COMPLIANCE SEMINARS FOR INDIVIDUALS & SMALL BUSINESSES
A previous post discussed the expiration of GSP and need for congressional action to renew it. GSP expired July 31, 2013. Importers were advised to continue to use the Special Program Indicator (SPI) “A” when importing into the U.S., which would signify a valid claim for GSP but to pay duty subsequent to that date, so that in the event of a retroactive renewal, CBP could process refunds automatically.
Unfortunately, the picture above is still correct – the trade community is in limbo – will we get our duties refunded if we are entitled to GSP? The answer… Yes, Maybe, No. Not comforting or reassuring.
Today, CBP advised the trade community that:
For those of you keeping up with the FDA Food Safety Modernization Act (FSMA), big changes are coming for those in the food industry. We have been keeping you up to date with blogs on updates to FSMA. We have even created an updated website on FDA to help you understand the vast requirements under the FSMA, as well as complying with FDA generally. If you are a foreign manufacturer, processor, packer, storer or holder of food products, you need a U.S. agent, and must register with the FDA – for more information, review www.FDA-USA.com.
The latest news is that the FDA has released the third Edition of the U.S. Food & Drug Administration (FDA) draft guidance titled “Guidance for Industry: Prior Notice of Imported Food Questions and Answers”. Prior notice is just what it sounds like, “notification to the FDA that an article of food, including food for animals, is being imported or offered for import into the United States in advance of the arrival of the article of food at the U.S. border.”
FDA is seeking comments on the draft guidance and addresses questions received since the publication of the second edition of the guidance in May 2004. The guidance also includes information related to the FSMA, which requires additional information to be provided in a prior notice of imported food submitted to the FDA. The FSMA included a new Prior Notice element, now the FDA requires a person submitting prior notice of imported food, including food for animals, to report the name of any country to which the article has been refused entry.
Although pursuant to 21 CFR 10.115(g)(5), comments can be made on the guidance at any time, in order to ensure that the FDA considers your comments on this draft guidance before it begins to work on the final version of the guidance, your comments must be submitted either electronically or in writing within sixty (60) days from the date in which the notice announcing the availability of the draft guidance is published in the Federal Register, or March 31, 2014. If you have questions on FDA’s FSMA or on submitting a comment, please feel free to contact me at (305) 260-1053 or via email at JDiaz@bplegal.com.
Trade Day is coming to Miami, courtesy of U.S. Customs and Border Protection, (CBP) on April 2, 2014. The ports of Champlain, Boston, Savannah, Buffalo and Detroit have held Trade Day (some already twice) and we are thrilled CBP’s Port of Miami is bringing Trade Day to us.
This is the time to take advantage. Importers, exporters, customhouse brokers, freight forwarders and all other interested parties in the international trade community – if you have been looking for an informal opportunity to meet one-on-one with government officials that are responsible for processing and facilitating trade related import transactions and enforcing the various Free Trade Agreements and trade laws, this is your chance.
For those who thought CBP’s “measured and commonsense” approach for those that weren’t fully complying with the Importer Security Filing (ISF or 10+2) rules would last forever, think again!
Effective, July 9, 2013, CBP advised it would start the liquidated damages phase of the Importer Security Filing (ISF) enforcement process. CBP will now make use of the newly activated cargo holds in the Automated Cargo Environment (ACE) system to address non-compliance with the ISF rule. CBP may also withhold the release or transfer of non-compliant ISF shipments at the terminal until the required ISF is filed. For carrier violations of the vessel stow plan requirement, CBP may refuse to grant a permit to unlade the merchandise. Once the ISF data is received and a security assessment is made, additional enforcement actions including a Non-Intrusive Inspection (NII) and/or intrusive exams may be initiated.
