Abady Law Firm, P.C. – Customs and Import/Export Attorney Blog
Learn the Basics of Customs and International Trade Policy and Procedure
Archive for the "Customs Law Firm" Category
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:
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)
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.
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.
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.
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.
There is a big market for used cell phones around the world. Accordingly, we come into contact with many entrepreneurs who are involved in the secondary cell phone market. As a result, we have handled many cases involving refurbished or remanufactured cell phones.
Your typical fact pattern involves a U.S. company that would export broken cell phones to a refurbishing center in a foreign country. Depending on the nature of repair, the cell phones would undergo a thorough repairing process before they are considered to be back in good working order. Subsequently, the cell phones are shipped back to the United States.
Prior to delivery to the importer, these now remanufactured or refurbished cell phones must clear through customs. U.S. Customs and Border Protection (“CBP” or “Customs”) is the responsible federal agency for determining the admissibility of such products. When it comes to investigation and delays for remanufactured or refurbished cell phones we have seen that questions involving intellectual property rights are most notably at issue. Specifically, Section 526(e) of the Tariff Act of 1930, as amended, provides that merchandise bearing a counterfeit mark within the meaning of Section 1127 of Title 15, that is imported in violation of Section 1124 of Title 15, shall be seized and, absent the consent of the trademark owner, forfeited for violations of the Customs laws. 19 U.S.C. Section 1526(e).
The first prong of section 526(e) requires that the imported merchandise bear a counterfeit mark as defined by section 45 of the Act of July 5, 1946 (the “Lanham Act,” codified as amended at 15 U.S.C. Section 1127. Section 45 of the Lanham Act defines the term counterfeit as “a spurious mark that is identical with or substantially indistinguishable from, a registered mark.” 15 U.S.C. Section 1127.
The second prong requires that the merchandise, in addition to bearing a counterfeit mark, shall have been imported in violation of section 42 of the Lanham Act, which provides:
Except as provided in subsection 1526 (d) of Title 19 . . . no article of imported merchandise . . . which shall copy or simulate a trademark registered in accordance with the provisions of this chapter . . . shall be admitted to entry at any customhouse of the United States . . . .
15 U.S.C. Section 1124. A “copying or simulating” trademark or trade name is one which may so resemble a recorded mark or name as to be likely to cause the public to associate the copying or simulating mark or name with the recorded mark or name. 19 C.F.R. Section 133.22(a).
Questions arise as to whether there is a violation of a trademark when one is selling remanufactured or refurbished goods under the original manufacturer’s U.S. trademark. As a general matter, it is not a violation to sell such goods without deceiving consumers provided that one attempts so far as possible to restore the original condition of the goods and full disclosure is made about the true nature of the goods i.e. that they are remanufactured or refurbished goods. Nitro Leisure Products, L.L.C. v. Achushnet Co., 341 F.3d 1356, 1361 (Fed. Cir. 2003). Accordingly, there is information one can provide to CBP to prove that your goods do not violate any trademark laws. This depends on the nature of remanufacturing or refurbishing done to the product, how it was imported, and the documents one has regarding their purchase.
If you find yourself in a position where your remanufactured or refurbished goods are detained or seized by CBP contact an attorney who is familiar with Customs and International Trade laws and regulations as well as the secondary cell phone market business.
For more information about an importing remanufactured or refurbished cell phone products or for assistance with any of the issues noted above, contact Abady Law Firm, P.C., at 800.549.5099, to speak with a international trade attorney today!
U.S. Customs and Border Protection (CBP or Customs) is the federal agency in charge of determining the admissibility of items sold in smoke shops across the country. Presently, we have been asked by importers across the United States for information regarding how to determine whether ones product will meet scrutiny by CBP. Moreover, whether Customs would permit entry of these products into the United States.
For such products like water pipes, grinders, blunt wraps/wrappers, and vaporizers CBP will consider whether the specific product you are attempting to import constitutes “drug paraphernalia.”
The relevant statute, 21 U.S.C. Section 863 provides,
(a) In general It is unlawful for any person—
(1) to sell or offer for sale drug paraphernalia;
(2) to use the mails or any other facility of interstate commerce to transport drug paraphernalia; or
(3) to import or export drug paraphernalia.
Pursuant to 21 U.S.C. Section 863(d), the term “drug paraphernalia” is defined as:
[A]ny equipment, product, or material of any kind which is primarily intended or designed for use in manufacturing, compounding, converting, concealing, producing, processing, preparing, injecting, ingesting, inhaling, or otherwise introducing into the human body a controlled substance, possession of which is unlawful under this subchapter. It includes items primarily intended or designed for use in ingesting, inhaling, or otherwise introducing marijuana, cocaine, hashish, hashish oil, PCP, methamphetamine, or amphetamines into the human body, such as—
(1) metal, wooden, acrylic, glass, stone, plastic, or ceramic pipes with or without screens, permanent screens, hashish heads, or punctured metal bowls;
(2) water pipes;
(3) carburetion tubes and devices;
(4) smoking and carburetion masks;
(5) roach clips: meaning objects used to hold burning material, such as a marihuana cigarette, that has become too small or too short to be held in the hand;
(6) miniature spoons with level capacities of one-tenth cubic centimeter or less;
(7) chamber pipes;
(8) carburetor pipes;
(9) electric pipes;
(10) air-driven pipes;
(13) ice pipes or chillers;
(14) wired cigarette papers; or
(15) cocaine freebase kits. (Emphasis added).
