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Korea, U.S. Sign Mutual Recognition Arrangement at World Customs
Organization
CBP has signed a mutual recognition arrangement with the Korean
Customs Service at the 115f116th Session of the World
Customs Organization Council in Brussels, Belgium. The arrangement
aligns security standards in international trade partnership
programs, also known as Authorized Economic Operator programs,
critical to both countries.
"Opportunities to secure our borders are aggressively being
identified on an ongoing basis through our partnerships and
collaboration efforts. Building upon these relationships will be
at the forefront of our priorities and strategies," said CBP
Commissioner Alan Bersin.
The Korean Customs Service Commissioner Young sun Yoon, and
Commissioner Alan Bersin agreed to mutual standards in Korea's
Authorized Economic Operator program and the U.S.'s C-TPAT
program.
The arrangement recognizes compatibility between the Korean and
U.S. cargo security programs and acknowledges that KCS and CBP
will accept the security status of members of the other program.
Additionally, it will allow for closer collaboration between
agencies and greater benefits and common standards to the trade
community. This marks the fifth mutual recognition arrangement
signed by the U.S., with previous arrangements signed with New
Zealand, Canada, Jordan and Japan.
Mutual recognition is a key concept within the World Customs
Organization's SAFE Framework of Standards to Secure and
Facilitate Global Trade, established with the input of the
U.S. in 2005 to promote end-to-end supply chain security and
facilitation at a global level. Similarly, the integration of
border security and trade facilitation is an essential part of
Commissioner Bersin's vision for a layered risk management and
risk segmentation strategy, which extends security beyond our
physical borders.
The National Customs Brokers & FOIwarders Association of America.
Inc.
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Commissioner
Shares Trade Vision at CBP Conference
06/22/2010
 The
message was resoundingly clear when U.S. Customs and Border
Protection Commissioner Alan Bersin greeted attendees at the
opening of CBP’s fourth, national Trade Conference in Arlington,
Va., today. Trade is an integral part of CBP’s mission of keeping
America safe and strong.
The
Commissioner presented audience members with two propositions to
consider. The first -- “Trade is key to the national prosperity
and economic competitiveness of our country,” he said. “We cannot
see trade and security as being opposed to one another. We cannot
see the job of field operations as being divorced from the
national security requirements of economic competitiveness and
national economic prosperity.”
His
second proposition addressed facilitation. “Securing flows of
people and passengers and cargo and things is key to the success
of CBP’s integrated mission,” said Bersin. “Our function is to
keep dangerous people and dangerous things away from our homeland.
We need to do that in terms of time. The earlier we discover
things that we want to identify as being risky, the better off we
are, and the further away from our physical boundaries, the better
off our people will be as well.”
The
four-day conference, held from June 22-25, will bring nearly 200
CBP trade policy makers and field managers together to openly
discuss new and changing policies as well as the agency’s trade
vision for the future. Hosted by CBP’s Office of International
Trade, the conference, entitled “One CBP: Enhancing the Trade
Mission through Modernization, Enforcement, and Collaboration,”
will focus on CBP’s strategic goals for trade enforcement and
facilitation as well as modernization and collaboration efforts
that support the trade mission.
“For CBP to function as an effective and uniform agency, it’s very
important to bring our field personnel who implement our policies
together with our policy makers,” said CBP’s Assistant
Commissioner of the Office of International Trade Dan Baldwin. “We
need to make sure that we’re all talking with each other about
various issues and exchanging ideas,” he said. “There’s no better
way to do that than to bring everyone together so that they can
hear the same messages, have the same dialogue, and understand the
same issues at the same time.”
Nearly half of the attendees are directors and assistant directors
who work at CBP’s field offices and ports from around the country.
The value of our field personnel coming to Washington for the
conference is critical. “Having the opportunity to hear
Commissioner Bersin lay out his views, policies, and vision on how
we need to move forward cannot be replaced by memos, letters, and
emails,” said Baldwin. “The Commissioner’s remarks this morning
reverberated much stronger than any kind of e-mail message ever
could.”
More than 30 presentations and work-group discussions will be
featured during the four-day event. These will include discussions
on the direction of CBP’s trade strategy; new legislation, rulings
and regulations; interactions with other government agencies and
interagency requirements; specific facilitation and
enforcement-related issues; and the newest developments pertaining
to the Automated Commercial Environment also known as ACE.
