JAS USA COMPLIANCE

News & Insights from JAS Worldwide Compliance

JAS Forwarding (USA), Inc.

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GSP to be Renewed! Reinstatement Looks Positive

April 27, 2015

CONGRESS LOOKS TO AID TRADE WITH REINSTATEMENT OF GSP AND OTHER TRADE PROGRAMS

After two years, Congress is discussing the possible reinstatement of GSP (Generalized System of Preferences). The GSP Program was developed as a trade program to provide opportunities for many of the world’s poorest countries to use trade to grow their economies and climb out of poverty. GSP is the largest and oldest U.S. trade preference program. GSP promotes economic development by eliminating duties on approximately 5,000 types of products when imported from one of the 122 designated beneficiary countries and territories. If the program is reinstated, refunds will be issued for qualifying goods. According to the Coalition for GSP, American companies have paid nearly $2 million per day in taxes since GSP expired July 2013.

From the Tuttle Law Offices Newsletter:

"GSP is a trade program designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 4,800 products from 129 designated beneficiary countries (“BC”) and territories. GSP was instituted on January 1, 1976, by the Trade Act of 1974, but authorization for the program lapsed in 2013. Duty-free status is generally available to qualifying goods from qualifying countries if the BC content is 35% or more of the appraised customs value. During an April 22 markup, the Senate Finance Committee amended and sent to the Senate floor all four major trade bills: Trade Promotion Authority, Trade Adjustment Assistance, Customs Reauthorization and a preference package that contains renewals for the Generalized System of Preferences and the African Growth and Opportunity Act (“AGOA”). All were approved with decisive margins. Among the new provisions added as amendments are a temporary extension of an increase to the Merchandise Processing Fee, Miscellaneous Tariff Bill reform legislation, and tariff changes for performance outwear and athletic footwear."

Read the entire newsletter.

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DEMURRAGE DETENTION

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.

CBP BOND GUIDE

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.

PENALTY USA

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.

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