Friday, December 7, 2012

FCBF Hosts "Getting Back to Basics" - Part II of Seminar Series


Export Attorney Peter Quinter to Present at the "Back to Basics II: Export Documents" Seminar

When: Wednesday, December 12th, 9:00am-12:00pm
Where: Florida Customs Brokers and Forwarders Association (FCBF) office located at 8181 NW 14th Street, Suite 300, Doral, Florida 33126

What:  This session will provide a thorough review of the essential documenation and procedures to export merchandise by both air and ocean with focus on the license requirements of both the U.S. Department of Commerce and U.S. Department of State.


Click Here for the FCBF Registration Form
Print and Fax/Email : 305-499-9491/ events@fcbf.com  

What's Covered?

A simple review of Tariffs and NRAs, i.e. Negotiated Rate Arrangements
  • Powers of Attorney
  • Forwarder Liabilities for Cargo
  • Electronic Export Information/Shipper’s Export Declaration (EEI/SED)
  • AES filing, Error messages, ITN numbers
  • Schedule B numbers, ECCNs, EAR
  • Presenting Licenses upon Export
  • CBP Export Issues
  • ITAR
  • DDTC Registration, Licenses, Statements
  • BIS areas of concern
  • Export Investigations and Penalties

    For any questions regarding these topics, please contact:

    Peter Quinter, Shareholder and Chair
    Customs and International Trade Law Group
    GrayRobinson, P.A.
    Miami, Florida
    (305) 416-6960
    Peter.Quinter@Gray-Robinson.com

    Monday, November 26, 2012

    NAFTA Verification Audits and Customs


    On Thursday, October 18, 2012, Peter Quinter moderated a panel at the American Bar Association's International Section Fall Meeting at the Fontainebleau Hotel on Miami Beach. The seminar NAFTA Verification Audits: What to Expect & How to Prevail was a tremendous success.



    A big thank you to all the panelists pictured above  Gabriel Arriaga, Arriaga Abogados, Mexico City; Cyndee Todgham Cherniak, Lexsage Professional Corporation, Toronto; Turenna Ramirez, Sanchez Devanny, Mexico City, and moderator Peter Quinter, GrayRobinson, Miami, Florida.  Panelist Cheryl Johnson, Assistant Field Director, Houston, Texas, U.S. Customs and Border Protection (not included in photo above).

    The panel presentation was very well attended at the American Bar Association conference. The attendees included attorneys, accountants, international trading companies, freight forwarders, customs brokers, and international business consultants whose import and export companies in the United States, Canada, and Mexico have been subjected to NAFTA verification questionnaires.  Unfortunately, the reality is that too many exporters do not fully understand the requirements of the NAFTA Certificate of Origin as to what really is needed to qualify as "originating" under the NAFTA. The result for many companies is that they are assessed unpaid customs duties, interest, and huge penalties by customs administrations for the importing country. This can lead to very serious business difficulties between the foreign exporter which completed the NAFTA Certificate of Origin and the importer which presented the NAFTA Certificate of Origin to the customs administration in the importing country. The panel of legal experts answered numerous questions from the attendees.

    For any questions regarding the NAFTA Certificate of Origin or NAFTA Verification Audits, feel free to call me.

    Peter Quinter, Chair
    Customs and International Trade Law Group
    GrayRobinson, law firm
    Peter.Quinter@Gray-Robinson.com
    mobile phone (954) 270-1864

    Monday, October 15, 2012

    Seized Money Returned by Homeland Security


    Peter A. Quinter, Esq.
    Below is a picture of a United States Treasury check. Not just any check, but a check payable to a client whose money was seized by U.S. Customs and Border Protection (CBP) and Immigration and Customs Enforcement (ICE) officials of the U.S. Department of Homeland Security.  The seizure occurred as the international passenger arrived in the United States at a border crossing in California, and was stopped and questioned by Homeland Security officers regarding the source of his money.

    Without an adequate explanation, CBP officers took the business traveler's cash.  The client originally hired another attorney at a different law firm without success.  Only then did he seek a customs law expert both knowledgeable and experienced in seizures by CBP.  After I went through the petition process of the Fines, Penalties, and Forfeiture Office of CBP, including a face to face meeting by my client and me with the FP&F Officer, assigned Paralegal Specialist in the FP&F Office, and the local CBP legal counsel, the money was returned in full.

    I have filed over 1,000 Petitions with CBP all over the United States, and learned a thing or two about how to get seized merchandise returned to my clients.

