JAS Forwarding (USA) Inc.’s VP Compliance, Laurie Arnold and Compliance Operations Manager and NCBFAA Legislative Committee Chair, Leah Ellis, has diligently championed to help pass the Customs Business Fairness Act (CBFA) for many years alongside the National Customs Brokers & Freight Forwarders Association of America (NCBFAA).  In a significant victory for Customs Brokers the bill was included in a continuing resolution bill that passed both the House and Senate.  The CBFA has finally come to fruition.  “The CBFA bill has been a long-standing passion of mine to help prevent Customs Brokers from having to return customs duties when an importer has filed bankruptcy and at long last (20 years) this bill has passed and signed into law and I am very happy to have been a part of the march to protect the Customs Brokers of our industry,” said Laurie Arnold when asked for her reaction on the passing of CBFA.

The CBFA, a long-standing initiative of the NCBFAA, aims to protect customs brokers and their employees by advocating for changes in bankruptcy laws. The bill seeks to grant "subrogation" rights to customs brokers, allowing them to assume the priority rights of U.S. Customs and Border Protection (CBP) when importers file for bankruptcy. This would prevent payments made to CBP through customs brokers from being subject to preference payment recovery actions during the 90-day period preceding the importer's bankruptcy filing.

NCBFAA President Jose D. (JD) Gonzalez lauded the passage of CBFA, emphasizing its importance to the customs broker industry. He credited the dedicated efforts of the association's Legislative Committee leadership, Legislative Advisor Nicole Bivens Collinson, and member companies for lobbying lawmakers and pushing for the bill's passage.

Special recognition was extended to Rep. Andrew Garbarino (R-NY) for his role in championing CBFA in the House of Representatives. Garbarino reintroduced the bill at the association's request in 2023, garnering bipartisan support with 28 co-sponsors. NCBFAA expressed gratitude to its members for their engagement in advocacy efforts, including letter-writing campaigns urging Representatives to support the bill.

NCBFAA also acknowledged the contributions of individuals and organizations who worked tirelessly over the past two decades to advance CBFA. Past and current leaders of the association's Legislative Committee, along with former NCBFAA Legislative Representative Jon Kent, were recognized for their efforts. Additionally, the longstanding lobbying efforts of organizations such as the New York/New Jersey Foreign Freight Forwarders & Brokers Association, JFK Airport Customs Brokers and Forwarders Association, and International Trade Surety Association were highlighted as instrumental in the bill's progress.

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In a recent enforcement action at International Falls, Minnesota, U.S. Customs and Border Protection (CBP) officers intercepted over 7,800 lighting fixtures bearing counterfeit Underwriters Laboratories (UL) certification marks. These fixtures, as part of shipments from China and imported by a U.S. home design company, were deemed unsafe after inspection, raising concerns about potential fire hazards.

The seized lighting fixtures, among the cargo transiting from Canada into the United States, were inspected by CBP officers at International Falls, the busiest rail port in the country. Upon discovering the counterfeit UL certification marks, which falsely implied safety testing, CBP seized the shipments and initiated enforcement actions.

DeAnn O’Hara, CBP’s Fines, Penalties, and Forfeitures Officer for the area port of Pembina, North Dakota, highlighted the seriousness of the issue. "When U.S. consumers purchase a lighting fixture with a UL trademark on it, they are under the impression that the lighting fixture has been tested for safety. When Chinese manufacturers fraudulently place a UL trademark on untested fixtures, they are tricking consumers into buying a product that may not be safe and could start a fire in their homes," she explained.

CBP imposed fines totaling $100,000 on the shipments, in addition to seizing and destroying the lighting fixtures. This enforcement action underscores CBP's commitment to protecting the American public from unsafe and counterfeit products.

The seized lighting fixtures represent just one facet of CBP's broader efforts to safeguard public safety and enforce trade regulations. Beyond intercepting unsafe goods, CBP's Fines, Penalties, and Forfeitures Division (FP&F) plays a crucial role in adjudicating enforcement actions, ensuring compliance with laws, and facilitating the forfeiture process for seized items.

