Come Join Me for the Next OWIT-NY Event Tonight Monday (22-Nov-2010) at 6 pm
This program will address the relationships that exist between importers/exporters and their Customs Brokers, Freight Forwarders & NVOCCs (non-vessel operating common carriers).
Featuring: William Shayne, Esq. of Shayne Law Group, P.C. (Hooray SLG!)
William Shayne has been working in the Customs Brokers, Freight Forwarders & NVOCC industries before transitioning to the practice of law. A major portion of his practice is representing each of these different entities as well as importers and exporters.
He will look at these relationships from both a practical and legal perspective and from both the service provider and consumer perspectives.
The program will include discussions relating to each of their respective responsibilities and liabilities, and the practicalities of working with them.
Time: Networking and refreshments at 6:00pm. Program commences at 6:30pm.
Location: Law offices of Baker & McKenzie in the Grace Building
1114 Avenue of the Americas (the entrance is on 42nd Street directly across from Bryant Park.) New York, NY
*** Cost ***: $20 for OWIT members , students, and government employees
$25 for non-members
GO TO WWW.OWITNY.ORG TO SIGN UP! Hope to see you there!
Monday, November 22, 2010
Sunday, November 14, 2010
Where Does This Glass of Wine Come From?
TTB proposes to change the rules on multi-state appellations and is seeking your comments!
As a native of northern California, it’s no wonder I am relatively well versed in wines from Napa Valley and Sonoma Valley (my favorite!). In particular, I seriously enjoy visiting the Buena Vista Carneros winery and am always happy to have a “taste of home” by way of a glass of their wine here in NYC.
There is a new discussion around the labeling of imported wine and its regional origin designation or “appellation of origin.”
The recent labeling discussion arises from a quasi-governmental authority from Australia that regulates the exportation of Australian wine. Known as the Australian Wine and Brandy Corporation (AWBC), it petitioned the US agency, the “Alcohol and Tobacco Tax and Trade Bureau” (TTB), which oversees wine regulations (both domestic and foreign imported wine), to permit the labeling of Australian wines with multi-state, i.e., regional, appellations.
As a result of this petition, TTB is proposing to require that all imported wine display on its label the percentage of the wine derived from fruit or other agricultural product(s) grown in each particular political subdivision.
The reason for this amendment would be to provide wine consumers with quality information about the identity and quality of the wine. In addition, TTB is also proposing to mandate that imported wine labeled with a multi-state appellation conforms to the requirements of the foreign laws and regulations governing the composition, method of production, and designation of wines available for consumption within the country of origin.
TTB is seeking comments from interested parties regarding the utility of these amendments to the consumer and to determine whether the amendments will result in comparable treatment between domestic and foreign imported wines. TTB further seeks comments regarding subdivisions of foreign political systems that might be considered equivalents of U.S. states.
Written comments can be submitted until on or before Jan. 3, 2011 and can be sent to:
•[Online] http://www.regulations.gov (via the online comment form for this notice as posted within Docket No. TTB–2010–0007 at ‘‘Regulations.gov,’’ the Federal erulemaking portal);
•[By Regular Mail] Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, P.O. Box 14412, Washington, DC 20044–4412; or
• [By hand delivery/courier in lieu of mail] Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street, NW., Suite 200–E, Washington, DC 20005.
TTB regulations regarding labeling and advertising of wine can be found at 27 CFR Part 4.
For more information on the proposed amendments, see the Federal Register notice at 75 FR 67663
Questions/comments? Post below or email me at clark.deanna@gmail.com
As a native of northern California, it’s no wonder I am relatively well versed in wines from Napa Valley and Sonoma Valley (my favorite!). In particular, I seriously enjoy visiting the Buena Vista Carneros winery and am always happy to have a “taste of home” by way of a glass of their wine here in NYC.
There is a new discussion around the labeling of imported wine and its regional origin designation or “appellation of origin.”
The recent labeling discussion arises from a quasi-governmental authority from Australia that regulates the exportation of Australian wine. Known as the Australian Wine and Brandy Corporation (AWBC), it petitioned the US agency, the “Alcohol and Tobacco Tax and Trade Bureau” (TTB), which oversees wine regulations (both domestic and foreign imported wine), to permit the labeling of Australian wines with multi-state, i.e., regional, appellations.
