An Indirect Air Carrier (IAC) is a person or entity within the United States not in possession of a Federal Aviation Administration (FAA) air carrier operating certificate, that undertakes books cargo on passenger airplanes. IAC’s must adopt and carry out a security program that meets TSA requirements, and must have a person responsible within their company for managing the program. TSA approves applications for companies to become an IAC. Diaz Trade Law can advise if your company should proceed with the IAC application and assist you in reviewing your obligations under the TSA laws and regulations, including the known shipper program.
The Transportation Security Administration (TSA) was created to strengthen the security of the nation’s transportation systems and ensure the freedom of movement for people and commerce. TSA regulates IAC’s and often issues penalties, pursuant to itsregulations in 49 CFR Part 1503 (Investigative and Enforcement Procedures). The regulations discuss how and when TSA may issue a monetary civil penalties against an airline or IAC (a.k.a. “licensed freight forwarder”) for a violation of the Transportation Security Regulations.
What is the Penalty Process?
First, a TSA attorney is assigned, and drafts a Notice of Proposed Civil Penalty against the alleged violator (the airline or IAC). The Notice contains the underlying facts which lead to the violation, the relevant TSA law and regulation allegedly violated, and provides 30 days for to respond. The penalty notice may be sent to the President or CEO of the company, or to the TSA-designated security coordinator (make sure it is not disregarded).
What are Your Options?
The airline or IAC that receives such a Notice has several options (written from my preferred methods of response first to least preferred last):
request an informal conference with the TSA attorney identified in the Notice;
write back to the TSA and attempt to persuade the TSA that the violation did not occur;
plead that the individual or company does not have the money to pay the penalty;
demand a hearing before an Administrative Law Judge; or
pay the penalty in full.
How Can Diaz Trade Law Help?
From past experience, it is best to request to meet with the TSA attorney who issued the penalty notice as part of an informal conference. Informal conferences may be held by telephone or in person. I prefer in person and often suggest an officer of the company that allegedly violated the cited TSA regulations, or the security coordinator attend as well to describe the incident that led to the Notice and most importantly, the corrective actions taken by the company and all mitigating factors present. The TSA attorney has the authority to settle the case at the informal conference, and cases may be settled at that time, if the specific facts, mitigating factors and corrective action warrant it.
Diaz Trade Law can also assist in drafting a Voluntary Disclosure to the TSA. The program is the U.S. Customs and Border Protection (CBP) and the Bureau of Industry and Security (BIS) programs. A voluntary disclosure may be filed if an apparent violation is disclosed to the TSA (in advance of an investigation by the TSA), and if accepted, then no penalty will be issued by the TSA.
Diaz Trade Law assists in identifying when a voluntary disclosure should be filed, and importantly, filing valid voluntary disclosures.
In order to file a voluntary disclosure:
(1) the violation must have been inadvertent,
(2) once discovered, the violation must have been promptly reported to the TSA,
(3) the violation must have been immediately terminated once discovered, and
(4) corrective action must have been taken or is being discussed.
Federal Maritime Commission (FMC)
The Federal Maritime Commission (FMC) is the independent federal agency responsible for regulating the U.S. international ocean transportation system for the benefit of U.S. exporters, importers, and the U.S. consumer. U.S.-based companies or sole proprietors operating as Ocean Freight Forwarders (OFF) or Non-Vessel-Operating Common Carriers (NVOCCs) are required to obtain a license from the FMC. Non-U.S.-based NVOCCs are not required, but may apply for a FMC-issued license. Diaz Trade Law assists companies in applying for a license from the FMC to operate as a NVOCC and/or OFF.
Alcoholic beverage imports, distribution, storage and wholesaling are regulated in the U.S. primarily by Alcohol and Tobacco Tax and Trade Bureau (TTB). The TTB issues permits for companies to operate as an importer and wholesaler of alcoholic beverages in the U.S. TTB also strictly regulates the labels that appear on all alcoholic beverages. Each state and municipality has additional laws that may further regulate alcoholic beverage distribution, importation, storage, wholesale and retail operations. Also, each state and municipality may issue its own permit to allow businesses to perform these business operations.
To import alcohol into the U.S. you must meet several requirements:
Complete an Importers Basic Permit with the TTB
Depending on your business model, complete a Wholesalers Basic Permit with the TTB
Obtain a TTB-issued Certificate of Label Approval (COLA) for each unique product/label.
Alcohol is treated as a food by the U.S. FDA, therefore you must also register as a food facility under FDA’s Food Facility Registration before importing or distributing alcoholic beverages in the U.S.
Our team assists with all TTB permits, and label reviews and assists in completing the COLA.
Diaz Trade Law is owned and managed by Jennifer Diaz, an expert on Customs and International Trade services, who regularly counsels all sizes of global clients in import and/or export compliance and enforcement mitigation services. Our expertise is in assisting companies in successfully complying with the vast U.S. federal laws and regulations for import and export transactions as well as supply chain security.
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