From: David Hickmott [DHickmott@uli-atl.com]
Sent: Thursday, December 03, 2009 5:20 PM
To: Eric Moeller
Cc: David Hickmott; David Hickmott
Subject: ISF Security Filing (10+2)
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ISF enforcement is coming - are you ready?
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Dear Valued Unique Customer,
Further to the below message, U.S Customs and
Border Protection (CBP) has recently updated 10+2 filing requirements for U.S.
import shipments. With less than two months to go before the enforcement period
begins, it is critical that filers understand the latest requirements and have
a solution in place.
Unique Logistics International (ATL), LLC
proven Importer Security Filing (ISF) solution provides a cost-effective
platform for importers to streamline the collection of required ISF data
elements from multiple sources, complete filings to U.S. CBP, and closely
monitor filing status and exceptions.
January 26th, 2010 ISF becomes
mandatory. As your CHB/FF, ULI is prepared to file ISF on your
behalf. If any questions, please do not hesitate to contact us.
Thank you for your support of Unique Logistics
International. We appreciate and value your business.
Discover the "Unique" difference of logistics from
Asia to USA trade!
Best
Regards
David
Hickmott - Executive Vice President
ph#404-767-0500
(ext 306)
Mobile#
678-478-6604
Fax#
404-767-3319
www.uli-atl.com
From: David Hickmott
Sent: Monday, September 07, 2009 12:18 PM
To: Eric Moeller
Cc: David Hickmott; David Hickmott
Subject: FW: MS&K International Trade Alert - September 4, 2009
From: Eric Moeller
Sent: Friday, September 04, 2009 1:31 PM
To: Jeff Smith; chb
Cc: David Hickmott
Subject: FW: MS&K International Trade Alert - September 4, 2009
Dear Valued Unique Customer,
The below trade alert is from MS&K. One of the key
articles is with regard to ISF filing. On January 26th, the
ISF (Security Filing) will be in full swing (not trial) and subject to do not
load and/or fines/penalties for late filing, incorrect data, etc…..
One of the areas that ULI has identified in regard to potential
violation is late filings. Typically, this is a result of the overseas
vendor not completing the ISF form in a timely fashion. For those
shipments that ULI is the handling agent at origin, this has not been a problem
area as we have established SOP for vendor to complete at same time that the
booking/shipping order is received. However, we also have many customers
where there vendors do not use ULI Asia offices. In these instances, the vendors
send the ISF data to the importer who will then send to ULI Atlanta for
filing. We have found that the overseas vendor is sending the ISF filing
data to the importer late (65% of the time).
Another area that ULI has identified as a problem area are CIF
or C&F vendors where the origin supplier is arranging the freight. In
these cases, the overseas vendor is not so concerned with the filing of the ISF
as they are arranging the freight. However, it is the importer that will
be subject to fines/penalties if the filing is incorrect, not filed and/or
untimely filed.
Some suggested solutions that Unique Logistics International can
offer to our customers as follows:
1) ULI
can offer cargo management services where our origin office can serve as the
booking office for the vendor.
2) Consider
changing your terms with vendor from CIF/C&F to FOB terms.
If any questions, please do not hesitate to contact us.
Eric Moeller
Unique Logistics International (ATL) LLC
General Manager / LCHB
Direct Tel- 678-365-6003
Fax- 404-767-1156
www.uli-atl.com
C-TPAT Certified and Validated
-----Original
Message-----
From:
Sent: Friday, September 04, 2009 1:27 PM
To: Eric Moeller
Subject: MS&K International Trade Alert - September 4, 2009
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September
4, 2009
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HOLD
ONTO YOUR WALLET:
NEW ISF PENALTY
GUIDELINES AND PROPOSED GOODS MOVEMENT TAX INCREASE
By Susan Kohn Ross
ISF Penalty Guidelines Published
As has been widely publicized, Customs finally published
the penalty guidelines for the Importer Security Filing (ISF) program.
Highlighting its goal of getting importers to participate as soon as
possible, the first mitigating factor listed by Customs is an importer’s
history of compliance with ISF. If you wait until the last minute to start
filing - just before the January 26, 2010, enforcement deadline - and there
are mistakes, do not expect any mercy or mitigation from Customs.