As a result of this petition, TTB is proposing to require that all imported wine display on its label the percentage of the wine derived from fruit or other agricultural product(s) grown in each particular political subdivision.
The reason for this amendment would be to provide wine consumers with quality information about the identity and quality of the wine. In addition, TTB is also proposing to mandate that imported wine labeled with a multi-state appellation conforms to the requirements of the foreign laws and regulations governing the composition, method of production, and designation of wines available for consumption within the country of origin.
TTB is seeking comments from interested parties regarding the utility of these amendments to the consumer and to determine whether the amendments will result in comparable treatment between domestic and foreign imported wines. TTB further seeks comments regarding subdivisions of foreign political systems that might be considered equivalents of U.S. states.
Written comments can be submitted until on or before Jan. 3, 2011 and can be sent to:
•[Online] http://www.regulations.gov (via the online comment form for this notice as posted within Docket No. TTB–2010–0007 at ‘‘Regulations.gov,’’ the Federal erulemaking portal);
•[By Regular Mail] Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, P.O. Box 14412, Washington, DC 20044–4412; or
• [By hand delivery/courier in lieu of mail] Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street, NW., Suite 200–E, Washington, DC 20005.
TTB regulations regarding labeling and advertising of wine can be found at 27 CFR Part 4.
For more information on the proposed amendments, see the Federal Register notice at 75 FR 67663
Questions/comments? Post below or email me at clark.deanna@gmail.com
Friday, November 5, 2010
Voyage Charters and Charter Parties
Umm… did someone say “PARTY?” Yes, Halloween just passed but no, this does not have anything to do with a celebration or “partying” as we conventionally know it.
While it is probably ridiculously obvious, I will state it anyway: Without vessels, there would be no international trade. This is because a majority of cargo is “carried” to our shores via steamship lines, which in today’s world typically means by container ship with respect to dry cargo, and a tanker with respect to wet cargo.
A “Voyage Charter” is where a vessel owner agrees to perform a single (or series of) voyages in exchange for the payment of the lease rate of the vessel which is payable upon issuance of the bill of lading.
A "Charter Party" is the name of the actual agreement between the “Charterer,” which is the party that borrows the boat, and the vessel owner.
I found it curious to learn that the Charter Party is prepared by a “Charter Broker.” While this may not seem as if it would be surprising, given that customs brokers file entry records for importers, it nonetheless surprised me because of the length and detail of a Charter Party.
The terms of a Charter Party cover typical maritime issues, such as the freight weight, departure and arriving ports, and demurrage charges. In everyday language, demurrage is the cost for continued use of the vessel beyond the “lay time” (defined below). These agreements however, further contain provisions for cleaning the vessel, and concepts known as “dead freight” and General Average, among other clauses.
“Dead freight” I thought was an interesting one. Wet cargo is contracted to in terms of weight, that is, the freight charge is based on the weight of the cargo. As the Charterer is guaranteeing that the weight will meet a minimum amount of tonnage, irrespective of whether you have a fully loaded vessel with cargo, payment for that amount of tonnage is still required.
For example, crude oil that weighs less, i.e., is lighter, takes up a larger volume of space. Therefore, despite the hull being full with oil, the Charterer is still liable for the payment of the “dead freight,” which is the difference between the weight contracted to (i.e., the guaranteed tonnage) and the actual weight.
“General average,” another concept I find intriguing, deals with the idea of abandoning cargo in the event of say, rough seas, in order to save the remaining cargo onboard and complete the voyage. Due to the cargo being thrown over for the “benefit of the adventure,” a General Average clause then indicates that the cargo owners whose merchandise did safely make the journey, must all chip in to pay those parties whose cargo was essentially sacrificed for the “greater good.”
Coming back to the concept of “lay time,” this is the amount of free time the Charterer has to load the ship with cargo at the “load port,” and unload the vessel at the “discharge port.” Keep in mind that just because you are able to load the cargo in an amount of time shorter than that which is designated, does not automatically mean that an extension of time is available on the discharge end. In order to preserve this, the clause regarding Lay Time in the Charter Party must be contracted to be “reversible,” which will provide for an allowance of the time saved on the front end (load port), for the back end (discharge port).
