Written by Susan Kohn Ross For many months, the customs brokerage community has been expecting to see updates to the existing regulations. They finally came out in the Federal Register on June 5, 2020, see here. Comments are due on or before August 4, 2020. While much of what is in the proposed revisions is not controversial and fits nicely into CBP’s stated purpose to … Continue reading Customs Broker Regulations Update – What Was CBP Thinking?
Written by Susan Kohn Ross
The official Federal Register notice authorizing the duty payment deferral option has been published – please see here. The comment deadline expires on May 20, 2020.
We noted in our Alert below that CBP stated the decision about whether or not to defer payment of duty had to be made by 11:59 PM today. CBP has now clarified that is 11:59 PM Eastern Time, and the deadline refers to the April Periodic Monthly Statement.
Also, CBP is now saying if the 301 duty exclusion covers the entire entry, the entry is eligible for the duty payment deferral option.
Despite statements discounting the possibility, saner heads have prevailed and published late yesterday was an Executive Order issued permitting the Secretary of the Treasury to adjust the deadlines related to payment of duty. Executive Order re Duty Payment Deferral. On that basis, CBP announced a 90 day postponement of duty payment is possible. First, in CSMS 42423171, CBP made clear the option to postpone duty payment for 90 days exists for many entries filed in March and April 2020. However, if the entry involves antidumping duty, countervailing duty, and/or Section 201, 232 or 301 duties, duty payment deferral is not available. While not obvious from the publications available to date, if your goods are subject to a 301 tariff but you have an exclusion, CBP has verbally advised you are not eligible for duty payment deferral. Many more questions are likely and CBP is holding a second briefing with the trade community this morning. The first such briefing took place yesterday evening. During that briefing, CBP indicated the duty deferral decision had to be made before 11:59 p.m. tonight. This is understood to refer to duty payments due today, April 20, 2020. Make sure to consult with your customs broker, but do not be surprised if many are unsure about the application of this newly announced program, due to the timing of its rollout. Continue reading “CBP Authorizes Duty Payment Deferral”
On January 31, 2020, President Trump issued Executive Order 13904 (“EO”) entitled “Ensuring Safe & Lawful E-Commerce for U.S. Consumers, Businesses, Government Supply Chains, and Intellectual Property Rights.” It begins by stating that e-commerce is “being exploited by traffickers to introduce contraband into the United States, and by foreign exporters and United States importers to avoid applicable customs duties, taxes and fees.” The types of malfeasance cited are counterfeit goods, narcotics (specifically synthetic opioids, such as fentanyl), and other contraband, plus, of course, protection of the revenue. The focus of the EO is on express consignment operators, carriers, hub facilities, international posts, customs brokers and e-commerce platform operations (the “Regulated Parties”). Anyone who participates in the “introduction or attempted introduction” of parcels containing contraband can be held accountable with accountability taking the form of both civil and criminal consequences, as appropriate. The EO goes on to state that CBP’s suspension and debarment procedure will form the framework through which these actions will be carried out. Suspension and debarment apply in the context of doing business with the government, such as government contracts, subcontracts, grants, loans and other assistance programs.
With the ever-increasing scrutiny being brought to compliance and the payment of duties on imported goods by Customs and Border Protection (CBP), it is worth commenting that any duties which are due when an entry liquidates may, in fact, end up having to be paid even if the related protest remains pending due to the legal and contractual relationship between the importer and his surety company. Simply put, if a surety insists on receiving payment of any amounts demanded by CBP upon liquidation, the importer does not have any solid grounds to object. Why would the surety do so if a protest is pending? Because the surety is looking to mitigate its risk. If the importer does not pay, the surety will have to do so, at least up to the face amount of any bonds it has written, and sureties try their best not to be put in that position. Continue reading “Due Your Duty”
In July 2016, the Houston Regulatory Audit office sent a letter to a number of large importers cautioning them to be sure their value declarations were correct, underscoring CBP’s position by pointing recipients to a long list of CBP informed compliance publications, and touting the advantages of correcting any errors by way of a prior disclosure.
Now we see Round 2. In early October 2016, the Agriculture and Prepared Products Center for Excellence and Expertise (“Center”) sent a letter to many fruit and vegetable importers asking more value questions. Specifically, the Center wanted to know:
- Was the importer purchasing his goods or receiving them on consignment?
- Are the parties related?
- From which suppliers is the importer purchasing?
- From which suppliers are the goods received on consignment?
- If on consignment, how are the goods being valued at time of entry?
- Is reconciliation filed? If not, what actions does the company take to determine if the actual cost of goods is more or less than the value declared at time of entry?
It is this last question that ties right into the revenue collection role of Customs and Border Protection (CBP). Is CBP collecting the right amount at time of entry? If the value is too low at time of entry, it must be corrected. Similarly, if it is too high, it should also be corrected. Continue reading “Appraising Produce”