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liquidated damages

Best PracticesBloombergChina Trade WarCounterfeitsEnforcementExportImportInternational BusinessInternational LawInternational TradeIPR, Trademarks and LogosPenaltyReasonable CareSeizuresSupply ChainU.S. Customs and Border Protection (CBP)U.S. Food and Drug Administration (FDA)

USDA & CBP Combat Non-Compliant WPM

posted by Jennifer Diaz January 9, 2020 0 comments

Diaz Trade Law’s President, Jennifer Diaz and Associate Attorney, Denise Calle are enthusiastic to announce that our article USDA & CBP Combat Non-Compliant WPM was published by Bloomberg Law!  Below is the article reproduced with permission for your reading pleasure. We’d love to hear your feedback! Continue Reading

Best PracticesImportInternational LawInternational TradeU.S. Customs and Border Protection (CBP)

HELP US CELEBRATE 2018 SUCCESSES!

posted by Jennifer Diaz December 26, 2018 0 comments

successesDTL saved clients MILLIONS of dollars in 2018, below we share some of success stories with you. We look forward to assisting you in 2019!

U.S. Customs & Border Protection (CBP)

  • Successfully assisted numerous importers in various seizure cases to assist in getting property returned, despite CBP claims merchandise was drug paraphernalia, counterfeit, etc.

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ExportInternational TradeU.S. Customs and Border Protection (CBP)Vehicles

A Smoother Road to Exporting Vehicles: CBP’s New Electronic Validation Export Program

posted by Jennifer Diaz February 20, 2018 1 Comment

boatsIn our previous post “Knowing The Rules Of The Road: Exporting Cars From The U.S.”, we discussed CBP’s laws and regulations that must be followed to successfully export vehicles from the United States to foreign destinations. Failure to do so could result in the imposition of severe penalties — up to $10,000. Additionally, we provided a quick guide on how to export your vehicle form the United States, which provided all the documents required to successfully export your vehicle. Continue Reading

Import

Homeland Security Says U.S. Customs Bonds are Insufficient

posted by Jennifer Diaz August 13, 2011 0 comments

The Office of Inspector General (OIG) of the U.S. Department of Homeland Security (DHS) issued a report criticizing U.S. Customs and Border Protection (CBP).  In a June 2011 report entitled "Efficacy of Customs and Border Protection’s Bonding Process," DHS concluded that up to $12 billion in single transaction bonds for importers may fail to be collected.   Considering that approximately $2 trillion of goods are imported into the United States each year, and that CBP collects about $32 billion in duties, taxes, and fees, $12 billion is a heck of a lot of money to lose.

Let’s discuss some fundamental customs laws and policies first.  A bond is a contract between a principal (i.e. importer) and a surety (i.e. insurance company), with CBP serving as the beneficiary when an importer fails to pay any duties, taxes, and fees assessed by CBP on the imported merchandise.  The single transaction bond amount for the importer established by CBP is typically 1 to 3 times the total value of the imported merchandise for that particular shipment, plus duties, taxes, and fees.  If the importer does not pay the assessed amounts promptly, a liquidated damages claim is issued by the Fines, Penalties, and Forfeitures (FP&F) Office of CBP against the importer and the surety company.  

Although in theory, this type of insurance policy should pay CBP in full every time, it does not really work that way.  Blame it, in part, on anti-dumping and countervailing duty cases.  The U.S. Government Accountability Office (GAO) estimates that it takes over 3 years in anti-dumping or countervailing duty cases between the initial entry of merchandise subject to an anti-dumping or countervailing duty order, and when the final duty bill is issued to the importer.   Importers that are unwilling or unable to pay, or have already gone out of business, result in a loss of revenue to CBP. 

According to the OIG Report, CBP has written off tens of millions of dollars "because of inaccurate, incomplete, or missing bonds" such as a lack of signatures or inaccurate transaction numbers.   Moreover, it turns out that CBP is not doing a good job of keeping copies of the bonds, but often relies upon the customs brokers to do so.  The OIG Report concluded that "there is a potential for collusion between the broker and the importer."  Well, at least, for once, DHS and CBP don’t blame this problem on those pesky customs lawyers.

So, you ask, what will happen now.  No surprise this time – CBP will certainly re-evaluate its current monetary guidelines, last significantly updated in November 2010, to establishing higher bond limits, especially for food and drug products regulated by the FDA which pose a potential threat to the public health and safety.  Importers should expect to see such letters from CBP’s Revenue Division at the National Finance Center located in Indianapolis, Indiana, and more liquidated damages claims from the FP&F offices around the country.