Lay time may be spelled out as “Laydays” in the contract with a designation for when it commences and is canceled. The commencement date indicates when use of the ship will be available in the port designated in the Charter Party. Typically, the agreement will specify certain notice requirements, such as that to inform the Charterer as to what the estimated time of arrival is for the vessel. When a vessel does not arrive on the agreed upon date however, or when the vessel owner alerts the Charterer to a delay for which the boat will not arrive on the agreed upon date at the load port, then what is a Charterer left to do?
It turns out that the only remedy is to cancel the Charter Party within 48 hours. This can be a difficult remedy however, both for the vessel owner who is en route to the port to drop off the vessel, as well as for the Charterer who now has to scramble to find a vessel to meet its needs within 48 hours.
The long and the short of it is that chartering boats is not for amateurs.
Questions/comments? Post below or email me at clark.deanna@gmail.com
While it is probably ridiculously obvious, I will state it anyway: Without vessels, there would be no international trade. This is because a majority of cargo is “carried” to our shores via steamship lines, which in today’s world typically means by container ship with respect to dry cargo, and a tanker with respect to wet cargo.
A “Voyage Charter” is where a vessel owner agrees to perform a single (or series of) voyages in exchange for the payment of the lease rate of the vessel which is payable upon issuance of the bill of lading.
A "Charter Party" is the name of the actual agreement between the “Charterer,” which is the party that borrows the boat, and the vessel owner.
I found it curious to learn that the Charter Party is prepared by a “Charter Broker.” While this may not seem as if it would be surprising, given that customs brokers file entry records for importers, it nonetheless surprised me because of the length and detail of a Charter Party.
The terms of a Charter Party cover typical maritime issues, such as the freight weight, departure and arriving ports, and demurrage charges. In everyday language, demurrage is the cost for continued use of the vessel beyond the “lay time” (defined below). These agreements however, further contain provisions for cleaning the vessel, and concepts known as “dead freight” and General Average, among other clauses.
“Dead freight” I thought was an interesting one. Wet cargo is contracted to in terms of weight, that is, the freight charge is based on the weight of the cargo. As the Charterer is guaranteeing that the weight will meet a minimum amount of tonnage, irrespective of whether you have a fully loaded vessel with cargo, payment for that amount of tonnage is still required.
For example, crude oil that weighs less, i.e., is lighter, takes up a larger volume of space. Therefore, despite the hull being full with oil, the Charterer is still liable for the payment of the “dead freight,” which is the difference between the weight contracted to (i.e., the guaranteed tonnage) and the actual weight.
“General average,” another concept I find intriguing, deals with the idea of abandoning cargo in the event of say, rough seas, in order to save the remaining cargo onboard and complete the voyage. Due to the cargo being thrown over for the “benefit of the adventure,” a General Average clause then indicates that the cargo owners whose merchandise did safely make the journey, must all chip in to pay those parties whose cargo was essentially sacrificed for the “greater good.”
Coming back to the concept of “lay time,” this is the amount of free time the Charterer has to load the ship with cargo at the “load port,” and unload the vessel at the “discharge port.” Keep in mind that just because you are able to load the cargo in an amount of time shorter than that which is designated, does not automatically mean that an extension of time is available on the discharge end. In order to preserve this, the clause regarding Lay Time in the Charter Party must be contracted to be “reversible,” which will provide for an allowance of the time saved on the front end (load port), for the back end (discharge port).
Lay time may be spelled out as “Laydays” in the contract with a designation for when it commences and is canceled. The commencement date indicates when use of the ship will be available in the port designated in the Charter Party. Typically, the agreement will specify certain notice requirements, such as that to inform the Charterer as to what the estimated time of arrival is for the vessel. When a vessel does not arrive on the agreed upon date however, or when the vessel owner alerts the Charterer to a delay for which the boat will not arrive on the agreed upon date at the load port, then what is a Charterer left to do?
It turns out that the only remedy is to cancel the Charter Party within 48 hours. This can be a difficult remedy however, both for the vessel owner who is en route to the port to drop off the vessel, as well as for the Charterer who now has to scramble to find a vessel to meet its needs within 48 hours.
The long and the short of it is that chartering boats is not for amateurs.