FP&F, comprised of a team of officers, paralegals, seized property specialists, and technicians nationwide, handles a wide range of cases, from drug seizures to intellectual property rights violations. The division follows a strict process with defined timeframes to ensure fairness and due process for all parties involved.

In addition to its enforcement duties, FP&F is instrumental in returning stolen property and cultural artifacts to their rightful owners. Recent successes include repatriating stolen artifacts to countries like Ukraine and Yemen, showcasing CBP's dedication to preserving cultural heritage and combating illegal trade.

While CBP faces challenges in keeping pace with evolving trade patterns and increasing volumes of shipments, its collaboration with other law enforcement agencies and commitment to public safety remain steadfast. As DeAnn O’Hara emphasized, "At CBP, we take the safety of the American public very seriously. That’s why we work so hard to remove unsafe products from the U.S. commerce before they can ever reach consumers."

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In a significant interception, U.S. Customs and Border Protection Officers (CBP) at the San Ysidro Port of Entry apprehended over $11 million worth of blue fentanyl pills concealed within a vehicle recently.

A staggering estimated 561,000 fentanyl pills, with a total weight of 123.6 pounds, were confiscated by CBP officers during the operation, highlighting the continuous efforts to curb the influx of illicit drugs across the border.

The interception unfolded around 8:20 p.m. when a 37-year-old man driving a 2008 sedan applied for admission into the United States from Mexico at the San Ysidro Port of Entry. A CBP K-9 unit, conducting routine pre-primary inspections, alerted officers to the glove compartment area, indicating potential narcotics present presence.

Following the canine alert, CBP officers proceeded with further examination, leading them to refer both the driver and the vehicle for comprehensive inspection in the secondary inspection area.

Upon meticulous scrutiny, CBP officers uncovered a startling discovery – a total of 100 packages containing blue pills meticulously concealed within the vehicle's dashboard and the front passenger seats. Subsequent testing confirmed the contents as fentanyl, a potent synthetic opioid known for its lethal potency.

Mariza Marin, Port Director for the San Ysidro Port of Entry, emphasized the gravity of the situation, stating, “Fentanyl is a very lethal drug that continues to be encountered along our southern border. I’m very proud of the exceptional work by our officers who skillfully interdict illicit narcotics on a daily basis.”

The apprehended individual was promptly handed over to the custody of Homeland Security Investigations for further investigation, while both the narcotics and the vehicle were seized by CBP officers as part of the operation.

This seizure is part of Operation Apollo, a collaborative regional effort involving federal, state, and local agencies aimed at combating the pervasive threat posed by fentanyl and other illicit synthetic narcotics. Operation Apollo underscores the commitment of law enforcement entities to safeguard communities against the devastating impact of drug trafficking.

For more information about Operation Apollo and ongoing efforts to combat the drug trade, interested individuals are encouraged to seek additional details through official channels.

The successful interception serves as a testament to the unwavering dedication of CBP officers in safeguarding the nation's borders and preventing dangerous substances from infiltrating communities.

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The U.S. Commerce Department’s Bureau of Industry and Security (BIS) announced significant revisions to the Export Administration Regulations (EAR), imposing stricter controls on exports and reexports to Nicaragua. This move comes in response to mounting concerns regarding human rights abuses perpetrated by the Nicaraguan government against its citizens and civil society groups, as well as its continued military and security cooperation with Russia.

The amendments, effective immediately, see Nicaragua being shifted from Country Group B to Country Group D:5, resulting in a more restrictive classification. Consequently, a stricter licensing policy will apply to items controlled for national security reasons, with the country now subject to 'military end use' and 'military end user' restrictions.

Under Secretary of Commerce for Industry and Security Alan Estevez emphasized the alignment of U.S. national security and foreign policy with its values, stating, "We will not allow peaceful trade to be diverted in ways that undermine our values and weaken our security." Assistant Secretary of Commerce for Export Administration Thea D. Rozman Kendler echoed this sentiment, highlighting the role of export controls in preventing U.S. technology from being misused to support human rights abuses.

This rule builds upon previous actions by BIS, including the addition of the Nicaraguan National Police to the Entity List in March 2023. It reflects ongoing efforts by the U.S. Government to restrict the availability of items subject to EAR to Nicaragua’s military and security services.