“There are a lot of new things happening,” said CBP’s Assistant
Commissioner of Field Operations Thomas Winkowski. “There are a
lot of new policies that have been coming out and this conference
will give our managers an opportunity to meet face-to-face with
individuals at headquarters to ask questions and clarify policies
that in some cases are difficult to implement. Oftentimes, phone
calls, emails and conference calls aren’t sufficient.”
One
of the most groundbreaking presentations at this year’s conference
is on CBP’s “Five-Year Strategy for Intellectual Property
Enforcement.” An initial internal rollout of the strategy was
given today in advance of a public announcement that will be made
by the agency later this summer. CBP also has been working with
the White House on a joint strategic plan to combat intellectual
property theft that was announced today by Vice President Biden.
On
Friday, June 25, the final day of the conference, CBP will host
its first “Trade Day.” Members from the trade community will
discuss importing and exporting from a small business perspective
and improving trade facilitation from the industry’s point of
view. “We frequently have CBP officials attend large gatherings
with the trade community to tell them about CBP issues as well as
hear their views,” said Kim Marsho, CBP’s director of trade
relations. “But this event is unique in that we will have a large
audience of CBP headquarters and field personnel being addressed
by trade folks who will present to us their perspectives on what
CBP should consider doing differently.”
CBP’s last trade conference was held in 2008. “It’s been awhile
since we’ve had a good trade conference like this,” said Baldwin.
“This is a time for us to reengage, check back-in, and really make
sure that we’re accentuating the fact that trade is, in fact, a
priority mission for this agency.
Video:
Commissioner Bersin Gives Remarks at Trade Conference
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Customs Assists: importers get hurt by what
they don't know
CBP has for decades targeted importers looking for problems
with assists. And that trend has only escalated recently.
Most importers do not even realize that they have assists that
must be reported to CBP. This happens because importers do
not firmly grasp what an assist is. All this comes to a head
typically when CBP audits an importer or sends a request for
information. Then there is a mad rush to file prior
disclosures and to fix the problem, while shelling out large
settlement payments to CBP.
An "assist," is defined by statute as "materials, components,
parts, and similar items incorporated in the imported
merchandise" that is provided "free of charge or at a reduced
cost, by the buyer of imported merchandise for use in
connection with the production or sale for export to the
United States of the imported merchandise." 19 USC Section
1401a(h)(1). An "assist" might consist of, for example, design
or engineering work done overseas. The value of the assists is
subject to import duties pursuant to 19 USC Section
1401a(b)(1)(C). Pursuant to 19 CFR 152.102 an assist means
any of the following if supplied directly or indirectly, and
free of charge or at reduced cost, by the buyer of imported
merchandise for use in connection with the production or the
sale for export to the United States of the merchandise: (i)
Materials, components, parts, and similar items incorporated
in the imported merchandise. (ii) Tools, dies, molds, and
similar items used in the production of the imported
merchandise. (iii) Merchandise consumed in the production of
the imported merchandise. (iv) Engineering, development,
artwork, design work, and plans and sketches that are
undertaken elsewhere than in the United States and are
necessary for the production of the imported merchandise.
There are ways to avoid violations, including understanding
the regulations governing assists, meticulous record keeping,
careful coordination with suppliers, and sound communications
within the company.
By the way, did you know that 19 CFR § 152.103 (d) (2) allows
companies to depreciate the value of an assist? The
regulation states: "If the assist has been used previously by
the buyer, regardless of whether it had been acquired or
produced by him, the original cost of acquisition or
production would be adjusted downward to reflect its use
before its value could be determined."
GRVR Attorneys
info@exportimportlaw.com
www.exportimportlaw.com |
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Supreme
Court Rules on Liability for Inland Portion of Intermodal
Shipments
 The
Supreme Court issued a ruling June 21 that reversed two Ninth
Circuit Court of Appeals decisions concerning through bills of
lading, which allow cargo owners to contract for transportation
across oceans and to inland destinations in a single transaction.
The Supreme Court ruled 6-3 that the Carmack Amendment to the
Interstate Commerce Act of 1887, which governs the liability of
domestic rail carriers, does not cover damages to cargo during the
inland leg of an international intermodal shipment moving under a
through bill of lading issued by an ocean carrier where no
domestic bill of lading was issued and the ocean carrier
subcontracted for rail transportation. Instead, such shipments are
covered by the Carriage of Goods by Sea Act, which regulates bills
of lading issued by ocean carriers engaged in foreign trade.