Questions/comments? Post below or email me at clark.deanna@gmail.com
Monday, October 18, 2010
Contracts and the International Sale of Goods
Between the office and teaching International Business Law at F.I.T., contracts have been a main topic on my mind recently. Just last week in class, I went over a Drawback Contract with my students to set out the pertinent areas of a contract while going over the duty refund concept of drawback.
This week, we are turning to contracts involving the international sale of goods and it reminds me of my law school days at Tulane when I first learned about contracts. The difference however, is that I get to expose my students to the UN Convention on Contracts for the International Sale of Goods, which was adopted by a diplomatic conference on April 11, 1980, and is commonly referred to as the “CISG.”
The CISG is an international set of commercial rules established to provide a framework for international sales contracts, that is, to govern commercial relationships between merchants of different countries. The rules are therefore, applicable to those countries who are “Members” that have ratified the CISG under the premise that the development of international trade on the basis of equality and mutual benefit is an important element in promoting friendly relations among States.
The CISG is comprised of 101 Articles, with each Article providing a rule specific to a commercial transaction, such as Article 51 which states “The buyer must pay the price for the goods and take delivery of them as required by the contract and this Convention.”
Pace University’s Law School has the Institute of International Commercial Law and has a wealth of material on the CISG, including the CISG Treaty text and legislative history, cases on the CISG and other scholarly materials.
Unlike the CISG, the Uniform Commercial Code (UCC), which is our domestic law here in the U.S. that governs commercial transactions, has only 9 “Articles.” Within each Article however, are multiple sections, with each Article governing a particular area, such as Article 3, which deals with “negotiable instruments,” or Article 5, which deals with Letters of Credit.
Of course, for this week’s class, we will be focusing on Article 2 which deals with “Sales” as this is the section you would look to in order to understand how domestic merchants behave in a commercial setting. In fact, just perusing through Article 2, you see how it begins with contract formation and construction – after setting forth some definitions, of course – and then continuing on with the idea of acting in “good faith,” performing under the contract and alas, breach of contract.
It is not surprising that the “Remedy” section of the UCC is so lengthy, after all, it is not uncommon to find that it is not until a dispute arises that parties begin to pay attention to the laws governing their agreement.
Questions/comments? Post below or email me at clark.deanna@gmail.com
This week, we are turning to contracts involving the international sale of goods and it reminds me of my law school days at Tulane when I first learned about contracts. The difference however, is that I get to expose my students to the UN Convention on Contracts for the International Sale of Goods, which was adopted by a diplomatic conference on April 11, 1980, and is commonly referred to as the “CISG.”
The CISG is an international set of commercial rules established to provide a framework for international sales contracts, that is, to govern commercial relationships between merchants of different countries. The rules are therefore, applicable to those countries who are “Members” that have ratified the CISG under the premise that the development of international trade on the basis of equality and mutual benefit is an important element in promoting friendly relations among States.
The CISG is comprised of 101 Articles, with each Article providing a rule specific to a commercial transaction, such as Article 51 which states “The buyer must pay the price for the goods and take delivery of them as required by the contract and this Convention.”
Pace University’s Law School has the Institute of International Commercial Law and has a wealth of material on the CISG, including the CISG Treaty text and legislative history, cases on the CISG and other scholarly materials.
Unlike the CISG, the Uniform Commercial Code (UCC), which is our domestic law here in the U.S. that governs commercial transactions, has only 9 “Articles.” Within each Article however, are multiple sections, with each Article governing a particular area, such as Article 3, which deals with “negotiable instruments,” or Article 5, which deals with Letters of Credit.
Of course, for this week’s class, we will be focusing on Article 2 which deals with “Sales” as this is the section you would look to in order to understand how domestic merchants behave in a commercial setting. In fact, just perusing through Article 2, you see how it begins with contract formation and construction – after setting forth some definitions, of course – and then continuing on with the idea of acting in “good faith,” performing under the contract and alas, breach of contract.
It is not surprising that the “Remedy” section of the UCC is so lengthy, after all, it is not uncommon to find that it is not until a dispute arises that parties begin to pay attention to the laws governing their agreement.