    5 Important Lessons to Learn for International Passengers Carrying Over $10,000 in Cash:
    1.  Properly complete and submit the "Report of International Transportation of Currency or Monetary Instruments Form" (Fincen 105) to CBP officers;

    2.  Have an adequate explanation for the source and intended use of the money if questioned by Homeland Security officers;


    3.  Do not sign any affidavits or declarations allegedly "required" by the Homeland Security officers;

    4.  Do not wait for CBP to send you a formal, written Seizure Notice before taking action; and

    5.  As soon as your money or other property has been seized, immediately contact a customs lawyer who is an expert in handling Homeland Security matters, especially seizures by CBP.

    -------------------

    For questions or comments about seized currency, ICE or CBP, please contact me.

    For any questions or comments regarding these topics, please contact:

    Peter Quinter, Shareholder and Chair
    Customs and International Trade Law Group
    GrayRobinson, P.A.
    1221 Brickell Avenue
    Suite 1600
    Miami, Florida 33131
    Office: (305) 416-6960
    Mobile: (954) 270-1864
    Peter.Quinter@Gray-Robinson.com

    Tuesday, October 2, 2012

    Avoiding Export Violations and Penalties; Developing Your Own Export Management and Compliance Program (EMCP)


    At our Export Compliance Bootcamp, the 75 participants were treated to an informative presentation by Special Agent Jonathan Barnes, from the Miami Field Office of the Office of Export Enforcement for the Bureau of Industry and Security (BIS), U.S. Department of Commerce, and Peter Quinter, Chair, Customs and International Trade Law Group at GrayRobinson.

    Special Agent Barnes shared many stories about his vast and varied experiences as a BIS Agent, and offered very pragmatic advice for any exporter to address the most common causes of Civil Enforcement Cases regarding Export Violations:
            1. Incomplete Transaction Information
            2. Ignoring Red Flags
            3. Human Error
            4. Incorrect SED/EEI Filing
            5. Non-Compliance with License Conditions
    When going into more detail on each of these subjects, Special Agent Barnes spent a lot of time talking about Category #3 - Human Error. He strongly urged all exporters present at the Bootcamp to take the time to create an Export Management and Compliance Program (EMCP).  Although having a Written Compliance Program in place is not required of all exporters, it is an enormously effective tool to help an exporter manage its export transactions,  detect human errors, and is a factor in mitigating any potential penalty assessed by BIS for a violation.

    Special Agent Barnes also stressed the importance of correctly creating and implementing an EMCP. He explained that many times exporters attempt to create these EMCPs on their own and end up creating more problems for themselves by doing it incorrectly or incompletely. Special Agent Barnes urged the participants to work together with BIS as well as with a customs and trade attorney to effectively design an EMCP. In our experience, when BIS sees that an exporter has taken seriously the responsibility of correctly drafting and implementing an EMCP (including working with professionals to ensure compliance with Federal Regulations), BIS Agents and attorneys in the BIS Office of Chief Counsel will look upon the exporter much more favorably when reducing the penalty.

    So what is an EMCP?

    An EMCP takes individual decisions and pieces of information and builds them into an organized, integrated system. It is a program which can be established to manage export-related decisions and transactions to ensure compliance with the Export Administration Regulations (EAR) and license conditions.

    Why is having an EMCP so important?

    While the EAR allows flexibility in the manner in which U.S. companies meet these compliance requirements in a number of different methods, BIS strongly recommends that all parties dealing with export transactions maintain a vigorous and effective Export Management and Compliance Program (EMCP), incorporating the nine key elements (listed below and also available here), and especially the screening of all parties to transactions, as part of their overall due diligence. Compliance activities would differ depending on the nature of the items being exported and the destinations to which they are exported, but err on the side of caution to ensure that our U.S.-origin dual-use goods and technologies are exported in compliance with the EAR.

    So what are the Core Elements of an Effective EMCP?
    1. Management Commitment: Senior management must establish written export compliance standards for the organization, commit sufficient resources for the export compliance program, and ensure appropriate senior organizational official(s) are designated with the overall responsibility for the export compliance program to ensure adherence to export control laws and regulations.
    2. Continuous Risk Assessment of the Export Program
    3. Formal Written Export Management and Compliance Program: Effective implementation and adherence to written policies and operational procedures.
    4. Ongoing Compliance Training and Awareness
    5. Cradle to Grave Export Compliance Security: Screening of employees, contractors, customers, products, and transactions and implementation of compliance safeguards throughout the export life cycle including product development, jurisdiction, classification, sales, license decisions, supply chain, servicing channels, and post-shipment activity.
    6. Adherence to Record keeping Regulatory Requirements (EAR Part 762)
    7. Internal and External Compliance Monitoring and Periodic Audits
    8. Internal Program for Handling Compliance Problems, including Reporting Export Violations
    9. Taking Corrective Actions in Response to Export Violations
    So what are the next steps? How can an exporter create an appropriate and effective EMCP?

