Importer Security Filing (ISF): Important Update, Time Sensitive
To our valued clients,
As you know the ISF program has been in effect since January 26, 2009 under an INTERIM Rule Period. The interim period has been allowed by CBP (Customs & Border Protection) to allow importers to organize their ISF programs and to file the information in a test period. This test period is coming to a close soon and effective January 26, 2010 the penalty phase of this program will begin. As of that date the ISF information must be electronically submitted to Customs no later than 24 hours before the cargo is to be loaded on board the vessel at origin. Failure to file timely and / or accurate information will result in Customs assessing penalties anticipated to be $ 5,000 per filing against the importer of record.
Earlier this year OCEANAIR contacted our ocean importers to obtain authorization to act as your filer of this information and to advise you of the information required. This was stage 1 of our plan. Stage 2 consisted of obtaining and filing the ISF information received for your transactions. This information was not always filed in what will be considered timely in January 2010, but has been filed to show a good faith effort by the importer. We are now entering stage 3 which will be detailed in the next paragraph.
Stage 3 began October 12 and continues. Stage 3 is the final shake down cruise so to speak. In stage 3 we are identifying the following: clients who have not provided ISF authorization; clients for whom filings are being done, but information is not being received in a timely manner. This email is being forwarded to all clients. Individual clients will also be contacted on a case by case basis.
Stage 3 — IMPORTER'S RESPONSIBILITY
Two documents are available on this web site:
The first is the authorization document — if you have not completed this document or if you are unsure and want to send again to be sure, please complete and send this form to 10+2questions@oceanair.net with the subject line — ISF authorization
The second form is the actual ISF information required form. It is strongly suggested that you review your list of known international suppliers and prepare of copy as a template for each of your suppliers who ship to you via ocean. Remember at this time this applies only to shipments arriving in the US by ocean. It is required for all ocean shipments. Your vendors should be required to complete this for every transaction. Remember that the liability and responsibility under the CBP Regulations make the importer of record liable for this transaction. It is up to the importer to be sure that the information is received by their authorized filer in time to meet the deadlines. The completed form is to be emailed to 10+2@oceanair.net This email address has been set up to receive the filings and is used to control the filings and record when received. It is very important that you instruct your suppliers to complete this and email a minimum of 3 business days prior to the vessel loading date. We have less than 100 days until full implementation and need your assistance. Various Customs attorneys have been advising importers to build this document and the instructions in to their purchase orders advising the vendor that failure to supply timely or accurate information which results in a penalty from CBP will not be tolerated and the penalty will be charged back to the vendor.
If you have any questions please direct them to our 10+2questions@oceanair.net address and your inquiries will be responded to promptly.
William J. (Bill) Connolly
Director of CHB & Customs Compliance
OCEANAIR
186A Lee Burbank Highway
Revere, MA. 02151
C-TPAT Certified
Direct Tel 781 560 1130
Fax 781 286 3095
Email bconnolly@bosoa.com
http://www.oceanair.net
Inbound Rate Increases
The busy trans-Pacific season may be weeks away, but rates and demand in the nation's largest import market already are taking a sharp turn upward.
Emboldened by surging imports and vessel space and equipment shortages likely to persist through October, carriers in the eastbound trans-Pacific ocean trade are increasing freight rates seemingly at will today, and they're filing for peak-season surcharges to take effect on Aug. 1.
Interviews with shippers and carriers suggest no U.S. importers are immune from the rate hikes, regardless of scale. Large retailers are seeing relatively modest rates for cargo moving under contract commitments, but containers beyond minimum volume commitments are facing higher rates.
And small shippers without space commitments are being hammered, paying rates well above $3,000 per 40-foot container to the West Coast and $4,000 to the East Coast — if they're even able to secure space and equipment. Cargo consolidators, known as non-vessel-operating common carriers, also are paying very high rates and passing them on to their customers.
The surge in spot market prices at the start of the summer, accompanied by building momentum in trade lanes that are a foundation of the U.S. consumer economy, signals a hectic peak season likely to stand in sharp contrast to slack importing business over the past two years. The spring contract season is supposed to bring order to pricing and service for the rest of the year, but many shippers say they have seen anything but order in the trans-Pacific market so far.
