<\/p>\n
If the thought of monetary penalties, shipment delays, detentions or seizures of merchandise keep you up at night, then this article is for you. \u00a0First, it\u2019s quite easy to establish a U.S. company, pick (what you hope is) a terrific customs broker, file Form 5106<\/a> with U.S. Customs and Border Protection (CBP) to request your importer number, pick a surety<\/a> (there are many, your broker will likely sway you to their favorite) and WALLAH! Right? Wrong. No one sits you down during this process to say, wait, importing can be great, but, this is also a LOT of responsibility. Your company (and SOMETIMES even YOU) have liability and a burden when importing. This article will walk you through YOUR burden as an importer, how CBP can question your imports, and how penalties can ensue and what you should be doing about it, in advance!<\/p>\n Importer\u2019s Burden <\/em><\/strong><\/p>\n The best resource (when you\u2019re ready to read 211 pages) is the \u201cImporting into the U.S.\u201d \u201cA Guide for Commercial Importers\u201d<\/a> by CBP (last revision in 2006).\u00a0 The guide discusses the Trade Act of 2002 and the Customs Modernization Act (the \u201cMod Act\u201d) and the responsibilities that came to fruition for importers as a result. A key feature of the Mod Act is a \u201crelationship between CBP and importers that is characterized by informed compliance\u201d. What this means is now there is a shared responsibility<\/strong> between CBP and the import community, wherein CBP communicates its requirements to the importer, and the importer, in turn, uses \u201creasonable care\u201d to assure that CBP is provided with accurate and timely data<\/strong>. Bottom line, no \u201creasonable care\u201d = BIG problem. I developed the TOP 10 TIPS When Importing<\/a> to alert importers to \u201creasonable care\u201d requirements and top items to think about, and ensure you have a plan to comply with.<\/p>\n Customs Request for Information (CBP Form 28)<\/em><\/strong><\/p>\n CBP has the right to check up on importers and ensure you are using \u201creasonable care\u201d in regards to the classification, valuation, country of origin and use of duty preference programs for merchandise upon entry to the U.S.\u00a0 CBP often verifies that an importer is declaring merchandise entered into the U.S. properly by sending an importer a Request for Information, also known as Customs Form (CBP Form) 28. Upon receipt of a Request for Information, if an importer determines an inadvertent error took place, and an investigation by CBP has not yet commenced, filing a perfected Prior Disclosure may assist in drastically reducing potential penalties from CBP.\u00a0 This is where you get counsel involved to ensure you respond adequately to the CBP Form 28, and if advised by counsel, submit a Prior Disclosure as a response.<\/p>\n Notice of Action (CBP Form 29)<\/em><\/strong><\/p>\n If CBP is not satisfied with an importers response to a Request for Information, CBP will then send a Notice of Action, also known as Customs Form 29.\u00a0 It is essential that importers contact an expert upon receipt of a Request for Information or Notice of Action as they often lead to penalties if not responded to properly.<\/p>\n CBP 1592 PENALTIES<\/em><\/strong><\/p>\n CBP expects importers to use \u201creasonable care\u201d in reporting your classification (HTSUS), value, country of origin, duty preference program, etc. \u00a0\u00a719 U.S.C. 1592 is the statute CBP references when issuing penalties for negligence, gross negligence or fraud \u2013 depending on the degree of culpability CBP believes you had at the time of your non-compliance.\u00a0 At this stage, you want to ensure you have an expert on your side. That expert should know of CBP\u2019s laws and regulations, including when a Pre-Penalty notice should be issued first, the FP&F Mitigation Guidelines<\/a>, and how best to assist you in asserting to CBP your side of the story, which hopefully is that no negligence, gross negligence or fraud existed and that you did use reasonable care when importing. An expert will discuss your options with you, including filing a Petition with CBP and working on Pre-Compliance for future importations.<\/p>\n Diaz Trade Law has had great success in mitigating penalties from CBP for an underlying intellectual property rights violation. Some REAL examples include a successfully mitigated $141,000.00 penalty for negligence down to $0 and another successfully mitigated $27,000.00 penalty for negligence down to $1,000.00.<\/p>\n Avoid Becoming Personally Liable Under Customs Penalty Statute 19 U.S.C. \u00a7 1592(a)<\/em><\/strong><\/p>\n Compliance officers, business owners, and others can be held personally<\/strong> liable under the customs penalty statute 19 U.S.C. \u00a7 1592(a) for fraudulently or negligently providing information on imports, pursuant to the court decision from United States v. Trek Leather Inc. and Harish Shadadpuri (Trek Leather)<\/em>.