Customs Brokers Would Get More Flexibility to Share Client Info under CBP Proposal

(World Trade Interactive)

Customs brokers would have more flexibility to share client information with other entities under a new proposal from U.S. Customs and Border Protection.

This proposed rule would allow brokers, with written consent from the client, to share client information with affiliated entities related to the broker so that they may offer non-customs business services to the broker’s clients. Brokers would also be allowed to use a third-party service provider to perform photocopying and scanning of client records, provided that the service provider enters into a non-disclosure agreement requiring it to keep confidential the contents and information contained in any records pertaining to the broker’s client.

Finally, brokers would be able to use a third-party messenger service for transporting and/or delivering client documents on the broker’s behalf if those documents are sealed so that the messenger cannot view, alter or amend them.

CBP states that these proposed changes are intended to codify its previously published rulings and to update its regulations to reflect modern business practices while protecting the confidentiality of client (importer) information. Comments on this proposal are due no later than Dec. 27.

Customs Chief Wants Better Broker Relations

(CSCB – Journal of Commerce)

CBP Commissioner Alan Bersin concedes working partnership ‘polarized’ over demands

U.S. Customs and brokers traditionally worked together in what Bersin called village atmosphere to facilitate trade and to ensure import duties were paid and contraband did not enter the country. However, the September 11 terror attacks changed that as the agency took the lead in fighting the potential for terrorist exploitation of the supply chain, straining relations with trade facilitators as requirements and restrictions mounted.

“The village has been polarized,” Bersin told the annual Western Cargo Conference of the Pacific Coast Council of forwarders and brokers in San Diego. Read more here.



 

Heating Boilers Made in Canada, CBP Rules

(World Trade Interactive)

U.S. Customs and Border Protection has issued a final determination concerning the country of origin of certain heating boilers that may be offered to the U.S. government under an undesignated government procurement contract. CBP issues country of origin advisory rulings and final determinations as to whether an article is or would be a product of a designated country or instrumentality for the purposes of granting waivers of certain “Buy American” restrictions in U.S. law or practice for products offered for sale to the U.S. government. Read more here.

U.S. Producers of Plastic Grocery and Shopping Bags Applaud Investigation and Conviction of Importers Engaged in Illegal Circumvention of Antidumping

(KansasCity.com)

Owners of a Chicago-area importer, S&P Plastics, Inc., were sentenced last month for their role in defrauding U.S. Customs and failing to pay antidumping duties on imports of plastic grocery and shopping bags (referred to as polyethylene retail carrier bags, or “PRCBs”) from China. Young Seung Shin and Peili Ding admitted to falsely declaring certain entries of shopping bags as not subject to an antidumping order on PRCBs from China. The two were sentenced to prison terms of six months and twelve months, respectively, and are subject to additional fines and forfeiture of $182,871 attributable to the lost duties. In addition, the government seized all containers of the bags at issue that had not yet cleared Customs.

These convictions arose out of a joint investigation by U.S. Immigration and Customs Enforcement (“ICE”) and U.S. Customs and Border Protection (“Customs”), and were conducted in conjunction with the U.S. Attorney’s Office for the Northern District of Illinois.

Joe Dorn, a partner at the law firm of King & Spalding and counsel to the PRCB Committee, an ad hoc coalition of U.S. plastic bag manufacturers, applauded the government’s enforcement efforts. “We greatly appreciate the dedication and hard work of ICE, Customs, and the U.S. Attorney in Chicago which resulted in these convictions and which demonstrate that illegal circumvention of antidumping orders on plastic bags will not be tolerated,” said Mr. Dorn. Read more here.

10+2 Rule Scores 80% Compliance

(Journal of Commerce Online – R.G.Edmonson)

Nearly 1,000 unmanifested containers identified since January

Customs and Border Protection said 80 percent of importer filings comply with the Importer Security Filing, or 10+2 rule, since enforcement began in January. The agency also identified approximately 1,000 unmanifested containers from vessel stow plans that carriers file. Such containers present the highest security risk.

The findings were noted in a report Tuesday from the Government Accountability Office, which added the comment that Customs needs to integrate the data it collects into its overall targeting strategy. GAO also said that under White House Office of Management and Budget rules, Customs should be more transparent in assessing how it put the ISF rule into effect. Read more here.

Trade Court Rules to Protect Brokers

(Journal of Commerce Online – R.G.Edmonson)

Customs may not revoke entry filer code without due process

Customs and Border Protection may not revoke a broker’s entry filer code without providing some form of due process, the U.S. Court of International Trade ruled on Monday.

