2010 - Customs & International Trade Law Firm

Santa’s U.S. Customs Problems

Well, I just wanted to let you all know that Santa may not be coming this year to deliver all those wonderful holiday gifts.

Because of incorrect Incoterms and incomplete documentation, the gifts for all the world will have to be returned to the North Pole (at Santa’s own expense).

Santa decided to ship everything DDP and even though he hired an international freight forwarder to handle all of the logistics to transport the gifts, the forwarder was unable to determine who the correct customs broker was for each individual importer. There was also a question about whether the Power of Attorney required by U.S. Customs was correctly completed.

Determining the importer of record turned out a nightmare since EVERYONE in the world wants a visit from Santa but no one was willing to be the importer of record.

New laws and regulations regarding entry of exotic animals also had the U.S. Fish and Wildlife Service forcing Rudolph and his crew back out before they could even land.

All the electronics needed prior FCC approval, and since the North Pole is nearest to Canada, Santa was trying to claim NAFTA. Obviously, U.S. Customs refused to clear any of it without detailed product literature regarding the country of origin.

Santa got tons of U.S. Census Bureau warnings because the dimensions and weight of the gifts were too unreal to calculate, and because Santa could not prove where the materials to make the toys came from (the North Pole is not on the approved country of origin list).

Santa […]

By Jennifer Diaz|2021-04-09T12:54:08-04:00December 16, 2010|U.S. Customs and Border Protection (CBP)|0 Comments

Save Money by Admitting Your Export Violations to the U.S. Commerce Department

Sometimes it is beneficial for an exporter to voluntarily self-disclose its export violations to the U.S. Government. Maybe an exportation of an item occurred without first obtaining the necessary license, or maybe the item was shipped to a company overseas other than allowed in a license. Both situations are violations of the Export Administration Regulations, and both violations could result in $250,000 penalties against the exporter. By voluntarily self-disclosing the violation, the exporter would reduce, and might even eliminate, such a penalty.

For a suspected violation of 15 CFR 764.2 of the Export Administration Regulations (EAR) enforced by the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce, an exporter may submit a voluntary self-disclosure (popularly known as a “VSD”) to the Office of Export Enforcement of BIS at its Washington, D.C. headquarters office. The contents of what must be included in a VSD are established in 15 CFR 764.5.

Procedurally, once a properly filed VSD is received by the BIS, it is investigated by a Special Agent from the Office of Export Enforcement. If a penalty or other sanction is contemplated, the case is referred to an attorney with the Office of Chief Counsel of BIS. The BIS attorney will contact the exporter’s attorney, eventually resulting in a written Settlement Agreement between the exporter and the BIS. Negotiating the terms of the Settlement Agreement is critical.

The Obama Administration is actively pursuing export control reforms. Importantly, Kevin Wolf, Assistant Secretary of Commerce for Export Administration, on November 9, 2010, at […]

By Jennifer Diaz|2015-12-01T01:51:39-05:00December 12, 2010|Export, U.S. Bureau of Industry and Security (BIS)|0 Comments

Unhappy Holidays for Some International Flight Attendants Courtesy of U.S. Customs

Every few weeks, I get a call from an international flight attendant who wants my help to deal with a huge fine issued by U.S. Customs and Border Protection. The typical scenario is that while the nice international flight attendant is traveling overseas, she purchases some counterfeit, luxury brand handbags, wallets, watches or jewelry for friends, family, or co-workers back in the States. Flight crews are rarely stopped and searched by U.S. Customs upon return to the United States, so the risk is low. Unfortunately, some do get stopped, and the Customs officer seizes the counterfeit items. That is just the beginning of the nightmare.

Some weeks after Customs seizes the counterfeit items, the flight attendant will receive a formal written Seizure Notice stating what was seized, why it was seized, and providing an opportunity for him or her to file a Petition. Since the flight attendant typically only spent a few hundred dollars, and the stuff is clearly counterfeit, most people don’t bother to file a Petition, and the merchandise is automatically forfeited to U.S. Customs.

What the flight attendants need to know is that after the merchandise is forfeited, Customs will send a second letter assessing a fine pursuant to 19 U.S.C. 1526(f). The fine is equal to the Manufacturer’s Suggested Retail Price (MSPR) as if those counterfeit items were real. So, instead of a fine of a few hundred dollars for a few, counterfeit Rolex or Chanel watches, the fine might total $100,000, as regular readers know from my August 10, 2010 blog […]

By Jennifer Diaz|2015-12-01T01:51:11-05:00November 27, 2010|Counterfeits|0 Comments

Miami Aircraft Company Pays $225,000 Fine for Lying to OFAC

Pinnacle Aircraft Parts, Inc., based in Miami, Florida, just paid $225,000 to the U.S. Office of Foreign Assets Control (“OFAC”) regarding OFAC’s investigation of a jet engine that may have been shipped to Iran. This case is unique in that OFAC did not assess the fine because the jet engine was actually shipped to Iran, but because Pinnacle Aircraft Parts failed to properly comply with it subpoena to provide all records about that shipment.

OFAC certainly has the authority to issue an administrative subpoena, and to demand documents for any alleged sale of a jet engine to Iran. See 31 CFR Section 501.602, which states:

Every person is required to furnish under oath, in the form of reports or otherwise, from time to time and at any time as may be required by the Director, Office of Foreign Assets Control, complete information relative to any transaction,…

Pinnacle received such a subpoena demanding “all correspondence and other documents” related to the payment and transportation of the jet engine. Through its outside legal counsel, Pinnacle provided 260 pages of responsive documents, however, according to the OFAC’s Enforcement Information notice for November 16, 2010.

[Pinnacle] failed to submit a copy of a post-sale e-mail – which Pinnacle had provided to its [legal] counsel – indicating that the aircraft engine was likely destined for Iran…

OFAC determined that the failure to produce the responsive document was “egregious”, resulting in almost the maximum penalty of $250,000. OFAC concluded that Pinnacle “knowingly withheld” the relevant documentation. Pinnacle’s unfortunate reliance on the incorrect advice of […]

By Jennifer Diaz|2015-12-01T01:50:41-05:00November 26, 2010|U.S. Office of Foreign Assets Control (OFAC)|0 Comments

EPA Compliance Webinar November 30, 2010, by NCBFAA

The National Customs Brokers and Forwarders Association of America (NCBFAA) is hosting a webinar on the topic of “EPA Import Compliance – What To Do When Things Go Wrong”.

The webinar will focus on the practical import compliance policies and procedures of both the U.S. Environmental Protection Agency (EPA) and U.S. Customs and Border Protection (CBP) for the importation of mobile source equipment such as non-road and marine spark ignition engines in motorcyles, generators, and lawn mowers.

An introduction to the EPA’s enforcement of the Clean Air Act through its regulations will be discussed. Learn about ‘EPA Certificates of Conformity,’ ‘ EPA Administrative Settlement Agreements,’ and the proper use of EPA Form 3520.

Real-life examples of detentions and seizures by CBP will be used, along with a step by step “how to” resolve seizures and penalties by CBP and settle civil penalty cases with the EPA.

Registration may easily be done on-line by clicking on this “Register Now” link, or by calling Brian Barber, Director, NCBFAA Educational Institute, at (202) 466-0222.

By Jennifer Diaz|2015-12-01T01:50:08-05:00November 18, 2010|Import, U.S. Environmental Protection Agency (EPA)|0 Comments

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