Questions/comments? Post below or email me at clark.deanna@gmail.com
Wednesday, October 13, 2010
OWIT-NY Event Tonight on Trade Compliance
The Organization of Women in International Trade - NY Chapter is pleased to present
"Customs Compliance Software and the Bottom Line - Cutting Costs and Leveraging Time for Importers, Exporters, Brokers and Forwarders"
featuring
Jason L. O'Brien, Director of Sales and Marketing for MIC Customs Solutions
and Co-Panelist
John O'Shea, Director, Trade Compliance at Bloomberg L.P. (presenting the perspective on compliance systems from the user, manager and consultant side)
Topics of Discussion Include:
• License vs Hosted solutions
• Global Trade Compliance vs US Trade Compliance
• All in one Global Solutions vs Best of Breed
• Return on investment
Time: Networking and refreshments at 6:00pm. Program commences at 6:30pm.
Location: Law offices of Baker & McKenzie in the Grace Building,
1114 Avenue of the Americas (the entrance is on 42nd Street directly across from Bryant Park.) New York, NY
*** Cost ***: $20 for OWIT members , students, and government employees
$25 for non-members
About MIC-
MIC Customs Solutions is a worldwide leading provider of global customs solutions and is dedicated to the development, implementation and support of global customs software solutions. MIC specializes in integrated solutions while leveraging regional and national legal requirements. MIC software helps large and small companies grow, comply and compete globally. Currently, MIC customs software is used by more than 700 customers, in 40+ countries, on five continents.
Jason O’Brien is a 12 year veteran of the global trade customs compliance software space and will give an overview of the software industry as it relates to cross border trade and how it is being used in the Customs/compliance space globally to leverage time, energy and financial savings.
To register for this event go to www.owitny.org. You may also pay at the door. Hope to see you there!
Questions/comments? Post below or email me at clark.deanna@gmail.com
"Customs Compliance Software and the Bottom Line - Cutting Costs and Leveraging Time for Importers, Exporters, Brokers and Forwarders"
featuring
Jason L. O'Brien, Director of Sales and Marketing for MIC Customs Solutions
and Co-Panelist
John O'Shea, Director, Trade Compliance at Bloomberg L.P. (presenting the perspective on compliance systems from the user, manager and consultant side)
Topics of Discussion Include:
• License vs Hosted solutions
• Global Trade Compliance vs US Trade Compliance
• All in one Global Solutions vs Best of Breed
• Return on investment
Time: Networking and refreshments at 6:00pm. Program commences at 6:30pm.
Location: Law offices of Baker & McKenzie in the Grace Building,
1114 Avenue of the Americas (the entrance is on 42nd Street directly across from Bryant Park.) New York, NY
*** Cost ***: $20 for OWIT members , students, and government employees
$25 for non-members
About MIC-
MIC Customs Solutions is a worldwide leading provider of global customs solutions and is dedicated to the development, implementation and support of global customs software solutions. MIC specializes in integrated solutions while leveraging regional and national legal requirements. MIC software helps large and small companies grow, comply and compete globally. Currently, MIC customs software is used by more than 700 customers, in 40+ countries, on five continents.
Jason O’Brien is a 12 year veteran of the global trade customs compliance software space and will give an overview of the software industry as it relates to cross border trade and how it is being used in the Customs/compliance space globally to leverage time, energy and financial savings.
To register for this event go to www.owitny.org. You may also pay at the door. Hope to see you there!
Questions/comments? Post below or email me at clark.deanna@gmail.com
Sunday, October 10, 2010
FedEx and the “Express Consignment Facility”
This week I had the pleasure of taking a field trip with some of my FIT students to Federal Express in Newark, New Jersey. Referred to as “ECO,” which stands for East Coast Overlay, this facility is one of six regional sort operations in the U.S., with the others being in Indianapolis, IN, Memphis, TN, Miami, FL, Oakland, CA, and Anchorage, AK.
It is through these centers that all foreign freight is “cleared” for US Customs and other federal agencies, such as US Fish and Wildlife (US F&W) and the Food and Drug Administration. Not only does US Customs have an office on-site at ECO but I likewise met a US F&W inspector while there who mentioned inspecting live animals and getting the typical declaration for items with mother of pearl.
US Customs designates these regional sort operations as “hubs,” which are bonded warehouses permitted to handle international cargo. The regulations overseeing hub operations are under the “Express Consignment Facility” regulations found at 19 CFR Part 128.