USCIT Judge Richard K. Eaton ruled Customs officials in San Diego in October 2008 improperly deactivated customs broker Guillermo Lizarraga’s filer code for alleged “misuse” without stating the reasons, and giving him no chance to respond.

Brokers need the code to electronically file entries through the Automated Broker Interface in the Automated Commercial System. Ninety-six percent of all entries are made through ABI, so loss of the filer code effectively puts a broker out of business. Read more here.

Homeland Security Begins Work on Container Security Standards

(Logistics Today)

The U.S. Customs and Border Protection (CBP) is partnering with the Department of Homeland Security’s Science and Technology Directorate (DHS S&T) to develop performance standards – requirements that must be met by products to ensure they will function as intended – for container security technologies. CBP, which is responsible for container security, is constantly on the lookout for cargo containers that are being used to transport unlawful cargo, including weapons of mass destruction, illicit arms, stowaways, and illegal narcotics into the United States.

After successful completion of testing, S&T plans to deliver performance standards to DHS’s Office of Policy Development and CBP. DHS has conducted research and development for four container security technology projects, but has not yet developed performance standards for them. Read more here.

Customs Withdraws First Sale Proposal

(Sandler, Travis & Rosenberg, P.A.)

The formal notice withdrawing U.S. Customs and Border Protection’s January 2008 proposal to revoke the First Sale Rule will be published in [today’s] Federal Register. A copy of this notice can be found here.

CBP’s formal action withdrawing the proposed notice is directly related to our efforts. When this issue was brought to light a few months ago, our team acted immediately urging stakeholders on Capitol Hill as well as administration officials to insist that CBP formally withdraw its notice proposing elimination of first sale valuation. Read more here.

Brokers to Play Key Role in US Customs System

(Journal of Commerce Online – R.G.Edmonson)

Account management to aggregate data for business

Customs brokers will play a key role in getting small and medium sized businesses into a Customs and Border Protection account management system, Commissioner Alan Bersin told members of the National Customs Brokers and Forwarders Association of America on Monday.

Bersin said handling the imports of the United States as millions of lines of separate entries was an outdated practice that Customs must change.

“We have to aggregate this data and approach it in a simplified fashion, and that’s what management by account is intended to accomplish,” Bersin said. “It strikes me that the customs broker is absolutely critical in making account management available to small and medium-sized businesses.

“It’s going to require that we collaborate and figure out how the customs broker can help perform the aggregating tasks that will be required,” Bersin said. “It is a new set of responsibilities but I think your association recognized from the beginning that this is an evolving profession.” Read more here.

C-TPAT 2010 Partner Survey

(CIFFA eBulletin)

U.S. CBP has published a report of the results regarding their 2010 Member and Cost-Benefit Survey. The document can be downloaded here [164 pages].

CBP Continues to Ramp Up Enforcement with NAFTA-Related Audits

(Lexology – Arent Fox LLP)

Canada and Mexico are still account for a huge amount of imports ? over 25% of all imports entering the United States last year. And of course a large proportion of those imports are processed with claims that the product is eligible for NAFTA duty preference (zero or reduced duty rates and no mpf fees). Based on activity levels over the past year, it appears that Customs and Border Protection (CBP) is now more aggressively probing to see if those NAFTA claims are valid. For U.S. importers, this can mean some level of disruption to gather and present paperwork acceptable to CBP for past entries, as well as the potential for loss of NAFTA benefits (higher duty rates and mpf), enforcement actions, and penalties if NAFTA claims turn out to be incorrect or cannot be supported with sufficient backup to satisfy CBP.

Over the past few years, we have heard several pronouncements from CBP (as well as the Canadian and Mexican customs authorities) that more attention would be paid to verifying NAFTA origin claims. Anecdotal evidence indicates this has indeed occurred, with increased emphasis on validating NAFTA origin claims in a variety of ways. Read more here.

Customs Head Continues Ban on C-TPAT Eligibility For Non-Asset Based 3PLs

(Mark B. Solomon — DC Velocity)

CBP chief Bersin says agency’s C-TPAT resources are best allocated to companies with extensive international exposure, not 3PLs with primarily domestic operations.

U.S. Customs and Border Protection (CBP) has said it will continue its 17-month-long ban on allowing non-asset based third-party logistics service providers (3PLs) to join the Customs-Trade Partnership Against Terrorism (C-TPAT), one of the agency’s leading supply chain security initiatives.

