Tag

Pre-Compliance

Best PracticesFDA IssuesImportMedical Devices

Does Your Medical Device Have a Unique Device Identification (UDI)?

posted by Jennifer Diaz June 14, 2017 0 comments

We’ve previously kept you informed on how to determine whether your product is regulated as medical device by the U.S. Food and Drug Administration (FDA) and how to register your medical devices with the Agency. On June 2, 2017, FDA issued a letter to Device Labelers of certain classes informing of extended compliance dates for UDI requirements. Today we are providing more information on medical device labeling requirements – specifically the new Unique Device Identification (UDI) requirement. Continue Reading

Best PracticesFDA IssuesImportMedical DevicesU.S.CustomsUncategorized

WHAT DO CONTACT LENSES, DENTAL FLOSS, AND PACEMAKERS HAVE IN COMMON?

posted by Jennifer Diaz June 12, 2017 0 comments

Medical DevicesOne might naturally think of a product like a defibrillator as a medical device, but in our business, we find many companies unsure if its products are, in fact, medical devices.

The following is the first of a two part series which you may use as a helpful guide to get you through the medical device maze. First is a description of what medical devices are, and helpful hints so that you may identify if your product is regulated as a medical device. Second is a brief overview of FDA’s regulation of medical devices. The second part of the series will discuss the classes of medical devices, and the FDA registration process.

What is a Medical Device? Continue Reading

Best PracticesCBPEventsImportIPR, Trademarks and LogosSpeakingU.S.Customs

DTL’s Jennifer Diaz will moderate panel at the U.S.-Mexico Logistics & Supply Chain Leader Meeting

posted by Jennifer Diaz September 6, 2016 0 comments

UntitledWe strive to keep our readers updated on import and export compliance issues and events. Here is another chance for you to learn what it takes to trade with Mexico. Join Diaz Trade Law’s founder, Jennifer Diaz, at U.S.-Mexico Logistics & Supply Chain Leader Meeting this Thursday, September 8, 2016 at the Four Seasons in Brickell.

Ms. Diaz has been appointed as the moderator for panel discussion on Challenges and Opportunities in Cross-border ECommerce.  The panelists include:

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Best PracticesE-CigaretteFDA IssuesImportSeizuresTobacco

The End of Vape Shops, Hookah Shops, & E-Cigs? FDA’s New “Deeming” Laws

posted by Jennifer Diaz May 26, 2016 0 comments

 How to comply

On April 24, 2014, the U.S. Food and Drug Administration(FDA) announced that it was officially “deeming” e-cigs, e-hookah, vape pens, and other tobacco products subject to the Federal Food, Drug, and Cosmetic Act (FD&C Act). This article covered the proposed regulation at the time. On May 10, 2016 the FDA published the final rule on the new deeming law.

What Are Tobacco Products and What’s Being Regulated?

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Best PracticesCBPCustoms BrokerEventsImportSpeakingU.S.Customs

Why Pre-Compliance is a MUST

posted by Jennifer Diaz April 7, 2016 13 Comments

Compliance Blue Marker

If the thought of monetary penalties, shipment delays, detentions or seizures of merchandise keep you up at night, then this article is for you.  First, it’s quite easy to establish a U.S. company, pick (what you hope is) a terrific customs broker, file Form 5106 with U.S. Customs and Border Protection (CBP) to request your importer number, pick a surety (there are many, your broker will likely sway you to their favorite) and WALLAH! Right? Wrong. No one sits you down during this process to say, wait, importing can be great, but, this is also a LOT of responsibility. Your company (and SOMETIMES even YOU) have liability and a burden when importing. This article will walk you through YOUR burden as an importer, how CBP can question your imports, and how penalties can ensue and what you should be doing about it, in advance!

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Best PracticesC-TPATCBPCounterfeitsIPR, Trademarks and LogosU.S.Customs

CBP Pilot Program Focuses on Pre-Compliance

posted by Jennifer Diaz October 13, 2014 0 comments

IPR CBP is currently taking volunteers for a brand new Intellectual Property Rights (IPR) voluntary pre-compliance program.  The Journal of Commerce reported on the new pilot program here.

Do you agree with my comments?

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CBPCustoms BrokerImport

BEWARE – Liquidated Damages WILL be Imposed for 10+2 Violations

posted by Jennifer Diaz July 18, 2013 0 comments

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.

Liquidated Damages

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:

  1. Manufacturer (or supplier) name and address
  2. Seller (or owner) name and address
  3. Buyer (or owner) name and address
  4. Ship-to name and address
  5. Container stuffing location
  6. Consolidator (stuffer) name and address
  7. Importer of record number/foreign trade zone applicant identification number
  8. Consignee number(s)
  9. Country of origin
  10. Commodity Harmonized Tariff Schedule (HTS) number

From the carrier, 2 data elements are required:

  1. Vessel stow plan – required for arriving vessels with containers.
  2. Container status messages – required for containers arriving via vessel.

Hence, 10+2!

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:

  1. Booking party name and address
  2. Ship-to name and address
  3. Commodity Harmonized Tariff Schedule (HTS) number
  4. Foreign Port of Unlading
  5. 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 info@diaztradelaw.com and we would be happy to assist you!

Best PracticesCBPCounterfeitsCPSCImportInvestigationIPR, Trademarks and LogosSeizuresU.S.Customs

Florida Companies Convicted and Sentenced

posted by Jennifer Diaz June 24, 2013 0 comments

Co Authored by Robert Becerra

In another example of the government’s continuing use of the criminal justice system to enforce international trade laws, three Florida companies and their management were recently convicted and sentenced for importing smuggled toys from China containing lead and containing counterfeit trademarks.

