for the U.S. ; and (2) container status messages, which report container movements and changes in status (e.g., empty or full).
The 10 additional data elements required to reported by importers are:
The "10+2" name for the proposed rule refers to the 10 additional pieces of information the importer is required to provide to CBP as an "Importer Security Filing" plus 2 data elements to be provided to CBP by carriers/vessel operators prior to loading the cargo: (1) a vessel stow plan used to transmit information about the physical location of cargo loaded aboard a vessel bound for the U.S. ; and (2) container status messages, which report container movements and changes in status (e.g., empty or full).
The 10 additional data elements required to reported by importers are:
- Manufacturer (or supplier) name and address
- Seller (or owner) name and address
- Buyer (or owner) name and address
- Ship-to name and address
- Container stuffing location
- Consolidator (stuffer) name and address
- Importer of record number/foreign trade zone applicant identification number
- Consignee number(s)
- Country of origin, and
- Commodity Harmonized Tariff Schedule number
2008 HTSUS Posted on USITC Website
12/27/07 10:28 AM
CBP Announces Singapore to Scan U.S.-Bound Cargo as Part of Secure Freight Initiative
12/17/07 10:42 PM
Singapore - The United States and Singapore today arranged to cooperate on the Secure Freight Initiative, a joint effort of the Department of Homeland Security's U.S. Customs and Border Protection, the U.S. Department of Energy's National Nuclear Security Administration and the U.S. Department of State aimed at keeping radioactive weapons out of U.S.-bound cargo.
Singapore is a key location for this scanning. Among worldwide seaports processing containers with goods destined for the U.S., Singapore is first world-wide in terms of volume of transshipments, and sixth in terms of the volume of shipments and containers imported. In fiscal year 2006, for example, the country processed more than 375,000 shipments bound for the U.S., constituting approximately 3.68 percent of all shipments here.
Singapore will initially participate in the Secure Freight Initiative in a limited capacity. However, even this limited participation goes beyond the mandate of the Security and Accountability for Every Port Act (SAFE Port Act) of 2006. That law required that the U.S. evaluate, at three initial ports, the possibility of scanning 100 percent of U.S.-bound cargo for radiation.
The port of Singapore is part of the second group of international ports evaluating integrated cargo radiation detection and non-intrusive imaging capabilities in Phase 1 of the Secure Freight Initiative. Fully operational testing of Secure Freight Initiative equipment began October 12, 2007 at Port Qasim, Pakistan; Puerto Cortés, Honduras; and at the Port of Southampton, United Kingdom.
The second group of ports will provide radiation detection and imaging capabilities on a limited capacity basis that exceeds the requirements of the SAFE Port Act. In addition to Singapore, these facilities include: Hong Kong's Modern terminal; the Gamman terminal at Busan, Korea; and Oman's Port Salalah. These facilities were chosen to help determine the impact of radiation scanning at large volume ports, as well as at ports where a large number of transshipments are processed. Phase 1 results will provide guidance on future port expansion.
At Singapore, as at other ports, data from Secure Freight Initiative scanning and imaging equipment will be provided in near-real time to CBP officials on-site, as well as to officials at the National Targeting Center in the United States for analysis and automatic integration with U.S. systems.
In March 2003, the port of Singapore was designated a Container Security Initiative port. For more than four years, CSI officers have used manifest examinations and other information to determine whether x-ray and radiation detection equipment should be used to examine U.S.-bound cargo. The Port of Singapore began participating in Department of Energy's National Nuclear Security Administration Megaports Initiative in spring, 2004. The Secure Freight Initiative expands the use of radiation scanning and imaging equipment to examine more U.S.-bound containers, not just those determined to be high-risk.
CBP Textile Enforcement Fiscal Year 2007 Review
12/17/07 12:58 AM
On
December 17, 2007, the U.S. Customs House
Guide posted
a
review of Customs and Border Protection (CBP)
for Fiscal Year 2007. The report states that
among this year's accomplishments are:
-
In FY 2007 CBP increased foreign factory visits by 57%. CBP visited 671 foreign factories to monitor for illegal transshipment by sending textile production verification teams (TPVT) to confirm actual country of origin and compliance with trade preference programs. These teams examine production documents at foreign factories to ensure that potentially violative shipments are stopped before being shipped to the United States;
-
CBP visited 168 foreign factories in 10 countries in FY 2007 to verify claims involving Free Trade Agreements like the Central America - Dominican Republic Free Trade Agreement and other trade preference programs such as the African Growth and Opportunity Act;
-
CBP auditors conducted 66 audits on textile importers and recommended additional revenue collections of $5.61 million in FY 2007 - an increase of 57% in audit activity;
-
CBP officers at the ports of entry examined 13,327 shipments in FY 2007 and found more than 2,300 shipments where discrepancies were identified;
-
Further, Import Specialists initiated 1,905 reviews of entry documents resulting in 959 detained shipments and 314 seized shipments worth $48.1 million for violations of China quota restraints; and
-
CBP also initiated 68 actions totaling $50.1 million in penalties for commercial fraud.