    First step is to audit your own exporting processes and see how you are currently doing in comparison to requisite EMCP provisions. You can download BIS's EMCP Audit Module: Self-Assessment Tool here
    Next, an Exporter should print out and thoroughly read through the BIS Compliance Guidelines: How to Develop an Effective Export Management and Compliance Program and Manual. This official BIS 166 page document provides an exporter with a strict and specific set of guidelines for establishing an EMCP effectively.


    The next step is to contact an experienced and knowledgeable export compliance attorney to draft and assist in the implementation of the EMCP, including training of affected employees in the logistics, compliance, or export departments of the company. Once you are done with the audit and reading through the EMCP Guidelines, the exporting company should make a commitment to drafting its own Export Management and Compliance Program and Manual and then implementing it. Remember - having an EMCP is multi-faceted.... you are putting your procedures in writing, pursuant to the Federal Regulations, and then you must actually abide by those procedures for every single export transaction or potential export transaction that you may come across.

    Companies should not be afraid to ask for help from BIS directly, skilled and experienced consultants, or Customs and International Trade Attorneys. BIS has made it clear that establishing and implementing an effective EMCP is key for all exporters and this responsibility should not be taken lightly.

    For questions on creating your own EMCP, please do not hesitate to reach out.

    For any questions or comments regarding these topics, please contact:

    Peter Quinter, Shareholder and Chair
    Customs and International Trade Law Group
    GrayRobinson, P.A.
    1221 Brickell Avenue
    Suite 1600
    Miami, Florida 33131
    Office: (305) 416-6960
    Mobile: (954) 270-1864
    Peter.Quinter@Gray-Robinson.com
    .

    Thursday, September 27, 2012

    Peter Quinter Featured in LexisNexis Export Compliance Article

    Recent FedEx Export Enforcement Underlines Need for Proper Export Controls for All Companies  - By Dylan McGuire, LexisNexis In-House Advisory

    Shipping giant FedEx’s recent agreement to pay $370,000 in fines to settle allegations that it violated U.S. export regulations by shipping computer equipment to a company in Dubai that allegedly used such equipment to make explosive devices used in Iraq and Afghanistan, highlights the importance of having proper export controls for U.S. companies that ship overseas, panelists at a recent webinar said.

    “I don’t care how big a company you are, how small a company you are, how many lawyers you have on staff—compliance people on staff—sooner or later the chances are pretty good that every company is going to end up making a mistake or error or somehow commit a violation of law or regulation,” related to export regulations, said Peter Quinter of Gray Robinson speaking at a September 11, 2012 LexisNexis® Webinar entitled Understanding U.S. Export Regulations.

    Peter Quinter, Esq.
    (305) 416-6960
    peter.quinter@gray-robinson.com
             
    Quinter said that once the government suspects an export violation, its first step is often to issue an enforcement subpoena or a summons to the company.

    “When the government issues an enforcement subpoena or summons or conducts any kind of investigation … you don’t know whether it’s going to result in a criminal prosecution, an administrative monetary penalty, or no action whatsoever. Be advised the government is not obligated to tell you—they may not know at that point. So, you should always suspect the worst—that it is a criminal investigation and to keep in mind that when someone contacts you, you’re not necessarily required to answer their questions.  The subpoena you are required to respond to, however.  How you respond and when you respond is of course up to you and your legal counsel,” said Quinter.

    Failure to respond to an Office of Foreign Asset Controls (OFAC), Department of the Treasury, subpoena can result in substantial fines—an automatic fine of $20,000 for failure to respond and up to $50,000 if the value of the exported merchandise exceeds $500,000, Quinter said.

    “Just because a subpoena asks for everything under the sun does not mean that you absolutely have to discuss or provide that documentation to OFAC,” he said.

    Quinter pointed out that just about everybody who does business overseas is subject to OFAC regulations, but that companies that do business with Syria or Iran are particularly under scrutiny.  He said that all U.S. citizens, regardless of whether they are living in the country are elsewhere, may find themselves subject to OFAC regulations if they do business with those countries, due to ongoing sanctions programs.

    He offered the following advice to companies under investigation by OFAC: “The government likes it when you cooperate.  There are many situations where the violator does not cooperate.  As a matter of fact, the violator often provides false information to the government, believe it or not.  So when the subpoena is issued by OFAC or BIS [Bureau of Industry and Security] to a company and they ask for certain documents, or ask for certain information and either the documentation or the information is falsified, the government doesn’t like that and will issue penalties based upon that alone.  They’ve actually gone after people criminally for lying to the government.”