The move signifies a continued escalation in U.S. efforts to address the situation in Nicaragua, as international concern grows over the Ortega government's crackdown on dissent and violations of human rights.

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JASVP Compliance, Laurie Arnold attended the CBP Trade Facilitation and Cargo Security Summit in Philadelphia, PA from March 26 through March 28, 2024.  The US Customs Trade Facilitation & Cargo Security Summit in Philadelphia addressed updates on ACE 2.0, continuing education, and ecommerce.

Also, JAS’ own Scott Cassell, Corporate Compliance Project Manager attended the Commerce Department’s BIS Update Conference on Export Controls and Policy in Washington DC from March 27 through March 29, 2024.  A wide variety of topics related to US export controls were updated by members of the Commerce Department and related agencies involved in export controls.

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Every year on April 4th, carrot enthusiasts and food lovers alike come together to celebrate National Carrot Day. This humble vegetable, with its vibrant orange hue and crisp texture, holds a special place in the hearts and diets of people worldwide.

Carrots, scientifically known as Daucus carota, have a rich history dating back thousands of years. Originating in Central Asia, they were initially cultivated for their medicinal properties rather than culinary appeal. Ancient civilizations, including the Greeks and Romans, recognized carrots for their health benefits, particularly for improving eyesight.

Over time, carrots evolved from a medicinal herb to a staple ingredient in cuisines around the globe. From soups and salads to stews and desserts, carrots lend their unique flavor and nutritional value to a myriad of dishes. Their versatility in both savory and sweet recipes makes them a favorite among chefs and home cooks alike.

Nutritionally, carrots pack a powerful punch. They are an excellent source of beta-carotene, a precursor to vitamin A, which is crucial for eye health, immune function, and skin health. Additionally, carrots provide a healthy dose of fiber, vitamins C and K, potassium, and antioxidants, making them a nutritious addition to any diet.

National Carrot Day offers an opportunity to celebrate this underrated vegetable and explore its culinary potential. Whether enjoyed raw as a crunchy snack, roasted to caramelized perfection, or blended into a velvety soup, there are endless ways to savor the flavor and goodness of carrots.

Beyond their culinary appeal, carrots have also found their way into popular culture, appearing in folklore, literature, and even as beloved cartoon characters. Who can forget Bugs Bunny munching on a carrot as he outsmarts his foes?

In addition to indulging in carrot-centric dishes, National Carrot Day encourages awareness of sustainable farming practices and the importance of supporting local agriculture. Choosing organic, locally grown carrots not only ensures freshness and flavor but also reduces carbon footprint and supports small-scale farmers.

So, whether you're a devoted carrot connoisseur or simply looking to incorporate more vegetables into your diet, National Carrot Day provides the perfect opportunity to celebrate this crunchy and nutritious root vegetable. So grab a bunch of carrots, get creative in the kitchen, and join in the festivities on April 4th!

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On February 26, the Federal Maritime Commission (FMC) issued its long-awaited final rule for Demurrage and Detention Billing Requirements. The issuance and processing of detention and demurrage invoices by common carriers and marine terminal operators has long been a contentious issue in the logistics industry. The FMC deserves credit for taking this issue on and working to bring some standards to the process. The final rule will be effective as of May 28, 2024. Some of the key elements of the final rule are:

• A list of required minimum information that must be included on any invoice for detention or demurrage. If any of this information is missing, that will eliminate the obligation for the billed party to pay.

• An invoice for detention or demurrage must be issued by a billing party to either the consignee or the person for whose account the billing party provided ocean transportation or storage of cargo and who contracted with the billing party for the ocean transportation or storage of cargo.

• A billing party must issue a demurrage or detention invoice within thirty (30) calendar days from the date on which the charge was last incurred. If billed after thirty (30) calendar days, then the billed party is not required to pay.

• If the billing party is a non-vessel-operating common carrier (NVOCC), then it must issue a demurrage or detention invoice within thirty (30) calendar days from the issuance date of the demurrage or detention invoice it received. If the NVOCC issues an invoice after thirty (30) calendar days, then the billed party is not required to pay.

• The billing party must allow the billed party at least thirty (30) calendar days from the invoice issuance date to request mitigation, refund, or waiver of fees from the billing party. The billing party must then resolve such a request within thirty (30) calendar days of receiving the request or at a later date as agreed upon by both parties.