CBP Plans to Launch New Message Broadcast System
12/06/07 09:45 AM
On
December 6, 2007, the U.S. Customs House
Guide reported
that
U.S. Customs and Border Protection (CBP) plans
to launch a new free message broadcast system
called the Cargo Systems Messaging Service
(CSMS). CSMS will function as an email listserve
and will be used by CBP to provide information
to the trade.
U.S. Customs House Guide states:
U.S. Customs House Guide states:
Currently, the only automated commercial system with an administrative messaging capability is the Automated Broker Interface. CBP has no broadcast mechanism for other commercial systems, such as ocean/rail manifest, air manifest and electronic truck manifest. The new CSMS listserve will allow CBP to broadcast messages not only to ABI users, but to users of all CBP automated commercial systems including the Automated Commercial Environment (ACE), Automated Commercial System (ACS) and more.
To
receive messages via CSMS, a user must subscribe
and create a subscriber profile with an email
address, password (optional), and an indication of
subjects of interest. A link to the subscription
page will be available at a later date.
CBP Moves Ahead on C-TPAT for Air Carriers and 3PLs
11/19/07 08:53 PM
American Shipper reports that CBP officials had previously said they intended to open up enrollment for the first time to logistics providers by the end of last summer, but CBP is carefully studying the dynamics of the outsourced logistics sector and developing a common definition for such a service provider, which is proving difficult because the industry is using so many subcontractors. CBP wants to ensure that any security plans instituted by the 3PL are also pushed down the pipeline to the companies doing the actual work.
The C-TPAT office plans to complete a draft proposal for 3PL minimum security requirements by early December, get executive approval by the end of the month and present the standards to the Commercial Operations Advisory Committee for final review.
China to Host C-TPAT Meeting
11/15/07 05:46 PM
CBP reported last month that China's Minister of Customs, Mu Xinsheng, had finally agreed to allow U.S. CBP inspectors in the country to verify security compliance of manufacturers and logistics providers whose customers participate in C-TPAT. Prior to this, CBP had authorized the use of 11 private companies in the Third Party Validation Pilot program, but interest from the trade community had been minimal due to concerns about sharing proprietary business and security data and the costs associated with the validation, which were to be incurred by the importer. China had been the only country to refuse to allow access to U.S. Customs teams seeking to validate that foreign suppliers are following the security plans submitted by their U.S. import customers and approved by CBP.
Mullen stated that the two customs administrations have exchanged letters about moving forward with joint validations in which CBP supply chain specialists would accompany Chinese officials during on-site visits of domestic companies. The two sides are still in the process of setting up a meeting at the invitation of Mu, Mullen stated.
Importer Fined $7.5 Million for Declaring Incorrect Customs Values
11/12/07 02:13 PM
Based on the facts found at trial, Seaveg would negotiate the initial price for the produce with the Mexican growers by telephone and then, under an agreement with its suppliers, receive an invoice at 70% of the negotiated price, with the understanding that the remaining 30% would be paid within 60 days of delivery into storage after certain adjustments were made. At the time of entry, the invoice at 70% of the true sales price was declared value to Customs. However, neither Inn Foods, Seaveg, nor the customs broker informed Customs that the invoice values declared at the time of entry were "provisional."
Firstly, the court found that Inn Foods was responsible for all of the liabilities despite the fact that Seaveg and Inn Foods were incorporated as two separate entities because it found that Seaveg was an alter ego or alias of its sister subsidiary Inn Foods.