    Quinter recommended that an effective compliance program come from the top down.

    “If you’re a substantial exporter, you should really have a written export management and compliance program, signed by the president and enforced by legal counsel or other compliance personnel.  It should a management commitment in writing, right from the top and provided to every employee, that says how important the export rules are. The government agencies like to see that,” he said.

    He also recommended that companies engage in continuous risk assessment

    “Someone should in the company should always be checking to see—not just initially when they install the program but routinely every six months or a year—that the risks are minimal,” he said.  He recommended that companies call into their sales department posing as an international company seeking to, for example, ship goods to Iran or Syria, to test how their personnel reacts.

    He also recommended companies engage in ongoing training and awareness programs and keep accurate records of transactions and dealings.

                                                                                  ###

    Thursday, September 13, 2012

    The Red Sole Saga Continues....

    Christian Louboutin's distinctive and high-fashion lacquered red sole shoes have been in the news frequently in the last month. A war is being waged over these famous red-soles.... one battle is being played out at our ports while the other is being played out in our courtrooms.
    

    Look closely at the picture about and you'll notice the famous CBP green tape just below those famous red soles. On August 14, CBP import specialists and officers assigned to the Los Angeles/Long Beach seaport seized a total of five shipments arriving from China containing 20,457 pairs of ladies footwear, in violation of the Christian Louboutin trademark, with a domestic value of $57,490 and an estimated manufacturer’s suggested retail price of $18 million. CBP's first hint that something was wrong with the shipment - it was coming from China instead of Italy, where the legitimate Louboutins are produced.


    CBP is not the only enforcer of Louboutin's trademark.  After Louboutin entered into a major legal battle with its competitor, Yves St. Laurent (YSL), the district court determined that the red-sole mark was invalid because a "monopoly on the color red would impermissibly hinder competition amongst other participants."  This was mostly overturned just this week, as the U.S. Court of Appeals for the Second Circuit found that Louboutin had the right to trademark its red soles, as long as the color of the sole contrasted with the rest of the shoe.  The appellate court held that the doctrine of aesthetic functionality is a valid defense in the Second Circuit in cases “where protection of the mark significantly undermines competitors’ ability to compete in the relevant market” (emphasis in original). A mark is aesthetically functional if granting exclusive protection to the feature “would put competitors at a significant non-reputation-related disadvantage,” citing TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 32-33 (2001).The appellate court concluded that the red, lacquered outsole had acquired limited secondary meaning "as a distinctive symbol that identifies the Louboutin brand."

    The greatest lesson from this saga, for all producers of distinctive goods, is the importance of working with an attorney to register your trademark with the U.S.P.T.O. and then record those registered marks with CBP’s Intellectual Property Rights e-Recordation system. Christian Louboutin has U.S. Customs and Border Protection policing its brand from Chinese counterfeiters at our country's borders, while the Federal Court system protects its product's distinctiveness from legitimate big-pocket competitors. This kind of protection is invaluable for any manufacturer, designer, producer, or importer - just follow the saga of the red-sole shoes.

    -----

    For any questions or comments regarding these topics, please contact:

    Peter Quinter, Shareholder and Chair
    Customs and International Trade Law Group
    GrayRobinson, P.A.
    1221 Brickell Avenue
    Suite 1600
    Miami, Florida 33131
    Office: (305) 416-6960
    Mobile: (954) 270-1864
    Peter.Quinter@Gray-Robinson.com

    Monday, September 10, 2012

    Export Compliance Bootcamp - Join Us!


    I am pleased to invite you to join me on September 24th in Miami and/or on September 27th in Fort Lauderdale for a informative event - our Export Compliance Bootcamp









    Complying With U.S. Export Controls
    Fundamentals of the Export Administration Regulations (EAR) and the International Traffic in Arms Regulations (ITAR)

    Who Should Attend
    All those involved in the export process: U.S. Manufacturers and Sellers (U.S. Principal Parties in Interest), Freight Forwarders, Exporting Carriers, Consolidators, etc.

    AGENDA

    How to Protect Yourself in an Enforcement Proceeding.
    Peter Quinter, GrayRobinson, P.A. 

    Export Controls Basics (Agencies, Jurisdiction, Scope and Regulations).
    Albert Saphir, Principal, ABS Consulting

    Screen or Risk Being Fined - Why denied party screening is important.
    Elayne Garber, OCR Services 

    Export Compliance - a government perspective.
    Jonathan Barnes, Bureau of Industry and Security (BIS), U.S. Department of Commerce


    LEARN

    • How to avoid shipping to denied parties, whether your product needs an export license, and how to apply for one.
    • Which government agency has jurisdiction over export controls for your products.
    • Automated Export System (AES) Requirements.
    • How to handle criminal and civil investigations, including summonses and subpoenas.
    • How to respond to proposed penalties for EAR and ITAR violations.