In the case at issue, an ocean carrier issued four through bills
of lading for goods to be shipped from China to inland U.S.
destinations. These bills contained a “Himalaya clause” that (a)
extended the bills’ defenses and liability limitations to
subcontractors, (b) permitted the ocean carrier to subcontract to
complete the journey, (c) provided that the entire journey is
governed by COGSA, and (d) designated a Tokyo court as the venue
for any dispute. The cargo was then shipped in the carrier’s
vessels to the U.S., where it was loaded onto a train. A
subsequent derailment along the inland route allegedly destroyed
the cargo.
When the ocean and rail carriers were sued for damages, a federal
district court ruled in their favor, dismissing the lawsuits based
on the parties’ Tokyo forum-selection clause. The Ninth Circuit of
Appeals reversed, concluding that this clause was trumped by the
Carmack Amendment. The Supreme Court overturned the appeals court
decision, stating that the Carmack Amendment does not apply to a
shipment originating overseas under a single through bill of
lading.
The Supreme Court’s decision explained that the Carmack Amendment
assigns liability for damage on the rail route to the receiving
rail carrier and the delivering rail carrier but that there was no
such entity in the shipment at issue. “Carmack applies only if the
journey begins with a receiving rail carrier that had to issue a
compliant bill of lading, not if the property is received at an
overseas location under a through bill that covers transport into
an inland location in this country,” the court said. “The initial
carrier in that instance receives the property at the shipment’s
point of origin for overseas multimodal import transport, not
domestic rail transport.” The ocean carrier in this case was not a
receiving rail carrier within Carmack’s definition of that term,
and the fact that it chose to use rail transport to complete one
segment of the journey under its essentially maritime contracts
“does not put it within Carmack’s reach.”
In addition, the court said, applying the Carmack Amendment to the
inland segment of an international carriage originating overseas
under a through bill of lading would undermine that law’s
purposes, which are premised on the view that a shipment has a
single bill of lading and any damage is the responsibility of both
receiving and delivering carriers. “Under the Ninth Circuit’s
interpretation, there might be no venue in which to sue the
receiving carrier,” the court noted. “That interpretation would
also undermine COGSA and international, container-based multimodal
transport: COGSA’s liability and venue rules would apply when
cargo is damaged at sea and Carmack’s rules almost always would
apply when the damage occurs on land. Moreover, applying Carmack
to international import shipping transport would undermine COGSA’s
purpose ‘to facilitate efficient contracting in contracts for
carriage by sea.’”
Copyright © 2010 WorldTrade Interactive, Inc. - All Rights
Reserved
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Companies Face Large Fines for Illegal Exports
The Department of Justice reported June 22 that a Colorado
corporation has been sentenced to forfeit $1 million and spend
five years on probation after pleading guilty to one count of
knowingly and willfully exporting defense articles without a
license. The company was charged with exporting to Turkey, South
Korea, China and Russia prisms and technical data related to
various optics used in military applications, which were
designated as defense articles on the U.S. Munitions List, without
having first obtained a State Department license or written
authorization.
Separately, the Treasury Department’s Office of Foreign Assets
Control announced June 22 that another company will pay a total
criminal penalty of $1.14 million as well as a fine of $860,000 to
settle charges that it exported oil and gas production equipment
for use in Sudan. The Sudanese Sanctions Regulations prohibit
certain exports to Sudan, including most transactions involving
the Sudanese petrochemical industry. As part of the settlement the
company pleaded guilty to one count of knowingly and willfully
facilitating the exportation of 16 multi-phase flow meters from
Venezuela to Sudan without first having obtained the required
authorization from OFAC. The company also accepted four years of
probation, agreed to institute a comprehensive economic sanctions
compliance program and agreed to initiate employee training as
part of that program.
Copyright © 2010 WorldTrade Interactive, Inc. - All Rights
Reserved
SHORTAGE of OCEAN CONTAINERS
Peter Tirschwell | Jun 18, 2010 The Journal of
Commerce Magazine - Commentary
There is a disturbing undercurrent in the chaotic scramble in Asia
for slot capacity on ocean container lines, at least for shippers:
a shortage of containers themselves. This threatens to prolong the
capacity squeeze beyond the period when everyone would presume the
return of laid-up capacity would bring vessel supply and demand
back into balance.