Some carriers are acting cautiously in dealing with their long-time customers, while others are raising rates indiscriminately, said Dave Akers, managing director of the Toy Shippers Association. But "every carrier is getting more money," he said.
Most shippers operate under confidential service contracts they signed with their ocean carriers in April and May. Although those rates vary widely, the spot rates for NVOs shipping a 40-foot container from Hong Kong to Los Angeles are easier to ascertain and indicate just how quickly rates are rising in the largest U.S. trade lane.
During the week of June 21, Drewry Shipping Consultants' Container Rate Benchmark for spot rates from Hong Kong to Los Angeles sat at $2,607 per FEU, the highest point in the benchmark's five-year history. That was the same as the previous week, but up from $2,193 in early June and almost triple the $921 carriers were charging during the week of June 14, 2009, on the way to a record low $871 last summer.
Export Haulage from UK to Cost More
Shippers and manufacturers exporting goods from the UK will have to pay more for haulage services or face being cut off, according to one leading logistics firm.
Phillip Jones, P&O Ferrymasters Commercial Director and Corporate Sales General Manager, told IFW its customers needed to be "re-educated" after the industry had been "turned on its head".
He explained that in the past, rates for eastbound exports from the UK only contributed to costs, with profits made on the westbound leg. But the situation had now changed and logistics firms are having "difficult" conversations with eastbound customers about rate increases.
Jones said the supply/demand balance was previously governed by the westbound leg, because volumes were stronger in that direction.
"The industry now needs to re-educate its customers and say 'the UK is pushing out more exports, so you need more trucks from the available capacity. Less trucks are coming into the UK, so your prices are going to go up'."
"Some customers have their head in the sand, refusing to accept it, using stalling tactics and trying to ring around and tell us we'll lose the business. But the consensus of opinion is that the market has changed dramatically in the last two months, with demand outstripping capacity and that means the end of the cheap days."
He added: "We do not want to get to this situation, but sometimes you have to take the customer right to the wire. A point comes where you have to say 'as of Friday, I will not position our trucks to load your goods'."
Jones said increases in steel volumes out of the UK were fuelling P&O Ferrymasters' export growth. Previously volumes from the Benelux countries and Germany heading to the UK had governed rates.
Wide-Ranging Textile Enforcement Bill to Be Introduced May 25
Reps. Larry Kissell (D-NC), Walter Jones (R-NC), John Spratt (D-SC) and Howard Coble (R-NC) will hold a press conference May 25 to announce the introduction of the Textile Enforcement and Security Act of 2010, which is being touted by the National Council of Textile Organizations and the American Manufacturing Trade Action Coalition as the first-ever textile-specific customs enforcement bill. According to an NCTO fact sheet, the legislation would provide the departments of Homeland Security and Justice with the necessary resources, authority and direction to enforce U.S. textile and apparel obligations. The fact sheet also includes a comprehensive summary of the legislation, provided below.
The bill is already generating controversy among the apparel trade in part because some of its provisions appear to be superfluous or excessively cumbersome while others raise legitimate legal questions.
Battery Rule Will Cost US $1Billion of Pain
Shippers, freight forwarders and airlines have reacted with anger and dismay to the latest ill-conceived proposed legislation from US lawmakers. Following on from the farce of the 100 per cent screening ruling, the industry is again set to absorb massive extra costs should the proposal become law.
Plans for new regulations governing the transportation of lithium batteries by air, threaten to take a heavy toll on airlines and cause severe headaches for shippers and forwarders.
This announced proposal exposes the complete lack of lobbying power associations such as IATA and TIACA have in the corridors of power — especially in the US. Once again the industry is having to fight for a more logical and workable solution at a late stage following the failure of its associations to influence government policy.
Belatedly, industry bodies as well as individual carriers and agents, are urging the US Department of Transportation (DoT) not to go ahead with its proposed rule changes, which aim to reclassify lithium batteries as hazardous cargo subject to hazmat regulations. "We see a danger that from the new rules significant operational and commercial problems could arise," declared a spokesman for Lufthansa Cargo. "The new regulation could result in that significantly fewer electronic goods — like cell phones, laptops and relevant accessories — could be moved by airfreight."