We were given a tour of both ECO’s domestic and foreign freight operations, as well as the offices of FedEx Trade Networks, its on-site customs clearance operation. Interestingly, they have licensed customs brokers and, individuals working under their direction, to prepare and file entry summaries, which by definition, is done on behalf of the importer. They have high-tech software that allows for a quick tariff determination by way of “clicking” your way through the subheadings, which is done based on the invoice and other shipping records which are scanned in at the point of sale overseas. The oddity with FedEx’s clearance operation, however, which admittedly, I forgot to ask about, is as follows.
The shipper, by virtue of going to FedEx in say, Germany, pays for the service and directs FedEx to provide the customs clearance services so that the end recipient, aka, the importer and/or consignee here in the US, can receive the package at its address, as delivered by FedEx' domestic carriers.
Customs brokers, however, must have a valid power of attorney to engage in “customs business,”which includes the filing of entry papers, on behalf of the importer. It therefore begs the question – how is it possible that FedEx clears these shipments when it does not have a valid power of attorney (authorizing the broker to clear the cargo on behalf of the importer) for every domestic recipient of foreign cargo? This is a question I did not get a chance to ask as mentioned above. Perhaps they do have one after all for every importer in accordance with the regulations, though I would be interested to know how that is obtained given the express nature of FedEx.
Express consignment facilities are recognized as hubs by US Customs because it is through these that foreign cargo destined for other foreign locations gets sorted through. That is, cargo arrives on the inbound flight from a foreign location, which in the case of ECO would likely be from Charles de Gaulle Airport in France, and is placed on an outbound flight to a different foreign location.
As all cargo is listed on the airplane’s manifest, it is at these hubs that US Customs comes through, examining the manifest in search of anything suspect – be it the cargo itself, the foreign destination, etc. - and despite the cargo not being “entered,” or attempted to be entered into the US, as it has a final destination with a foreign address and it is just passing through the U.S. for logistical purposes, all cargo at an express consignment facility is “fair game” for inspection, detention, or seizure, as it is on U.S. soil.
Typically, a “suspect” shipment is one where contraband may be found, or where an allegation of a counterfeit or trademark violation exists, such as with a shipment of cell phones or other electronic devices. Any hint of a violation, and the cargo gets detained. ECO even had a designated US Customs holding cage for cargo that US Customs flagged for further investigation.
According to our tour guide, one of three licensed customs brokers in the Regulatory Compliance and Clearance office of ECO, FedEx’ relationship with US Customs is very good and that they work very closely with US Customs to further its mandates with regards to imports.
Remember, US Customs has free reign to inspect all cargo at any hub, whether it is destined for importation into the US or not. As most foreign cargo is routed through a FedEx regional sort operation while en route to its ultimate foreign destination, this is something to keep in mind when choosing an express courier from a foreign country.
Questions/comments? Post below or email me at clark.deanna@gmail.com
It is through these centers that all foreign freight is “cleared” for US Customs and other federal agencies, such as US Fish and Wildlife (US F&W) and the Food and Drug Administration. Not only does US Customs have an office on-site at ECO but I likewise met a US F&W inspector while there who mentioned inspecting live animals and getting the typical declaration for items with mother of pearl.
US Customs designates these regional sort operations as “hubs,” which are bonded warehouses permitted to handle international cargo. The regulations overseeing hub operations are under the “Express Consignment Facility” regulations found at 19 CFR Part 128.
We were given a tour of both ECO’s domestic and foreign freight operations, as well as the offices of FedEx Trade Networks, its on-site customs clearance operation. Interestingly, they have licensed customs brokers and, individuals working under their direction, to prepare and file entry summaries, which by definition, is done on behalf of the importer. They have high-tech software that allows for a quick tariff determination by way of “clicking” your way through the subheadings, which is done based on the invoice and other shipping records which are scanned in at the point of sale overseas. The oddity with FedEx’s clearance operation, however, which admittedly, I forgot to ask about, is as follows.
The shipper, by virtue of going to FedEx in say, Germany, pays for the service and directs FedEx to provide the customs clearance services so that the end recipient, aka, the importer and/or consignee here in the US, can receive the package at its address, as delivered by FedEx' domestic carriers.