It’s a sign of a growing concern as summer begins, when the year’s
strongest volumes are just a few weeks away. And, although
container construction is rebounding rapidly from a virtual
standstill last year, unprecedented — and perhaps long-lasting —
market dynamics are emerging.
Box
manufacturing is not rebounding as quickly as demand would
warrant, in part because it appears skilled laborers in coastal
China, where virtually all containers are built, are not as
plentiful as they once were, possibly prolonging the period of
undersupply. More significantly, longer-term trends suggest even
more boxes will be needed to satisfy the same level of demand the
Asia-based trade lanes have seen in the past.
These developments include slow-steaming by carriers — which some
believe may persist as long as oil prices stay high — as well as
the extension of supply chains deeper into China and the
development of two-way trade in major markets that had been
heavily imbalanced.
In
an interview last month in Geneva, we asked Gianluigi Aponte, head
of Mediterranean Shipping, whether there is, in fact, a looming
container shortage.
Here is his full response: “I believe it’s true. I will give you
an example. When the dollar was very strong, we were carrying full
vessels to the States. But our ships were coming back to Europe
and Asia with very few full containers. We were repositioning
mainly empty containers. And so what is happening today is that we
carry, let’s say 3,000 containers to the States, and we come out
with 3,000 containers full. What happens when you do this is that
the 3,000 containers that you brought in, they go for discharge to
the client and they come back empty. And they go to another client
to be filled again and come back full. And then they are shipped
to the destination. When they get to the destination, they go to
the client, who has to break down the container and bring it back.
“So the idle time of the container in the States, if before it was
a week, now has become three weeks, and the same in Europe. So in
other words, where you needed, let’s say two containers, now you
need six containers. That is the reason why today there is a
shortage of containers, and this is worldwide. For example, China
was importing very little and exporting a lot in the past. Today,
they are still exporting a lot but they import a lot because the
country is starting to consume.
Add to this slow-steaming, which requires an estimated 5 to 7
percent more containers to carry the same amount of cargo, and
it’s clear that new operating dynamics are in play.
The pressure on manufacturers is building. Since the third quarter
of 2009, when factories began reopening after a year of
inactivity, 34 are reportedly now in production and will turn out
an estimated 1.9 million TEUs this year, more than five times last
year’s total but still less than the 2.6 million to 4.2 million
produced annually before the recession, according to a May 18
Nomura Securities report.
Given an expected 1.5 million TEUs of disposals (some believe that
estimate is high), Nomura estimates the global container fleet
will grow only 1.9 percent this year to 27.6 million TEUs. This is
against forecast cargo volume growth of 10 to 12 percent. Nomura
sees the global fleet growing just 7 percent in 2011. That sounds
like a shortage, and there are signs of that in the market, with
“sweeper” ships appearing with greater frequency at U.S. ports,
carrying away nothing but empties, and box lessors reporting
unheard of utilization levels of 98 percent.
“We’re trying to get every single container we can get our hands
on from the factories,” said John Maccarone, president and CEO of
San Francisco-based lessor Textainer.
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Maersk Expects Peak Season Container Shortage in Asia
Peter T. Leach | Jun 16, 2010 4:41PM GMT The Journal of Commerce
Online - News Story
Warns of surcharges up to $1,000 per FEU, $750 per TEU
Maersk Line is telling its customers to expect a shortage of
container availability for exports out of Asia lasting through the
peak season.
The
warning of shortages came in a notice to customers on the Web site
of the
Canadian International Freight Forwarders Association explaining
why the Danish carrier is imposing a peak season surcharge on the
Asia-Europe trade even though it has not yet officially announced
it.
“As
the peak season kicks in, we estimate that there will be a
significantly higher demand for liner transport coupled with a
shortage of equipment across the entire industry,” the Maersk
advisory said.
“There will simply not be enough containers available in Asia to
meet the demand for transported goods to Europe. There is a
substantial additional cost incurred from the many extensive
measures we have taken, and continue to take, to provide equipment
to our customers,” Maersk said in the note on the CIFFA website.
Asia-Europe Westbound Container Traffic: By The Numbers.
Maersk said the peak surcharge will enable it to recover the
higher costs caused by the increased volumes, including port
costs, equipment positioning costs and extra loaders.
