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December 2009

ImportU.S. Customs and Border Protection (CBP)

CBP Symposium Highlights

posted by Jennifer Diaz December 15, 2009 1 Comment

The annual CBP Symposium, held at the D.C. Convention Center, Washington, D.C. from December 8-10, 2009, was the 10th year of this very successful event.  Over 850 attendees were initially greeted by outgoing Acting Commissioner Jay Ahern.  The Symposium agenda was a smorgasbord of information that was appropriate for anyone with a serious interest in international trade and logistics. Highlights included presentations from Assistant Commissioner Dan Baldwin, Office of International Trade, Rich DiNucci, Director, Secure Freight Initiative (“10+2”), Bob Swierupski, Director, National Commodity Specialist Division, and Brenda Smith, Executive Director, Trade Policy and Programs, about what the international trade community should expect in 2010 from CBP.  Special Presentations were made by Jeremy Baskin, Office of General Counsel, U.S. Consumer Product Safety Commission, and Domenic Veneziano, Director, Division of Import Operations and Policy, U.S. Food and Drug Administration.

Mr. DiNucci’s presentation on Importer Security Filing (ISF) stated that CBP has received from January 26, 2009 through December 6, 2009 3.65 million ISF filings from over 1,900 ISF filers representing 103,000 ISF importers. There is now a 95% acceptance rate on ISF filings.  As you know, the enforcement mode for ISF begins January 26, 2010, and there will be a $5,000 penalty issued by CBP for a violation per ISF transmission or $10,000 maximum per ISF filing.  Importers should be familiar with the ISF Interim Final Rule, the FAQ on ISF, and the Mitigation Guidelines issued by CBP.

Therese Randazzo, Director, IPR Policy and Programs Division, stated that CBP had issued over 1,000 fine notices, pursuant to 19 U.S.C. 1526(e), totaling $94 million against importers for attempting to import counterfeit merchandise.  However, only $2 million was collected from those importers.   Ms. Randazzo acknowledged that the U.S. Attorney’s Offices are reluctant to pursue such cases because the importer has already been punished in that the merchandise was seized and forfeited, and adding a fine on top of that may be considered a violation of the “excessive fine” clause of the United States Constitution.  Charles Steuart, the new Intellectual Property Rights and Restricted Branch Chief, stated that CBP had  “targeting inefficiencies because of  lack of information of the international supply chain from trademark and copyright holders” who have recorded their trademarks, trade names, and copyrights with CBP.

Mr. Swierupski stated that his office had issued 6,821 Rulings pursuant to 19 CFR Part 177 in FY 2009, that Rulings from his New York office are issued within 30 days and those from CBP HQ are issued within 90 days.  Myles Harmon, Director, Commercial and Trade Facilitation Division, reminded persons submitting Ruling Requests to do so using CBP’s new e-Rulings system, however, if a physical sample is submitted to CBP, the Ruling must still be made by paper, and not through the e-Rulings system. CBP has issued about 160,000 rulings available on CROSS.  Advance Ruling Requests are still the best method of predicting proper classification, valuation, country of origin, and other import requirements.

I look forward to next year’s CBP Symposium. Be sure to sign up early as the event is always quickly sold out.

EPAImportU.S. Customs and Border Protection (CBP)

Importer Pleads Guilty to Smuggling Freon

posted by Jennifer Diaz December 5, 2009 2 Comments

On November 20, 2009, in Federal Court in Miami, Florida, Mr. James Garrido and the company he controlled, Kroy Corporation, pled guilty to charges related to their illegally smuggling into the United States certain restricted ozone-depleting substances, in violation of the Clean Air Act enforced by the U.S. Environmental Protection Agency.

Chlorofluorocarbons (CFCs) are ozone depleting substances and include CFC-22 which is otherwise known as R-22 or popularly known by its trademark name, Freon, owned by DuPont.  CFC-22 is a widely used refrigerant for residential heat pump and air conditioning systems.

In 1988, the United States ratified the Montreal Protocol on Substances that Deplete the Ozone Layer. By ratifying the Protocol, the United States committed to a collaborative, international effort to regulate and phaseout ozone-depleting substances. The United States amended the Clean Air Act (CAA) in 1990 to include Title VI, Stratospheric Ozone Protection. The Clean Air Act established a schedule to phase out the production and importation of CFC-22.  Individual companies are licensed annually by the EPA to import specified maximum quantities of CFC-22.  By 2030, the CFC-22 will be completely phased out.

Neither Mr. Garrido nor Kroy Corporation were ever licensed by the EPA to import CFC-22.  They imported approximately 420,000 kilograms of CFC-22 valued at about $4 million over 2 years in violation of  18 U.S.C. section 545(smuggling).  They intentionally misdescribed the CFC-22 on documentation presented to U.S. Customs and Border Protection as another refrigerant, R-134A, which did not require any special license from the EPA. As stated in the press release by the United States Attorney’s Office for the Southern District of Florida:  “Except for a small quantity of legal refrigerant strategically placed in front of the contraband, the shipment contained CFC-22 and were accompanied by false documentation.”

The case was investigated by Special Agents from the Miami offices of the EPA and the U.S. Immigration and Customs Enforcement (ICE).  Sentencing will take place on February 11, 2010.  Mr. Garrido could be sentenced to 20 years imprisonment, and a criminal fine of $250,000 for each of the three counts to which he pled guilty.