Copyright 2009 Air Cargo News, April 19, 2010 Edition. www.aircargonew.net Used by permission.
See also the European Union response to the DOT proposal. Attached above. It is VERY interesting. We hope someone in Washington is listening!
If you have any questions, please contact Harvey Waite at OCEANAIR at 781-560-1208 or cell at 617-335-7790.
DOJ Probes Allegations Against Panalpina, EGL
The U.S. Justice Department said it is pursuing allegations that freight forwarders Eagle Global Logistics and Panalpina provided unlawful kickbacks in the form of meals, drinks, tickets to sports events and golf outings to employees of Kellogg Brown & Root (KBR).
The agency has intervened in a whistleblower lawsuit against KBR, Panalpina Inc. and others that alleges employees of the two freight forwarders doing business with the companies provided unlawful kickbacks to KBR transportation department employees. KBR is the prime contractor under the Logistics Civil Augmentation Program (LOGCAP III) contract for logistical support of U.S. military operations in Iraq. The whistleblowers also allege overbilling by a KBR subcontractor in the Balkans, Wesco, under a military contract.
Eagle Global Logistics has since merged with TNT Logistics and become CEVA.
"The government will seek damages and penalties under the False Claims Act and common law, as well as penalties under the Anti-Kickback Act," the Justice Department said in a press release issued Wednesday. The United States has declined to intervene in the remaining allegations of the suit.
The lawsuit was filed in U.S. District Court for the Eastern District of Texas under the whistleblower provisions of the False Claims Act by David Vavra and Jerry Hyatt, who have been active in the air cargo business. The act allows a private citizen, or "relator," to sue on behalf of the United States. If the suit is successful, they may share in the recovery.
"Defense contractors cannot take advantage of the ongoing war effort by accepting unlawful kickbacks," said Tony West, Assistant Attorney General of Justice's Civil Division. "We are committed to maintaining the integrity of the Department of Defense's procurement process."
The United States previously intervened in and settled the relators' allegations that EGL included non-existent charges for war risk insurance in invoices to KBR for air shipments to Iraq, costs that KBR passed on to the Army. Two EGL employees pleaded guilty to related criminal charges. EGL paid the United States $4 million in the civil settlement.
The government also intervened in and settled the relators' allegations that EGL's local agent in Kuwait, a company known as Al-Rashed, overcharged it for the rental (or demurrage) of shipping containers. The United States resolved potential claims arising from that matter against EGL for $300,000. Finally, EGL paid the government $750,000 to settle the relators' allegations that the company provided kickbacks to employees in KBR's transportation department. Former EGL employee Kevin Smoot and former KBR employee Bob Bennett pleaded guilty to related criminal charges in federal court in Rock Island the Justice Department said.
That case, [United States of America ex rel. Vavra, et al. v. Kellogg Brown & Root Inc., et al., C.A. No. 1:04-CV-00042 (E.D. Tex.)], is being prosecuted as part of a National Procurement Fraud Initiative.
Trade Group Concerned About CBP Use of Requests for Information/Notices of Action
The American Association of Exporters and Importers wrote to U.S. Customs and Border Protection recently regarding CBP's use of forms CBP 28, Request for Information, and 29, Notice of Action. The group wrote that its members have raised two concerns: CBP declaring that the issuance of these notices precludes a prior disclosure, and language on these forms implying that a formal investigation is open when in fact that might not be the case.
For example, the letter stated, there have been recent instances where CBP has declared that the issuance of a CBP 28 and/or 29 should be interpreted by the importer that an investigation has begun, despite offering no proof that a formal investigation had been initiated, and has denied a prior disclosure on that basis. In addition, recent CBP 28s have been issued by the ports with language like "…failure to provide information could lead to penalties under 19 USC 1592" or "this office is investigating the classification of…." AAEI members have heard that CBP is pointing to this language to deny the benefits of a prior disclosure even though both of these statements are generic and do not necessarily mean that a formal investigation has been opened.
