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 Release" Category

Liquidated Damages by Customs and Border Protection

Liquidated Damages are predetermined civil penalties assessed against importers who have breached the terms of Customs bond.  These liquidated damages claims arise when an importer  fails to adhere to the Customs regulations and/or requests made by Customs on behalf of other government agencies (e.g. FDA). Specifically, a majority of the claims for liquidated damages stem from issues related to failure to redeliver goods, or improper  classification, valuation, or marking.

Petitions for relief from liquidated damages must be filed within sixty (60) days from the date of mailing to the bond principal, the notice of claim for liquidated damages, or penalty secured by a bond.  The degree at which Customs will grant mitigation is dependent on Customs mitigation guidelines and the facts and circumstances of the case.

As always when faced with a liquidated damages claim it is best to consult with a customs attorney about your options when preparing a petition to file with Customs.

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 an import export attorney — who has insight into liquidated damages claims — about your company’s import or export situation and to schedule a consultation.  To chat with us, click the bottom right corner tab of our homepage.

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Notice of Seizure and Information to Claimants Form AF

Have you received a letter from Customs that looks like this http://twitpic.com/9j9rll ?

U.S. Customs and Border Protection is the agency responsible for protecting our borders. Accordingly, Customs officials at seaports, airports, and other border crossings all over the U.S. have the authority to examine, detain, and/or seize merchandise entering or exiting the country. More often than not, importers and exporters are surprised and intimidated when they find out that the government has intervened in their business. As a result, it is best to provide my readers some basic knowledge in an effort to appease any distress from Customs intervention.

Customs officials have a laundry list of “red flags” when targeting merchandise; they are looking for drugs, non-compliance with the Food and Drug Administration, counterfeit goods, and currency among many others. When Customs decides to detain a particular shipment the merchandise is transferred to a Centralized Examination Station where officials sort through and intensely examine the contents of the shipment. During the detention Customs must provide an explanation for the detention (see previous post for more detail). It is important to note that Customs explanation for the detention may have been provided under the advisement of another federal agency – as Customs is the “enforcer” for all other federal agencies relating to the import/export of products. Here is an example: Customs detained a shipment of T-shirts from Canada due to the failure to provide documentation that the importer has the authority to utilize a logo that is a registered trademark.

If Customs find a violation, they will seize it and transfer it from the Centralized Examination Station to an official warehouse. Throughout this process the importer is charged storage fees which must be paid if Customs agrees to release the goods. Seizures are handles by a department in Customs known as Fines, Penalties, and Forfeitures (FP&F). An FP&F paralegal reviews the case and issues a seizure notice to the alleged violator. The seizure notice will give information regarding the identity of the merchandise, the location of the seizure, and citations to legal authorities. Generally, the alleged violator is given options 1) abandon the goods; 2) file a petition with customs within 30 days of the issuance date on seizure notice; 3) file an offer in compromise (this option is beneficial in specific circumstances – best to speak with an attorney first to confirm whether an offer is the right strategy); or 4) take the matter directly to court for litigation (you need to fill out the seized asset claim form and post a cost bond equal to 10% of the value of the seized merchandise, or $5,000, whichever is lower).

At this time it is highly recommended to contact a Customs attorney regarding your best options and strategy moving forward.  If an attorney is hired, he/she would notify Customs that the alleged violator is being represented by counsel. Thereafter, generally, the attorney would make what is called a Freedom of Information Act Request (FOIA). This formal request is sent in order to gain access to records that customs has regarding the alleged violation.

If the petition option is chosen, the alleged violator is given an opportunity to explain to customs why the goods should be released. It is important to hire an attorney who knows the policies, procedures, and practices that customs has in place in order to convince customs to release your goods. Thereafter, customs will render a decision on the case and either grant or deny the petition. If denied, the alleged violator is given an opportunity to file a supplemental petition to which must state additional information not before provided to customs. Alternatively, the alleged violator can choose to file an offer in compromise whereby one can make an attempt to negotiate with customs by offering a monetary sum to settle the matter and release the goods.

As discussed, there are various options offered to the alleged violator under the law. It is best to consult with an attorney experienced in these matters to explain these options as they relate to a particular set of facts. TIME IS OF THE ESSENCE!

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 the Notice of Seizure — about your company’s import situation and to schedule a consultation.  To chat with us, click the bottom right corner tab of our homepage.

Customs Attorney: Customs and Border Protection: Notice of Detention

Customs is given broad authority to inspect shipments entering into the country.  When Customs questions the admissibility of goods into the United States, Customs has the authority to detain the shipment until satisfactory information is provided to enable release.  Customs has five (5) business days from the date on which the merchandise is presented for examination to decide whether or not to detain the merchandise or to allow its release.  If Customs decides to detain a shipment, they must provide the importer with a formal Notice of Detention within five (5) days of the determination to detain the shipment.  During the detention phase the importer has the opportunity to resolve any issues as to admissibility in order to avoid a rejection or seizure.

A Notice of Detention must provide the following information under the law:

  • That the goods have been placed under detention;
  • The precise reason for their detention;
  • The estimated length of time that they will be detained;
  • A description of any inquiries being conducted or tests to be made (legally, test results also must be promptly provided to the importer) regarding the goods; and
  • Any additional information that may assist in the prompt disposition of the detention.

Customs has thirty (30) days to render a decision regarding the detained shipment, unless a longer time period has been granted.  If no final decision is reached at the end of this thirty day period, the merchandise is automatically considered excluded for purposes of protest. If the goods are seized, the importer will receive a notice of seizure. It will provide the reasons for the seizure and options available to the importer.

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 CBP Detentions — about your company’s import situation and to schedule a consultation.  To chat with us, click the bottom right corner tab of our homepage.

Customs Attorney: Request for Information – CF 28

When goods are presented at the border for entry into the United States, Customs, at the point of liquidation, makes a final determination as to the classification and valuation, or other requirements pertaining to the imported goods. How does Customs make that determination? Customs uses the information provided by the importer such as the commercial invoice and other documentation at the time of entry. Issues arise when Customs finds that the information given to them is inaccurate, incomplete, or insufficient whereby Customs cannot formulate a decision. Customs may give the importer an opportunity to add additional information, clarify what was provided, or provide a sample of the imported product in order for Customs to make a final determination.

The means by which Customs does this is via a Request for Information – Customs Form 28 (CF 28) – see it here. The importer must be cautious; responding to Customs’ questions may have future effects. Importers should ask themselves, why is Customs asking me this question, and what effect will my answer have on my shipments. This is the opportunity to make your case to Customs for present and future treatment.

The importer has 30 days to respond in writing to Customs from the date of issuance. If not possible to respond within that time frame a request for an extension can be asked for and usually obtained from the Customs Import Specialist handling the matter. If a Request for Information is not responded to, Customs will most often presume the least favorable interpretation of the facts, thus leaving the importer in a financial disadvantage. Therefore, it is vital that CF 28 be responded to properly and with the help of an experienced person who can guide the importer in the appropriate direction.

Contact us today at 347-512-9007 regarding a CF 28 you received, time is of the essence!

Customs Attorney: Customs and Border Protection- Liquidation

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.