Abady Law Firm, P.C. – Customs and Import/Export Attorney Blog

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Archive for the "Customs and Border Protection" Category

Exporting New and Used Vehicles from the United States to an Overseas Buyer

The question of whether one is permitted to export a vehicle from the United States to a foreign buyer (in China, Dubai, etc) is a tricky one.  Over the last few years there have been cases of federal officials seizing vehicles and cash associated with the business of exporting vehicles. News articles and government press releases of such scenarios have been reported on:

Two California Men Plead Guilty In “Far-Reaching And Elaborate” Automobile Export Scam (April 29, 2013)

U.S. Targets Buyers of China-Bound Luxury Cars (February 11, 2014)

Man accused of identity theft, fraud in car scheme arrested (March 18, 2015)

Selling vehicles for export angers automakers, but is it illegal? (July 21, 2014)

Exporting luxury cars is lucrative, legally questionable (August 6, 2014)

U.S. authorities are cracking down on oversea auto exporters (October 2, 2014)

Investigators pursue luxury car exporters (January 17, 2015)

Inside Stories From the War Between Automakers And Dealers Over Exports (February 12, 2016).

In United States v. Content of Wells Fargo Bank, et al,  the court ordered the federal government to return money and vehicles it seized from an automotive export business that sold luxury vehicles to the overseas market.  The government argued that there were federal wire fraud laws violated by using foreign money to defraud American car dealers into selling them vehicles that were intended to stay in the United States. Specifically, luxury vehicle dealers are prohibited by their manufacturers from selling cars for export.  Dealers have the purchaser sign a contractual agreement stating that the cars are not to be exported. In order the facilitate the purchase of luxury vehicles the automotive export company used “straw buyers” to purchase said vehicles (if the same purchaser walked into the same dealership multiple times to purchase luxury vehicles the dealership may get suspicious and prohibit the sale) and thereafter shipped them overseas.  The court held that the government could not establish probable cause to believe that the funds seized are the “proceeds” of wire or mail fraud.  The court reasoned that the misrepresentation was only a civil matter (not criminal) because the party deceived by a material misrepresentation (dealer) is NOT the same party injured (manufacturer). Therefore, the court ordered the immediate release of seized funds and vehicles.

While this decision may protect one from criminal liability there is still the question of civil liability.  In an article written by Automotive News entitled Dealer scores in suit against illegal exporters over 100 vehicles were purchased and exported overseas without the dealer’s knowledge.  As a result, the dealer violated its franchise agreement (which prohibited the sale of vehicles for export) and was liable to reimburse the manufacturer for incentive money it did not qualify for. Thereafter, the dealer filed suit against the purchasers and a jury found in favor of the dealer under claims of fraud, breach of contract, and intentional misrepresentation or concealment and violation of the RICO act.

Based on these cases, one must be careful in conducting an auto export business.

In addition, U.S. Customs and Border Protection (“Customs”) provides a list of regulations on its website regarding the export of vehicles here. One important point is the definition of “used” vehicles for purposes of filings in the Automated Export System (“AES”). For example, you go into a dealership and purchase a vehicle.  You drive it off the lot, is it now considered a “used” vehicle? Further, the distinction between a “new” versus “used” and “titled” versus “untitled” vehicle correlates to the type of documentation needed to be provided to Customs.

With respect to the definition of “used”:

  • Used. “Used” refers to any self-propelled vehicle the equitable or legal title to which has been transferred by a manufacturer, distributor, or dealer to an ultimate purchaser.
  • Ultimate Purchaser. “Ultimate Purchaser” means the first person, other than a dealer purchasing in his capacity as a dealer, who in good faith purchases a self-propelled vehicle for purposes other than resale.

A mistake in the designation of a vehicle as “new” versus “used” in the AES can result in the seizure of said vehicles. Thus, it is vital that one carefully reviews the Customs regulations prior to export.

Resource Information

For more information about this blog post, please contact Abady Law Firm, P.C. and speak with our customs lawyer at (800) 549-5099. Also visit www.customsesq.com to chat with a customs lawyer — who has insight into Exporting Vehicles — about your company’s export situation and to schedule a consultation.  To chat with us, click the bottom right corner tab of our homepage.

Hoverboards On Fire This Holiday Season – Literally

 

Burned hoverboard. Photo: CPSC hoverboard fire

This past holiday season hoverboards have been one of the most popular items this past holiday season.  As a result, we have received numerous phone calls regarding U.S. Customs and Border Protection (“CBP” or “Customs”) intense examinations of these products.  The reason being is that there have been cases where these hoverboards burst into flames due to counterfeit batteries being used to power them. See here http://nypost.com/2015/12/30/hoverboard-bursts-into-flames-inside-a-brooklyn-apartment/. This led to intervention by the Consumer Product Safety Commission (“CPSC”), the federal agency regulating the safety of consumer products nationwide.