In separate letters to a House lawmaker and to the Transportation Intermediaries Association (TIA), the group representing the 3PL industry, Customs Commissioner Alan D. Bersin, who took over CBP earlier this year as a recess appointment, laid out essentially the same message: that the agency’s C-TPAT resources are best allocated to validating companies with extensive international exposure, rather than to 3PLs whose operations are primarily domestic in nature.

Under C-TPAT, which was conceived following the 9/11 terrorist attacks, companies submit plans to CBP showing they have acceptable security measures in place across their supply chain. Those that pass a government audit receive expedited clearance of cargo entering U.S. commerce.

In January 2009, CBP denied eligibility to 3PLs that didn’t own any assets and who just did business in domestic U.S. commerce. Read more here.

US Immigration and Customs Enforcement Targeting Counterfeit Merchandise

(Fanhouse.com)

The NFL and other pro sports leagues are working with federal authorities to curb the flow of counterfeit products, the U.S. Immigration and Customs Enforcement (ICE) recently announced.

ICE agents based in New Orleans investigated vendors and confiscated more than 1,400 counterfeit hats, t-shirts and jerseys worth approximately $210,000. While most of the merchandise included faked NFL gear, counterfeit NBA, MLB and NASCAR products were also seized along with bogus Duracell batteries and John Deere products. Read more here.

Rumored Changes to Customs Valuation Treatment of Transfer Pricing

(Lexology – Arent Fox LLP)

Recently, word has spread in the importing community that US Customs and Border Protection (CBP) is contemplating changes to the way it interprets the customs valuation statute related to income tax transfer pricing rules for related party pricing, and more specifically, to compensating adjustments. These potential changes could affect the declared value of imported goods (and consequently the import duties/fees paid on those goods) for large companies with many related party sales according to a transfer pricing formula.

The overlap between customs valuation rules for imported merchandise and income tax transfer pricing rules for related party pricing has been debated in trade circles for at least the past decade. Multinational corporations (MNCs) must set transfer pricing policies in accordance with Section 482 of the Internal Revenue Code; and most major players have a bilateral Advance Pricing Agreement (APA) with the Internal Revenue Service (IRS) and a foreign income tax authority. Read more here.

Montreal Student Sues U.S. for Border Searches

(The Associated Press via CBC News)

Lawyers, photographers in lawsuit to stop searches without cause

Civil rights lawyers cited the case of a Montreal student Tuesday as they sued the U.S. government to try to stop authorities from examining the laptops, cellphones and cameras of international travellers without probable cause.

The lawsuit was filed in U.S. District Court in Brooklyn against the Department of Homeland Security, as well as U.S. customs and immigration authorities.

In May, a graduate student in Islamic studies at McGill University in Montreal was detained for several hours as his electronic devices were searched, the suit says. The encounter badly frightened the student, according to the suit. Read more here.

Related:
• ACLU files suit against suspicionless laptop searches at U.S. borders - Fierce Government
• Privacy watchdogs challenge laptop seizures at US orders‎ - Register
• Group sues Department of Homeland Security to stop laptop searches‎ - InfoWorld
• New lawsuit to challenge laptop searches at US border‎ - Washington Post

US-Bahrain Customs Meeting Held

(Gulf Daily News)

Customs officials from Bahrain and the US met to discuss ways to further enhance the capability of Bahrain Customs to effectively implement all the aspects of the US-Bahrain Free Trade Agreement (FTA).

The officials from Bahrain Customs and the US Department of Commerce, US Customs and Border protection officials attended programmes that were organised and funded by the Middle East Partnership Initiative under the Commercial Law Development Programme of the US Department of Commerce.

Phase I programme was conducted in Bahrain in June and phase II in Washington this month.

Phase I covered the overall aspects of “advance ruling”, which is one of the vital components of the FTA.

Phase II programme was an extension of Phase I and covered an in-depth understanding of all the specific sub-clauses of this aspect such as, valuation determination, regulatory audit, penalties, classification and determinations.

Further joint committee meetings are expected to be held between US and Bahrain officials soon.

Former Blackwater Firm to Pay U.S. Fine

(Nathan Hodge — Wall Street Journal)

Xe Services LLC, the private security firm formerly known as Blackwater, reached an agreement with the State Department to pay a multi-million-dollar fine over alleged violations of U.S. export-control law.

The agreement spares the firm from possible criminal charges over allegations that it violated arms export restrictions, and allows the company to continue doing business with the U.S. government.

