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A COURT RECOMMENDS IMPORTERS OBTAIN RULING
APPEALS COURT RULES IN FAVOR OF DRAWBACK CLAIMANT
ATPA REFUND CLAIM PROCEDURES - DEADLINE 02/01/03
CAFTA-DR REFUNDS January 5, 2007
CARGO CLAIMS
CHANGES IN THE BANKRUPTCY LAW
CLASSIFICATION OF WATCHES & TRACTORS
CURRENCY AND MONETARY INSTRUMENT SEIZURES
CUSTOMS AMENDS ITS GUIDELINES FOR SECTION 1592 PENALTIES
CUSTOMS AMENDED ITS REGULATIONS FOR FDA RELATED LIQUIDATED DAMAGES
CUSTOMS BROKERS CAN LIMIT THEIR LIABILITY. UPDATE 10/5/98
CUSTOMS BROKERS CAN LIMIT THEIR LIABILITY
CUSTOMS CLASSIFICATION OF COSTUMES
CUSTOMS HAS APPEALED THE HMT SWISHER CASE TO THE SUPREME COURT
CUSTOMS HAS PUBLISHED A FINAL RULE THAT SWISHER TYPE CLAIMS FOR HMT (export) REFUNDS MUST BE FILED BY 12/31/2001
CUSTOMS HAS PUBLISHED ITS COMPLIANCE GUIDELINES FOR IMPORTS AFFECTED BY TRADEMARKS, COPYRIGHTS, AND PATENTS.
CUSTOMS ISSUES NEW GRAY MARKET REGULATIONS
CUSTOMS ISSUES NEW REGULATIONS FOR PETITIONS FOR SEIZURES, PENALTIES AND LIQUIDATED DAMAGES.
CUSTOMS ISSUE NEW REGULATIONS FOR THE EXPORTATION OF USED MOTOR VEHICLES
CUSTOMS ISSUES NEW REGULATIONS FOR PAYMENT OF HMT (Export) REFUNDS
CUSTOMS ISSUES NEW RULE ON TEXTILE MARKING
CUSTOMS IS WARNING OF THE PITFALL OF IMPORTING THROUGH THE INTERNET
CUSTOMS OFFERS OF COMPROMISE
CUSTOMS 1592 PENALTY CASES THAT WERE BANNED FROM THE CUSTOMS WEBSITE BY THE COMMISSIONER!
CUSTOMS PROPOSES DEFERRAL OF DUTY ON LARGE YACHTS
CUSTOMS PROPOSES DUTY REDUCTION ON FOOTWEAR ACCESSORIES
CUSTOMS RELEASES IT'S LATEST INFORMED COMPLIANCE PUBLICATIONS
DETAINED MERCHANDISE
DOES CUSTOMS OWE YOU?
DON'T MISS OUT ON YOUR DRAWBACK REFUNDS
DOUBLE DUTIES
DO YOU NEED TRADEMARK, TRADE NAME, COPYRIGHT OR PATENT PROTECTION AT THE BORDER?
DRAWBACK UPDATE CRITICAL 4/6/1999!
FDA IS PROPOSING NEW RULES ON THE IMPORTATION OF FOOD.
FILING PROTESTS FOR LOWER DUTY RATES
FMC NOT A PAPER TIGER!
FREEDOM OF INFORMATION ACT HAS BEEN AMENDED
GENERALIZED SYSTEM OF PREFERENCES (GSP) Update 7/9/99
GSP REFUND CLAIM PROCEDURES - DEADLINE 02/01/03.
HAVE YOU EVER BEEN BOTHERED BY GOVERNMENT SEIZURES?
HOW TO REDUCE YOUR CUSTOMS' CLAIM FOR LIQUIDATED DAMAGES
HOW TO SURVIVE A CUSTOMS AUDIT
IMPLEMENTATION OF THE ANDEAN TRADE DUTY CHANGES
Imported Plastic Soft Sided Coolers Should Be Classified Under HTSUS 3924.10
IMPORTERS/EXPORTERS CAN REQUEST CONFIDENTIAL TREATMENT FROM CUSTOMS
IMPORTERS WIN MAJOR CASE ON PAYMENT OF, "INTEREST"
JUDGE RESTANI FINALIZES HMT REFUND PROCEDURES CRITICAL 10/15/98!
LIQUIDATION DATES REMAIN CRITICAL FOR PROTESTS
MISCELLANEOUS TRADE & TECHNICAL CORRECTIONS ACT OF 2004
MORE PROBLEMS WITH CUSTOMS' PRIOR DISCLOSURES
MUST THE GOVERNMENT FOLLOW ITS OWN REGULATIONS
NEW GENERAL WAREHOUSE REGULATIONS
NEP / IMPLANT JURISDICTIONAL NIGHTMARE FOR CUSTOMS BROKERS
NEW HARBOR MAINTENANCE TAX CASE
NEW CUSTOMS GUIDELINES FOR CANCELLATION OF CLAIMS FOR LIQUIDATED DAMAGES
NEW CUSTOMS REGULATIONS FOR LARGE YACHTS
NEW FORFEITURE LAW TAKES EFFECT
NEW TRADEMARK MADRID PROTOCOLS
OVERPAYMENTS OF CUSTOMS DUTIES
PITFALLS OF A PRIOR DISCLOSURE TO U.S. CUSTOMS Update 7/9/99
PROTESTS SHOULD BE FILED FOR BUTT-WELDED PIPE FITTINGS.
RECOVERING SEIZED MONEY
REFUND OF IMPORT HARBOR MAINTENANCE TAXES
RELAXED IRANIAN TRANSACTION REGULATIONS FINAL
REPAYMENT OF IDENTIFIED DUTIES BY AN EXPORTER IS NOT A REBATE OF PRICE TO BE ADDED TO DUTIABLE VALUE
REVOCATION OF DRAWBACK PRIVILEGES
SHOULD YOU BE PAYING 100% DUTIES UNDER HTSUS SUBHEADING 903.02?. 4/30/03
TOO MANY INTENSIVE EXAMINATIONS?
THE NEW CUSTOMS' IMPORTER SELF-ASSESSMENT PROGRAM MAY ACTUALLY BE HELPFUL FOR IMPORTERS.
THE POWER OF FREEDOM OF INFORMATION ACT LITIGATION!
THE STONE CONTAINER DECISION IS THE LATEST NEWS ON HMT (EXPORT) REFUNDS.
TO CHECK ON THE STATUS OF YOUR HMT (EXPORT) REFUND CLAIM.
WHY THE GOVERNMENT CANNOT FORFEIT YOUR MONEY
WILL EXPORTERS RECOVER MORE THAN 2 YEARS OF HMT PAYMENTS?
WILL YOUR IMPORTED PRODUCTS BE AFFECTED BY THE BEEF/BANANA WAR?