The
surcharge, $750 per 20-foot equivalent container unit and $1,000
per 40-foot container unit, is scheduled to take effect July 15 on
westbound shipments to North Europe in response to a sharp
increase in traffic on one of the world’s busiest container
routes.
Maersk hasn’t officially announced the surcharges, but spokesman
Michael Storgaard confirmed details to Reuters in Copenhagen on
Friday.
Maersk said the surcharge is relatively higher on 20-foot units
than on 40-foot units because “there is a greater lack of 20-foot
units compared to 40-foot units. Consequently, the cost of
supplying the Asian market with 20-foot containers is
proportionally higher.”
The
surcharge, which is expected to remain in place through the third
quarter — traditionally the peak season for containerized ocean
shipments — comes on top of steep increases in ocean freight rates
since the beginning of the year. Rates for Asia-Europe cargo have
soared close to $4,000 per 40-foot container from just a few
hundred dollars in the depth of the 2009 recession.
Maersk said it is not trying to take advantage of the current
equipment shortage situation, but is adjusting prices in line with
seasonal demand.
“Pricing levels change in line with seasonal demand in many
industries, including services, travel and manufactured goods,” it
said.
“As an example, when you book a vacation in the middle of the peak
summer months, the price will be higher compared to off-peak
periods. In container shipping there are additional expenses to
scale a network for a peak volume flow compared to off-peak.”
Maersk, CMA CGM, MSC Restore Trans-Pacific Container Service
Peter T. Leach | Jun 23, 2010 The Journal of Commerce Online -
News Story
Three largest container lines add 39,000 TEU to trade lane for
peak season
With capacity tight and demand strong on the trans-Pacific trade,
the world’s three largest container lines are restoring a joint
service to the U.S. West Coast that they had suspended last
October.
Maersk Line, Mediterranean Shipping Co. and CMA CGM all announced
separately on Wednesday that they would put the vessel-sharing
agreement back into service as of July 10, adding a total capacity
of 39,000 20-foot equivalent units to the trade in time for peak
season.
The
service, which Maersk calls the TP2, MSC the Eagle Service and CMA
CGM the Yang Tse service , will consist of six 6,500-TEU vessels,
of which MSC will deploy three, Maersk Line two and CMSA CGM one.
The
VSA will cover the following port rotation on the eastbound leg:
The new TP2 service rotation will be Kaohsiung, Taiwan; Hong Kong,
China; Xiamen, China; Shanghai, China; Qingdao, China; and Long
Beach, California.
The
westbound rotation will be Long Beach, California; Kaohsiung,
Taiwan; Hong Kong, China; Xiamen, China; Shanghai, China; and
Qingdao, China.
The
first call of the joint service will take place on July, 10 with
the departure of the MSC Luisa from Xiamen.
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FMC Extends Capacity Fact Finding For Three Months
R.G.
Edmonson | Jun 23, 2010 The Journal of Commerce Online - News
Story
Commission to pursue fact-finding through peak shipping season
The
Federal Maritime Commission granted Commissioner Rebecca Dye a
three-month extension of her fact-finding into vessel capacity and
equipment shortages, putting off completion of a report until the
end of this year’s peak shipping season, The Journal of Commerce
learned.
Sources within the commission said the extension was granted in a
closed session Monday, when the fact-finding was due to be
completed. The investigation began in March after U.S. exporters
complained they were unable to secure containers and chassis, and
that carriers’ reduced schedules had curtailed vessel capacity.
The
issue also attracted congressional attention. Rep. Elijah
Cummings, D-Md., chairman of the House Transportation subcommittee
on Coast Guard and maritime transportation, led a hearing on March
17 at which FMC Chairman Richard A. Lidinsky Jr. announced the
fact-finding mission.
Cummings is scheduled to hold a follow-up hearing June 30.
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Oberstar Calls for Broad Ocean Shipping Reform
JOC
Staff | Jun 11, 2010 The Journal of Commerce Online - News
Story
House leader would end carrier antitrust immunity, impose new
shipper protections
Decrying ocean container carrier business practices, the head of
the House Transportation and Infrastructure Committee called
Thursday for the end of antitrust immunity for vessel operators in
the United States along with a wide range of new restrictions
aimed at protecting shippers.
