Monday, July 21, 2014

C-TPAT Annual Meeting by CBP in San Antonio, Texas, on August 26-28, 2014

Peter Quinter
Customs and International Trade Attorney

U.S. Customs and Border Protection (CBP) has announced its annual meeting of the Customs-Trade Partnership Against Terrorism (C-TPAT) will take place at the beautiful JW Marriott in San Antonio, Texas. There will be two separate sessions each lasting 2 days. For more information regarding the 2014 C-TPAT National Conference, please click here.

With over 11,000 members, the real questions that companies, and executives who lead those companies, are asking is whether the time and expense of becoming and then staying a member of C-TPAT, is worth it. For some companies, the answer is a definite yes because either they have been directly or indirectly strongly recommended by CBP that they should be a C-TPAT member, some are advised by their customers that they should be a C-TPAT member, and others just think strengthening their companies' international supply chains is a darn good idea, whether or not there is any deterrent effect upon potential terrorists.

The concern that I hear often from executives in international logistics is that there is not enough benefit to importers, ocean carriers, and customs brokers for membership in C-TPAT. As a "trusted trader" one would expect expedited shipments, yet CBP has been reluctant to share data that establishes that C-TPAT members' cargo is cleared any faster than non C-TPAT members. C-TPAT members have their cargo examined and detained by CBP, or other Federal agencies. When such cargo is detained, often CBP provides no explanation for such examinations which are costly both in terms of expense and delay.

I encourage companies that can qualify to participate in C-TPAT, but first do a cost benefit analysis.

For any questions about C-TPAT or CBP generally, contact me at:

Peter Quinter, Chair
Customs and International Trade Law Group
GrayRobinson, P.A.
1221 Brickell Ave., 16th Floor
Miami, FL 33131

Office (305) 416-6960
Mobile (954) 270-1864
email Peter.Quinter@Gray-Robinson.com
Skype Peter.Quinter1

Tuesday, June 3, 2014

The Global Entry Program by U.S. Customs and Border Protection - The Good, The Bad, and The Ugly

Over 1 million people are currently enrolled in the Global Entry program of U.S. Customs and Border Protection (CBP). According to CBP, 96% of the members are from the United States, but as of 2013, nationals from other countries are also accepted into this worthwhile program, including Germany, Mexico, Qatar, Netherlands, Panama, Korea, and the United Kingdom. Currently, Global Entry kiosks are located at 31 airports in the United States, and 10 pre-clearance airports in Canada and Ireland.

Global Entry is a way for CBP to facilitate or expedite the international arrival and clearance process for the almost 1,000,000 international passengers who attempt to enter the United States each day. Members approved into Global Entry are determined to be "low risk". Applicants must submit an online application, pay a fee, have the information vetted by CBP, and undergo an in-person interview by a CBP officer.

The United States Government Accountability Office (GAO) recently completed a critical analysis of Global Entry and CBP's other "Trusted Travelers" programs, and issued a May 2014 Report to Congress. While the GAO Report was generally complimentary, it was very critical of the discrepancies that occured among CBP interviewers for Global Entry applicants. GAO stated that "interviews may not be conducted consistently across enrollment centers" resulting in the denial of otherwise qualified applicants. According to CBP, approximately 5% of applicants are denied membership into Global Entry. Appplicants whose applications are denied are to be notified by email of the denial. Denied applicants can reapply for a trusted traveler program or request reconsideration of the denial to be trusted traveler Ombudsman.

Persons with felony convictions are automatically denied, however, applicants with misdemeanors may be considered for inclusion in some cases, depending on how recent the convictions were, the overall number of misdemeanor convictions, and the applicant's nationality. According to the GAO Report, approximately 40% of the appeals to the Ombudsman were granted, allowing the applicant membership into Global Entry, however, the appeal processing time is 5 months.

My take is this - Global Entry is awesome! I just returned from Colombia to Miami International Airport, went to the Global Entry kiosk, answered a few questions on the machine, had the "ticket" printed, skipped the long line waiting for a CBP officer, and handed my ticket to the CBP officer as I walked out the door. Total time was only a few minutes. Anyone who can qualify should apply immediately. Any applicants who are initially denied should appeal to the Ombudsman after consulting with an attorney or other person who is very knowledgeable about the customs laws and regulations, including the Global Entry process.