AAEI is therefore requesting that CBP:
Copyright 2010, Sandler, Travis & Rosenberg, P.A Originally published in the March 02, 2010 issue of ST&R's WorldTrade\Interactive (www.strtrade.com/wti/register.asp) Reprinted by permission.
CBP to Phase in 10+2 Enforcement
During recent NCBFAA webinars and a media conference call, U.S. Customs and Border Protection officials discussed the graduated, escalated enforcement approach CBP will take beginning January 26th, when it “fully enforces” the 10+2 interim final rule that requires Security Filing information from importers and additional information from carriers for vessel (maritime) cargo before it is brought into the U.S.
(The interim final rule was effective on January 26, 2009; however, it provided a one year delayed enforcement period (until January 26, 2010) to allow the trade to work through various problems and to come into compliance with the requirements.)
CBP Will Not Use Data Collected During Delayed Enforcement against Trade
CBP officials state that they will not use the data collected during the one-year delayed enforcement period against the trade, as it was given in "good faith." However, for those that did file during this period, it will remain a mitigating factor.
CBP to Look at Data from an Enforcement Perspective Starting January 26th
CBP will be doing an analysis of the Importer Security Filing data generated or lack of data submitted beginning on January 26, 2010 and will be looking at it from an enforcement perspective. Therefore, lack of filing or inaccurate filings after this date can be held against the filer when CBP moves towards stricter enforcement of the ISF requirements.
No Liq Damages for 1st Quarter; CBP to Issue Warning Letters, Work with Filers
CBP states that it will not be issuing any liquidated damages for ISF issues during the first quarter beginning January 26, 2010. CBP intends to use the first quarter to identify importers that are not filing and filers that are having issues with their ISFs.
During the first quarter, CBP will be issuing warning letters and/or calling the importers (and filers if separate) to communicate with them about what they are lacking or issues with their ISFs. This will put the trade on notice that their data has been reviewed in an "enforcement light."
If there are issues involved that require CBP to take specific actions for reasons other than ISF, such as smuggling or national security, CBP will move against those entities with the full penalty tools that it has in place. This includes placing shipments on hold, issuing do not loads (DNLs), non-intrusive inspections (NIIs), and conducting physical examinations. However, ISF stand-alone issues will not cause CBP to take such actions.
(CBP officials noted that the attempted terrorist attack that occurred on December 25, 2009 will have ramifications in both the passenger and cargo environments.)
Those Not Filing Will See Holds on Shipments in 2nd and 3rd Quarters
Moving into the second and third quarters, those that do not file will see holds on shipment, NIIs, document reviews, and/or physical examinations.
Liquidated Damages to Start in Third and Fourth Quarters
During the third and fourth quarters, CBP will take a much stronger enforcement approach. By the third and fourth quarter, the ISF data generated will be used and CBP will begin to issue liquidated damages claims. There will also probably be more frequent holds on shipments that should have an ISF but do not.
In addition, during these quarters CBP will begin to look at data accuracy as a key point and make sure that filers have bonded their ISF submissions appropriately.
Copyright 2010 by Broker Power, Inc publisher of "International Trade Today" (www.brokerpower.com). Reprinted by permission.
TSA Certified Cargo Screening Program Seminar
Proposed New Regulations for Lithium Batteries
DOT Looks to Tighten Requirements for Transportation of Lithium Batteries
The Department of Transportation's Pipeline and Hazardous Materials Safety Administration is proposing to amend the requirements in the Hazardous Materials Regulations on the transportation of lithium cells and batteries, including those packed with or contained in equipment, as follows. Comments on this proposal are due by March 10.
Link to Federal Register:
http://edocket.access.gpo.gov/2010/2010-281.htm
Copyright 2010, Sandler, Travis & Rosenberg, P.A. Originally published in the January 11, 2010 issue of ST&R's WorldTrade\Interactive (www.strtrade.com/wti/register.asp). Reprinted by permission.