Rep. James L. Oberstar said carrier actions including rapid
enactment of surcharges, bumping shipments from vessels and
refusing to carry certain containers have caused widespread
problems for retailers, costing them business as they try to
recover from the recession and driving up costs for American
consumers.
Oberstar’s strong statements at a shipping industry policy forum
raised the possibility that Congress could undertake the most
sweeping look at ocean transport regulation in more than a decade
and impose new restraints on how carriers operate in the market
and interact with their shipper customers.
“I
think we should end the antitrust immunity that allows the
carriers to talk to each other about rates, and if we replace that
with full competition there will be a real marketplace that would
see improvements in rates and service and delivery to consumers,”
the Minnesota Democrat told the annual Washington Freight
Transportation Policy Forum of the National Industrial
Transportation League.
Oberstar did not say he has prepared legislation, and there’s
likely little chance of drawing up and passing an ambitious new
bill in the short period left before this fall’s elections. But
his comments marked the strongest statement yet from a public
official about controversies that have roiled the container
shipping world since last year, from volatile swings in pricing to
widespread reports of “rolled” containers in Asia and complaints
from U.S. shippers of container shortages that are hurting export
opportunities.
Pointing to comments from shippers at a recent hearing in
Congress, Oberstar took aim at the broad state of the container
shipping business since last year’s downturn and detailed specific
areas he wants to address, including regulation of surcharges,
limits on vessel sharing agreements, and deeper Federal Maritime
Commission oversight of the basics of shipper-carrier contract
relations.
That includes, he said, a bar against “the practice of bumping and
rolling” containers, something shippers said has become especially
prevalent in Asia as demand for space to Europe and the United
States has far outstripped vessel capacity. Oberstar said new
barriers could be modeled on the protections airline passengers
have when they buy tickets.
“Aviation law prohibits airlines from engaging in deceptive
practices and overbooking a flight without providing compensation.
We need to protect shippers and consumers. We may have legislation
to direct the (Federal Maritime Commission) to prohibit such
deceptive practices,” he said.
He said he is particularly concerned with reports from some
shippers that some carriers have refused to board containers not
owned by the carrier. “e need network neutrality in ocean
transportation,” he said.
And he criticized the carrier surcharges that have increased
rapidly over the past year. “There are charges that are not
necessarily based on costs,” he said. “We have to clarify that
they have authority on such charges – do they provide notice in
advance of increases, are there explanations of the charges? There
has to be a process so shippers and consumers are not at a
disadvantage.”
Oberstar says new regulation could include restrictions on the
vessel sharing agreements that carriers have used to extend
services while spreading risk. “The European Union restricts VSAs
to 30 percent of the capacity in a single trade. That may be a
reasonable place to begin,” he said.
“The ocean carriers sold the world on just-in-time,” he said.
“It’s something they marketed and the shippers of the world
believed them. And now the carriers have failed to live up to that
promise.”
Congress has not broadly addressed ocean regulation since the
Ocean Shipping Reform Act of 1998, which brought a new measure of
deregulation to the industry following the Shipping Act of 1984.
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NCBFAA Works With Environmental Groups to Revise Lacey Act
After months of negotiation with environmental groups, agreement
has been reached on a number of changes to the implementation of
the Lacey Act. Some will require regulatory change; others will
require legislation. However, with over 54 diverse organizations
endorsing the change, that task may prove non-controversial.
The
document is linked to this article. Please see the
joint letter for details on the proposed changes.
NCBFAA
was among a small number of industry organizations that negotiated the
changes, focusing on areas particularly problematic for customs
brokers. While we have a great number of other objections to this
legislation, a surprise and hidden provision of the last Farm Bill, it
has been necessary to find areas of common agreement with the
environmental groups to expedite regulatory and statutory change.
The National Customs Brokers & FOIwarders Association of America. Inc.
FDA to Extend Information Collections on Cosmetics,
Prior Notice, Facility Registration
• Cosmetic Labeling Regulations – Cosmetic manufacturers, packers
and distributors must disclose information about themselves or
their products on the labels or labeling of their products. FDA
regulations require the label of a cosmetic product to (a) bear a
declaration of the ingredients in descending order of
predominance, (b) specify the name and place of business of the
manufacturer, packer or distributor, and (c) declare the net
quantity of contents of the product. In addition, the principal
display panel of a cosmetic product must bear a statement of the
identity of the product.