    LOCATIONS

    MIAMI
    Monday, September 24th
    GrayRobinson
    1221 Brickell Avenue
    Suite 1600
    8:30 a.m. - Check-in/registration
    9:00 a.m. to 12:00 p.m. - Program


    FORT LAUDERDALE
    Thursday, September 27th
    GrayRobinson
    401 E. Las Olas Boulevard
    Suite 1850
    8:30 a.m. - Check-in/registration
    9:00 a.m. to 12:00 p.m. - Program


    --------------------------

    Cost is $50 and includes seminar materials, breakfast, and lunch. NCBFAA credit will be offered and parking validated. For more information and to register, email:

    MIAMI
    Monday, September 24, 2012

    miamirsvp@gray-robinson.com
    FORT LAUDERDALE
    Thursday, September 27, 2012

    fortlauderdalersvp@gray-robinson.com

    Any questions, please contact Yesy Rojas at 954-761-7486.

    Friday, August 17, 2012

    Another Way Cigars Are Bad for You

    If for some reason or other you were thinking that perhaps the next time you were in Dunhill’s in Paris or London you might just slip a few Cubans into your briefcase and bring them back to the U.S., think again, particularly if you’re a lawyer and want to stay that way. The Illinois Attorney Registration and Disciplinary Committee just recommended the disbarment of an Illinois attorney because, among other things, he was convicted of violating the Trading with the Enemy Act in connection with boxes of Cuban cigars that he brought with him into the United States.
    Now, admittedly, Richard S. Connors, the attorney in question, did just a teensy bit more than stuff a few Cohibas in his blazer jacket and try to slip them past Customs. According to the Seventh Circuit Court of Appeals, which upheld his criminal conviction, Connors was caught with 46 boxes of cigars in four suitcases in his automobile’s trunk while crossing the Canadian border and apparently more were carried back when returning from approximately 30 other trips to Cuba. Connors was also convicted of filing a false passport when, after Customs yanked his passport in connection with the cigar smuggling, he applied for a new one, stating only that his previous passport was missing. The Illinois Committee also noted that Connors had been previously suspended for misappropriation of client funds and had still not reimbursed those funds.

    But the story gets better (or worse, I suppose, if you are Mr. Connors). The feds were tipped off to his Cuban cigar shenanigans by his wife during a messy divorce proceeding. In fact, according to Connors in his unsuccessful appeal, she “reconciled” with him only to get into his house to get information to turn over to federal investigators, something Connors claimed, without success, violated his Fourth Amendment rights. Oh, and about that house, the feds seized it because he kept the cigars there and used the proceeds from the sales of his cigars to pay his mortgage.

    One other interesting tidbit: the Communist regime in Cuba was not toppled upon the end of Mr. Connor’s cigar business. Fidel and Raúl are doing fine; Mr. Connors, not so much.

    --------
    [Authored by Attorney Clif Burns, publisher of Export Law Blog. See our BlogRoll on the right column.]

    Monday, August 6, 2012

    Customs Broker Arrested for $100 Million Fraud

    Peter Quinter, Esq.
    In a Criminal Complaint unsealed on July 25, 2012, the U.S. Attorney's Office for the Southern District of California in San Diego announced that it had charged 8 people and 3 companies with conspiracy and customs fraud. Among those arrested was Gerardo Chavez, the President of the San Diego Customs Brokers Association, and owner of a customs brokerage company, Tecate Logistics, LLC.

    According to the press release by the U.S. Department of Justice, the customs broker and his employees conspired with various individuals and companies to enter merchandise into the United States "in bond" to avoid paying customs duties, then forged official U.S. Customs and Border Protection (CBP) stamps to attempt to establish that the shipments were transported into Mexico. In reality, the shipments never left the United States, but were distributed to various customers throughout California.  The imported merchandise was worth over $100 million, and the unpaid duties on the imported cigarettes, apparel, and food products was about $10 million.


    Criminal Complaint Case No. 3:12-mj-02756-KSC alleged violations of 18 U.S.C. 371 (conspiracy to defraud the United States), which provides for a maximum penalty of 5 years in prison and a $250,000 fine; 18 U.S.C. 542 (entry of goods by means of false statements to CBP) which provides for a maximum penalty of 2 years in prison and a $250,000 fine; and 18 U.S.C. 1519 (obstruction of justice) which provides for a maximum penalty of 20 years in prison and a $250,000 fine per count.  The case was investigated by CBP, U.S. Immigration and Customs Enforcement (ICE), and the Office of Criminal Investigations of the U.S. Food and Drug Administration (FDA).