Secondly, the court found that Inn Foods' conduct was fraudulent as Customs had proved that Inn Foods had deliberately introduced merchandise into the commerce of the United States by means of material false statements with the intent to defraud the revenue or otherwise violate the laws of the United States. Although Inn Foods and Seaveg argued that there was no evidence adduced at trial that indicates that "Inn Foods knew or understood the legal effect of post-importation price adjustments to the price actually paid or payable to the grower/packers based on the U.S. resale prices," the court found the argument to needlessly confuse the crux of the wrongdoing. The court stated that the wrongdoing is that:
Inn Foods knew that (1) the prices on the subject entries were significantly undervalued, (2) these undervaluations caused a commensurate reduction in lawful Customs duties owed and (3) there was no plan or intention to correct these undervaluations. . . . Therefore, while Inn Foods correctly states that "there is nothing sinister, per se, about provisional pricing agreements," it is not the provisional pricing agreement here that is at issue, but the underlying undervaluation scheme which the provisional pricing agreements only play a part.
Customs sought $624,602.55 in unpaid duties and merchandise processing fees and civil penalties in the amount of $15,319,513.35 if Inn Foods' conduct was found to be fraudulent. In determining the penalty to be assessed, the court noted that for violations of fraud, the maximum penalty is the domestic value of the merchandise with no set minimum penalty and that the court possesses the discretion to determine a penalty within the parameters of the statute. After considering a number of factors as set forth in United States v. Complex Machine Works Co., 23 CIT 942, 949-50, 83 F. Supp. 2d 1307, 1315 (1999), the court ordered that Inn Foods pay $624,602.55 for unpaid duties plus pre-judgment and post-judgment interest, and civil penalties in the amount of $7,500,000.00, plus costs and fees and interest from the date of judgment.
This case represents a cautionary tale for importers who use any type of provisional invoices, including those importers who true-up customs valuations at some point after entry due to the additions to value, such as assists, royalties, buying commissions, etc. Importers have a continuing obligation to review the correctness of information contained in invoices used as entry documents, and to declare to Customs the true and correct value of the goods at the time of entry. See 19 U.S.C. §§ 1484 and 1485. Accordingly, importers should maintain proactive internal controls over their Customs valuation and understand the impact of the full financial transaction for imported goods, including any possible additions to value.
If an intercompany or transfer price is declared as the customs value of an imported good, an importer should assess whether the intercompany or transfer price satisfies the customs valuation statute independent of the acceptability of the price for tax purposes. See Customs' Informed Compliance Publication, Determining the Acceptability of Transaction Value for Related Party Transactions. In addition, importers who utilize a customs value that must be adjusted subsequent to entry should consider joining Customs' Reconciliation program. This program allows importers to declare estimated customs values and subsequently adjust those values to final values and pay or be refunded any additional duties or fees owed.
Finally, an importer may be able to limit its liabilities for valuation and other errors it discovers on its own by filing a prior disclosure with Customs. By filing a prior disclosure, an importer voluntarily discloses to Customs the factual circumstances of a violation of the customs statute and tenders any duties and fees owing. If the prior disclosure is done properly, the importer's liability for penalties can be reduced to the interest owed, unless fraud is found.
Global Trade Expertise can assist with an importer in assessing the validity of their customs valuations, joining CBP's Reconciliation program, and/or filing a valid prior disclosure with CBP. Please contact us for assistance.
Customs Seizes Counterfeit Footwear and Jackets Worth $2 Million
11/07/07 03:44 PM
The report states that during fiscal year 2006, CBP made more than 14,000 seizures of counterfeit goods worth more than $155 million that violated intellectual property laws. Footwear and wearing apparel are among the top commodities seized by CBP in fiscal year 2006.
New Customs Bulletin Issued
10/31/07 01:13 PM
The
Customs Bulletin and Decisions, Vol. 41, No. 45,
October 31, 2007 can be found here.
Of interest:
U.S.-Bahrain Free Trade Agreement - Interim rule effective October 16, 2007; comments must be received by December 17, 2007.
Of interest:
U.S.-Bahrain Free Trade Agreement - Interim rule effective October 16, 2007; comments must be received by December 17, 2007.
New Customs Bulletin
10/24/07 12:34 PM
Customs Bulletin
Vol. 41, No. 44 was issued on October 24, 2007 and
can be found here.
Of interest in the Bulletin is:
HQ W968251, dated October 3, 2007, a Customs tariff classification ruling holding that individually sheathed single mode (SM) optical fibers, used in long-distance telephony and cable television applications for voice and data transmissions are classified under HTSUS subheading 9001.10.0030, dutiable at 6.7% ad valorem, rather than under subheading 8544.70.0000, duty-free.