LM Import-Export, Inc., Lam’s Investment Corp., and LK Toys Corp., Hung Lam and Isabella Kit Yeung plead guilty to charges of conspiracy to traffic and smuggle toys containing hazardous substances such as lead, and one count of trafficking in counterfeit goods, in violation of 18 U.S.C. Secs. 371 and 2320, respectively. Co-defendant Yeung plead guilty to one misdemeanor count of submitting a false country of origin label, in violation of 19 U.S.C. Sec. 1304(a). The information, or charging document filed in court, against all defendants, as well as the plea agreements for each defendant can be found on the website of the District Court for the Southern District of Florida. (If you have trouble getting these documents, email me and I’d be happy to share them with you).

The facts underlying the charges, as stated in court documents, are that from April, 2000, until May 2011, a span of 11 years, the corporate defendants conspired to sell children’s products imported from China in violation of the Consumer Product Safety Act 15 U.S.C. Sec. 2068, and the Federal Hazardous Substances Act, 15 U.S.C. Sec. 1263. Some of the toys contained lead, while others presented various hazards such as choking, aspiration or ingestion. The products were imported using false statements on Customs declaration forms and with false country of origin labeling.

Hung Lam was sentenced to 22 months incarceration, 3 years of supervised release and a $10,000 fine. The corporations were sentenced to 5 years of probation. Yeung was sentenced to 1 year probation and a $1,000 fine. An order was entered mandating the forfeiture to the government of $862,500 and all products imported by the defendants that were seized by the government. The press release from the Consumer Products Safety Commission and Department of Justice discussing the case can be found here and here respectively.

This case is extremely important for importers to be familiar with and understand that:

  1. It is vital for importers to retain counsel to assist with pre-compliance before you import.
  2. When you receive any violation notice from the federal government, retain counsel immediately and be sure to address all violations with remedial action and enhanced compliance procedures in an attempt to keep administrative penalties or forfeiture cases from turning into potential criminal matters.
  3. Resolving a civil action through a consent decree with the government does not absolve you of criminal liability.
  4. Once contacted by government officials, retain counsel immediately. Any evidence you provide or any statements you make will be used against you in court.
  5. Repeated misconduct and federal regulatory law violations over a period of years will often result in criminal prosecution of both companies and their individual employees, resulting in federal prison sentences and substantial fines and forfeitures.

 

Best PracticesCBP

Band-Aid or Stitches? What’s Your Compliance Approach?

posted by Jennifer Diaz September 27, 2012 4 Comments

When you get a deep cut, do you simply put on a band-aid or do you go to the hospital to get stitches that you really need? Stitches take time and are more costly – but, your bleeding will stop and your cut is less likely to re-open. With a band-aid – you’re likely to re-open your wound and/or get an infection. You get stitches if you know what’s good for you! 

Compliance is similar in that there may be a quick fix for the current issue; however, if you don’t stop the bleeding and get stitches, you will be in trouble in the long-run, and the bleeding won’t stop.

On a daily basis, different companies call me to discuss issues they are having with U.S. Customs and Border Protection (CBP). For instance, today, a company called me discussing a CBP 28 – Request for Information, and thereafter a CBP 29 – Notice of Action received from CBP. The issue was an underlying classification issue. Bottom line, they had never done any Pre-Compliance on the Harmonized Tariff Schedule’s (HTS) they were using for their imported merchandise. They said the infamous line – that’s why I hired a broker. Important to note that this just does not cut it with CBP.

CBP publishes really great Informed Compliance Publications for Importers – too few importers have read them, and too small a percentage of importers know they exist. For new importers, CBP has a great resource titled Basic Importing and Exporting. Included within these vast resources is a guide titled Importing into the U.S.: A Guide for Commercial Importers. This 211 page guide can save you hundreds of thousands of dollars if you review it, and/or hire the right expert to explain it to you and walk you through it. There is a "Reasonable Care Checklist" in this Guide, and I urge you to review it as soon as possible. If you do not know the answers, then it’s time to start asking the right questions and hiring the right experts to help you.

CBP expects importers to use "reasonable care" in reporting your HTS, value, country of origin, free trade agreement preference, etc. This is a subjective standard; however, all of the questions in the checklist provide a rough overview to get you started. You may still want to ask an expert to make sure you’re on the right track and have the right Pre-Compliance standards in place. Actually, Question #1 is whether or not you have retained an expert (lawyer, customs broker, accountant, or customs consultant) to assist you in complying with CBP requirements. If this answer is no, and you want to import, you need to get an expert, or the penalties for non-compliance can be severe. 19 U.S.C. 1592 is the statute CBP references when issuing penalties for negligence, gross negligence or fraud – depending on the degree of culpability CBP believes you had at the time of your non-compliance.

What’s the bottom line? You can try to put a band aid on your responses to CBP’s 28, and CBP’s 29, and thereafter file a Protest for your current issue; however, until you audit your current practices, the bleeding won’t stop. You can expect more CBP 28’s and 29’s until you have your Pre-Compliance plan in place, and that likely means duties or severe penalties will be owed to CBP by your company.

When you’re ready to spend the time and energy on the Pre-compliance you need, I can help you, so call me and I’ll make sure you are on the right track to protecting yourself and your company.