• Prior Notice of Imported Food – Prior notice for food, including
food for animals, that is imported or offered for import into the
U.S. must be submitted electronically using the Automated Broker
Interface of U.S. Customs and Border Protection’s Automated
Commercial System or FDA’s Prior Notice System Interface.
Information collected in the prior notice submission includes the
submitter and transmitter; the entry type and CBP identifier; the
article of food, including complete FDA product code; the
manufacturer, for an article of food no longer in its natural
state; the grower, if known, for an article of food in its natural
state; the FDA country of production; the shipper, except for food
imported by international mail; the country from which the article
of food is shipped or, if the food is imported by international
mail, the anticipated date of mailing and country from which the
food is mailed; the anticipated arrival information or, if the
food is imported by international mail, the U.S. recipient; the
importer, owner and ultimate consignee, except for food imported
by international mail or transshipped through the U.S.; the
carrier and mode of transportation, except for food imported by
international mail; and planned shipment information, except for
food imported by international mail. Any person with knowledge of
the required information may submit prior notice; thus, the
respondents to this information collection may include importers,
owners, ultimate consignees, shippers and carriers.
• Registration of Food Facilities – Domestic and foreign
facilities that manufacture, process, pack or hold food for human
or animal consumption in the U.S. must register with FDA.
Facilities are also required to submit updates within 60 days of a
change to any required information on its registration form and to
cancel its registration when the facility ceases to operate, is
sold to new owners or ceases to manufacture/process, pack or hold
food for consumption in the U.S.
Domestic facilities are required to register whether or not food
from the facility enters interstate commerce. Foreign facilities
that manufacture/process, pack or hold food are also required to
register unless food from that facility undergoes further
processing (including packaging) by another foreign facility
before it is exported to the U.S. However, if the subsequent
foreign facility performs only a minimal activity, such as putting
on a label, both facilities are required to register.
Registration is accomplished using form FDA 3537, which refers to
both the paper version of the form and the electronic system known
as the Food Facility Registration Module. Information required on
the registration form includes the name and full address of the
facility; emergency contact information; all trade names the
facility uses; applicable food product categories, unless most/all
human food categories or none of the above mandatory categories is
selected as a response; and a certification statement that
includes the name of the individual authorized to submit the
registration form. Facilities are also encouraged to submit their
preferred mailing address; type of activity conducted at the
facility; other food categories that are helpful to FDA for
responding to an incident; type of storage, if the facility is
primarily a holding facility; and
approximate dates of operation if the facility’s business is
seasonal.
Copyright © 2010 WorldTrade Interactive, Inc.
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10+2 Adds Up
R.G. Edmonson | Jun 28, 2010
The Journal of Commerce Magazine
Compliance with Customs’ ISF program runs smoothly, but penalties are
coming for shippers lagging behind
Six months after Customs and Border Protection moved to active
enforcement of Importer Security Filing rules amid suggestions that
the sky would collapse for many importers, the sky looks to be right
where it’s always been. In fact, says Richard DiNucci, director of
cargo control, the level of compliance with the regulatory program is
pleasantly high.
“I hate to say it, but it’s pretty boring. It’s gone pretty well,”
DiNucci said. “I know there are some out there who said this would not
work. We heard the ‘sky is going to fall’ scenario.”
But, he said, “We’re not sending out ‘Do Not Load’ messages left and
right. Containers didn’t start stacking up all over the world. The sky
did not fall; we never slowed things down.”
Directed for security purposes to improve information on goods coming
into the United States, Customs published the final regulations for
ISF, also known as the 10+2 rule, two years ago, ushering in a period
of adjustment and trepidation over compliance. It allowed one year for
importers to get on track for compliance before the agency would phase
in enforcement this year.
Under the rule, importers and ocean carriers provide 12 data elements
that are not on a ship’s manifest. Among the 10 importer data elements
are such details as the name and address of a foreign supplier, and
where their cargo is stuffed in containers. Customs says the
additional data helps identify shipments that are at risk for
tampering by terrorists.
DiNucci said Customs worked closely with the trade industry to craft a
rule that everyone can live with. That hasn’t kept importers from
feeling nervous about what comes next. Customs is still trying to
nudge importers into compliance, but it won’t be long before the
agency applies more force. DiNucci said Customs would begin to assess
liquidation damages on the most flagrant violators by the fourth
quarter of this year.