Customs and CPSC work closely to ensure the safety of products that are imported in the U.S. Customs is the “enforcer at the border” and enforces not only their own regulations but the regulations of all third party federal agencies.  Here, importers must ensure the quality of these hoverboards before importation. Make sure the factory you purchase from has a licensing agreement with the trademark holder of the battery inside.  If you are dealing with an agent in a foreign country make sure you get a paper trail leading to the trademark holder.  Once these goods arrive at the port of entry there is generally no turning back.  The trademark holder is unlikely to offer any assistance if the batteries are counterfeit and Customs will detain, seize, forfeit and destroy these goods.  Meaning the importer is out the money spent to their supplier for the purchase of the goods and Customs may come after the importer for penalties (if you receive a penalty contact a Customs and International Trade expert immediately).

How can this mistake be avoided?  Make sure you get a full understanding of what you are buying, the components (and packaging) comprising a product are just as important as the product as a whole. A minor mistake will cost you, and seizure will not be remitted because of ignorance.   Further, Customs will have you flagged as a potential violator and you may see an increase is examinations (and delays) at ports of entry.   Thus, if there are any trademarks on the goods, seek documentation supporting their legitimacy.  If you need help with identifying issues or verifying documentation contact an attorney experienced in Customs and International Trade law.

Resource Information

For more information about this blog post, please contact Abady Law Firm, P.C. and speak with our customs attorney at (800) 549-5099. Also visit www.customsesq.com to chat with a customs and international trade attorney —  about your company’s import/export situation and to schedule a consultation.  To chat with us, click the bottom right corner tab of our homepage.

Exporting to Dubai – UAE and CBP’s Fear of Iran

Companies looking to export goods to Dubai need to be aware that it takes proper precaution before they submit the export documents to U.S. Customs and Border Protection (“CBP” or “Customs”).  We have dealt with many cases where Customs is suspicious as to the end user of said goods.  Conversations with CBP personnel have indicated that Dubai is a major reexporter of goods to Iran.  As of today’s blog post, the U.S. maintains sanctions against Iran.  See our previous posts on Iran and sanctions here.  As a result, goods may be detained and/or seized because an Office of Foreign Assets and Control (“OFAC”) license is required to be obtained before they can be permitted export to Iran.

Many times the goods are destined for Dubai and are going to stay in Dubai. Due to the cross-border relationship between Dubai and Iran, it is vital that the proper information be provided to Customs prior to questions regarding the final destination of your products.  We have represented companies before Customs in disclosing the right information so that their shipments see clearance for export at ports around the country.

If you intend on exporting products to Dubai or are in the midst of questions from CBP regarding your exports to Dubai contact us immediately.

Resource Information

For more information about this blog post, please contact Abady Law Firm, P.C. and speak with our customs attorney at (800) 549-5099. Also visit www.customsesq.com to chat with a customs and international trade attorney —  about your company’s import/export situation and to schedule a consultation.  To chat with us, click the bottom right corner tab of our homepage.

Frequently Getting Selected by Customs and Border Protection for Additional Screening at U.S. Ports or Borders? Here’s What You Can Do…

If you find yourself consistently being detained for secondary screenings at U.S. entry ports when returning from international destinations, you should probably contact the Department of Homeland Security’s Travel Redress Inquiry Program (“DHS TRIP”).

The above statement also applies to travelers who:

  • Often face problems at ports of entry
  • Were delayed or denied entrance on an airplane
  • Were denied or delayed when trying to enter or exit U.S. ports of entry or border checkpoints.
  • Feel that they have been improperly or unfairly: denied, delayed, or required to undergo additional screening at national transportation hubs.

The reasons for these additional screenings can be anything from being confused with someone else, or past convictions. Fortunately, for those who fall into any of the above categories, there are steps you can take to ease your entry and exit through these ports.

Step 1: Figuring out why you are repeatedly selected for additional screening

If you do not understand why Customs and Border Protection (CBP) keeps singling you out for additional screening, you should to find out why. That task is not particularly difficult since the Freedom of Information Act (FOIA) allows you to request copies of all information CBP has on you. The information on DHS databases go as far back as 1982, so by submitting a FOIA request on CBP.org, you should be able to pinpoint why you are being targeted at entry ports.

Step 2: Correcting erroneous information on your DHS files

Once you figure out why you are often made to undergo additional screening by CBP, you can file an inquiry through DHS TRIP to have incorrect information corrected. It’s a straightforward process that only requires a computer and internet access.

Simply head to the online form, and fill out the required information.

If you found erroneous information in the copies you received from your FOIA request, you should address that in the appropriate part of the form. Make sure you include details and any other information that can help clear things up.