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Customs and Border Protection (CBP) recently released an update to its 1991 Directive 3510-004 – Monetary Guidelines for Setting Bond Amounts. The updated guide is entitled "A Guide for the Public: How CBP Sets Bond Amounts”. The new guide brings the previous directive up to date by amending many minimum bond requirements, adding information on bond activity codes that were not included in the earlier directive such as for Importer Security Filing bonds and Marine Terminal Operator bonds, and adding information on ACE eBond procedures.

A large tractor and agricultural equipment manufacturer agreed via a stipulated judgment to pay $2 million in penalties for falsely labeling wholly-imported replacement parts as “Made in the USA”. It was also agreed that the company would submit compliance reports and notices to the Federal Trade Commission (FTC) for the next 20 years. The FTC had initiated the proceeding against the company to enforce its Made in USA Labeling Rule. This rule states that for items to be labeled as “Made in the USA”, the final assembly or processing of the good, and all significant processing that goes into the good, must occur in the United States. Further, all or virtually all ingredients or components of the good must be made and sourced in the United States.

A Florida couple were sentenced to 57 months in prison and were ordered to pay over $42 million in forfeitures, as well as reimbursing the government for over $1.6 million in storage costs, after pleading guilty to conspiring to import plywood in violation of the Lacey Act and customs laws and conspiring to sell the illegally imported plywood. An employee of theirs was also sentenced to 3 years probation and ordered to pay a $3,000 fine. From 2016 to 2020, the couple, via several companies set up for the purpose, imported numerous containers of plywood products and falsely declared the species, country of origin and country of harvest to avoid paying antidumping and countervailing duties that had been instituted on such products from China in 2017. Some of the plywood was shipped to Malaysia from China and re-loaded in containers to appear to be of Malaysian origin. False Lacey Act declarations were then made upon entry into the U.S.

On February 12, Customs and Border Protection (CBP) announced in the Federal Register that the Global Business Identifier (GBI) Evaluative Proof of Concept (EPoC) will be extended to February 23, 2027. The test is also being expanded to include entries of merchandise classifiable under any subheading of the Harmonized Tariff Schedule and for merchandise of any country of origin. Previously, the test was limited to certain categories of merchandise from only 10 specific countries of origin. The purpose of the test is to evaluate a possible replacement for the Manufacturer Identification Code (MID). The MID is a code that is required to be submitted on all customs entries to identify the manufacturer or shipper involved. For the test, all or one of three alternative codes can be used to identify the manufacturer, shipper, and seller on entries. These alternatives are the nine (9)-digit Data Universal Numbering System (D–U–N–S®), thirteen (13)-digit Global Location Number (GLN), and/or twenty (20)-digit Legal Entity Identifier (LEI). All of these alternatives provide more detailed and specific information on the parties involved and would create greater visibility into supply chains.

The long negotiated United States initiative, the Indo-Pacific Economic Framework For Prosperity (IPEF), finally had one of its agreements enter into force on February 24, 2024. The Supply Chain Resilience Agreement was negotiated “to establish a framework for deeper collaboration to prevent, mitigate, and prepare for supply chain disruptions, such as those experienced in recent years from the COVID-19 pandemic”. The IPEF has 14 countries as participants - the United States, Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam. The first step in implementation of this agreement will be the establishment of three bodies, the Supply Chain Council, Crisis Response Network, and Labor Rights Advisory Board, with a goal of “identifying and notifying partners of each country’s list of critical sectors and key goods for cooperation under the Agreement by no later than 120 days after the date of the entry into force for each country”.