Among other things, the company was said to have proposed a package to train and equip the armed forces of southern Sudan, which emerged as an autonomous region after a U.S.-brokered peace deal in 2005. McClatchy newspapers reported details of Xe's Sudan business aspirations, which were said to include a proposal to train a security detail for south Sudanese leadership and a more ambitious deal worth $100 million to train and equip the south's army. Xe was under scrutiny for other alleged export violations. Read more here.

Manufacturing Enhancement Act of 2010

(CBP)

CBP is announcing changes to the Harmonized Tariff Schedule of the United States (HTSUS) by the Manufacturing Enhancement of 2010.

Background:

The Manufacturing Enhancement Act of 2010, which was signed into law on August 11, 2010, sets forth changes to subchapter II, chapter 99 of the Harmonized Tariff Schedule of the United States (HTSUS), as amended. Goods listed in Titles I, II, and III of the Manufacturing Enhancement Act of 2010, entered or withdrawn from warehouse for consumption, on or after August 26, 2010 are afforded the duty suspensions or reductions listed in the Manufacturing Enhancement Act of 2010.

Title I of the Manufacturing Enhancement Act of 2010, added new duty suspensions and reductions to subchapter II, chapter 99 of the HTSUS. Titles II and III of the Manufacturing Enhancement Act of 2010, pertain to either existing duty suspensions and reductions or additional existing duty suspensions and reductions to subchapter II, chapter 99 of the HTSUS.

Action:

Goods listed in Titles II and III of the Manufacturing Enhancement Act of 2010, are provided retroactive benefits for merchandise entered or withdrawn from warehouse, on or after January 1, 2010 and before August 26, 2010. Notwithstanding section 514 of the Tariff Act of 1930, any other provision of law, US Customs and Border Protection (CBP) shall liquidate or reliquidate articles listed in Titles II and III in accordance with the Manufacturing Enhancement Act of 2010 upon a formal request filed with CBP. Liquidation or reliquidation will occur only if the request is filed with CBP within 180 days after the enactment of the Manufacturing Enhancement Act of 2010. The request must contain sufficient information to enable CBP to locate the entry or request a reconstructed entry if it cannot be located. The request must be made at the port of entry. Any payment of amounts owed by the Government pursuant to liquidation or reliquidation of an entry shall be paid without interest, not later than 90 days from the date of the liquidation or reliquidation. CBP is in the process of updating the Automated Commercial System (ACS) to reflect the provisions of the Act. And it is expected that these changes will be completed by the effective date.

The Manufacturing Enhancement Act of 2010, and applicable tariff numbers listed in Titles I, II, and III can be found here.

U.S. Department of Homeland Security’s first ever Private Sector Resources Catalog

(CBP)

I am pleased to announce today the release of the U.S. Department of Homeland Security’s first ever Private Sector Resources catalog.

The DHS Private Sector Resources Catalog allows our private sector partners to access to the resources the Department needs to help keep our country secure. Targeted specifically towards our private sector partners, this document collects the training, publications, guidance, alerts, newsletters, programs, and services available to the private sector across the department. Recognizing the diversity of the available resources as well as the continually evolving work of the department, this catalog will be updated regularly to publicize new resources and to increase private sector awareness.

You may download the catalog by visiting http://www.dhs.gov/xabout/gc_1273165166442.shtm. We encourage you to pass this message along to your colleagues, partners, and member organizations and have included a short sample newsletter item for your website, blogs, list serve and publications.

As you may be aware, DHS the Private Sector Office (PSO) coordinates active engagement between DHS and the private sector. PSO is always available to provide assistance or address your comments, questions, issues and concerns and can be reached at private.sector@dhs.gov, (202) 282-8484.

Sincerely,
Kimberly Marsho
Director, Trade Relations, Office of the Commissioner
U.S. Customs and Border Protection (CBP)
Tel: (202) 344-1440 Fax: (202) 344-4290 Kimberly.Marsho@DHS.GOV

FDA Product Code Changes for Tobacco Products

(CBP)

Due to legislative changes in the regulation of Tobacco products, FDA will be ending the following 3 product codes 30 days from the date of this message, which is being issued on August 17, 2010.

80M--SN Cigarettes (containing Tobacco)
80M--SO Tobacco, Cigarette (for use in making)
80M--SP Tobacco, Smokeless (cut, ground, powdered, or leaf intended to be placed in oral cavity)

They have been replaced by the following more specific product codes which are already active.