You’ll also be required to send in copies of some documents with your inquiry like your passport. Copies of these can be sent via snail mail or scanned and sent to TRIP@dhs.gov.

Once your inquiry is accepted, you will be sent a Redress Control Number. This allows you to check up on the status of your inquiry and for booking flights once your inquiry has been resolved.

So, if you find yourself getting consistently singled out at U.S. entry ports and would like to avoid more of the same in the future, the above steps should point you in the right direction. However, you should note that resolving issues on your DHS files does not automatically exempt you from additional screening in the future. The selection process for determining which travelers are singled out depends on many other factors like random selection and travel patterns.

Generally speaking though, a positive outcome from your DHS TRIP inquiry should make it a lot easier for you to enter and exit U.S. ports.  One should seek the advice from an attorney to increase the probability of success through the DHS TRIP. 

For more information on this customs issue or to request a consultation with Abady Law Firm’s customs attorney, visit  www.customsesq.com or call (800) 549-5099

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Understanding the Charges That Come with a CBP Inspection Conducted at a Centralized Examination Station

If you have recently had a container inspected by Customs and Border Protection (CBP), you are probably wondering why you are being charged by the Centralized Examination Station (CES) conducting the inspection.

While those charges might seem strange at first, it’s all part of the regular examination process.

Every day, thousands of shipments make their way through U.S. ports of entry, and it is the CBP’s responsibility to ensure that these shipments do not contain contraband or otherwise illegal items.

In order to protect our borders CBP has the right to inspect any shipment that enters the United States, and it is the importer’s responsibility to bear the costs of all cargo exams performed by the CES. It’s all under 19 USC 1467. That law applies to household products as well since there is no distinction between personal and commercial shipments when it comes to port inspections.

The CBP has the right to examine any shipment that comes through U.S. ports, period.

The law also states that the owner of the shipment is responsible for any costs associated with the examination in 19 CFR 151.6: The Government shall be reimbursed for the compensation, computed in accordance with § 24.17(d) of this chapter, and other expenses of the Customs officer or employee supervising the action permitted.

CBP does not charge for inspections, but other costs can arise when shipments are sent to a CES for further examination. The charges for the inspection are not actually coming from CBP, it’s the CES – which is a privately owned entity – that charges for the costs associated with examinations.

Once an inspection is ordered by the CBP, the shipment is moved to a CES facility. There, the cargo will be unloaded, examined, reloaded, and then transported back to its original location. The bill that is sent to you is for the costs associated with all these tasks, plus storage fees in some cases.

The exact amount you end up getting charged varies depending on a host of factors like location, size of your shipments, and the distance to the nearest CES facility. The charges can be as high as a few hundred dollars in some cases, or less than a hundred in others.

While these charges might be inconvenient for some, using CES facilities for inspections allows for more timely and efficient inspections for all.

For more information on the charges that come with a  CBP inspection as well as any other customs law issue, please contact Abady Law Firm (www.customsesq.com) at 800-549-5099

Global Entry – Expedited Clearance for Travelers Through U.S. Customs

International travelers, do you hate waiting on line in order to clear Customs at airports around the country? Global entry is a program established by  U.S. Customs and Border Protection (CBP) that expedites clearance for pre-approved, low-risk travelers upon arrival in the United States.  Instead of waiting on those long lines, one is able process their clearance through Customs at Global Entry kiosks where one can scan their passport or U.S. permanent resident card, place their fingertips on the scanner for fingerprint verification, and make a customs declaration.

In order to become accepted under the Global Entry program travelers must be pre-approved.   This includes a full background check and interview.

What are the advantages under the Global Entry program?

Globalentry.gov provides that there is:

  • No processing lines
  • No paperwork
  • Access to expedited entry benefits in other countries
  • Available at major U.S. airports
  • Reduced wait times

Globalentry.gov further provides the following reasons for a DENIAL under the Global Entry program:

  • Provide false or incomplete information on the application;
  • Have a criminal history, have been convicted of any criminal offense or have pending criminal charges or outstanding warrants;
  • Have been found in violation of any customs, immigration or agriculture regulations or laws in any country;
  • Are subjects of an ongoing investigation by any federal, state or local law enforcement agency;
  • Are inadmissible to the United States under immigration regulation, including applicants with approved waivers of inadmissibility or parole documentation;
  • Cannot satisfy CBP of their low-risk status (e.g. CBP has intelligence that indicates that the applicant is not low risk; CBP cannot determine an applicant’s criminal, residence or employment history)

Need help applying for the Global Entry Program?  Were you denied and need assistance filing an appeal? Was your Global Entry status revoked?