Customs brokers, however, must have a valid power of attorney to engage in “customs business,”which includes the filing of entry papers, on behalf of the importer. It therefore begs the question – how is it possible that FedEx clears these shipments when it does not have a valid power of attorney (authorizing the broker to clear the cargo on behalf of the importer) for every domestic recipient of foreign cargo? This is a question I did not get a chance to ask as mentioned above. Perhaps they do have one after all for every importer in accordance with the regulations, though I would be interested to know how that is obtained given the express nature of FedEx.
Express consignment facilities are recognized as hubs by US Customs because it is through these that foreign cargo destined for other foreign locations gets sorted through. That is, cargo arrives on the inbound flight from a foreign location, which in the case of ECO would likely be from Charles de Gaulle Airport in France, and is placed on an outbound flight to a different foreign location.
As all cargo is listed on the airplane’s manifest, it is at these hubs that US Customs comes through, examining the manifest in search of anything suspect – be it the cargo itself, the foreign destination, etc. - and despite the cargo not being “entered,” or attempted to be entered into the US, as it has a final destination with a foreign address and it is just passing through the U.S. for logistical purposes, all cargo at an express consignment facility is “fair game” for inspection, detention, or seizure, as it is on U.S. soil.
Typically, a “suspect” shipment is one where contraband may be found, or where an allegation of a counterfeit or trademark violation exists, such as with a shipment of cell phones or other electronic devices. Any hint of a violation, and the cargo gets detained. ECO even had a designated US Customs holding cage for cargo that US Customs flagged for further investigation.
According to our tour guide, one of three licensed customs brokers in the Regulatory Compliance and Clearance office of ECO, FedEx’ relationship with US Customs is very good and that they work very closely with US Customs to further its mandates with regards to imports.
Remember, US Customs has free reign to inspect all cargo at any hub, whether it is destined for importation into the US or not. As most foreign cargo is routed through a FedEx regional sort operation while en route to its ultimate foreign destination, this is something to keep in mind when choosing an express courier from a foreign country.
Questions/comments? Post below or email me at clark.deanna@gmail.com
Friday, October 1, 2010
Consumer Product Safety and US Customs Cooperation
As the watchdog of our country’s borders, US Customs has the authority to enforce, and otherwise maintain the integrity of, other federal agency regulations with respect to imported merchandise.
While the Consumer Product Safety Commission (CPSC) is responsible for the oversight of some better known laws, including the Flammable Fabrics Act (addressing inter alia, sleepwear and mattresses) and the Consumer Product Safety Act (CPSA) (dealing with, inter alia, children’s products and lighters), it is likewise overseeing some lesser known laws which I find to be interesting, such as the Refrigerator Safety Act and the Children’s Gasoline Burn Prevention Act.
Like US Customs, CPSC has specific statutory authority under 15 USC §2066 and 15 USC §1273 for sampling imports in order to ensure compliance with consumer product safety rules. Where a violation of its regulations is suspected, it likewise may issue a notice of detention (if the circumstances so require) describing the alleged violation and its governing statute.
CPSC will issue this notice to the importer who then deals directly with CPSC. Copies are provided to the importer’s Customs broker and US Customs as well. Detained merchandise remains under US Customs custody whether US Customs has issued its own detention notice or not.
Typically, the recipient of a notice has 5 business days within which to provide the requested information to CPSC in order to resolve the detention. While extensions may be granted, CPSC makes an effort to resolve detentions within 30 days.
Of all of the laws that CPSC regulates, where a violation of the CPSA occurs (and only the CPSA), a hearing may be sought by the importer, owner, or consignee under the Administrative Procedures Act. During this time however, i.e., pending the completion of the hearing, the merchandise must remain under government custody at the expense of the importer, owner, or consignee, which in everyday language, typically amounts to fees for warehousing and other incidental charges, such as the use of a forklift, a forklift supervisor, etc. Charges will vary based on the quantity and type of merchandise at issue.
When requested, CPSC may grant a conditional release of the merchandise for examination and testing so long as it remains under the US Customs bond. While "conditionally released" the goods may not be distributed.