Presidential Proclamation impacts Products from: Mauritania, Guinea, Madagascar and Niger
President's Proclamation No. 8468 Adds Mauritania, Deletes Guinea, Madagascar, and Niger from AGOA Beneficiary Countries Effective
(Source: http://edocket.access.gpo.gov/2009/E9-31097.htm) [Excerpts]
74 FR 69229-69230: Presidential Proclamation 8468 of December 23, 2009
-- To Take Certain Actions Under the African Growth and Opportunity Act By the President of the United States of America -- A Proclamation
(1) Section 506A(a)(1) of the Trade Act of 1974, as amended (the "1974 Act'') (19 U.S.C. 2466a(a)(1)), as added by section 111(a) of the African Growth and Opportunity Act (title I of Public Law 106-200) (AGOA), authorizes the President to designate a country listed in section 107 of the AGOA (19 U.S.C. 3706) as a "beneficiary sub-Saharan African country'' if the President determines that the country meets the eligibility requirements set forth in section 104 of the AGOA (19 U.S.C. 3703), as well as the eligibility criteria set forth in section 502 of the 1974 Act (19 U.S.C. 2462). …
NOW, THEREFORE, I, BARACK OBAMA, President of the United States of America, acting under the authority vested in me by the Constitution and the laws of the United States of America, including but not limited to section 104 of the AGOA (19 U.S.C. 3703), and title V and section 604 of the 1974 Act (19 U.S.C. 2461-67, 2483), do proclaim that:
Further, note 2(d) to subchapter XIX of chapter 98 of the HTS is modified by deleting "Republic of Guinea,'' "Republic of Madagascar,'' and "Republic of Niger'' from the list of lesser developed beneficiary sub-Saharan African countries.
IN WITNESS WHEREOF, I have hereunto set my hand this twenty-third day of December, in the year of our Lord two thousand nine, and of the Independence of the United States of America the two hundred and thirty-fourth.
(Presidential Sig.)
Copyright 2009 The NGC Ex/Im Daily Update published Wednesday December 30, 2009 Used by Permission
Congress Drags Feet-Chapter 99 Temporary Duty Reductions Will End
The below email concerning electing the date of entry for duty rate purposes, has major significance this year, due to the expiration on 01/01/2010 of almost all Chapter 99 tariff numbers with temporary duty reductions.
A. The Miscellaneous Tariff Bill with provisions to extend these hundreds of Chapter 99 tariff numbers now entitled to temporary duty reductions, will not be passed by either the House or Senate before the Christmas recess and passage of the MTB will have to wait until next year. Even when the MTB progresses next year, many products will only enjoy duty reductions rather than a full suspension of the duty.
B. H.R.4284 with provisions to extend for one year the GSP and Andean Trade Preference Act (ATPA) programs, has passed the House and is awaiting Senate approval. If passed and signed into law before 1/01/2010, this bill would:
CSMS# 09-000376 - Immediate Delivery at Year End
Tue, 22 Dec 2009 11:27:51 -0600
Automated Broker Interface
The Office of International Trade is issuing a blanket authorization for Immediate Delivery (ID) procedures for merchandise to be released on or after December 16, 2009 and until December 31, 2009, in accordance with 19 CFR 142.21(i). The authorization is offered to filers who may want to take advantage of the Harmonized Tariff Schedule changes, which take effect on or after January 1, 2010.
This blanket authorization does not apply to absolute quota merchandise and merchandise moved under an immediate transportation entry (type 61). Tariff rate quota merchandise previously authorized for ID release under 19 CFR 142.21(e) may still be released under ID; however, the entry summary shall be presented within the time specified in 19 CFR 142.23, or within the quota period, whichever expires first.
In those instances where the paper CBP Form 3461/CBP Form 3461(ALT) is used as the entry document and importers wish to elect ID, a line must be drawn through the word "ENTRY" on the document. ABI entry transmissions, including the "paperless" provisional message, will establish the desired entry date by using the estimated entry date in the summary transmission ("EI" transmission). This will identify the change from "Entry" to "Immediate Delivery" and will allow filers to elect a date of entry in order to take advantage of tariff changes or special programs. Under ID procedures, the Entry/Entry Summary must be filed within 10 working days after release. This blanket authority extends to shipments released December 16, 2009 through December 31, 2009 only.
No grace period will be granted for the purpose of timely filing ID entry summaries under this one-time allowance.
Questions regarding this policy should be addressed to Ms. Laurie Dempsey, Chief, Entry, Summary and Drawback Management at (202) 863-6509.