    Procedurally, the Criminal Complaint was filed, under seal, on July 23, 2012.  Arrest warrants were issued that day.  Mr. Chavez and others were arrested on July 26, 2012, and have made their initial appearance before Magistrate Judge Crawford.  Some of the individuals charged with crimes remain at large as fugitives.

    This shocking case is of great interest to those of us in the logistics business, any owner of a customs broker business, any employee of a customs broker, and anyone who handles in-bond merchandise.  I will continue to report regularly on developments in this case.  I also remind readers that a Criminal Complaint is merely an allegation.

    Peter Quinter, Chair
    Customs and International Trade Law Group
    GrayRobinson law firm.
    peter.quinter@gray-robinson.com
    (954) 270-1864

    Thursday, August 2, 2012

    Trade-Based Money Laundering - Affecting HSBC, ING, and now YOUR business too.....


    The British bank HSBC is making headlines, thanks in part to a U.S. Senate hearing held this past month, during which executives from the bank were grilled for failing to stop Mexican drug cartels, subsidiaries linked to al Qaeda, and nations on the U.S. sanctions lists like Syria and Iran, from making illegal purchases and moving money into the United States. HSBC executives admitted that a large portion of some $7 billion transferred by their Mexican subsidiaries into the bank's U.S. operation likely belonged to drug cartels.

    Likewise, a Settlement Agreement was released in June 2012 by the United States Department of the Treasury regarding the voluntary self-disclosure to the Office of Foreign Assets Control (OFAC) by ING Bank. ING admitted to violating numerous sanctions programs imposed by the United States against Cuba, Burma, the Sudan, Libya and Iran. These violations were deemed by the Americans as “egregious” and the total settlement by ING Bank to resolve this matter with the U.S. government is $619,000,000.00, an amount equivalent to 8.5 percent of ING Bank’s net profits in fiscal 2011.

    As succinctly stated by Malcolm Beith from The Daily Beast, "the reality is that international institutions—and the U.S. financial sector—have long been vulnerable to money launderers, who are often several steps ahead of the authorities in their bid to exploit loopholes and weak links in institutions hellbent on capitalizing and expanding." While catching banks like HSBC and ING involved in this kind of money laundering may take the Federal government years of investigation, advances in technology as well as Homeland Security's recent partnering with foreign nations to exchange trade data, have allowed for an explosion of seizures of by the Drug Enforcement Administration (DEA) and the U.S. Immigration and Customs Enforcement (ICE) or Homeland Security Investigations (HSI) for alleged trade-based money laundering (TBML) for companies involved in importing and exporting goods to and from the United States.

    TBML is a money laundering method through which transnational criminal organizations (TCOs) earn, move, and store illicit proceeds by disguising them as legitimate trade. TCOs often exploit global trade networks to move value around the world, using the complex and sometimes confusing documentation that is frequently associated with legitimate trade transactions. A notable example - Colombian drug cartels use TBML extensively to repatriate drug proceeds in a scheme commonly referred to as the Black Market Peso Exchange.

    Just as major banks like HSBC and ING have learned the hard way of the consequences of not keeping a watchful eye for signs that money is being laundered, it is important for U.S. importers and exporters to be aware of the realities and consequences of not being fully aware of who they are doing business with and where money is coming from. Red flag indicators of trade-based money laundering include: 
    • Payments to vendor made in cash by unrelated third parties
    • Payments to vendor made via wire transfers from unrelated third parties
    • Payments to vendor made via checks, bank drafts or postal money orders from unrelated third parties
    • False reporting: such as commodity misclassification, commodity over-valuation or under-valuation
    • Carousel transactions: the repeated importation and exportation of the same high-value commodity
    • Commodities being traded do not match the business involved
    • Unusual shipping routes or transshipment points
    • Packaging inconsistent with commodity or shipping method
    • Double-invoicing
    It is critical for all importers and exporters to understand these factors and implement systems to recognize when any one of these "red flags" comes into play. The explosion of bank account seizures this year as well as the "taking down" of major financial institutions is ample proof that the federal government is watching the money coming in and out and it is critical to take this new reality seriously.