DOUBLE DUTIES

If Customs doubles your dumping/countervailing duties for failing to file a certificate of reimbursement, file protests. This doubling is not based on a law or regulation but a letter from Commerce to Customs. Click
HERE to view letter.
CAFTA-DR REFUNDS

Customs issued a memorandum dated 01/04/07 extending the time beyond 12/31/06 in which to file retroactive claims/protests back to 01/01/04. For a copy of the memorandum click
HERE.
The power of Freedom of Information Act litigation!

If you need any information from the Government sue them. In our recent FOIA litigation we became aware that the Government spends $3 in storage charges for every $1 it collects for seized property. This is a powerful argument for an early release!
Details may be reviewed by clicking
HERE.

The new Customs legislation
Miscellaneous Trade & Technical Corrections Act of 2004

may be reviewed by clicking
HERE.

Imported Plastic Soft Sided Coolers Should Be Classified Under HTSUS 3924.10

In 1997 the U. S. Court of Appeals for the Federal Circuit ruled that plastic soft sided coolers should be classified under HTSUS 3924.10.50 at 3.4% [now 3924.10.40 at 3.4%]. Customs has been classifying them at HTSUS 4202.92.90 at 17.8% or 6307.90.9989 at 7% [now 6307.90.9889. SGI, Inc. v. The United States, 122 F. 3d 1468. If you are paying the higher rates you should be filing protests with Customs.

Should you be paying 100% duties under HTSUS subheading 9903.02?.

With the passage of the Trade and Development Act of 2000, Customs has been collecting 100% duties under HTSUS subheading 9903.02 since July 29, 1999. These duties are the result of the "Imposition of 'Beef Hormone Regime' Sanctions on Certain Member Countries of the European Communities." This Act provided authority for the United States Trade Representative to create a "retaliatory list" of imported products for which the 100% duties should be applied. Since the establishment of this retaliatory list, 2 problems have arisen. First, beginning November 26, 1999, the USTR is required to revise the retaliatory list every 180 days to rotate the products subject to the 100% duties. To date the USTR has not made a single revision to the retaliatory list. Second, the economic benefit of the imposition of the 100% duties is for the farmers and ranchers in the export beef industry. However, many of the products on the retaliatory list bear no relation to this industry.

It is strongly recommended that protests be immediately filed contesting the liquidation of entries under HTSUS subheading 9903.02. This issue is currently being pursued in the U. S. Court of International Trade. There may be several sources you can contact regarding this issue. As always, this firm will be pleased to provide any one with information on this subject.

3/23/2003 New Customs Regulation for Large Yachts, Click HERE.

Food & Drug Administration is proposing
new rules on the importation of food. Click
HERE and HERE. Feb 3. 2003

For information on the new Trademark Madrid Protocols click HERE. Dec. 18, 2002

For New General Order Warehouse Regulations, click HERE. Nov. 19, 2002

For implemtation Of The Andean Trade Duty Changes, click HERE. Nov 19, 2002

BE SURE TO REQUEST YOUR ATPA AND
GSP REFUNDS PRIOR TO 02/02/03.

For the ATPA procedures click
HERE,
and for GSP, click HERE.

8/7/02 THE NEW CUSTOMS' IMPORTER SELF-ASSESSMENT PROGRAM MAY ACTUALLY BE HELPFUL FOR IMPORTERS.
If an importer can get through the Customs' red-tape (application, etc.), the proposed benefits could make an importer's life much easier. For more information,
click here.

8/7/02 PROTESTS SHOULD BE FILED FOR BUTT-WELDED PIPE FITTINGS.
Customs is liquidating entries with a major increase in dumping duties for steel butt-weld pipe fittings imported from Thailand for the period 7/95 to 6/96. Protests should be filed against these increases.

5/9/2002 MUST THE GOVERNMENT FOLLOW ITS OWN REGULATIONS
As a member of the importing/exporting community, you know the Government forces you to follow every one of its regulations to the letter! But you also know that the Government is very lax in following its own regulations as though it doesn't care. Is there anything you can do to force them to right their wrong? One example of how a wrong was righted, click
HERE and read all about it.