This service is provided to you at no charge by U.S. Customs and Border Protection.
Privacy Policy | GovDelivery is providing this information on behalf of U.S. Department of Homeland Security, and may not use the information for any other purposes.
U.S. Customs and Border Protection | U.S. Department of Homeland Security | Washington, DC 20528 · 800-439-1420
For affected Tariff numbers, see Chapter 99 at
http://www.usitc.gov/publications/docs/tata/hts/bychapter/0911C99.pdf
For further information, please contact Richard Somers or Bill Connolly at OCEANAIR 781-286-2700
FWS Fees to Increase on January 1, 2009
On December 2, 2009, the U.S. Fish and Wildlife Service (FWS) released a notice to the trade community regarding inspection fee increases.
On December 9, 2008, FWS published a final rule in the Federal Register revising certain sections of title 50 of the Code of Federal Regulations, part 14 (50CFR14), amending its user fee structure for inspections. The final rule mandated new fees for 2009 along with fee increases to be implemented each year through 2012.
The fees will be increased to the following amounts:
New overtime inspection fee will also be implemented.
The increased rates will take effect on January 1, 2010.
The full text of the FWS notice is attached and can also be accessed online at:
http://www.fws.gov/le/PubBulletins/PB120209UserFeeIncrease2010.pdf
December 10 ECCN changes due to Wassenaar Arrangements Implementation
DOC/BIS Amends EAR to Implement Wassenaar Arrangement 2008 Plenary Agreements
(Source: http://edocket.access.gpo.gov/2009/E9-28806.htm)
74 FR 65999-66027: 15 CFR Parts 740, 742, 743, et al.; Wassenaar Arrangement 2008 Plenary Agreements Implementation: Categories 1, 2, 3, 4, 5 Parts I and II, 6, 7, 8 and 9 of the Commerce Control List, Definitions, Reports; Final Rule
AGENCY: Bureau of Industry and Security, Commerce.
ACTION: Final rule.
SUMMARY: The Bureau of Industry and Security (BIS) maintains the Commerce Control List (CCL), which identifies items subject to Department of Commerce export controls. This final rule revises the Export Administration Regulations (EAR) to implement changes made to the Wassenaar Arrangement's List of Dual Use Goods and Technologies (Wassenaar List) maintained and agreed to by governments participating in the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual Use Goods and Technologies (Wassenaar Arrangement, or WA). The Wassenaar Arrangement advocates implementation of effective export controls on strategic items with the objective of improving regional and international security and stability. To harmonize with the changes to the Wassenaar List, this rule revises the EAR by amending certain entries that are controlled for national security reasons in Categories 1, 2, 3, 4, 5 Part I (telecommunications), 5 Part II (information security), 6, 7, 8, and 9; adding new entries to the CCL, revising reporting requirements and adding and amending EAR Definitions. The purpose of this final rule is to revise the CCL and definitions of terms used in the EAR to implement Wassenaar List revisions that were agreed upon in the December 2008 Wassenaar Arrangement Plenary Meeting. This rule also adds or expands unilateral U.S. export controls and national security export controls on certain items to make them consistent with the amendments made to implement the Wassenaar Arrangement's decisions. The Wassenaar Agreements that pertain to ECCNs 6A002, 6A003, and all related ECCNs will be implemented in a separate rule, because of the sensitivity of the items and complexity of procedures and controls for these items.
DATES: Effective Date: This rule is effective December 11, 2009.
FOR FURTHER INFORMATION CONTACT: For questions of a general nature contact Sharron Cook, Office of Exporter Services, Bureau of Industry and Security, U.S. Department of Commerce at (202) 482 2440 or E-mail: scook@bis.doc.gov.
For questions of a technical nature contact:
Category 1: Bob Teer, 202 482 4749.
Category 2: George Loh, 202 482 3570.
Category 3: Brian Baker, 202 482 5534.
Category 4: Joseph Young, 202 482 4197.
Category 5 Part 1: Joseph Young, 202 482 4197.
Category 5 Part 2: Michael Pender, 202 482 2458.