    In the event your bank account is seized, it is important to know that bank account holders absolutely have the right to challenge the taking of their money by the DEA or ICE.  If your money has been seized, you have a right to know the legal basis for the seizure, and should, through your attorney, contact the DEA or ICE Agent, or the Assistant U.S. Attorney.  In civil forfeiture cases, there is an administrative process to follow once a Notice of Seizure is issued to the bank account holder by the Fines, Penalties, and Forfeitures Office of U.S. Customs and Border Protection (CBP) or a Notice of Seizure by the DEA.  If the Notice of Seizure is from CBP, file a Petition, and if the Notice of Seizure is issued by the DEA, file a Sworn Claim with the Asset Forfeiture Section located in Quantico, Virginia.  The procedures of both agencies are very specific, and must be followed carefully, otherwise, your right to challenge the seizure will be lost forever.

    -----------------------
    Comments or questions, please post below or feel free to contact me directly.

    For any questions or comments regarding these topics, please contact:

    Peter Quinter, Shareholder and Chair
    Customs and International Trade Law Group
    GrayRobinson, P.A.
    1221 Brickell Avenue
    Suite 1600
    Miami, Florida 33131
    Office: (305) 416-6960
    Mobile: (954) 270-1864
    Peter.Quinter@Gray-Robinson.com

    Monday, July 30, 2012

    It is Time to Light Up Your Cigar This Thursday in Orlando


    Peter Quinter, Esq.
    The 80th Annual IPCPR Convention & International Trade Show is from August 2-6 at the Orange County Convention Center, Orlando, Florida.  The International Premium Cigar & Pipe Retailers Association (IPCPR) event is the world's largest premium tobacco trade show, and it includes an educational component for its members and attendees.  This Thursday, August 2, from 2:15 p.m. -3:45 p.m., the topic is "U.S. Tobacco Tax & Trade Bureau (TTB) - What You Need to Know With Peter Quinter".    Specifically, the lecture will address:

    1.  TTB Tax Audit Division audits of cigar companies,

    2.  Payment of Federal Excise Tax (FET) to U.S. Customs,

    3.  Proposed FDA Regulation of Cigars, and

    4.  Counterfeit Cigars.

    The full Trade Show agenda is available at the IPCPR website.

    As those executives operating cigar companies know, the Department of the Treasury's Alohol and Tobacco Tax and Trade Bureau (TTB) has authority to regulate the entry and distribution of cigars in the United States, and the collection of Federal Excise Tax (FET).  The TTB's Audit Division was created in 2001 to verify that cigar companies are paying the correct amount of FET, especially when the taxes were significantly increased in 2009 with the implementation of the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA).  The TTB Audit Division typically does on-site examination of documentation, including the Monthly Report - Tobacco Products or Processed Tobacco Importer (TTB Form 5220.6).



    When you buy a "Cuban" cigar, you should know it is not from Cuba, especially since importing products from Cuba is illegal because of the U.S. embargo with Cuba.  Nevertheless, there are lots of counterfeit Cohiba and other brands being sold on-line and in the United States.  U.S. Immigration and Customs Enforcement (ICE) of the U.S.Department of Homeland Security investigates and arrests people trying to evade the embargo by importing Cuban cigars, and even counterfeit cigar sales are prohibited by 18 U.S.C. 2320 (trafficking in counterfiet products).

    For questions or comments about cigars, TTB or CBP, please contact me.

    For any questions or comments regarding these topics, please contact:

    Peter Quinter, Shareholder and Chair
    Customs and International Trade Law Group
    GrayRobinson, P.A.
    1221 Brickell Avenue
    Suite 1600
    Miami, Florida 33131
    Office: (305) 416-6960
    Mobile: (954) 270-1864
    Peter.Quinter@Gray-Robinson.com


    Friday, July 13, 2012

    I am Not Ashamed About the U.S. Olympic Team

    Peter Quinter, Esq.
    Perhaps you have already heard or seen the comments by political pundits and other commentators regarding the controversy about members of the U.S. Olympic Team wearing clothing that has "Made in China" labels. I want you to know that as a customs and international trade attorney, as someone who believes in free and fair trade, and as someone who has been to China several times, I have no problem with our Olympic athletes wearing clothes that were made in China...or Guatemala, or Brazil, or Indonesia, or Italy.  Sure, it would be nice to think that Ralph Lauren, the brand that provided the clothing to the Olympic athletes, should have obtained the clothing from a manufacturer in the United States.  Guess what, chances are, the fabric for those clothes, or the buttons, or the thread, would have come, in part, from China anyway.

    Now, this may be very controversial, and many of you reading this may disagree with me. Ok, let's discuss this a little bit, but first, get naked. Yes, take your clothes off, or at least for the first time look at the labels of what you are buying and wearing.  I mean, look at the labels on the clothes, shoes, hangbags, wallets, etc. that you have with you right now. Surprise, chances are they do not display "Made in the USA" but were made outside the United States.  By the way, the TV or computer you are reading this on right now... yup again, probably Made in China or at least some components made in China.