Of course, where the cargo is not returned prior to the termination of the conditional release period, there is always the risk that US Customs might issue a Redelivery Notice which could ultimately lead to seizure, destruction or exportation of the merchandise.
Or, in the event the goods are not redelivered, an importer would likely be facing an assessment of liquidated damages. US Customs must issue this notice however, within 30 days after the end of the conditional release period.
Lastly, an importer may request that the detained merchandise be exported or destroyed. Of course, destruction means that not only has the importer/owner forfeited the money for the cost of the merchandise, but it also has to pay out-of-pocket for its destruction, and carry out the operation under Government supervision.
Needless to say, when an alleged violation remains unresolved, big brother (i.e., some branch of the government) will be watching, until a resolution has been found, a penalty (or liquidated damages claim) has been paid, or the merchandise has been destroyed.
In my experience I have noticed that all too often, importers believe that “no news is good news.” As a practitioner, I recognize that no news can actually be a prelude to really bad news with expensive consequences.
It would therefore, be prudent to routinely review importation practices and protocols, and obtain periodic advice and counsel on existing practices to ensure compliance with existing laws or newly implemented regulations. As always with new endeavors, the prudent approach would be to obtain expert advice.
Questions/comments? Post below or email me at clark.deanna@gmail.com
While the Consumer Product Safety Commission (CPSC) is responsible for the oversight of some better known laws, including the Flammable Fabrics Act (addressing inter alia, sleepwear and mattresses) and the Consumer Product Safety Act (CPSA) (dealing with, inter alia, children’s products and lighters), it is likewise overseeing some lesser known laws which I find to be interesting, such as the Refrigerator Safety Act and the Children’s Gasoline Burn Prevention Act.
Like US Customs, CPSC has specific statutory authority under 15 USC §2066 and 15 USC §1273 for sampling imports in order to ensure compliance with consumer product safety rules. Where a violation of its regulations is suspected, it likewise may issue a notice of detention (if the circumstances so require) describing the alleged violation and its governing statute.
CPSC will issue this notice to the importer who then deals directly with CPSC. Copies are provided to the importer’s Customs broker and US Customs as well. Detained merchandise remains under US Customs custody whether US Customs has issued its own detention notice or not.
Typically, the recipient of a notice has 5 business days within which to provide the requested information to CPSC in order to resolve the detention. While extensions may be granted, CPSC makes an effort to resolve detentions within 30 days.
Of all of the laws that CPSC regulates, where a violation of the CPSA occurs (and only the CPSA), a hearing may be sought by the importer, owner, or consignee under the Administrative Procedures Act. During this time however, i.e., pending the completion of the hearing, the merchandise must remain under government custody at the expense of the importer, owner, or consignee, which in everyday language, typically amounts to fees for warehousing and other incidental charges, such as the use of a forklift, a forklift supervisor, etc. Charges will vary based on the quantity and type of merchandise at issue.
When requested, CPSC may grant a conditional release of the merchandise for examination and testing so long as it remains under the US Customs bond. While "conditionally released" the goods may not be distributed.
Of course, where the cargo is not returned prior to the termination of the conditional release period, there is always the risk that US Customs might issue a Redelivery Notice which could ultimately lead to seizure, destruction or exportation of the merchandise.
Or, in the event the goods are not redelivered, an importer would likely be facing an assessment of liquidated damages. US Customs must issue this notice however, within 30 days after the end of the conditional release period.
Lastly, an importer may request that the detained merchandise be exported or destroyed. Of course, destruction means that not only has the importer/owner forfeited the money for the cost of the merchandise, but it also has to pay out-of-pocket for its destruction, and carry out the operation under Government supervision.
Needless to say, when an alleged violation remains unresolved, big brother (i.e., some branch of the government) will be watching, until a resolution has been found, a penalty (or liquidated damages claim) has been paid, or the merchandise has been destroyed.
In my experience I have noticed that all too often, importers believe that “no news is good news.” As a practitioner, I recognize that no news can actually be a prelude to really bad news with expensive consequences.
It would therefore, be prudent to routinely review importation practices and protocols, and obtain periodic advice and counsel on existing practices to ensure compliance with existing laws or newly implemented regulations. As always with new endeavors, the prudent approach would be to obtain expert advice.
Questions/comments? Post below or email me at clark.deanna@gmail.com
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