Customs Law Pro

Pre-shipment Advance Notification

Wed, 13 Jan 2010 18:20:00 -0000

On November 24, 2008, Customs published in the Federal Register a 64 page notification of the long awaited implementation of the 10+2 rule. This refers to the two items of information regarding the cargo that must be supplied by the carrier and the 10 items of information that must be supplied by the importer at least 24 hours before lading of goods bound for the US. The information must be supplied via a Customs' approved electronic data interchange system and this will generally involve your Customs broker, who has access to the computer program. (The currently approved system for importers is ABI; for vessels, it is AMS.) The security filing is mandatory on and after January 26, 2010.

Landed, Duty Paid (LDP) and Delivered, Duty Paid (DDP) Terms

Tue, 29 Dec 2009 06:10:00 -0000

Customs is increasingly targeting LDP and DDP shipments. Such goods are sold by a foreign manufacturer or middleman, or through a US selling agent. They are imported by a US-based company, generally but not always an affiliate of the shipper or seller, and are usually drop-shipped to the customer. The import invoice amount is well below the price paid by the customer.

Customs is wary of such sale. It believes that they are often nothing more than a method of reducing duties by disguising the real sale price. It believes that the real sale, and the real value for duty purposes, is often not the price invoiced to the importer but rather that paid by the US buyer. To combat the practice, it often denies the importer the right to clear the goods, saying that only the true owner has the right to do so and in reality, title never passed to the importer. In other cases it seeks increased duties, based on the sales price to the final customer.
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One does have the right to structure transactions so as to minimize liabilities for duties. There are several ways to structure such sales and remain well within the limits of what has been approved as a matter of law, but the failure to carefully do so invites problems.

Consumer Product Safety Commission Requirements You Must Know

Wed, 23 Dec 2009 23:20:00 -0000

Administrative requirements under the Consumer Product Safety Improvement Act of 2008 (CPSIA) have been, for the better part of a year, promulgated, modified, and stayed at an unprecedented rate. Yesterday's absolute requirements and implementation dates may no longer be in effect; coverage may have been limited or broadened. Before continuing on an existing or embarking on a new program involving the purchase and sale of any covered item,it is imperative that you consult with counsel or other advisor to be sure you are up to date.

OVERVIEW

Products subject to Consumer Products Safety Commission (CPSC) rules, regulations, testing requirements, bans and standards and of those of other agencies that it enforces must be covered by a new certification of compliance. The categories of merchandise covered is broad, with those covering infants', children's and toddlers' products being particularly stringent. The law covers consumer products manufactured, both domestically and abroad, on and after November 12, 2008 but implementation has been repeatedly delayed for many products, most recently for a wilde variety of (but by no means all) products, per an announcement dated December 18, 2009, just about two months before the previously announced cut-off date. This certificate must "accompany" the goods at the time of importation or, for domestic goods, their introduction into commerce. The certificates must also be "furnished" to distributors and retailers by the importer or domestic manufacturer. The law requires the destruction of imports that are not covered by a certificate prepared before importation. Failure to furnish them to a distributor or retailer will result in equally onerous penalties. As having the certificate gives some protection to the distributors and retailers, they can be expected to demand them.

Customs Proposes New Auditing Techniques

Sun, 25 Oct 2009 21:18:39 -0000

Customs and Border Protection announced on October 22rd that it can opt to employ sampling techniques during its audits in order to determine if there are any deficiencies in Customs declarations or if there are duties (and penalties) owing. The new proposed regulations for the most part embody existing practices. For example, they allow for offsets against duty underpayments for overpayments uncovered during the course of an audit, but regulations or not, this allowance has been in effect by statute since 2002. Major changes are that once a sampling technique is agreed upon by the importer, it will lose the option to request an entry-by -entry review should it later find that the sampling works to its disadvantage. Also new is the adoption of sampling for "prior disclosure." Under prior disclosure, penalties are eliminated or greatly reduced shoud an importer declare an underdeclaration before Customs initiates a fomal investigation into the matter. There had been no authority to allow offsets for overpayments in a prior disclosure.

The proposed regulations will allow for offsets, but only in the limited situation that they are based on a sampling technique that was previously proposed to and approved by approved by Customs No offsets are allowed in "prior disclosures" in other situations, as where an importer determines over- and underpayments on an entry-by-entry basis. In such cases, the only means available for the recovery of overpayments is though the protest procedure, and due o the short statute of limitations for filing protests, this avenue is often foreclosed.