4/10/2002 Does Customs Owe You?
Click
here. to find out about the latest drawback changes.

3/8/2002 A Court Recommends Importers Obtain Ruling
A federal court in New York has recommended, as does U. S. Customs, that importers obtain a ruling from Customs on their importing issues to insure they have exercised reasonable care. For more information, click
here.

03/08/2002 Refund of Import Harbor Maintenance Taxes
On April 18, 2001, the U S Court of Appeals for the Federal Circuit decided that importers could file complaints in the U S Court of International Trade for the refund of the Harbor Maintenance Taxes they paid on their ocean imports. For more information click
here.

3/8/2002 Recovering Seized Money
On February 28, 2002, Customs passed a final rule amending its regulatory procedures for recovering currency and other monetary instruments seized by the government. For more information click
here.

3/8/2002 Customs Classification of Costumes
The US Court of International Trade has decided that costumes,etc., are to be classified at a rate of 15.3% and not duty free as festive articles. Click
here for more information.

9/18/2001 To Check on the status of your HMT (Export) refund claim, click here.


9/01/2001 Customs has published its Compliance Guidelines for imports affected by Trademarks, Copyrights and Patents.
For more information
click here.

7/1/2001 Customs has published a final rule that Swisher type claims
for HMT (export) refunds must be filed by 12/31/2001.
For more information
click here.

4/6/2001 Customs amended its regulations for FDA related liquidated damages

On March 28, 2001, Customs amended its regulations for FDA related liquidated damages. For more information on the assessment of liquidated damages regarding imported merchandise that is not admissible under the Food, Drug and Cosmetic Act,
Click
HEREfor details

3/28/2001Customs Issues New Regulations For Payment Of HMT (Export) Refunds
Click here for details

12/9/2000 The Customs 1592 Penalty cases that were Banned from the Customs Website by the Commissioner!

On its website, Customs published a list of companies and the 1592 penalties they paid from 01/01/2000 to 06/30/2000. Almost immediately it was pulled from the website. Now the list has been published on this website.
Click Here. (note: You Must have Acrobat Reader installed on your machine to read this file. Click logo to download FREE Acrobat Reader). There is a very good a analysis of the 1592 Customs penalty statistics that were banned from the Internet; Click HERE.

12/9/2000 Customs is warning of the pitfalls of importing through the Internet. Click HERE.

10/31/2000 The Stone Container decision is the latest news on HMT (Export) refunds.

On October 5, 1998, the U.S. Court of International Trade ("CIT") ruled in Stone Container Corp. v. United States, No. 96-10-02366, slip op. 98-143, that exporters are entitled to refunds of more than two years of HMT payments. Department of Justice attorneys had maintained that Customs does not have to refund HMT paid more than two years prior to the filing of a refund lawsuit. The CIT disagreed.

The CIT ruled that the two year statute of limitations for filing a refund lawsuit did not run during the approximately 18 months (October 27, 1994 - May 7, 1996) it took the CIT to decide whether to allow a class action lawsuit, also filed by Katten Muchin & Zavis, to proceed. Baxter Healthcare Corporation v. United States, 925 F.Supp. 794 (CIT 1996). As a result of the ruling in Stone Container, the statute of limitations for filing a refund suit has been extended by as much as one and one-half years, depending on when an exporter filed suit. The CIT, however, declined to order refunds of more than three and one-half years of HMT payments, as urged by Katten Muchin & Zavis.

The precise effect of the Stone Container case on an exporter's refund lawsuit depends upon when an exporter filed its lawsuit. Lawsuits filed between October 27, 1994 and May 7, 1996 should result in refunds of HMT payments made from October 27, 1992 to May 7, 1996 because these lawsuits are deemed filed on October 27, 1994. Lawsuits filed between May 8, 1996 and May 7, 1998, should result in refunds of payments made on or after a certain date, which is derived by a three step calculation. First, count the number of days occurring between May 7, 1996 to the date the action was originally commenced. This figure represents the number of days that have expired under the two-year statute of limitations. Second, subtract that figure from 731 days (i.e., two years) to determine how much of the two year period remains. Third, subtract the remainder of the two year period from October 27, 1994 to determine the date on which the two year period began to run. For example, a lawsuit commenced on May 10, 1996 should result in refunds for payments made on or after October 30, 1992 (May 10, 1996 - May 7, 1996 = 3 days; 730-3=727; October 27, 1994 - 727 days = October 30, 1992). Lawsuits filed before October 27, 1994 and after May 7, 1998 are unaffected by the Stone Container case (i.e., the two-year rule applies).

Finally, exporters should note that the result in Stone Container does not alter the refund claim procedure established by the CIT earlier this year. Under that procedure, Customs will refund HMT payments made within two years prior of the filing of a refund lawsuit. Additional money owed exporters as a result of Stone Container will be paid after the Federal Circuit, and possibly the Supreme Court, review the recent CIT decision.

861756 (05628-00002-7)



9/20/00 Customs has appealed the HMT Swisher case to the Supreme Court

The HMT Swisher decision would have provided a method for refunding most of the HMT (Export) payments. On 09/15/00 Customs appealed this decision to the Supreme Court to prevent refunding these payments. I strongly urge any companies who have made HMT (Export) payments to file their 350 claims for refunds. For more information, click HERE, or contact my office.

9/13/00 Customs issues new regulations for petitions for seizures, penalties and liquidated damages.