Recently at the Logan Airport in Boston, a passenger who was returning from the Democratic Republic of Congo had a suspicious piece of baggage screened. The passenger advised the Customs and Border Protection (CBP) Agriculture Officer on the scene that the baggage only contained dried fish. However, upon further inspection, the officer found four dead and dehydrated bodies of monkeys in the baggage. Minimally processed wild animal meat such as this is often referred to as “bushmeat”. Bushmeat can come from a variety of wild animals and can, therefore, carry numerous germs and viruses, such as Ebola, which can pose a significant heath risk. The bushmeat in this case, however, might not have been discovered if there was not another officer on the scene, CBP K9 Buddey! K9 Buddey is a part of one of the 180 canine teams that assist CBP officers at air passenger terminals, border crossings, cruise terminals and other locations. The CBP officer handlers and their canine partners undergo 10 to 13 weeks of intense training together before being deployed in the field. Beagles and beagle mixes are the preferred breed of dog for use as K9’s since beagles have a very keen sense of smell and have a gentle disposition towards the public. They are usually trained to alert handlers of contraband by sitting near or pawing at the offending baggage. Next time you see a K9 in action, salute them for their service, but hope that they do not come and sit down next to you…

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The Bureau of Industry and Security (BIS) released its Export Enforcement Review for last year stating that 2023 was the year with the highest number ever of convictions, temporary denial orders and post-conviction denial orders. Some of the actions taken that the BIS highlighted were:

• Imposed the largest standalone administrative penalty in BIS history – a $300 million penalty related to the continued shipment of millions of hard disk drives to a sanctioned entity even after other competitors stopped shipping due to the foreign direct product rule.

• Obtained a guilty plea from a program administrator for a NASA contractor who secretly funneled sensitive aeronautics software to a Chinese University, which was on the Entity List for its involvement in developing Chinese military rocket systems and unmanned air vehicle systems.

• Imposed a $2.77 million penalty on a 3D printing company related to its sending export-controlled blueprints for aerospace and military electronics to China.

• Worked with the Department of Justice to bring eight separate indictments charging 14 people for their role in procuring items for the Russian military and Russian security service.

• In coordination with the Office of Foreign Assets Control, imposed a $3.3 million combined penalty against a major U.S. software firm for alleged and apparent violations of U.S. export controls and sanctions laws, including violations involving Russia, Cuba, Iran, and Syria.

BIS also emphasized the launch of the Disruptive Technology Strike Force with the Department of Justice “to protect U.S. advanced technologies from illegal acquisition and use by nation-state adversaries like Russia, China, and Iran. The Strike Force brings together experienced agents and prosecutors in fourteen locations across the country, supported by an interagency intelligence effort in Washington, D.C., to pursue investigations and take criminal and/or administrative enforcement action as appropriate”.

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Wine aficionados and importers should take notice of the recently initiated Antidumping Duty (AD) and Countervailing Duty (CVD) investigations of “Certain Glass Wine Bottles”. The AD investigation covers wine bottles from Chile (Case # A-337-808), China (Case # A-570-162) and Mexico (Case # A-201-862), while the CVD investigation covers bottles from China only (Case# C-570-163). What is alarming is that the U.S. entities that filed the petition are claiming that the dumping margins, which would determine the amount of additional duties to be instituted if the petitions are approved, should be a whopping 610% from Chile, up to 301% from China and up to 97% from Mexico! Additional duties of that magnitude on wine bottles would certainly have an effect on the overall price of wine itself. All interested parties should diligently follow the course that these investigations take. The AD/CVD process can be very lengthy and with the claimed dumping margins being so high, the results could be dramatic.

In a notice published in the Federal Register on January 16, Customs and Border Protection (CBP) announced that it is amending the ACE Entry Type 86 Test to require filing of these entries prior to or upon arrival of the cargo. The Entry Type 86 is a test allowing the electronic filing of entries for low-value shipments meeting the requirements for admission under the administrative exemption in 19 U.S.C. 1321(a)(2)(C). The traditional entry time frame of permitting filing of an entry up to 15 days after arrival of the cargo was used initially for the Entry Type 86 test. However, CBP has determined that that time frame “has proven to be inconsistent with the expedited process envisioned for the ACE Entry Type 86 Test”, and this has led to enforcement challenges and various violations such as entry by parties without the right to make entry, incorrect manifesting of cargo, misclassification, and delivery of goods prior to release from CBP custody. The requirement to file Type 86 entries prior to or upon arrival of the cargo will go into effect on February 15, 2024.