\u00a0 The Trek Leather case also held that import managers and compliance personnel can now be held personally liable in circumstances other than fraud for imports that violate U.S. custom laws.\u00a0 In the case, the court found a corporate officer of an importer of record personally liable for gross negligence penalties where the importer understated the value of the goods.\u00a0 The Court concentrated on introducers of goods into US commerce, which could potentially be anyone involved who creates documents or facilitates documents being used to enter goods into U.S. commerce.\u00a0 The Trek Leather Court ruled that the customs penalty statute applies to any person, regardless of whether or not they are an \u201cimporter of record.\u201d\u00a0 According to the court, the term \u201cintroduce\u201d was interpreted to mean \u201c[A]ctions that bring goods to the threshold of the process of entry by moving goods into CBP custody in the United States and providing critical documents (such as invoices indicating value) for use in the filing of papers for a contemplated release into United States commerce even if no release ever occurs.\u201d\u00a0 Since the definition does not limit the term \u201cintroduce,\u201d CBP could expand the actions that are covered under the definition.\u00a0 Some say the decision created a wide range of new individuals subject to negligence and gross negligence penalties under the customs penalty statute and regulations, others say this interpretation is not new, and individuals that are grossly negligent\/fraudulent when reporting information (like valuation) to CBP were always subject to enforcement.\u00a0 Regardless, owners of smaller businesses or closely held corporations, who are more involved in sourcing decisions and shipping arrangements, are particularly at risk for falling under this new definition, which is why it is especially important to contact Diaz Trade Law with any questions or concerns regarding your compliance with CBP laws and regulations.<\/p>\n Want More Information?<\/em><\/strong><\/p>\n The Small Business Development Center, in conjunction with 305 Cargo and Diaz Trade Consulting are hosting a Compliance Seminar on April 9, 2016<\/a>, that will serve as an introduction to importing compliance.\u00a0 Attendees will learn the importer\u2019s burden of reasonable care with U.S. Customs, importer\u2019s responsibilities, how importers can best manage their transactions through due diligence, CBP rulings, documentation and procedures, how to monitor and audit your shipments, and how to create your customs compliance program.\u00a0 The seminar is essential for importers and will be held at Broward College\/FAU at 111 East Las Olas Blvd. (Higher Education Complex), Conference Room 1110 A&B, Fort Lauderdale, FL 33301-2206.\u00a0\u00a0 For more information contact Diaz Trade Law at info@diaztradelaw.com<\/a> or Register HERE<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" If the thought of monetary penalties, shipment delays, detentions or seizures of merchandise keep you up at night, then this article is for you. \u00a0First, it\u2019s quite easy to establish a U.S. company, pick (what you hope is) a terrific customs broker, file Form 5106 with U.S. Customs and Border Protection (CBP) to request your importer number, pick a surety (there are many, your broker will likely sway you to their favorite) and WALLAH! Right? Wrong. No one sits you down during this process to say, wait, importing can be great, but, this is also a LOT of responsibility. Your company (and SOMETIMES even YOU) have liability and a burden when importing. This article will walk you through YOUR burden as an importer, how CBP can question your imports, and how penalties can ensue and what you should be doing about it, in advance! Importer\u2019s Burden The best resource (when you\u2019re ready to read 211 pages) is the \u201cImporting into the U.S.\u201d \u201cA Guide for Commercial Importers\u201d by CBP (last revision in 2006).\u00a0 The guide discusses the Trade Act of 2002 and the Customs Modernization Act (the \u201cMod Act\u201d) and the responsibilities that came to fruition for importers as a result. A key feature of the Mod Act is a \u201crelationship between CBP and importers that is characterized by informed compliance\u201d. What this means is now there is a shared responsibility between CBP and the import community, wherein CBP communicates its requirements to the importer, and the importer, in […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[33,62,20,52,118,32,72,61,89,14,16],"tags":[162,130,164,160,161,163],"class_list":["post-2713","post","type-post","status-publish","format-standard","hentry","category-customs-broker","category-customs-expert","category-events","category-expert","category-htsus","category-import","category-international-law","category-international-trade","category-compliance","category-speaking","category-cbp","tag-162","tag-cbp","tag-compliance","tag-customs","tag-customs-penalties","tag-pre-compliance"],"yoast_head":"\n