Customs has issued new regulations for petitions for relief from penalties, seizures and liquidated damages effective 10/05/00. For my information, click HERE.

NOTE: Customs has issued no instructions as to CAFRA claims relating to their seizures!


8/18/00 New Forfeiture Law Takes Effect 08/23/00

The Civil Assest Forfeiture Reform Act of 2000 becomes effective 08/23/00. It will change the forfeiture procedures used by Customs and other Federal agencies. Some key points:

  • No bond need be filed to have the case shifted from Customs to the courts.
  • If a claimant is sucessful, the government may have to pay attorney's fees; costs; and, interest.
  • The burden of proof shifts to the government.
For more information click
HERE.

7/15/00 CUSTOMS ISSUES NEW RULE ON TEXTILE MARKING

In T.D. 00-44 the U. S. Customs Service has given notice that effective October 10, 2000 they will no longer apply 19 CFR 12.130(c) for purposes of country of origin marking of textiles and textile products. For more information, click, HERE.


7/15/00 CUSTOMS PROPOSES DEFERRAL OF DUTY ON LARGE YACHTS

Customs has issued a Notice Of Proposed Rulemaking to provide that yachts in excess of 79 feet which are imported to be displayed for sale at a boat show may have the duty deferred for 6 months. For more info

6/27/2000 CUSTOMS AMENDS ITS GUIDELINES FOR SECTION 1592 PENALTIES

Effective July 23, 2000, Customs has amended its guidelines for remitting and mitigating penalties assessed for alleged violations of 19 USC 1592. Customs usually claims that an importer is culpable of fraud, gross negligence or negligence. These guidelines are helpful in the administrative process. They may be found at www.customs.gov/news/fed-reg/notices/914507.htm..

6/16/2000 WILL YOUR IMPORTED PRODUCTS BE AFFECTED BY THE BEEF/BANANA WAR?

Because of the Beef/Banana war with the EU, the US will alternate retaliation against products imported from the EU with higher duties. To find out if your products will be affected, check the Commerce 301 Alert Service by clicking: HERE.

5/22/2000 NEW HARBOR MAINTENANCE TAX CASE

On May 18, 2000 the U S Court of International Trade decided that aircraft fuel withdrawn from a bonded warehouse for use in international flight is exempt from the payment of Harbor Maintenance Taxes. If you have been paying HMT on this bonded fuel, then protests should be filed for refunds. Citgo Petroleum Corp. v. United States.

5/15/2000 CLASSIFICATION OF WATCHES & TRACTORS

Customs has issued new compliance guidelines for the Classification and Marking Requirements for Watches & Clocks, Click Here for details.

Customs has issued new compliance guidelins for classifying Tractors (HTSUS 8701) versus Heavy Industrial Machinery (HTSUS 8429 & 8430), Click Here for details.

5/7/2000 RELAXED IRANIAN TRANSACTION REGULATIONS FINAL

Customs has announced new rules regarding the importation into the United States, from Iran or a third country, of the following goods of Iranian-origin is authorized:
    (1) Foodstuffs intended for human consumption that are classified under chapters 2-23 of the Harmonized Tariff Schedule of the United States;
    (2) Carpets and other textile floor coverings and carpets used as wall hangings that are classified under chapter 57 or heading 9706.00.0060 of the Harmonized Tariff Schedule of the United States.     
Click Here for Details

5/1/2000 CUSTOMS PROPOSES DUTY REDUCTION ON FOOTWEAR ACCESSORIES

Customs has determined that shoe accessories are not clothing accessories and, are thus, classifiable under subheading 6307.90.9989, HTSUS, which provides for "Other made up articles, including dress patterns: Other: Other:Other; Other: Other".     This proposed duty rate reduction is not yet effective while the comment period is open.  A final rule will be issued at the close of the comment period on May 26.  Click Here for Details

4/22/2000 NEP / IMPLANT JURISDICTIONAL NIGHTMARE FOR CUSTOMS BROKERS

Customs Brokers considering national permits need to consider issues of jurisdiction. When a Broker reaches out to a client in another state, proposing national entry processing or an "implanted" employee, absent specific contractual provisions the Broker becomes subject to the jurisdiction of the second and additional states.

Imagine this scenario: your office is located in California. You land that dream account, National Oven Importers, Inc. of New York and begin NEP in New York, Los Angeles, Chicago, Miami, and Houston. Your entry clerk misclassifies a product entering in New York, Customs penalizes the importer, and it files a claim against you in New York. Now you must appear there to defend yourself, or a default judgment, enforceable against you in California, may result. Then suppose Customs starts reviewing all entries you filed for the client, and finds the same error in Chicago and Houston. You are subject to suit in those jurisdictions as well. Are you ready for protracted litigation in three states with three different local attorneys?

Before you implant or propose NEP to a client, you should address the above.  We are ready to assist and ensure that only the forum most favorable to you is where you may resolve disputes.

4/15/2000 FMC NOT A PAPER TIGER!

Since January 1999, the Federal Maritime Commission has assessed $6,892,500.00 in fines and penalties against Steamship Lines, NVOCC's, and OTI Freight Forwarders for regulatory violations.

Eight assessments have been made against VOCC's, while another twenty two assessments were against Forwarders and NVOCC's.