The Transportation Security Administration (TSA) advised that 2023 was a record year for the interception of firearms at airport security checkpoints. A record 6,737 firearms were intercepted at airport checkpoints during 2023, with 93%, or close to 6,265 firearms, being loaded at the time of interception. Firearms are strictly prohibited in carry-on baggage. They are allowed in checked baggage, however, they must be unloaded and packed in a locked hard-sided case and the presence of the firearm must be declared at the check-in counter. Upon discovery of a firearm at a checkpoint, the TSA officer will contact local law enforcement, who will remove the passenger and the firearm from the checkpoint. The passenger involved could then be arrested or cited. In addition, the passenger will be liable for a fine of up to $15,000 for possesing the firearm at the checkpoint.

On a lighter note, or maybe not so lighter note, the TSA also published a list of the Top Ten prohibited items discovered in traveler’s carry-on baggage in Idaho airports in 2023. Among the top items were a hatchet, a Ninja throwing star, a crow bar, and a grenade-shaped bottle of hot sauce.. (pictures are below).

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This month we launch a new feature of our monthly newsletter – JAS WANTS TO KNOW! - A short one question poll to receive our readers’ input and advice. Our poll this month is concerning compliance challenges. Click below to let us know!

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Laurie Arnold, JAS Vice President of Compliance, and Leah Ellis, JAS Compliance Operations Manager, were on the move this month attending the National Customs Brokers and Forwarders Association’s (NCBFAA) quarterly board meeting held in Los Angeles. Laurie serves as the Treasurer of the NCBFAA and Leah is the Legislative Committee Chair. During their time in Los Angeles, Laurie and Leah were also given an extensive tour of the Port of Los Angeles by invitation of the Los Angeles Customs Brokers and Freight Forwarders Association.

See below for pictures of the tour.

While regular practitioners of tariff classification well know this, the World Customs Organization (WCO) recently issued a 30 page report, The Exploratory Study on a Possible Strategic Review of The Harmonized System, which concluded that the tariff classification process is a very complex system which requires a high level of skill to use appropriately. The purpose of the report was to explore the feasibility of possible structural changes to the system to improve the accuracy and consistency of the process and make it more “user-friendly”. One of the issues noted was that key words are often not defined in the tariff schedule or, if defined, the location of definitions can be hard to find. The complex nature of the process was illustrated by a discussion on how to classify a plastic covered textile, a truly difficult proposition. One interesting note was that the WCO did a survey and found that a majority of respondents do not really use or do not really understand how to use the General Rules of Interpretation, which are supposed to explain how to classify. Lets hope the report leads to some improvements.

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In a Federal Register notice, the United States Trade Representative (USTR) announced that 77 COVID-related and 352 other Section 301 duty exclusions that were set to expire on December 31, 2023, will be extended for an additional 5 months through May 31, 2024. The Section 301 duties were imposed on various products from China to counter certain acts, policies and practices related to technology transfer, intellectual property and innovation. The USTR stated that the extension of the exclusions “will enable the orderly review of the exclusions consistent with statutory factors and objectives to identify in which cases additional time would enable shifts in sourcing to the United States or third countries”. The statutorily required four-year review of the Section 301 duties themselves is currently in process and the USTR further stated that this extension “will also facilitate the alignment of further decisions on these exclusions with the ongoing four-year review”.

Customs and Border Protection (CBP) is still welcoming importers of record and licensed customs brokers to participate in the Global Business Identifier (GBI) Evaluative Proof of Concept (EPoC). The GBI is a test to determine a potential replacement for the Manufacturer or Shipper Identification code (MID) currently required to be provided on entries filed with CBP. This new identifier could also be used for other entities involved in the entry process to obtain a “deeper insight into the legal structure of “who is who” across the spectrum of trade entities, and to understand more clearly ownership, affiliation, and parent-subsidiary relationship”. Participants in the EPoC can provide, at the time of entry filing, any of three entity identifiers associated with manufacturers, shippers, and sellers of merchandise covered by the entries. These identifiers are the nine (9) digit Data Universal Numbering System (D–U–N–S®), thirteen (13) digit Global Location Number (GLN), and twenty (20) digit Legal Entity Identifier (LEI). The test is limited to entry types 01 and 11, and to certain commodities and countries of origin. The limitations of the MID are well known in trade circles. Therefore, CBP is encouraging participation in this EPoC to facilitate the determination of a more robust replacement. If you would like to participate in this EPoC, contact compliance@jas.com.