    Every customs lawyer knows that all merchandise entering the United States must prominently display, in English, the country of origin of the merchandise. See 19 U.S.C section 1304 and the U.S. Customs and Border Protection regulations at 19 CFR Part 134.  I am in the business of identifying where things are made and how they should be labeled when entering the United States.  In customs lingo, we use the term "marked".

    So, if you are absolutely horrified that our U.S. Olympic athletes are wearing something Made in China, before making any criticism, please take a hard look at yourself first. 'People in glass houses shouldn't throw stones' is an old saying, and is still true.

    Please provide your comments or questions below.

    Peter Quinter, Shareholder
    Customs and International Trade Law Group
    GrayRobinson, P.A.
    (954) 270-1864
    Peter.Quinter@Gray-Robinson.com
    http://www.gray-robinson.com/

    Thursday, July 12, 2012

    Sunny and Safe - New Regulations for U.S. Sunscreen Labels

    In June of 2011, the FDA issued a Final Rule on Labeling and Effectiveness Testing for Sunscreen Products. The FDA is requiring these changes to be implemented by December of 2012, after pushing back the original June 2012 due date.  The new Rule is aimed at protecting consumers from misleading information and ensuring greater uniformity across product lines and brands. It establishes standards for testing the effectiveness of sunscreen products and require labeling that accurately reflects test results
    For example, a most notable change is that the terms “waterproof”, “sweatproof” and “sunblock” may no longer be used on sunscreen labeling. Instead, FDA allows for only water resistant characterization with a qualification of either 40 or 80 minutes of water resistance per application featured prominently on the front label of the product display.

    Similarly, for a sunscreen to use the term  “broad spectrum", a specific set of tests are required to back up the claim. Furthermore, only if sunscreen qualifies as "broad spectrum" and SPF of 15 or greater, may a manufacturer make a specifically designated statement regarding the products ability to diminish skin cancer and early skin aging risks.

    The complex and extensive testing and labeling requirements for sunscreen products under the new Rule are imposed equally upon products manufactured in the U.S. as well as those imported into the U.S. from abroad. While the FDA has extended the deadline for compliance to December 2012, it is important to get started on making these changes right away with the assistance of a qualified professional to ensure compliance with these rules and requirements as well as the rapidly approaching deadline.

    -------
    Comments or questions, please post below or feel free to contact me directly.

    For any questions or comments regarding these topics, please contact:

    Peter Quinter, Shareholder and Chair
    Customs and International Trade Law Group
    GrayRobinson, P.A.
    1221 Brickell Avenue
    Suite 1600
    Miami, Florida 33131
    Office: (305) 416-6960
    Mobile: (954) 270-1864
    Peter.Quinter@Gray-Robinson.com

    Monday, July 2, 2012

    "Show Me Your Papers" - Recent Updates to Arizona's Immigration Law

    Glenn M. Cooper, Esq.
    The U.S. Supreme Court on Monday June 25, 2012 delivered its decision on the Arizona immigration law.  The Court upheld the “show me your papers” provision of the Arizona immigration law requiring Arizona state law enforcement officers to determine the immigration status of anyone they stop or arrest if they have reason to suspect that the individual might be in the country illegally.  However, the court also decided that those same Arizona state law enforcement officers cannot detain or arrest anyone based solely on immigration violations.  Furthermore, the Court ruled that states cannot enact state laws making it a state crime for one to be in illegal immigration status (as such matters come under the jurisdiction of Federal authorities). 

    The Court struck down the Arizona immigration law provision making it a state crime for illegal immigrants to seek or hold jobs without proper documentation. The Court also struck down the Arizona immigration law provision making it a crime for immigrants to to fail to register with the federal government.  Additionally the Court took issue with state law enforcement officers detaining individuals for lack of immigration documentation.   

    While states such as Alabama, Georgia and South Carolina that have already enacted their own state immigration laws may use the Supreme Court decision upholding the "show me your papers" provision to propel their state immigration laws which are themselves being litigated in various courts, the state of Florida seems inclined to stay on the sideline and not enact its own state immigration law given that the previous effort in Tallahassee failed and given the strong lobby of the pro-immigration community in Florida. 

    On a separate yet related note, the Obama administration recently announced that it would not deport certain foreign students who are in the U.S.without lawful immigration status who were brought to the U.S. as young children and who have bright futures ahead of them as future graduates and professionals. 

    Glenn Cooper is a partner in GrayRobinson's Miami and Fort Lauderdale offices whose practice focuses on immigration law.  He can be reached at glenn.cooper@gray-robinson.com.