1. NEW CUSTOMS PUBLICATION REGARDING FINES, PENALTIES, FORFEITURES AND LIQUIDATED DAMAGES:  PDF FILE: EMAIL US TO RECEIVE BY RETURN: YOU MUST HAVE ADOBE ACROBAT TO OPEN

2. A COMPREHENSIVE LIST OF PRODUCTS ON WHICH YOU SHOULD NOW HAVE US FILING PROTESTS, PENDING THE OUTCOME OF OFFICIALLY DESIGNATED "TEST CASES".  CLICK ON THE LINK TO THE LEFT.

3.  THE "ELUSIVE" TD 00 - 20 PUBLICATION REGARDING DEDUCTIONS OF OCEAN FREIGHT AND OTHER COSTS FROM CUSTOMS VALUE:       PDF FILE: EMAIL US TO RECEIVE BY RETURN: YOU MUST HAVE ADOBE ACROBAT TO OPEN

9/30/99 MORE PROBLEMS WITH CUSTOMS' PRIOR DISCLOSURES

On September 20, 1999 Judge Restani decided the case of United States v. Pentax, USCIT Slip OP. 99-98, http://www.uscit.gov/99-098.pdf. Pentax sought to avoid the imposition of Customs penalties by making a disclosure that it had marked its cameras as made in Hong Kong rather than China which was the country of origin. Customs claimed the prior disclosure was fraudulent and would not accept it. Again, the pitfalls of a prior disclosure which is not accepted, is providing Customs with all of the details of the alleged violations which they then turn around and use it against the importer. Furthermore, prior disclosures do not alleviate potential criminal violations.



8/6/99 APPEALS COURT RULES IN FAVOR OF DRAWBACK CLAIMANT

In this case, Texport, Inc. v. U.S., Appeal No. 98-1352, an issue arose as to whether the imported and exported products were commercially interchangeable for the purpose of the drawback law, 19 USC 1313(j)(2). The standard for determining a product to be interchangeable is from the prospective of a reasonable competitor. The court also ruled that the merchandise processing fee is eligible for drawback but not the harbor maintenance tax.



7/29/99 LIQUIDATION DATES REMAIN CRITICAL FOR PROTESTS

The U.S. Court of Appeals for the Federal Circuit in US JVC CORP v. U.S., (07/21/99), reaffirmed that, even if Customs makes a mistake and liquidates an entry where the Commerce Department has issued explicit instructions to suspend liquidations, if a protest is not filed within 90 days from the date of the mistaken liquidation, there will be no refund. JVC had deposited estimated dumping duties and Commerce ultimately decided no dumping duties were due and authorized the refund of the duties. Had Customs followed Commerce's instructions or had JVC filed timely protests it would have received the refunds with interest. JVC did not file protests innocently believing Customs would follow Commerce's instructions!

The court continues to require importers to check the bulletin notices at the customhouse to monitor liquidations. In this age of automation, this is an antiquated process which few if any follow. My suggestion is for any importer who is required to deposit estimated dumping and countervailing duties with Customs, to set these entries into a tickler system. Even if Customs mistakenly (wrongfully) liquidates a suspended entry, it will issue the Courtesy Notice Of Entries Scheduled To Liquidate (CF 4333A) for these entries. This Courtesy Notice wil indicate "This Is Not A Bill - No Action Required." However, the receipt of this courtesy notice for a tickled entry, should trigger the immediate filing of a protest against the wrongful liquidation!

Interestingly, on the flipside, if an importer is not required to deposit estimated dumping and coutervailing duties, or they are less than what Commerce ultimately determines, and, Customs has mistakenly liquidated the entry as entered, Customs will sue the importer for the duties owed even though the liquidation has become final.




7/9/99 GENERALIZED SYSTEM OF PREFERENCES (GSP)
UPDATED

The Generalized System of Preferences hase lapsed again. The new Customs procedures for claiming GSP should Congress pass new legislation may be found at the following link:

http://www.customs.ustreas.gov/news/fed-reg/notices/n914514.htm




7/9/99 THE PITFALLS OF A PRIOR DISCLOSURE TO U.S. CUSTOMS UPDATED

As the author has been preaching, beware the potential evils of making a prior disclosure to Customs. Isuzu attempted a prior disclosure which Customs apparently did not accept. Isuzu has now had to sue Customs in the U.S. Court of International Trade. There is a good article in the Journal of Commmerce on the Isuzu case at the following link: http://www.joc.com/issues/990706/p1age1/e50939.htm.

In theory, Customs encourages importers to voluntarily disclose any errors or mistakes they made on their entries as a way to avoid the imposition of penalties and seizures. 19 U.S.C. 1592(c)(4). The disclosure must be complete; it must be prior to the commencement of a Customs investigation; and, lost revenues must be deposited.

If an importer does not make a disclosure and Customs becomes aware of what it considers violations of the laws it administers, then the penalties can be quite severe.

However, the pitfalls of a disclosure can also have severe consequences. For example, if an importer makes a full and complete disclosure and Customs does not accept it as a prior disclosure, then the maximum penalties are not avoided and the importer has made a case for Customs on a, "silver platter".

If entries have been liquidated and become final and, an importer subsequently discovers additional duties should have been paid, then a real dilemma arises. The finality of the liquidation prevents Customs from billing for additional duties. However, Customs may try to collect the additional duties through a 1592(d) proceeding, claiming importer negligence or worse.

In making a prior disclosure regarding liquidated entries where the importer has exercised, "reasonable care" and it truly believes the loss of revenue was caused by a clerical error or mistake of fact, then an importer should be able to claim this, "defense" pursuant to 1592(a) (2) and not have to pay any duty. However, the, "law enforcement" mentality of Customs considers prior disclosures an admission of negligence, regardless of the representations made by the importer. Such a defense will prob- ably not prevail at the port level, may find support at the Customs Headquarters level, and, as a last resort, in the U.S. Court of International Trade, if the Department of Justice accepts the collection case.