Resource Information

For more information about this blog post, please contact Abady Law Firm, P.C. and speak with our customs attorney at (800) 549-5099. Also visit www.customsesq.com to chat with a customs lawyer — who has insight into applying or appealing into the Global Entry Program — and to schedule a consultation.  To chat with us, click the bottom right corner tab of our homepage.

Don’t forget to LIKE US on Facebook for firm news, import/export news and legal updates.  

Currency Seizure: Transporting Cash Through FedEx, UPS, or DHL

Have you ever thought of placing cash inside of an envelope and sending it across the globe?  There are places around the world where one will find strict economic controls on their people or have problems with crime.  As such, sending money to friends and family becomes a dangerous and/or difficult process.  For example, if your friend was in dire need of money and the only way of getting it to him was to place cash in a box and ship it to a specific location, would you? If you decide to do so, be careful.

If Customs and Border Protection (Customs)/Homeland Security seizes your cash when transported through Express Consignments (i.e. FedEx, UPS, DHL) you will likely find that the alleged violations are of 19 U.S.C. §§ 1481, 1484, and 19 C.F.R. Part 128. Further, Customs will reason that you misdescribed currency/monetary instruments in express consignment shipments. If this occurs you will be facing administrative forfeiture proceedings.  A seizure notice will be issued to the sender and recipient of the package. On that notice you will be told where the cash was seized, the date of seizure, the reason for the seizure, and a list of options to contest the forfeiture.  It is best to consult an attorney experienced in Customs matters at that point as a poorly planned strategy may end up leaving your cash forfeited to the United States government.

Land Rover Defender Destroyed By U.S. Customs – How Can This Be Prevented?

I have represented many importers looking to import vehicles from around the world into the United States.  For those doing so, one must ensure that the vehicle is in compliance with the laws and regulations of the Department of Transportation. Otherwise, entry into the United States will be prevented by U.S. Customs and Border Protection. If a violation is found, the importer will face the possibility of a seizure and severe penalties for failing to comply.  If you find yourself in such a situation best to contact an attorney experienced in handling such matters to minimize such consequences and achieve the best possible solution under the circumstances.

You do not want to find your vehicle victim to the following:  http://autos.yahoo.com/video/u-customs-crush-land-rover-144127210.html

Customs Attorney: Confidential Treatment of Shipping Manifests

How can I prevent information about my imports from being available to the public?

As some of you may or may not be aware pursuant to the privacy statute, 19 C.F.R. § 103.31 (d), the public is allowed to collect manifest data (e.g., bills of lading) at every port of entry. The information is limited to vessel manifests (air, rail, and truck manifests will not be available to the general public in any form).

Websites such as panjiva.com and importgenius.com collect and publish names of importers/suppliers/manufacturers from vessel manifest data. This can be troubling for some because entities such as your competitors are able to access information related to the sourcing and/or manufacturing of your products. However, an importer/shipper may make a request for confidentiality. The confidential protection is valid for 2 years, after which time a renewal is needed. Send in renewal requests 60 days prior to the expiration of the 2 year confidentiality period.

If you need assistance in requesting such confidentiality contact a customs attorney who can help.

You may call us at 347-512-9007 for more information on your international trade and customs issues.

Customs Attorney: Customs and Border Protection: Intellectual Property Enforcement

As a Customs attorney I find it surprising that intellectual property holders do not take advantage of Customs and Border Protection’s (“CBP”) ability to protect their intellectual property (“IP”). CBP is authorized to search all imports/exports and exclude, detain, and/or seize products that are counterfeit or otherwise infringing on the intellectual property of the IP holder. The way to gain the assistance of CBP is to utilize their Intellectual Property Rights Recordation System

CBP’s record system is separate and apart from the U.S. Patent and Trademark Office and Copyright office filing. In order to maximize the IP holder’s rights at the border they should record with CBP via the e-Recordation system. CBP has provided some benefits of e-Recording:

  • Making intellectual property rights information available at the ports to help CBP personnel with infringement determinations.
  • Eliminating paper applications and the need for supporting documents.
  • Allowing rights owners to upload images of their protected rights.

Additonally, IP holders can work with Customs in order to help them identify infringers. Businesses and rights owners are encouraged to submit allegations of infringing shipments or conduct to CBP. CBP then uses this information to locate such activity. Further, IP holders can provide CBP with e-guides for detecting infringing goods. Lastly, IP holders can initiate training sessions to actual CBP inspectors at troublesome ports of entry.

To find trademark and copyright records one can access http://iprs.cbp.gov/. I urge IP holders to take advantage of these enforcement opportunities to ensure quality control of their IP rights. One can contact a Customs attorney who can guide an IP holder in maximizing the enforcement of their IP rights with CBP.

You may call us at 347-512-9007 for more information on your international trade and customs issues.