Tuesday, April 28, 2015

CBP Doubles the Penalties Against U.S. Companies, Says Commissioner

At the National Customs Brokers and Forwarders Association of America (NCBFAA) Annual Conference held in Orlando, Florida, last week, U.S. Customs and Border Protection (CBP) Commissioner Kerlikowske made some surprising comments in his prepared remarks.

Regarding the topic of "Trade Enforcement" by CBP, the Commissioner stated:

Even before my confirmation as Commissioner last year, I heard from trade and Congressional leaders about the importance of enforcing U.S. trade laws, and the critical role CBP plays in protecting American business and the U.S. market. I recognize those concerns, and we have made some important strides.

For example, CBP and Immigration and Customs Enforcement, Homeland Security Investigations (ICE/HSI) continue to enhance training, processes, and operations to attack smuggling and explosive growth in shipments of counterfeit goods, many of which pose serious threats to public health, safety and both national and economic security.
And here is where it gets really interesting; where the rubber meets the road. Commissioner Kerlikowske exclaimed:   

As a result, trade penalty assessments have increased by 140 percent from $385 million in Fiscal Year 2011 to $926 million in Fiscal Year 2014.

That is astounding!

It was obvious to me from the work I handle with the Fines, Penalties and Forfeitures Offices around the country on behalf of clients with penalties, seizures, and liquidated damages claims assessed by CBP against importers, exporters, trucking, ocean carriers, and airlines that CBP was more aggressive, but more than doubling the penalties in a few years seems over the top. 

Peter Quinter, Chair
Customs and International Trade Law Group
GrayRobinson, P.A.
333 SE 2nd Ave.
32nd Floor
Miami, Florida 33133

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

Saturday, April 18, 2015

Peter Quinter is running the Boston Marathon this Monday, April 20, 2015!

Dear Readers,

Been training for 6 months to run my first 26.2 mile marathon.  Doing it with my wife, Sandy, in my hometown of Boston, Massachusetts.  Wish me luck!

Tuesday, August 5, 2014

Seized and Forfeited Property for Sale at Auction - Psst, Want a Great Deal?

Do you ever wonder what happens to the millions of dollars of merchandise that is seized by U.S. Customs and Border Protection (CBP)?

After it has been seized and forfeited (i.e. becomes the property of the United States Government), it is auctioned by the U.S. Department of the Treasury. General property (cars, boats, planes, jewelry, coins, toys, electronics, laptops, etc.) are auctioned regularly at 3 locations in the United States - Dayton, New Jersey, Pompano Beach, Florida, and Riverside, California. Buyers can get some absolutely fabulous deals, but buyer beware. Cash and credit cards are accepted. Anything purchased for $10,000 or less must be paid in full promptly. Anything over $10,000 must be paid in full within 2 business days by 4:00 p.m.,and wire transfers are then acceptable.

The next U.S. Department of the Treasury auction is August 20, from 9:00 a.m.to 4:00 p.m., in Florida. The exact address is 2951 NW 27th Avenume, Pompano Beach, Florida 33069. Inspection of items is allowed prior to the start of the auction, and you must register prior to submitting any bid. I encourage serious bidders or buyers to read the "Sale of Government Property General Sales Terms and Conditions". See you at the auction on August 20. I might buy that Rolex watch I have been dreaming about.

For any questions or comments about seizures or forfeitures, please contact me directly 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

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
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