There is an, "axiom" in Customs and reported court cases that any voluntary payments made to Customs, such as duty, penalties, liquidated damages, etc. will not be refunded no matter the lack of culpability of the person making the payment. The only sure method an importer has to defend his claim of inno- cence is not to make any voluntary payments but to pay only when forced to. The pressure to pay may be by a billing, penalty notice, seizure or other similar means at the disposal of Customs.

Probably the worst pitfall of a prior disclosure is one that is not accepted and leads to a criminal prosecution. While there is some current legal thinking that being pro active, prior disclosure, is the proper strategy, some times this can backfire.

While there may be occasions when prior disclosures are beneficial, such disclosures should be carefully considered.




6/23/99 HAVE YOU EVER BEEN BOTHERED BY GOVERNMENT SEIZURES?

There is a bill currently pending in the House, "The Civil Asset Forfeiture Reform Act", which is designed to curb the abuses of federal civil forfeiture cases. Any person who has ever been aggrieved by a civil seizure should support this bill. Additional information may be found at http://www.washingtonpost.com/wp-srv/politics/daily/june99/forfeit23.htm



4/16/99 CUSTOMS ISSUE NEW REGULATIONS FOR THE EXPORTATION OF USED MOTOR VEHICLES

Effective May 6, 1999 Customs is amending its regulations relating to the exportation of used motor vehicles. These regulations may be viewed or downloaded by CLICKING HERE.



4/2/99 CHANGES IN THE BANKRUPTCY LAWS

For an overview of the bankruptcy laws and references to the priority of Customs duties (section 507) in bankruptcy, CLICK HERE.



4/2/99 NEW CUSTOMS' GUIDELINES FOR CANCELLATION OF CLAIMS FOR LIQUIDATED DAMAGES

Customs has issued new guidelines for the cancellation of claims for liquidated damages. To view or download CLICK HERE.



3/24/99 CUSTOMS ISSUES NEW GRAY MARKET REGULATIONS

Among the changes, Customs will apparently permit gray marketers to enter potentially offending trademarked merchandise by removing or grinding off products' brand names. To view or download the changes, CLICK HERE.



2/26/99 CUSTOMS OFFERS OF COMPROMISE

Customs will consider offers of compromise under provisions of 19 USC 1617 and 19 CFR 161.5. Offers are to be made to the Customs Port Director where you are experiencing a problem. The offer must be accompanied by the amount of money you are tendering to settle the case. After Customs deposits your money the offer will be considered by the Commisioner of Customs. If the offer is accepted the case is closed. If the offer is rejected your money will be returned.

This procedure is a viable alternative to the "prior disclosure" procedures advocated by Customs. While prior disclosures have the promise of limiting your liabilities, they contain many traps for the unwary. A prior disclosure subjects you to criminal liability without any protection. It presents Customs with a case on a "silver platter." If Customs rejects the prior disclosure, you are stuck with the information you have provided, (see previous article, "PITFALLS OF A PRIOR DISCLOSURE TO U.S. CUSTOMS").

Offers of compromise provide a less expensive avenue to settle seizure, penalty and liquidated damage cases for amounts less than what is being demanded. Guidelines for settling cases are usually taken from the United States Attorney's Manual.



1/22/99 DRAWBACK UPDATE

If you are currently using the drawback privileges of Accelerated Payment and Waiver Of Prior Notice, then to avoid losing these privleges, you must reapply to Customs by April 6,1999 to continue these privileges or they will be lost. The Port of Los Angeles has prepared a "drawback privilege application letter" to simplify this process. This letter may be obtained from Customs or my office.

If you are not currently participating in the Customs drawback program, the following information may be of interest:

  1. Customs estimates that approximately $4 billion of duties available to be refunded to qualified drawback claimants goes unclaimed each year.

  2. Who may claim drawback?
    1. Importers
    2. Exporters
    3. Manufacturers who use imported materials
    4. Distributors
    5. Suppliers of consumable goods to international carriers

  3. What is drawback?
    Generally, duty drawback provides for a refund of 99% of duties paid on imported goods (or appropriate substituted goods)which are exported or destroyed.




12/24/98 REVOCATION OF DRAWBACK PRIVILEGES

For users of drawback, exporters and/or claimants, the Exporter's Summary Procedure, Blanket Waivers and Payment of Accelerated Drawback are privileges. As the Court of International Trade stated in the case, The Pillsbury Company v. The United States, these privileges cannot be summarily revoked by Customs and there is no authority to "suspend" the privileges. Pursuant to this court case and the new drawback regulations, Customs must give notice of its intent to revoke these privileges. The drawback claimant then has the opportunity to provide evidence as to why these privileges should not be revoked. This "second chance" is required by the Administrative Procedures Act.




10/5/98 CUSTOMS BROKERS CAN LIMIT THEIR LIABILITY UPDATE!

Section 648 of the Customs Modernization Act specifically precludes the Secretary of the Treasury from preventing brokers from limiting their liability to other persons in the conduct of customs business. This law revoked section 111.44 of the Customs Regulations.




8/30/98 JUDGE RESTANI FINALIZES HMT REFUND PROCEDURES

On 08/28/98 Judge Restani issued a final order on the Harbor Maintenance Tax refund procedures and claim forms to be used. Such claim forms for Phase I should be submitted by 10/15/98.