New Declaration Requirement for Wood and Plant Products to Have Wide Impact

Tue, 31 Mar 2009 08:00:00 -0000

Within the 688 page âFarm Bill of 2008â which was passed in June, 2008,Â is a provision that requires importers to file a new formÂ covering the importation ofÂ wood, Â plants and products made with wood or plants.Â The declarition, which can be filed electronically, mustÂ list the species and country of origin of the plant or wood from which the product was made.Â Â The provision went intoÂ effectÂ on December 15, 2008 but enforcement has been delayed and will be in stages.Â The Department of Agriculture recently announce the first four inital phase-ins.Â All the items covered in these phases are classified in Chapeters 44, 47, 48 and 94 of the US Harmonized Tariff. Enforcement will begin May 1, 2009, with regard to products classified under the following tariff headings;

4401--FuelÂ wood
4403-- Wood in the rough
4404--Hoopwood, poles, posts, stakes
4406--Railway and tramway sleepers
4407--Wood sawed or chipped lengthwise
4408--Sheets for veneering
4409--Wood continuously shaped
4417--Tools, tool handles, broom handles
4418--Builders' joineryÂ

First Phase: UnitlÂ March, 2009,Â importers will at their option be allowed to file thee declaration.Â This periodÂ should be used as an opportunity to develop systems for obtaining and filing the required information.Â

SecondÂ Phase:Â Commencing September 30, 2009,Â declarations will be required for for plant and wood products that that are minimally processed or of less complicated composition such items as lumber, tools and wood carpentry;Â

Third Phase: Commencing March 31, 2010, filings will be required for the above plusÂ products that are more processed or complex, such as particleÂ board and wooden tableware.

Fourth Phase: CommencingÂ commencingÂ September 30, 2010, this phase covers the abbove plusÂ more highly processed articles, including paper, paperboard, and wooden furniture.

Agriculture has stated that declarations will not be required for goods covered by infomal entries, goods covered by carnets or imported under Transportation and Exportation entries,Â and goods cpvered by foreign trade zoneÂ and warehouse entries, among others.Â

Customs Seizures of Laptops Carried by Returning Travellers on the Rise

Wed, 22 Oct 2008 10:50:00 -0000

We have had several cases where returning businessmen (not women) and other travelers, especially those returning from Asia and Latin America, Â have been targeted by US Customs.Â They have had their laptop contents reviewed and had their laptops detainedÂ if Customs did not have the time to review themÂ on the spot or seized if CustomsÂ sawÂ that the laptop contained downloaded photograps of those who appeared to be minors.Â The number of seizures and detentionsÂ has grown to the point where, early this October, Â two Congressmen introduced a measureÂ to restrict Customs' ability to view content indiscriminately.

New Mandatory Security Requirements for Containerized Ocean Cargo

Thu, 25 Sep 2008 04:02:13 -0000

US Customs & Border protection announced that all maritime containers in transit to the US on and after October 15th must be sealed with a high securty seal that meets or exceeds the strength and durability standards set forth in ISO/PAS 17712. (ISO is the International Standards Organization). A copy of this standard can be obtained from American National Standards Institute, 25 West 43rd Street, New York, NY 10036.

Valuation

Thu, 25 Sep 2008 03:53:08 -0000

The âFirst Sale Ruleâ saves importers very significant duties when merchandise is purchased from a middleman rather than directly from the factory. It allows the goods to be appraised at the lower factory price and eliminates duties on the middlemanâs mark-up. The claim must be backed up with such documents as the factory invoice and proof of payment by the middleman to the factory. While the middleman might be reluctant to reveal its mark-up, this should be no problem where it is an affiliate of the importer or where there is a well established relationship with it.

Customs never liked this rule and accepted it only after two court cases forced it to do so. It is now reviewing this rule and is again seeking to overturn it. Even if it does so, a court challenge is likely. In any case, there is nothing to prevent an importer from claiming refunds on shipments imported before the yet-to-be effective date of the repeal, even if at the time of entry the higher middlemanâs price was used.

Wearing Apparel Quota

Thu, 25 Sep 2008 03:41:49 -0000

Quotas on the remaining categories of Chinese textiles and apparel that are subject to quantitative limitations and visa requirements are scheduled to end for all goods exported on and after January 1, 2009. As the year nears its end, you must be mindful of shipping dates. "Date of exportation" means the date the vessel or aircraft finally left the country of origin. Often the date on an airway bill or bill of lading precedes the date the aircraft or vessel left port. Also, given the definition of "date of exportation" may not be the date the ship carrying your goods left the port in which your goods were loaded, if it made another port call in the country of origin before heading overseas, the date it left that other port would be the date of exportation a call to another port in that country before heading overseas.

Curriculum Vitae

Mon, 22 Sep 2008 10:50:00 -0000

About Zelman & Associates

Zelman & Associates
Stephen M. Zelman, Esq.
888 Seventh Avenue
New York, NY 10106
Call: 1.212.245.6100
stephenzelman@gmail.com
Zelman & Associates is a New York based boutique law firm featuring principal attorney Stephen M. Zelman, who practices customs law and serves as a trade regulation consultant. He advises importers and others dealing with US Customs and other government agencies that regulate imported merchandise.