•
Charles W. Ballard, Export Compliance Director
•
Jerome M. Greenwell, Export Compliance Director
•
Michael L. Thomas, Import Compliance Director
10+2 (ISF) ENFORCEMENT
• Importer Security Filing (ISF)
enforcement has begun and Customs has updated the “10+2” FAQs to provide further
guidance. An updated enforcement section indicates that violators should expect
non-intrusive inspections (NII), warnings, and/or delays in release of cargo.
Repetitive violations will lead to more holds and inspections and will result in
liquidated damages and do not load (DNL) notices. Non-compliant C-TPAT
participants may be suspended, or have their C-TPAT status reduced or revoked.
ISF
FAQs (January 28,
2010).
• Customs has issued a CSMS
message regarding the implementation of the Customs Response Messages (CUSRES)
for 10+2 filers. Bond-related edits will be issued for two weeks after the
February 24 implementation, but thereafter will be rejected without further
notice. CSMS
#10-000038 (February 7,
2010).
BROKER PENALTIES
• The CIT dismissed a claim
against an officer for negligence committed by the customs brokerage firm. This
decision distinguishes prior holdings where corporate officers have been held
liable for violations committed in their employment capacity, in part because
Customs failed to adequately plead the complaint.
U.S.
v. Tip Top Pants, Inc.,
CIT Slip Op. 10-05 (January 13, 2010).
• The CIT recently held that in
broker penalty cases all 10 factors in 19 C.F.R. § 111.1 must be considered by
Customs and evidence provided at trial or the penalty action will be
dismissed.
U.S.
v. UPS Customhouse Brokerage, Inc.,
CIT Slip Op. 10-11 (January 28, 2010).
BUY AMERICAN
The U.S. and Canada have reached
agreement on certain “Buy American” provisions in the American Recovery and
Reinvestment Act of 2009 that will allow Canadian suppliers to bid on state and
local contracts subject to stimulus funds. Signing of the
agreement is expected
on February 16, 2010; a similar agreement is expected with Mexico.
CBP-ITAR PROCEDURES
Houston Customs has issued
guidance for imports controlled under the International Traffic in Arms
Regulations (ITAR), indicating that:
• all entries involving
temporary import licenses (DSP-61) or temporary export licenses (DSP-73) require
paper CBP Form 3461, and
• all imports under ITAR license
exemptions may be handled via ABI, but require special diligence with
documentation to avoid cargo delays. Houston Public Info. Notice
HFO
10-001 (February 5,
2010).
C-TPAT 2009 HIGHLIGHTS
Customs has posted the
Customs-Trade Partnership Against Terrorism (C-TPAT) program
accomplishments for
2009. Customs certified 1,237 new members in 2009, conducted 3,420 validations,
and suspended or removed 297 members.
EXPORT TASK FORCE
• High ranking Obama
Administration officials are still working on reforming the U.S. export control
system. Washington sources suggest there have been discussions on how to remove
items from the Commerce Control List (CCL), setting up a “community of trusted
partners” making it easier to ship to or from certain close allies, transferring
control of commercial satellites to the Bureau of Industry and Security, and
looking at an intra-company transfer set of regulations.
• In an interesting
argument against loosening export controls, the International Association of
Machinists and Aerospace Workers recently
expressed concern that
relaxed export controls may lead to more out-sourcing and fewer U.S. jobs.
HAITIAN RELIEF EFFORTS
• Customs and Census are
facilitating the shipment of relief supplies to Haiti. Automated Export System
(AES) filings are still required for shipments to Haiti if on a license or over
$2500 in value. Special Schedule B Numbers in Heading 9802 may be used for the
relief supplies, including food, medical products, apparel including footwear
and certain donated articles. The Census Foreign Trade Division Call Center
will provide assistance to exporters. Additional information can be found on
Census
website.
• Customs has
announced
temporary textile visa procedures for Haiti HOPE claims.
IPR SAMPLE BOND
Customs has posted a
sample
template for the
continuous IPR bond option on its website.