8/30/98 A REPAYMENT OF IDENTIFIED DUTIES BY AN EXPORTER IS NOT A REBATE OF PRICE TO BE ADDED TO DUTIABLE VALUE

The transactions in Century Importers, Inc. v. United States, USCIT Slip Op. 98-119 (08/17/98) went as follows: The exporter entered into a, "Side Letter Agreement" with the parent importing company that it would reimburse the duty paid. One subsidiary of the parent importing company was the importer of record; another subsidiary paid the exporter's invoice price and duty; and, was subsequently reimbursed by the exporter for the duties paid. When the importer provided Customs with the "Side Letter Agreement", Customs added the reimbursed duties to the dutiable value claiming this was a "post-importation adjustment of price " which would not lower the transaction value. 19USC 1401a(b)(4)(B). The judge disagreed stating under 19 USC 1401a(b)(3)(B) the duty rebates did not have to be added to transaction value, (transfer price). Interestingly, his case was decided pursuant to a claim made pursuant to 19 USC 1520(c)(1).




8/13/98 DO YOU NEED TRADEMARK, TRADE NAME, COPYRIGHT OR PATENT PROTECTION AT THE BORDER?

If you do, let the U.S. Customs Service and the International Trade Commission act as your policemen! Attorney Clayton J. Joffrion has published an excellent article in the Florida Bar Journal on the procedures to follow in obtaining intellectual property protection for your products. This article is available by CLICKING HERE.




8/7/98 CURRENCY AND MONETARY INSTRUMENT SEIZURES

Frequently Customs Agents will seize currency and monetary instruments from unsuspecting travelers entering or departing the United States. Frequently this is because the travelers are carrying more than $10,000 and they failed to complete a Customs Form 4790. Usually Customs tries to forfeit all or most of this money. Now the Supreme Court, in United States v. Bajakajian, decided this type of forfeiture was excessive. All seizures should be immediately petitioned to recover all or most of the seized money.




7/17/98 HOW TO REDUCE YOUR CUSTOMS' CLAIMS FOR LIQUIDATED DAMAGES.

After you receive a claim for liquidated damages from Customs, you must follow the guidelines set forth in T.D. 89-48 and T.D. 94-38.

To view T.D. 89-48, (45,437 bytes) CLICK HERE.

To view T.D. 94-38 (121,223 bytes) CLICK HERE.




7/9/98 WILL EXPORTERS RECOVER MORE THAN 2 YEARS OF HMT PAYMENTS?

The Journal of Commerce reported on a case filed in the CIT which claims there are no limitation periods for the refunding of the HMT payments. If successful, it would seem that those exporters who file claims in the CIT would be entitled to refunds of ALL of their payments.

It is expected that our Government will vigorously oppose this new case by its august 1st deadline.

The article also quotes a spokesman from our Justice Department who basically said if the exporter's are stuck with smaller refunds it is their own fault!

Note: this article can be accessed by clicking on the Journal of Commerce website link at the bottom of this newsletter.




7/9/98 WHY THE GOVERNMENT CANNOT FORFEIT YOUR MONEY

If you import of export more than $10,000 in monetary instruments from the United States and you do not complete the Currency/Monetary Instrument Reporting Form (CF 4790), the government is prohibited from forfeiting most of this money for this violation. This law was laid down by the Supreme Court on June 22, 1998 in the case, United States v. Bajakajina, 118 S. Ct. 2028. If the unreported monetary instruments are not the instrument of any other criminal activity, at most the government may keep only a very small percentage of the unreported monetary instruments. Note: the CF 4790 is a downloadable form from the customs website.




6/26/98 CUSTOMS RELEASES IT'S LATEST INFORMED COMPLIANCE PUBLICATIONS

On June 23rd, Customs made 2 important publications available on the CEBB, "Rules of Origin" and "Records and Recordkeeping Requirements." Both of these publications must be read and incorporated into importing manuals by customs brokers and importers.




6/17/98 OVERPAYMENTS OF CUSTOMS DUTIES

Customs is now operating on a 314 day liquidation cycle instead of the old 90 day liquidation cycle. If an importer or customs broker believes it has overpaid duties on an entry, it can request an administrative refund of the overpayment prior to the date of liquidation. The claim may include clerical, classification and valuation issues. The claim must be submitted in triplicate with a cover letter stating, "SUPPLEMENTAL INFORMATION LETTER REQUEST FOR REFUND." One or more entries may be listed and supporting documentation is required.

For additional information see Miami Customs Information Bulletin No. 98-060.




6/17/98 GENERALIZED SYSTEM OF PREFERENCES (GSP)

GSP expires on 6/30/98 and there is no indication Congress will renew it prior to that date. Legislation may be introduced later in the year to renew GSP. Be sure to indicate "A" for your GSP claims to preserve your opportunity for refunds. Additional information may be obtained from the Coalition for GSP, 202-347-1041.




6/17/98 TOO MANY INTENSIVE EXAMINATIONS?

Are you concerned that Customs is subjecting your importations to excessive intensive examinations? This issue was addressed in Los Angeles Public Bulletin 95-058. An importer may file a, "Frequency of Examination" inquery with the Customs Port Director. This inquiry should contain information on the 11 areas set forth in the Public Bulletin. If there have been no discrepancies with your importations, this procedure should reduce the intensive examinations.