Vessel operators will be penalized if they fail to timely
file stow plans or container status messages, but of the greatest interest is
how Customs intends to deal with importers. If the ISF is not filed, filed
late, or filed with inaccuracies, it is the importer who will be penalized.
Bulk cargo remains exempt, break bulk may or may not be exempt depending on
whether it is loaded into a container before being stowed on the ship, but
containerized cargo certainly must have ISF filed 24 hours prior to loading. Determining
when loading occurs remains a challenge. Although Customs has said it will
start consulting vessel operator data as to dates of departure, how importers
are expected to figure out loading times is unclear. At the same time,
figuring out when you have to file is another challenge, but the flexibility
as to how to declare certain data elements and when to declare others has not
changed.
So what potential penalties are importers facing under
these new regulations? First, the amount of the penalty will be $5,000 and
will be based on the final version of the ISF. However, if you fail to file,
Customs has said it will withhold release or transfer of the shipment. If
that happens, the related charges will be passed along to the importer by the
terminal operator. The agency may also deny a permit to unlade, and if the
shipment is unladen without permission, the shipment may be seized. Just as
Customs will issue a penalty if the ISF is late or inaccurate, a similar
$5,000 penalty will be issued if the ISF should have been withdrawn and was
not (for example, if the shipment will not arrive in the U.S.).
Customs has also said there will be penalties for serious
and repetitive errors. Those penalties will be issued under 19 USC 1595a(b)
and are not subject to the same $5,000 limitation, but rather are tied to the
value of the shipment.
In terms of mitigating those penalties, if law enforcement
goals are compromised, there will be no mitigation. Otherwise, for late or
inaccurate ISFs, or the failure to withdraw an ISF already on file, the first
offense will be mitigated to between $1,000 and $2,000 and subsequent
offenses will go no lower than $2,500.
Customs also provided a listing of mitigating factors:
- Progress in implementing ISF during the flexible
enforcement period - pre-January 26, 2010;
- Small number of violations compared to number of
shipments;
- Tier 2 or Tier 3 C-TPAT membership;
- Demonstrated remedial action;
- Vessel diversion due to factors outside the ISF
importer’s control, e.g., weather (but accidents should be included and
were not mentioned by Customs); and
- For inaccurate filings, did the importer acquire data
from a third party and reasonably rely on it, plus was not reasonably
able to verify the data - considered an extraordinary factor.
At the same time, aggravating
factors were articulated as:
- Lack of cooperation with CBP;
- Impeding CBP activity;
- Evidence of actual or attempted smuggling (may be
considered an extraordinary aggravating factor);
- Multiple errors on the ISF; and
- Rising error rate indicating deteriorating
performance.
In the case of
third-party data, Customs has said it will consider ordinary commercial
practices and how the presenting party acquired the data, and whether and how
that presenting party is able to verify that data. If the importer is unable
to verify the data, the standard is "reasonably believes to be
true." If Customs agrees that the importer could reasonably believe the
data was accurate, it may lead to outright cancellation of any liquidated
damages claim.
Customs has also said, if you are a Tier 2 or Tier 3 C-TPAT
member that status may account for up to 50% further mitigation. Finally, in
terms of additional options, Customs retains the right to:
(1) issue "do not load" messages; (2) delay or
deny the carrier’s preliminary entry permit to unlade; (3) withhold release
or transfer of cargo; and (4) apply statutory penalties, such as 19 U.S.C.
1595a(b), for aiding unlawful importations.
Proposed
Goods Movement Tax Increase
H.R. 2355 has been introduced with the goal of raising
funding to support infrastructure projects. By its terms, the bill provides
that states will be given yearly grants from the funds raised in proportion
to their contribution to the fund. The funding will be administered by the
state-level Department of Transportation. The federal program will be
administered by the U.S. Secretary of Transportation. Once funding is granted
to a state, the formula for distribution is 90% for goods-movement projects,
7% for environmental projects, and 3% for homeland security projects. To be
eligible, the project may be as much as 40 miles from the port of entry.