Peter Quinter, Chair
Customs and International Trade Law Group
GrayRobinson, P.A.
1221 Brickell Avenue
16th Floor
Miami, Florida 33131

Peter.Quinter@Gray-Robinson.com


Office (305) 416-6960
Mobile (954) 270-1864
Skype Peter.Quinter1

Wednesday, May 21, 2014

Overview of Financial Investigations by the U.S. Department of Homeland Security

The Customs Law Committe of the American Bar Association is sponsoring a teleconference on Thursday, May 22, 2014, from 1:00-2:00 P.M. EDT. Persons may dial in to hear the teleconference, or attend in person at the law firm of GrayRobinson, 401 East Las Olas Blvd., 10th Floor, Ft.Lauderdale, Florida.

The speakers are:

1) Peter Quinter, Vice Chair, Customs Law Committee and Shareholder in Charge of the Customs and International Trade Law Group at GrayRobinson, P.A.

and

2) Deborah Morrisey, Citibank, former Assistant Special Agent in Charge for Financial Investigations, Miami Office, U.S. Immigration and Customs Enforcement (ICE), U.S. Department of Homeland Security (DHS)

Import and export companies, along with customs brokers and freight forwarders, and banks and other financial institutions are keen to learn how, when, why, and where Special Agents from what is now known as Homeland Security Investigations (HSI) conduct such investigations. The discussion will go way beyond money laundersing investigations, use of Export Enforcement Subpoenas, seizures of merchandise, and seizures of bank accounts, and include cooperation with other Federal law enforcement agencies such as FinCen (Financial Crimes Enforcement Network). Learn from an insider the intracies of financial investigations occur.

To sign up for the teleconference or to attend in person, please contact Jonathan Lewis at jonathan.lewis@americanbar.org or (202) 662-1600.

For any questions, please contact me at:

Peter Quinter, Shareholder
Customs and International Trade Law Group
GrayRobinson, P.A.
1221 Brickell Ave.
16th Floor
Miami, FL 33131

mobile (954) 270-1864
office (305) 416-6960
Peter.Quinter@Gray-Robinson.com

Skype Peter.Quinter1

Tuesday, April 29, 2014

Customs Brokers are Critical to a Successful International Supply Chain


Peter Quinter 

Most cargo imported into the United States is cleared by a customs broker through U.S. Customs and Border Protection, and not by the importer directly. Customs brokers are professionals who are licensed by U.S. Customs and Border Protection (hereinafter "CBP") after passing both a very difficult written examination and an exhaustive background investigation. Part 111 of the CBP Regulations (19 CFR Part 111) detail numerous "duties and responsibilities of customs brokers" and establish the grounds for imposition of monetary penalties against customs brokers, as well as procedure for cancellation, suspension, or even revocation of a customs broker license, for various and numerous violations. In recent years, CBP has been more aggressive in assessing penalties against customs brokers for allegedly "failing to exercise responsible supervision and control", taking away licenses from brokers who violated the CBP regulations, and even pursuing criminal prosecutions against customs brokers for aiding or abetting persons or companies which commit import violations. This article appeared in International Trade Magazine on Monday, April 28, 2014.

The maximum monetary penalty that may be assessed by CBP against customs brokers is $30,000 per violation. CBP may stack penalties for repeat violations against a licensed customs broker, so if the same violation was committed each time on four separate shipments, the total penalty assessed by CBP's Fines, Penalties, and Forfeitures Offices may be $120,000. Fortunately, there is an opportunity for the broker to respond in writing to any pre-penalty and the penalty assessed by CBP, in an attempt to mitigate or cancel the penalty through the administrative petition process found at Part 171 of the CBP Regulations. Customs brokers convicted of most crimes will have their licenses revoked automatically, but again, brokers may choose to challenge that process administratively before CBP and the U.S. Department of Homeland Security in a complex process that involves CBP's Office of Chief Counsel, CBP's Broker Management Branch, and the local CBP Port Director where the violation(s) took place.

Separate for criminal prosecution and monetary penalties, it is now very common for CBP, through its Broker Management Branch and Import Specialist Division offices at the port level, to counsel customs brokers who appear to fail to exercise responsible supervision and control. Examples of failing to exercise responsible supervision and control may be repetitively and incorrectly classifying imported merchandise according to the Harmonized Tariff Schedule of the United States (HTSUS), failing to keep its employee list current, failing to maintain the proper entry records for each shipment for the required five year period, failing to timely make an entry or pay the required customs duties, failing to declare imported merchandise with the proper country of origin, or failing to properly declare that the imported merchandise is subject to antidumping or countervailing duties.