Of interest in the Bulletin is:
HQ W968251, dated October 3, 2007, a Customs tariff classification ruling holding that individually sheathed single mode (SM) optical fibers, used in long-distance telephony and cable television applications for voice and data transmissions are classified under HTSUS subheading 9001.10.0030, dutiable at 6.7% ad valorem, rather than under subheading 8544.70.0000, duty-free.
New Customs Bulletin
10/17/07 03:32 PM
Just
issued: Customs Bulletin and
Decisions, Vol. 41, No. 3, October 17,
2007
Contents:
CBP Decisions
- Approval to use authorized facimile signature and seal
General Notices
- Quarterly IRS interest rates used in calculating interest on overdue accounts and refunds on customs duties
- U.S. Customs and Border Protection Trade Symposium 2007: ‘‘Partnerships — Meeting the Challenges of Securing and Facilitating Trade’’
Customs Ruling Letters and Treatment
- Tariff Classification:
- Certain articles of semi-precious stones
- Certain stemmed tobacco
U.S. Court of International Trade
Slip Opinions
- Koyo Seiko Co., Ltd., et al. v. United States
- Ugine and ALZ Belgium, N.V., Arcelor Stainless USA, LLC, and Arcelor Trading USA, LLC v. United States
- Sherri N. Boynton v. United States
Contents:
CBP Decisions
- Approval to use authorized facimile signature and seal
General Notices
- Quarterly IRS interest rates used in calculating interest on overdue accounts and refunds on customs duties
- U.S. Customs and Border Protection Trade Symposium 2007: ‘‘Partnerships — Meeting the Challenges of Securing and Facilitating Trade’’
Customs Ruling Letters and Treatment
- Tariff Classification:
- Certain articles of semi-precious stones
- Certain stemmed tobacco
U.S. Court of International Trade
Slip Opinions
- Koyo Seiko Co., Ltd., et al. v. United States
- Ugine and ALZ Belgium, N.V., Arcelor Stainless USA, LLC, and Arcelor Trading USA, LLC v. United States
- Sherri N. Boynton v. United States
U.S.-Bahrain Free Trade Agreement
10/16/07 12:43 PM
In the
Federal Register today,
a document
amending the U.S. Customs and Border Protection
(‘‘CBP’&rsquo regulations on an interim basis
to implement the preferential tariff treatment
and other customs-related provisions of the
United States-Bahrain Free Trade Agreement
entered into by the United States and the
Kingdom of Bahrain. The interim rule is
effective on October 16, 2007 and any comments
must be received by December 17, 2007.
regulations on an interim basis
to implement the preferential tariff treatment
and other customs-related provisions of the
United States-Bahrain Free Trade Agreement
entered into by the United States and the
Kingdom of Bahrain. The interim rule is
effective on October 16, 2007 and any comments
must be received by December 17, 2007.
Court Refuses to Dismiss $42 Mil Recordkeeping Penalty
09/28/07 11:55 AM
The U.S.
District Court for the Western District of Texas
issued an order on September 27, 2007 denying Ford
Motor Company's motion to dismiss a $42 million
recordkeeping lawsuit brought by U.S. Customs and
Border Protection ("CBP"). The lawsuit began when
Ford refused to answer an administrative summons by
CBP demanding documents relation to imports of
products from Mexico under a NAFTA Certificate of
Origin. Ford claimed that the documents sought by
CBP were not "entry records" and thus, Ford had no
obligation to keep those records. The records in
question all involved components used by the
Mexican exporter to manufacture the products
purchased by Ford.
The Court disagreed with Ford and claimed that the "(a)(1)(A) list"of entry records includes "NAFTA Certificate[s] of Origin and supporting records." It then held, as a matter of law, that the documents requested by CBP were "supporting records" to the NAFTA Certificates of Origin and therefore qualified as entry records.
The Court went on to reject Ford's arguments that it should not be responsible for documents that were both created and maintained solely by the exporter. Even though the Court noted that the CBP publication, NAFTA Focused Assessment Program Guidelines, states that an importer is not responsible to maintain supporting documentation that is certified by the exporter of the NAFTA Certificate of Origin, the Court stated that the publication does not have the force of law to contradict the (a)(1)(A) list recordkeeping requirements.
The Court's order will allow CBP to continue pursuing the $42 million recordkeeping penalty against Ford. More importantly, it may create judicial precedent that should cause NAFTA importers to greatly expand their recordkeeping programs.
The Court disagreed with Ford and claimed that the "(a)(1)(A) list"of entry records includes "NAFTA Certificate[s] of Origin and supporting records." It then held, as a matter of law, that the documents requested by CBP were "supporting records" to the NAFTA Certificates of Origin and therefore qualified as entry records.