How do you determine whether an item is considered drug paraphernalia?
21 U.S.C. Section 863(e) provides that:
[I]n addition to all other logically relevant factors, the following may be considered:
(1) instructions, oral or written, provided with the item concerning its use;
(2) descriptive materials accompanying the item which explain or depict its use;
(3) national and local advertising concerning its use;
(4) the manner in which the item is displayed for sale;
(5) whether the owner, or anyone in control of the item, is a legitimate supplier of like or related items to the community, such as a licensed distributor or dealer of tobacco products;
(6) direct or circumstantial evidence of the ratio of sales of the item(s) to the total sales of the business enterprise;
(7) the existence and scope of legitimate uses of the item in the community; and
(8) expert testimony concerning its use.
Lastly, 21 U.S.C. Section 863(f) lists exemptions:
(1) any person authorized by local, State, or Federal law to manufacture, possess, or distribute such items; or
(2) any item that, in the normal lawful course of business, is imported, exported, transported, or sold through the mail or by any other means, and traditionally intended for use with tobacco products, including any pipe, paper, or accessory. (Emphasis added).
The U.S. Supreme Court examined the meaning of “drug paraphernalia” pursuant to 21 U.S.C. Section 863 in the matter of Posters ‘N’ Things v. United States, 511 U.S. 513 (1994), and considered the phrases (1) “primarily intended for use” and (2) “designed for use” in such case.
The Court concluded that “primarily intended for use” is to be understood objectively and refers generally to an item’s likely use. Posters ‘N’ Things, 511 U.S. 513, 521 (1994). Moreover, the Court noted that this “is a relatively particularized definition, reaching beyond the category of items that are likely to be used with drugs by virtue of their objective features.” Id. at 521 n.11.
The court stated that “items ‘primarily intended’ for use with drugs constitute drug paraphernalia, indicating that it is the likely use of customers generally, not any particular customer, that can render a multiple-use item drug paraphernalia.” Id. at 521 n.11. Therefore, items having possible multiple uses may constitute drug paraphernalia for purposes of 21 U.S.C. Section 863 if the likely use by customers of the seller of the items is for use with illegal drugs.
Customs will make the determination on a case-by-case basis about whether your product falls within the context of drug paraphernalia. Accordingly, one should take into account the relevant factors that CBP considers when publishing its rulings on such products. Further, one should speak with an attorney who focuses on Customs law to ensure that the best arguments are presented to CBP for clearance of their smoke shop products into the United States.
For more information about an importing smoke shop and vape products or for assistance with any of the issues noted above, contact Abady Law Firm, P.C., at 800.549.5099, to speak with a customs law attorney.
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.
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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.
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
Recently, U.S. Customs and Border Protection (“CBP”) amended its guidelines for the cancellation and mitigation of claims for liquidated damages in situations where the Petitioner is late in filing claims for relief. Petitions are considered “untimely” or “late” if they fall outside of the established regulatory time frames or after the expiration of any lawfully obtained extensions. 19 C.F.R. Part 172.
Under the new guidelines, untimely petitions will be accepted or considered only if the petitioner is able to demonstrate the existence of “extraordinary circumstances that prevented the petitioner from filing a timely petition or timely seeking a lawful extension of time in which to file a petition” (with limited exceptions). The Fines, Penalties, and Forfeitures Officer will exercise his or her discretion in determining whether the Petitioner meets the “extraordinary circumstances” standard.
As far as mitigation is concerned:
In calculating the mitigated amount on a late petition, CBP (with limited exceptions) will:
1. Determine the base amount (i.e., the amount of mitigation that would have been afforded on a timely petition or the previously available option one amount).
2. Determine the “additional mitigation amount” by multiplying the full assessed amount of the claim by 0.1% (.001) and then multiply by the number of days the petition is late.
3. The product will be the additional amount which will be added to the base amount to produce the mitigated amount applied to the untimely filed petition.
For example, a $100,000 liquidated damages claim for which a petition is filed 30 days late will be mitigated to the amount provided by the guidelines plus an additional amount calculated by the new formula (30 days late x .001 = .03 x 100,000 = $3,000 added charge.)
The above went into effect January 9, 2013.
As discussed above, untimeliness can result into substantial monetary loss. Thus, it is best to consult with an attorney regarding the new guideline applications and exceptions.
You may call us at 347-512-9007 for more information on your international trade and customs issues.
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.
In general, a commercial invoice should provide enough information for a Customs and Border Protection (CBP) Officer to determine if the goods being imported are admissible, and if so, what the correct rate of duty should be applicable based on its Harmonized Tariff Number.
Customs does not provide a specific format for a commercial invoice, however they do provide the elements that should be on an invoice in 19 C.F.R. 141.85.
At a minimum, an invoice should:
1. Describe the item clearly
2. Give the quantity
3. State the value (either price paid, or estimated value based on other considerations.) Give both the value in foreign currency and U.S. dollars
4. Country of Origin (where the item was made)
5. Where it was purchased
6. Name of the business or person selling the merchandise
7. Location of the business or person selling the merchandise
8. Name and address of business or person buying the merchandise, and if different from the importer
9. The U.S. address of the person or business the goods are being shipped to
In addition, Footwear is unique and Customs requires more detail; these additional requirements may be viewed at 19 C.F.R. 141.89. The additional invoice one must include with all their shipments is the “Interim Footwear Invoice.” A sample of a interim footwear invoice can be found here.