All too often, when CBP pursues a penalty pursuant to 19 USC 1592 against an importer for some wrongdoing, the importer blames its appointed customs broker. The actions by CBP may be pursued against a customs broker who violated the CBP regulations, and, interestingly, CBP may simultaneously pursue an investigation resulting in monetary penalties against the importer whom the customs broker represented. Even admitted failures by the customs broker do not absolve the importer of any wrongdoing. For example, if customs duties are not timely paid to CBP by a customs broker which had received payment for those duties from the importer it represents, CBP will always demand the payment from the importer as it always remains the importer's responsibility to pay any applicable customs duties, and comply with all relevant CBP regulations. Separate from monetary penalties, liquidated damages claims are often pursued by CBP against an importer for committing CBP violations because all importers must have an import bond as security for customs duties .

On top of all this, the new CBP Commissioner has recently announced that there will be significant changes to Part 111 of the CBP Regulations to add more responsibilities to customs brokers, including required annual, continuing education. Customs brokers remain critical to a successful international supply chain for U.S. importers in arranging for the international transportation of cargo to the United States, and clearance by CBP and other Federal agencies.

Peter Quinter, Chair
Customs and International Trade Law Group
GrayRobinson
1221 Brickell Ave.
16th Floor
Miami, FL 33131

office 305 416-6960
mobile 954 270-1864

Peter.Quinter@Gray-Robinson.com
>

Friday, April 4, 2014

Importing Counterfeit Merchandise and U.S. Customs and Border Protection

Every day, counterfeit merchandise of all kinds attempts to enter the United States. Whether it be handbags, jewelry, clothing, electronics, or medicines, it amounts to a worldwide phenomenon totalling billions of dollars. Fortunately, U.S. Customs and Border Protection (CBP) officers at the air, ocean, and land borders have the legal authority to stop, examine, and seize suspected counterfeit merchandise. That is why companies as diverse as Rolex, Gucci, Apple, Ford, and Disney register their trademarks with the U.S. Patent and Trademark Office, and then take the additional, important step of recording those trademarks with CBP.

CBP just issued its Fiscal Year 2013 seizure statistics for counterfeit merchandise that attempted to illegally enter the United States. You guessed right, the country of origin for the most counterfeit merchandise was again China, and the seizure statistics continue to climb year after year in both the number of seizures and the value of the seized merchandise.

On Thursday, April 11, 2014, in Las Vegas, at the 40th Annual Conference of the National Customs Brokers and Forwarders Association of America, Inc. (NCBFAA), I will provide a lecture on "Intellectual Property Rights: How to Detect and Avoid the Scammers". In other words, how, why, and when CBP targets and seizes suspected counterfeit merchandise, how trademark owners may assist CBP to enforce the intellectual property rights laws, and how owners of merchandise wrongly seized by CBP may attempt to get their merchandise released through the administrative petition process with the CBP Fines, Penalties, and Forfeitures Offices. My fellow presenter at the Conference on this topic is Robert 'Bob' Crane, U.S. Customs Program Manager, Global Security and Brand Protection, Underwriters Laboratories.

Too often, CBP officers seize merchandise that is suspected of being counterfeit or otherwise infringing a trademark or copyright, but really does not. The concept of gray-market, genuine merchandise still seems to be a challenging one for CBP. Moreover, when suspected counterfeit merchandise is seized by CBP, the current administrative petition process described at 19 CFR Part 171 takes far too long to resolve, especially when the value exceeds $100,000, and the case must be referred from the ports to CBP HQ in Wshington, D.C. By the time CBP realizes and agrees that the merchandise is not counterfeit, and releases it back to the importer, it could be a year later. The merchandise no longer has the same value, and the contract for the resale of the merchandise has likely been cancelled, so the importer who did (or tried to do) everything right, but the merchandise has been seized anyway, either because CBP or the importer made an error. In those situations, the importing company is royally you know what. These situations do not show up in the annual CBP statistics, but is an unfortunate reality for many.