The Court went on to reject Ford's arguments that it should not be responsible for documents that were both created and maintained solely by the exporter. Even though the Court noted that the CBP publication, NAFTA Focused Assessment Program Guidelines, states that an importer is not responsible to maintain supporting documentation that is certified by the exporter of the NAFTA Certificate of Origin, the Court stated that the publication does not have the force of law to contradict the (a)(1)(A) list recordkeeping requirements.
The Court's order will allow CBP to continue pursuing the $42 million recordkeeping penalty against Ford. More importantly, it may create judicial precedent that should cause NAFTA importers to greatly expand their recordkeeping programs.
Gov Group Calls for Risk-Based Testing for Import Safety
09/20/07 12:58 PM
In
a 22-page
report issued
on September 10, 2007, the
Intragency Working Group on Import
Safety, a
Cabinet-level panel appointed by President Bush
in July, recommended that the U.S. shift from
inspecting goods at the point of entry to
screening the riskiest imports to prevent the
safety problems that have led to recalls of
millions of toys, tires, and pet products this
year, particularly from China. The group also
recommends, as a preventative measure, targeting
for closer inspection key weak points in the
production and shipment of the $2 trillion worth
of clothes, electronics, seafood, and other
products imported into the U.S. each year.
The U.S. imports the $2 trillion of products from more than 150 countries, from more than 825,000 importers, through 300 ports of entry. The value of imports is expected to triple by 2015. The American Shipper's Journal of International Logistics sets forth specifics of the report in this article. The prevention framework and risk-based monitoring system appears to borrow heavily from the existing Customs-Trade Partnership Against Terrorism (C-TPAT) program, whereby the Department of Homeland Security works with importers to adopt best practices and require trade partners to also adhere to them.
The report also calls for improved information-sharing, promotion of technological innovation and development of "a culture of collaboration" among regulatory agencies and with foreign governments. Health and Human Services Secretary Michael O. Leavitt, who led the task force, stated that the changes will likely require additional funding and new powers, such as making consumer product recalls mandatory, however, he stated that it was too early to provide specifics. The group expects to provide details in mid-November, after hearing public comment. Congress intends to hold another hearing on import safety, and Chinese delegations plan to meet with federal officials.
The U.S. imports the $2 trillion of products from more than 150 countries, from more than 825,000 importers, through 300 ports of entry. The value of imports is expected to triple by 2015. The American Shipper's Journal of International Logistics sets forth specifics of the report in this article. The prevention framework and risk-based monitoring system appears to borrow heavily from the existing Customs-Trade Partnership Against Terrorism (C-TPAT) program, whereby the Department of Homeland Security works with importers to adopt best practices and require trade partners to also adhere to them.
The report also calls for improved information-sharing, promotion of technological innovation and development of "a culture of collaboration" among regulatory agencies and with foreign governments. Health and Human Services Secretary Michael O. Leavitt, who led the task force, stated that the changes will likely require additional funding and new powers, such as making consumer product recalls mandatory, however, he stated that it was too early to provide specifics. The group expects to provide details in mid-November, after hearing public comment. Congress intends to hold another hearing on import safety, and Chinese delegations plan to meet with federal officials.
Holiday Apparel Eligible for Festive Article Classification
09/12/07 10:36 AM
This decision makes it clear that holiday apparel, and other goods, may be classified as festive articles under HTSUS heading 9505 regardless of their utilitarian value if they meet two criteria: "(1) it must be closely associated with a festive occasion and (2) the article is used or displayed principally during that festive occasion." Although an appeal from the government may follow, the legal reasoning of the court appears sound.
Nevertheless, importers may be entitled to refunds for duties paid on such articles for past entries that are still within the protest time period. (Entries made in 2007 will not be eligible for protests as the 2007 amendments to the HTSUS now specifically exclude apparel and other utilitarian articles from classification as festive articles.) Protests of customs entries must be filed within 180 days of the entry's liquidation and Customs generally liquidates entries within 11 to 12 months. Thus, importers may be able to file protests for products imported within the past 18 months. Global Trade Expertise can assist importers with obtaining such refunds. Just contact us.
Gender & Age Discrimination Alleged in Tariff Rates
09/08/07 09:15 PM
If you are an importer who has paid tariffs based on gender differences and would like to explore filing suit in the USCIT to protect your claim to potential refunds, please contact Global Trade Expertise via our contact form or by phone at 925.876.1381.