CBP may also assess liquidated damages of up to $5,000 per violation for the submission of an inaccurate, incomplete or untimely filing. CBP Dec. 09-26 discusses “Guidelines for the Assessment and Cancellation of Claims for Liquidated Damages for Failure to Comply with the Vessel Stow Plan, Container Status Message, and Importer Security Filing Requirements.” First violations may be mitigated to $1,000-$2,000 – depending on the presence of aggravating or mitigating factors. Some mitigating factors for the failure to file a complete, accurate and timely ISF include evidence of progress in the implementation of ISF during the “flexible enforcement period,” small number of violations compared to number of shipments, Tier 2 and 3 C-TPAT status, remedial action…. CBP has advised that “no relief will be granted if CBP determines that law enforcement goals were compromised by the violation.” Aggravating factors include multiple errors on your ISF! If you do receive a Liquidated Damages claim, it is important you consult with an expert to file a timely, persuasive Petition to CBP and address all relevant mitigating factors to assure you receive the maximum reduction possible.
What’s ISF Again?
The ISF rules require importers and vessel-operating carriers to provide additional advance trade data on cargo shipments to CBP 24 hours prior to vessel lading, pursuant to Section 203 of the Security and Accountability for Every Port (SAFE Port Act) of 2006.
Importers must report the following 10 data elements on each ISF:
- 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
- Commodity Harmonized Tariff Schedule (HTS) number
From the carrier, 2 data elements are required:
- Vessel stow plan – required for arriving vessels with containers.
- Container status messages – required for containers arriving via vessel.
For shipments consisting entirely of freight remaining on board (FROB) cargo or goods intended to be transported in-bond as an immediate entry or transportation and exportation entry, the following 5 data elements are required:
- Booking party name and address
- Ship-to name and address
- Commodity Harmonized Tariff Schedule (HTS) number
- Foreign Port of Unlading
- Place of delivery
In order to avoid liquidated damages and untimely delays with your cargo, full ISF compliance is now required. Since we’re talking compliance, do you have your pre-compliance plan established? If not… Let’s talk!
If you have any questions on the listed requirements, need assistance with cargo detained as a result of this new enforcement phase, getting your C-TPAT application in ASAP (and getting to Tier 2 quickly!), or any other compliance or enforcement question, please feel free to contact Diaz Trade Law at email@example.com and we would be happy to assist you!
The American Conference Institute will be having its 8th Import Compliance and Enforcement Conference on June 11, 2013, in Washington DC. The conference will consist of two days full of lectures discussing highly complex U.S. import compliance challenges, along with how to satisfy Canadian and Mexican customs authorities. Unlike previous conferences, this unique event is designed to provide attendees with a comprehensive benchmarking experience, where participants can exchange best practices and lessons learned for 2013 and beyond. Some of the most notable industry experts that will be present are Chrystler, Hershey, Williams-Sonoma, Boeing, IBM, General Electric, Cisco, Tyco and yours truly.
This event is uniquely designed to maximize benchmarking on how to resolve the most complex, pressing import compliance issues affecting the industry. The new program features for 2013 are:
- Two highly focused sessions on valuation and transfer pricing:
- ISA member case studies: New and longstanding members speak about their recent experiences, and how to meet ISA requirements.
- Inside a focused assessment: Lessons learned from recent experiences on how to handle common and unanticipated CBP requests
- C-TPAT and Foreign Re-Validations: Meeting new expectations for C-TPAT risk assessments, and how the new EU Mutual Recognition Agreement affects importer validation requirements
- NAFTA, CAFTA, and US-Korea – FTA success stories:
- The finer points to minimizing duties, fees, taxes, red tape, and proving origin
- Developing a global strategy for customs classification and tariff engineering.
One of the most notable topics discussed will be broker selection and management. I have the privilege to discuss important aspects within the broker selection and management process such as:
- Detecting warning signs: How far you need to go in conducting due diligence.
- Designing a questionnaire for brokers: Assessing the skills, experience, and resources of customs brokers.