A recent series of settlements in False Claims Act (FCA) cases and a large fine imposed by a California District court demonstrate the importance of complying with the Customs and Border Protection (CBP) importation regulations. FCA cases are filed by “whistleblowers”, on behalf of the United States, charging any person with making a false claim to the federal government. The whistleblower, called the relator, receives a portion of any agreed settlement.

In Georgia, an importer of tools will pay $1.9 million to settle FCA allegations that it was falsely labelling its tools as “made in Germany” when, in fact, the tools were made in China. The settlement states that tools manufactured in China were sent to Germany for some additional processing and were then commingled with tools that had no additional processing done in Germany. All the items were then claimed to be of German origin upon importation into the U.S., thus avoiding the payment of Section 301 duties of 25%  assessed on certain imports of Chinese origin.

In Texas, in another FCA settlement, an importer of industrial products, along with two Chinese companies and two individuals, agreed to pay $2.5 million to resolve allegations that they were undervaluing imported goods. Commercial invoices were submitted to CBP at time of entry for the items in question showing values that were lower than the actual values and agreed prices. Invoices showing the true higher values were then sent by the Chinese suppliers to the importer at a later time. This resulted in the loss of revenue for CBP in the form of underpaid customs duties and other fees.

Finally, in California, in another double-invoicing scheme, a clothing wholesale company was fined $4 million, ordered to pay $6,390,781 in restitution, and placed on probation for five years for undervaluing imported garments in a scheme to avoid paying millions of dollars in customs duties. In this case as well, a false lower valued commercial invoice was submitted to CBP at time of entry, and a true higher value invoice was then sent later to the importer by the Chinese supplier resulting in the underpayment of duties and fees.

On December 18, the U.S. Food and Drug Administration (FDA) announced the launch of the Cosmetics Direct electronic submission portal for registration and listing of cosmetic product facilities and products. Cosmetics Direct is dedicated exclusively to cosmetic product facility registration and cosmetic product listing electronic submissions mandated by the Modernization of Cosmetics Regulation Act of 2022 (MoCRA). FDA had advised previously that enforcement of these new requirements would be delayed to provide industry with sufficent time to submit the facility registration and product listing information. FDA will not be enforcing the requirements until July 1, 2024. However, the law is now in effect, and all facilities required to register and submit product listings should do so as soon as possible and well before the July 1 deadline.

Senators Bill Cassidy of Louisiana and Sheldon Whitehouse of Rhode Island introduced the bipartisan Customs Modernization Act of 2023 which would make significant changes to laws administered by Customs and Border Protection (CBP).

Some of the key sections of the proposed bill include:

• Allowing CBP to access data prior to entry from parties throughout the supply chain. The importer of record could convert this pre-entry information into a certified entry filing. For any violation relating to the filing of the required pre-entry information by any party, CBP may impose a penalty of $5,000 for the first violation of these regulations and $10,000 for subsequent violations.

• At present, only ocean vessel manifest information must be publicly disclosed. The proposal would make it mandatory to also publicly disclose aircraft, truck and rail manifest information for the purpose, inter alia, of monitoring supply chains for illegal goods like fentanyl and those made with forced labor, combatting trade-based money laundering, and identifying unfair trade practices like dumping.

• Relaxing the seizure and forfeiture rules to allow for the summary forfeiture of certain IPR-infringing goods by CBP without having to go through the formal seizure/forfeiture process. This is to allow CBP the ability to seize and forfeit articles found violative in the de minimis realm in an expedited fashion.

• Specific penalties are enumerated for violations of the Section 321 de minimis provisions of up to $1,000 for the first violation and $2,000 for each subsequent violation.

• Under current law, CBP can penalize vessel masters, aircraft pilots, and persons in charge of a vehicle for failing to comply with reporting requirements like providing manifest information. However, much of this data is now transmitted electronically by other parties such as the air carrier. A new provision would clarify that “any person” reporting such information who knowingly provides incorrect information is liable for a civil penalty.

Senator Cassidy also advised that a bipartisan Trade Facilitation measure will be introduced in 2024 as well.