Peter Quinter, Shareholder
Customs and International Trade Law Group
GrayRobinson, P.A.
Miami, Florida
Office (305) 416-6960
Mobile (954) 270-1864
peter.quinter@gray-robinson.com


For questions or comments about this post, please add below.

Monday, March 24, 2014

Surprise! Tom Winkowski Transfers From U.S. Customs and Border Protection to U.S. Immigration and Customs Enforcement

In a move that surprised many in the international trade community, Tom Winkowski, former Acting Commissioner of U.S. Customs and Border Protection (CBP), effective immediately, is now in charge of the U.S. Immigration and Customs Enforcement, popularly known as "ICE". Mr. Winkwoski's new official title is Principal Deputy Assistant Secretary. Mr. Winkowski had over 30 years of knowledge and experience with U.S. Customs, including what many refer to as 'the good old days' pre-9/11 under the U.S. Customs Service when he was a Port Director in Los Angeles and Miami.

ICE is the principal investigative arm of the U.S. Department of Homeland Security (DHS). Created in 2003 through a merger of the investigative and interior enforcement elements of the U.S. Customs Service and the Immigration and Naturalization Service, ICE now has more than 20,000 employees in offices in all 50 states and 47 foreign countries. The "Mission" of ICE is to promote homeland security and public safety through the criminal and civil enforcement of federal laws governing border control, customs, trade and immigration. The agency has an annual budget of more than $5.7 billion dollars, primarily devoted to its two principal operating components - Homeland Security Investigations (HSI) and Enforcement and Removal Operations (ERO). As stated in ICE's current 'Strategic Plan' are topics already familiar to Mr. Winkowski:

The four key priorities for the agency's future:

1. Prevent terrorism and enhance security
2. Protect the borders against illicit trade, travel and finance
3. Protect the borders through smart and tough interior immigration enforcement
4. Construct an efficient, effective agency

This move by Mr. Winkowski, one of CBP's most decorated and accomplished executives, comes soon after CBP received its new Commissioner. Mr. R. Gil Kerlikowske was nominated by President Obama, and sworn in on March 7, 2014, as Commissioner of CBP. CBP has 60,000 employees, and budget of $12.4 billion. Most recently, Mr. Kerlikowske served as Director of the White House Office of National Drug Control Policy. He brings four decades of law enforcement and drug policy experience to his new position at CBP. He formerly served nine years as the Chief of Police for Seattle, Washington.

Commissioner Kerlikowske will deliver an address at the National Customs Brokers and Forwarder Association's Annual Meeting held in Las Vegas, Nevada, from April 6-10, 2014. We will see if 40 years of drug enforcement will help CBP properly rebalance its 200 year, proud history of facilitating international trade rather than hindering it under the guise of "national security".

Please post your comments below, or contact me directly.

Peter Quinter, Partner
Customs and International Trade Law Group
GrayRobinson, P.A.
1221 Brickell Avenue, 16th Floor
Miami, Florida 33131

peter.quinter@gray-robinson.com
Office (305) 416-6960
Mobile (954) 270-1864
Skype Peter.Quinter1



Tuesday, March 4, 2014

Importing Gold, U.S. Customs, and the Department of Homeland Security

In 2013 and so far in 2014, there has been a significant increase in seizures of imported gold shipments, and arrest and criminal prosecution of persons involved in the importation, transportation, assaying, and smelting of gold. U.S. Customs and Border Protection (CBP) routinely examine, and sometimes seize, gold as it is imported into the United States, for violations of false declarations (18 USC 542). Immigration and Customs Enforcement (ICE) Special Agents with the U.S. Department of Homeland Security (DHS) often investigation, and sometime arrest, persons in the gold business for smuggling (18 USC 545) and money laundering (18 USC 1956).

I will provide a description and explanation for the U.S. Government's sudden, keen interest in precious metals, especially gold, at the annual meeting of the International Precious Metals Institute's annual conference in Orlando, Florida, on June 7-10, 2014. We will discuss what ICE calls "trade-based money laundering", and how to avoid problems with both CBP and ICE.

Contact me with any questions or post a comment below.

Peter Quinter, Chair
Customs and International Trade Law Group
GrayRobinson law firm
1221 Brickell Ave.
Suite 1600
Miami, Florida 33131

office (305) 416-6960
mobile (954) 270-1864
peter.quinter@gray-robinson.com
Skype Peter.Quinter1