Category 6: Chris Costanzo, 202 482 0718 (optics), John Varesi, 202 482 1114 (sensors & cameras) and Mark Jaso 202 482 0987 (lasers).
Category 7: Daniel Squire 202 482 3710.
Category 8: Darrell Spires 202 482-1954.
Category 9: Gene Christensen 202 482 2984.
ADDRESSES: Comments regarding the collections of information associated with this rule, including suggestions for reducing the burden, should be sent to OMB Desk Officer, New Executive Office Building, Washington, DC 20503 Attention: Jasmeet Seehra, OMB Desk Officer, by e-mail at jseehra@omb.eop.gov or by fax to (202) 395-7285; and to the Office of Administration, Bureau of Industry and Security, Department of Commerce, 14th and Pennsylvania Avenue, NW., Room 6622, Washington, DC 20230.
[Remainder of item deleted by Update Editor.]
Dated: November 25, 2009.
Matthew S. Borman,
Deputy Assistant Secretary for Export Administration.
OCEANAIR Note: 4D003 may now require a license, no more TSR
Importer Focused Assessments and Quick Response Audits
The below article is a brief summary of Customs' Audit programs. For importers, Customs would initiate a Focused Assessment (FA)Audit. The most common compliance errors (FA) include lack of documentation to support entry claims such as free trade agreement eligibility or non-dutiable charges, valuation issues such as not declaring assists or commissions, and providing incomplete invoice documents that don't allow a classification determination. The above issues will be the main focus for Customs Trade Compliance during Fiscal Year 2010.
Importer Focused Assessments and Quick Response Audits
U.S. Customs & Border Protection (CBP) recently gave a presentation on their audit programs entitled "Single Issue Audits and Focused Assessments: How Audit Programs are Evolving and What You Need to Know to Prepare." The presentation was an overview of the two types of audits including Quick Response Audits and Focused Assessments.
CBP stated that for Quick Response Audits (QRAs):
CBP stated that for Focused Assessments (FAs):
CBP stated for both programs that best practices include (this listing is not all inclusive):
CBP also stated that they now conduct Supply Chain Security Observations (SCSOs) during FAs on non-participating C-TPAT companies, although an SCSO is not a part of the FA itself.
Further information on QRAs, FAs, and SCSOs may be viewed by visiting the CBP website at http://www.cbp.gov/xp/cgov/trade/trade_programs/audits.
State Dept. Issues New Guidance on Temporary Import Violations
The State Department's Directorate of Defense Trade Controls recently posted to its Web site a notice concerning temporary imports of defense articles. Such imports require the recipient to obtain a DSP-61 (temporary import license) or claim the exemption under 22 CFR 123.4. In order for the temporary import exemption to be claimed at the time of re-export, the article being returned must have been declared at the time of import on the appropriate U.S. Customs and Border Protection document.
DDTC states that it has seen an increase in the number of instances where a foreign person temporarily returns a defense article for repair or replacement without authorization to a U.S. person without the U.S person's prior knowledge. In this situation, the U.S. person is unable to coordinate the return and obtain the requisite DSP-61 license or claim the regulatory exemptions.
DDTC has therefore established the following new guidance regarding these unauthorized temporary imports and the subsequent exports to return the items. When this situation occurs, the U.S. person should investigate the nature and cause of the violation and determine if they had any responsibility for it. If not, then in lieu of submitting a separate voluntary disclosure the U.S. person can submit a DSP-5 license application to return the defense article to the foreign person. This application must be accompanied by a transmittal letter that (a) is signed by the empowered official, (b) explains the reasons why the applicant does not believe they have any responsibility for the violation and the steps taken to make this determination, (c) sets forth the identities and addresses of all persons known or suspected to be involved in the activities giving rise to the unauthorized temporary import, and (d) enumerates any measures taken to prevent a reoccurrence.
Copyright © 2009, Sandler, Travis & Rosenberg, P.A.. Originally published in the November 30, 2009 issue of ST&R's WorldTrade\Interactive (www.strtrade.com/wti/register.asp). Reprinted by Permission.
For any questions, please contact Harvey Waite at OCEANAIR Inc 781-2862700 hwaite@bosoa.com