In addition to the geographic distance, the eligibility
criteria include that the project must promote definable goals related to
improving highway, rail and port goods movement; mitigate environmental
damage to air, water and soil caused by goods movement; and promote the use
of clean trucks or diesel replacement; plus improve cargo inspection,
screening and security training for workers. Regional and state
transportation organizations are to be included in the project-selection
process. There is also a waiver provision allowing a project to be as much as
150 miles from a port of entry provided the site is located within the
goods-movement chain.
The proposal also mandates the federal share of the cost of
a project "shall be" 90%. However, rather than mandate a priority
for the selection of projects or the expenditure of federal funds, these
factors are left to the states to decide. At the same time, the grant
authority to the Secretary of Transportation ends on October 1, 2019. 71.43%
of the Harbor Maintenance Tax (HMT) collected will go into the newly
authorized National Goods Movement Improvement Fund. The provisions for the
HMT are then amended to provide that the tax applies to all cargo coming
through any land or sea port of entry. The current rate is 0.125% and is
substantially raised by this proposal. For ocean-going cargo, the HMT is
increased to 0.4375% and is imposed at time of unloading. For land shipment,
those transiting through Canada and Mexico, where there is currently no such
fee, the HMT is set at 0.3215% and is imposed at time of entry. Goods
originating in Canada or Mexico are exempt in order to comply with NAFTA. At
the same time, the Secretary may reduce the amount of the tax if the state or
local government collects fees for goods-movement improvement.
Leaving aside the concern that, if enacted, the formulas
and other limitations could be changed by a later act of Congress, there is
no methodology for ensuring all interested parties are brought together to
seek common agreement as to priorities and funding goals. There is also some
discussion about transferring the funding mechanism from yearly appropriations
by Congress to direct funding by the Army Corp of Engineers. If that were to
happen, it is not at all clear how civilian oversight would work. Another
concern is the added cost of doing business these charges represent. Assuming
this increase in assessment plus the expansion to land ports of entry is a
good idea, should there be a limit on a per-entry basis to the amount of HMT
collected, in much the same way there is a cap on the merchandise processing
fee?
Foreign
Trade Association Food Safety Seminar Series
Given the rising importance placed on food safety, the
Foreign Trade Association is hosting a two-part series providing an
international perspective on food safety. Laws and regulations are rapidly
changing in the U.S. and worldwide. Find out the latest about those changes
in Australia, the U.S., and Canada from an international panel of speakers:
Andrew Hudson of Hunt and Hunt in Melbourne, Australia; Cyndee Todgham
Cherniak of Lang Michener in Toronto, Canada; and Susan Kohn Ross of Mitchell
Silberberg & Knupp in the U.S.
Topics to be discussed will include the latest legislative
efforts and regulatory changes in all three countries, including good
manufacturing practices, registration requirements and new/additional fees,
and what operational changes/upgrades companies should consider in response.
Where does one find the latest details about these rapidly evolving and
significant changes? What are the new expectations being placed on industry?
How do those expectations differ by product? How will these changes impact
your bottom line?
The perspective from Australia and the U.S. will be
presented on September 15, 2009, at 1:00 p.m. PDT. The speakers will be
Andrew Hudson and Su Ross. The Canadian perspective will be presented on December
3, 2009 at 10:00 a.m. PDT with an update on developments in the U.S. Cyndee
Cherniak and Su Ross will speak at this session.
For more details, visit the FTA’s Calendar of Events at http://ftasc.org/ or contact the FTA office at
818- 951-2842 or info@foreigntradeassociation.com.
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Susan
Kohn Ross
International Trade Counsel
(310) 312-3206
skr@msk.com
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Mitchell Silberberg
& Knupp LLP
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11377 W. Olympic
Blvd.
Los Angeles, CA 90064
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12 East 49th
Street, 30th Fl.
New York, NY 10017
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1818 N Street
N.W., 8th Fl.
Washington, DC 20036
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www.msk.com
This alert is provided as a service to our clients and
friends. While the information provided in this
publication is believed to be accurate, it is general in nature and should
not be construed as legal advice.
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