- Evaluating brokers’ supply chain relationships
- Quantifying risk factors
- Communicating compliance expectations and requirements to brokers, and developing guidelines for your brokers
- Where the importer and broker responsibilities begin and end
- Incorporating contractual safeguards, including audit mechanisms
- How to monitor compliance, and what to do if you suspect or discover non-compliance by a broker
- Auditing foreign brokers, and conducting periodic review sand site visits
- When and how to terminate the relationship
- What constitutes customs brokering and business,and how to avoid unintended brokering activities
The conference will kick-off with discussions about strengthening global trade compliance. Meredith Covey, Director of Customs Operations and Compliance at Williams-Sonoma Inc., will discuss real world issues related to the implementation and monitoring of monitoring a global import compliance program. She will discuss structures, resources, tools, and techniques leading companies are using to implement, manage, and monitor an import compliance program. Following the conclusion of multiple speakers discussing these aspects, a discussion on Canadian customs regulations and enforcement will ensue. Eric Trudel, a Manager of CBSA, will discuss the key concepts and common pitfalls to compliance in Canada.
The ACI offers my clients and colleagues, and you, my special blog followers, a discounted price to attend the conference on June 11-12. This rate will expire on May 17th. Contact Adina Schwartz, JD, at 310-295-9789 or A.Schwartz@AmericanConference.com to get your discounted rate! You don’t want to miss this!
"Be Bold! Women in Transportation" will feature prominent women in the transportation, logistics and supply chain management industry. The purpose of the event is to inform about career opportunities and attract women and minorities to the transportation industry.
I’m thrilled to moderate this event where you’ll hear from top notch keynote speakers, Michelle Livingstone, VP of Supply Chain/Transportation at The Home Depot and Natalie Putnam, VP of Marketing at Ryder.
Join us to learn answers to the following questions:
- Why aren’t more women choosing Supply Chain/Transportation as a career?
- How will jobs in Supply Chain/Transportation evolve over the next few years?
- What does the logistics function look like within a manufacturing/distribution business?
- How have energy prices affected the Transportation Industry?
What impact does the changing demographics of the US have on opportunities for women in the supply chain field?
What is the role of sales and marketing in supply chain, logistics and transportation?
What is changing in business culture and what do companies need to do to acquire talent?
What are the skills needed to be successful in the field of logistics today?
Why is a career in supply chain a good choice?
The cost of luncheon is $30 in advance and $40 at the door. Click HERE to register.
For more information contact Jorge Guerra.
Hundreds of people apply every year to become a customs broker. Customs brokers are licensed by U.S. Customs and Border Protection (CBP). The process requires passing a rigorous multiple choice examination, and then passing a background investigation. For many applicants who successfully pass the examination, they are denied a license because the background investigation revealed a poor credit history and rating.
Although the application to be a customs broker is submitted to the local port, the decision letter granting or denying a broker license is issued by Allen Gina, Assistant Commissioner, Office of International Trade, CBP Headquarters in Washington, D.C. A typical denial letter would state:
After careful evaluation of the information obtained from the background investigation, we must deny your application due to your financial history.
The denial letter always cites the CBP regulation at 19 CFR 111.16 – a failure to establish the business integrity and good character of the applicant. Fortunately, the letter also cites 19 CFR 111.17 which provides the right of appeal of the denial of the customs broker license.
The appeal must be filed, in writing, and submitted to Mr. Gina no later than 60 days from the date of the denial letter. The appeal must persuasively argue why the applicant has business integrity and good character. For example, if the applicant went through a divorce, and the former spouse failed to pay certain bills which negatively affected the applicant’s credit history and rating, that is an important fact that must be argued, and documented, in the appeal.
There are numerous reasons why CBP may legitimately deny a customs broker license to an applicant who has a spotty financial history. Similarly, there are numerous reasons to explain to CBP that despite what appears to be a questionable financial history, the applicant has business integrity and good character, and should still receive the customs broker license.