Abady Law Firm, P.C. – Customs and Import/Export Attorney Blog
Learn the Basics of Customs and International Trade Policy and Procedure
Archive for May, 2012
Liquidation is the process through which Customs completes its review of an entry and finalizes its position as to the duties. You may ask, what about those duties paid at the time of entry? When duties are paid at the time of entry they are referred to as “deposits” because they are not considered Customs’ final assessment of duties owed. Generally, the entry remains “unliquidated” for a period of 314 days after the date of entry. During this interim period the entry information may be revised regarding country of origin, classification, valuation, etc. The 314th day marks liquidation. An entry is “deemed” liquidated by operation of law through Customs inaction within (1) year from the date of entry or reconciliation, unless extended.
An entry can be liquidated in one of three ways:
1. No change as to the way the goods were declared or duty deposited.
2. Customs may issue a bill of underpayment due to reasons such as change in classification or valuation.
3. Customs may issue a refund for overpayment.
Liquidation is important because it signifies the final calculation as to the payment of duties for a given entry. Further, the date of liquidation triggers the statutory limitations period where the importer may challenge Customs decision. For example, an importer who wishes to challenge Customs classification, the importer must file an administrative protest within 180 days from the date of liquidation. As a result, it is important for the importer to monitor liquidations.
Goods that are imported are released based on the filing of the entry and/or entry summary with Customs but before Customs may have determined whether or not the goods are admissible into the U.S. “Release” refers to Customs relinquishing physical control over the goods. However, Customs will not release the goods without evidence of an entry bond being filed. The bond offers protection to Customs in that the importer guarantees return of the goods to Customs custody if requested. Customs will order the return of goods for 1) failure to abide by the customs laws and regulations; 2) a need for examination or appraisal of the goods; 3) issues regarding country of origin marking.
As mentioned goods that are released may be subject to redelivery.
Customs may make the demand for redelivery
1. 30 days after release; or
2. 30 days after the end of a “conditional release period;”
3. or via conditional release periods pursuant to regulations for certain products.
Customs cannot make a demand for redelivery after liquidation is finalized.
Examples that create a conditional release period include: 1) Customs demand for a sample of the goods; 2) Customs request for information (CF28). The consequences for failure to comply with Customs conditional release may include substantial delays and a claim for liquidated damages.
Who is responsible for the costs of opening of a shipment and unloading product by Customs? The importer. Inspections are usually done on an appointment basis and are known to result in days of delay before released from Customs custody. Further, costs involving demurrage and storage charges are the responsibility of the importer.
In addition, there is generally no liability on the part of Customs for loss or damages to ones merchandise during the course of inspection.