Importers remain concerned about the requirements and the potential
for disruptions to inbound supply chains. In a recent Journal of
Commerce Webcast on Customs penalties, half of the questions from the
audience were about ISF and the prospect
“The majority of importers are trying to make sure they comply. They
want to get an idea of what’s in store in the event that they have an
error,” trade attorney Robert Pisani said. He applauds Customs for its
extended efforts to educate traders and to work with them to correct
reporting problems.
Customs received more than 6 million filings in 2009, and some 4.8
million already this year. DiNucci said a big reason the ISF
implementation has gone so smoothly is that large-volume importers got
on board early. It took time for them to thread their import data
along many supply lines, but they got the job done. Critics complained
that ISF compliance would harm small and medium-sized importers, but
Customs has received ISFs from more than 150,000 importers, and most
of them are companies that may make a handful of entries each year.
Still, DiNucci said much of the credit for the acceptance for ISF goes
to large, high-volume importers that took some six months to gather
and organize data from a complex web of supply lines. “It’s a tribute
to them that they got it done. The large importers are also good
citizens. They know we did this for a reason,” he said.
Customs is sending warning letters to violators, Pisani said. If
importers don’t make the corrections Customs wants, the agency will
have a paper trail of infractions to justify the liquidated damages
claims.
“If you get a letter, it’s your wake-up call. You’re not doing your
filings, or you’re not doing them correctly,” Pisani said. “Like any
new penalty regime, there’s a track record on you.” He said one of the
biggest problems seems to be with mismatched data. Carriers file the
master bill of lading, but importers are sometimes slow to file house
bills that contain the security data. “It’s what’s needed to drill
down to find what the contents of a container are.”
DiNucci said non-vessel-operating common carriers that lack automated
manifest systems have had some trouble with timely filing, but ISF may
be the incentive they need to automate. The rule requires importers
and carriers to file 24 hours before a ship leaves port, but Customs
is being flexible about timeliness — within limits.
“We’re trying not to be overly bureaucratic about looking at the clock
and saying, ‘Uh-oh, it’s 25 minutes late!’ We’re trying to be
equitable and common-sensical about how we enforce the rules,” DiNucci
said. However, if importers linger two days, they have trouble.
This is not about penalties; it’s about getting the data to Customs so
they can improve their targeting,” Pisani said. “I think they’ve been
consistent in that message. So far, you’re not seeing a bunch of
liquidated damages going out because the January date passed. It’s a
measured approach that recognizes there are logistical hurdles to
overcome.”
Contact R.G. Edmonson at
bmongelluzzo@joc.com.
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CPSC to Begin Issuing Detention Notices
June
2, 2010 By: David J. Evan
On June 2, 2010, the Consumer Product Safety Commission (“CPSC”) along
with U.S. Customs & Border Protection (“CBP”) conducted a webinar
regarding CPSC notices of detention. To date, detention notices with
regard to alleged CPSC violations have been issued by CBP. CPSC
intends to take over this role and issue its own notices with more
detailed information starting on or about June 14, 2010. Below is a
summary of the presentation:
• Detention notices will be issued by a CPSC compliance investigator
or field officer.
• Notices will contain the following information:
o Description of the suspected violation;
o Relevant statute; and
o CPSC contact information
• Notices will be issued to the importer with copies to the customs
broker and CBP; importer can choose to receive the notice by email or
fax.
• Only the goods described on the detention notice will be detained.
• The importer will deal directly with the CPSC.
• The importer has 5 business days to provide information to resolve
the initial detention (e.g., provide test reports which support
compliance). Extensions will be granted on a case by case basis.
• Conditional Release - CPSC can allow conditional release under
Customs bond pending their investigation results. Conditional release
will be considered on a case-by-case basis, e.g., for goods which do
not present an imminent hazard. Merchandise cannot be distributed
during the release period. If conditional release is not granted,
goods will be kept at a CBP bonded facility pending resolution.
• CPSC’s goal is to resolve the detention within 30 days. However,
goods will not be deemed excluded if CPSC fails to make a
determination within 30 days. This is significant as the importer will
not be able to file a protest on the 31st day as is the case when
goods are detained by CBP.
GRUNFELD,
DESIDERIO, LEBOWITZ, SILVERMAN &KLESTADT LLP COUNSELORS AT LAW
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