ISA STATS
Customs Importer Self-Assessment
(ISA) program statistics for 2009 confirm that participation in ISA is not a
free-ride. While the program currently has 198 participants, Customs has denied
18 applicants, 47 applicants are under an improvement plan, and 20 participants
have withdrawn from the program. We are also aware of at least two ISA
participants who have been notified of upcoming re-validations. Contact Michael
Thomas with questions.
NAFTA CERTS CASE
The CIT recently dismissed an
importer’s claim regarding the timely submission of NAFTA Certificates of Origin
with a post-importation NAFTA claim. The CIT held that the Certificates must
be presented within one-year of importation with any post-importation claims
made under 19 U.S.C. § 1520(d).
Ford
Motor Co. v. U.S., CIT
Slip Op. 10-4 (January 12, 2010).
OBAMA TRADE POLICY
President Obama announced his
initiatives to increase exports and to move forward on FTAs during his recent
State of the Union
Address. In a
follow-up
address to the Senate
Democratic Policy Committee, President Obama told Democrats that he would seek a
“reciprocal trade relationship” with China and squarely confront non-tariff
barriers, imbalances in Chinese currency valuation, develop new solar and wind
energy manufacturing in the U.S. and increase American exports.
OFAC SETTLEMENT
Increased export enforcement
continues: Balli Group PLC and Balli Aviation, Ltd. (Balli) have agreed to a $15
million civil penalty
settlement with the
U.S. Office of Foreign Asset Controls (OFAC) and the Bureau of Industry and
Security (BIS) for supplying and attempting to supply U.S. airliners to Mahan
Airlines of Iran. The Department of Justice also agreed to a $2 million
criminal penalty
settlement. Companies
must ensure that any business with embargoed/sanctioned countries is carefully
structured, and that “Chinese Walls” be implemented where necessary. Contact
Charles Ballard with questions.
ORIGIN MARKING RULING
In a recent ruling reminding
importers of the need to closely monitor Customs and broker communications,
Customs found that although an importer had not received a Customs issued
“Notice to Mark” in a timely manner, the company was still responsible for a
subsequent “Notice of Action” imposing a 10% marking duty because its broker had
received and signed the “Notice to Mark.”
See
HQ
H077355 (October 28,
2009).
PAIRED UP
The PAIRED (Port of Arrival
Immediate Release and Enforcement Determination) entry program, scheduled for
elimination on January 29, 2010, was granted a reprieve due to current
limitations with the Remote Location Filing (RLF) program. CSMS
#10-000026 (January 26,
2010).
SCREENING SUPPLIERS
A recent Wall Street Journal
article reminds
companies that they need to screen both imports and exports against denied party
lists. OFAC regulations prevent U.S. companies not only from selling products
to these companies, but also from buying products from them. In many cases the
denied party is not just the customer or supplier, but a bank, a freight
forwarder or other intermediary. Both names and addresses need to be
screened. Contact Sean Murray or Charles Ballard with questions on denied party
screening and establishing an effective management process.
TEXTILE TEAM VISITS
Customs
Textile
Production Verification Teams (TPVT)
visits
to 261 foreign factories for fiscal year 2009 identified a 60% error rate with
50 closed factories, 16 factories with evidence of transshipment, one refusal of
admission/documents, and 32 factories characterized as high risk. In addition,
11 factories were found in violation of FTA/Preference Programs, and 47 were
found to have insufficient documents to support FTA/Preference claims.
VOLUNTARY DISCLOSURES
The Bureau of Industry and
Security (BIS) has
posted
a detailed list of companies that submitted Voluntary Self Disclosures (VSDs)
for export violations in 2009. 17 companies submitted VSDs, with penalties
ranging from a high of 50% of what could have been fined to as little as 3%.
WHITE-COLLAR SENTENCING
The U.S. Sentencing Commission has
published Proposed Amendments to the Sentencing Guidelines that would reduce
penalties imposed on corporations related to criminal prosecutions if a company
has qualifying compliance programs and timely reports any potential criminal
violations to authorities. 75 Federal Register
3525
(January 21, 2010). Contact Sean Murray with questions on implementing,
reviewing, or enhancing import and export procedures.
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