6/12/98 IF YOU ARE IMPORTING ANY OF THE FOLLOWING PRODUCTS
YOU SHOULD BE FILING PROTESTS FOR LOWER DUTY RATES


Prepared Tomato Products
Canned Tomato Products
Spray Dried Tomato Paste
Virola Plywood
Naptha
Succinic Acid Anhydride
Loungewear
Inks
Pearlescent Pigments
Zinc Sulfides Doped For Electronic Uses
Photoresist And Other Photographic Chemicals
Toner/Developer For Photocopy Machines
Leather-Trimmed, Plastic Coated Handbags, Attache Cases And Similar Articles
Handbags, Travel And Sport Bags
Metal And Plastic Presentation Bags
Jewelry Boxes
PVC Cosmetic Bags
Day Planners
Glass Products
Capillary Membrane
Needled Auto Underlay
Temasoft/Forsoft Sheets
Cotton Woven Trousers
Bottles, Jars,Pots, Preserving Jars, etc.
Screws & Bolts
Thermofirm Cooper Tube
Laser Slit Aluminum Foil
Power Takeoff Clutch/Brakes
"Interplak", Electric Toothbrushes
Computer Hard Disk Cartridges
Infrared Television Remote Controls
Articles For Handicapped Persons
Bicycles
Support Systems For Television And Professional Video Cameras
LCD Modules
Instruments Used In Medical Science
Pacemaker Leads, Programmers, Simulators, and Components
Ceramic Wall & Floor Tiles
Equipment for Bracery and Bone Growth for the Handicapped
Down Comforters With Outer Shell Of Cotton
Festive Articles
Tractor Loadeer Backhoes




6/12/98 DON'T MISS OUT ON YOUR DRAWBACK REFUNDS

Most exporters should be making claims for manufacturing and unused drawback to obtain refunds of duty - but don't overlook the following special areas fro drawback claims:

  1. Internal revenue taxes for flavoring extracts, medicinal or toilet preparations, (including perfumery, bottled distilled spirits, and wines.
  2. Imported salt used to cure fish and meat.
  3. Materials used in construction and equipment of foreign vessels.
  4. Merchandise used in repairs, overhaul, etc. of jet engines.
  5. Some imported packaging materials.
  6. Some merchandise shipped to V.I. and other possessions.
  7. Internal revenue taxes on unmerchantable liquor.
  8. Merchandise transferred to FTZ.
  9. Supplies on US vessels and aircraft and supplies/equipment used on foreign vessels and aircraft.




6/12/98 HOW TO SURVIVE A CUSTOMS AUDIT

If you are an importer, or you are an agent of an importer, the U.S. Customs Service expects you to be prepared to pass a Customs audit.

The best preparation is to make the Customs', "Checklist For Compliance" your internal company manual and to have a designated person in the office, responsible for compliance with this checklist.

The "checklist" is available from my office or CLICK HERE to obtain it from the official U S Customs Service Web Site.




CUSTOMS BROKERS CAN LIMIT THEIR LIABILITY

Prior to the effective date of the Customs Modernization Act, December 1993, customs brokers could not limit their liability to a client due to the broker's wrongful or negligent action pursuant to 19 C.F.R. 111.44. The Mod Act prohibits the Secretary of the Treasury from imposing this limitation on the brokers. Many brokers incorporate a $50 limitation per invoice they issue for the services they provide.




IMPORTERS/EXPORTERS CAN REQUEST CONFIDENTIAL TREATMENT FROM CUSTOMS

Section 103.31 provides a method for importers/exporters to request Customs to keep confidential their names, addresses and other information that might appear on inward and outward manifests.




CARGO CLAIMS

To Protect your shipments from loss or damage you should indicate the full value of the cargo on the bill of lading. Otherwise, if the claim is against a carrier you will face a per package limitation. If you do not want to declare the full value for purposes such as security, you should insure the cargo. High risk cargo may be subject to special conditions to be adequately covered by the certificate of insurance. For the ultimate security and collectability of a claim, the consignee should place the insurance, especially if title has passed to the consignee prior to shipment.





IMPORTERS WIN MAJOR CASE ON PAYMENT OF, "INTEREST"

Since December 8, 1993, the effective date of the Customs Mod Act, whenever duties are refunded for entries filed after that date, Customs is required to pay interest on the overpayment from the date of deposit of the estimated duties.

Now, Customs is required to pay interest on duty overpayments for entries, (and estimated duty deposits) filed prior to December 8, 1993. The U.S. Court of Appeals for the Federal Circuit ruled on July 2, 1997 in the case, Travenol Laboratories, Inc. v The United States, that 19 U.S.C. 1505(c) requires the payment of this interest from the date of the deposit of the estimated duties.

What is not known at this time is whether Customs and/or the U.S. Court of International Trade will agree to the pay- ment of this interest if no claim, protest or court case has been filed in a timely manner. If you are an importer of record who has received duty refunds it may be worth the effort to file a claim or court case to recover the additional duties on the refunds.





THE FREEDOM OF INFORMATION ACT HAS BEEN AMENDED

Since March of this year not only paper documents can be requested from the Government but also electronic documents. The amended Act also encourages more disclosure. As always, a prevailing party in a court proceeding for documents can request attorney fees and costs.




DETAINED MERCHANDISE

If Customs has not released your merchandise within 10 business days you may consider it to be detained. If your merchandise has not been released within 30 days, you may consider it to be excluded. You may then file a protest against the exclusion and if necessary proceed immediately to court to seek the release of the merchandise.