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 "Trade Attorney" Category
On May 30, 2013, the U.S. government issued a General License on the export of electronic devices such as, cellphones, laptops, computers, and wireless routers to Iran. This effectively ended a ban that has been in place since 1992. According to the Department of Treasury’s press release “this General License aims to empower the Iranian people as their government intensifies its efforts to stifle their access to information.” Pursuant to 31 C.F.R. Part 560 the General License does not authorize the export of any listed equipment to the Iranian government or to any individual or entity on the Specially Designated Nationals (SDN) list.
If you have any questions about the specifics of this regulation or would like to begin exporting authorized electronic devices or any other types of goods to Iran contact us at 347-512-9007 for legal assistance.
When a entity is presented with the question of whether a good or service falls under the Commerce Control List (“CCL”) or the United States Munitions List (“USML”) they may proceed for a commodity jurisdiction request (“CJ”). The U.S. government applies different licensing procedures and policies depending on above jurisdiction.
The Bureau of Industry and Security (“BIS”) is the licensing agency for exports subject to the Export Administration Regulations (“EAR”) containing the CCL. The Department of State Directorate of Defense Trade Controls (“DDTC”) is the licensing agency for exports subject to the the Arms Export Control Act (“AECA”) and the International Traffic in Arms Regulations (“ITAR”); the ITAR contains the USML.
Once a CJ is submitted the DDTC will make a determination as to its licensing authority. This determination is not a license or approval to export an item or perform a service; one must still gain the appropriate approval from BIS or DDTC prior to export. The timetable for the processing of a CJ varies depending on the complexity of the request and the recommendations of the reviewing agencies. However, the DDTC estimates that requests should be answered within 60 days.
Proper export control determination is a fundamental and vital step in export compliance. The consequences for an incorrect jurisdiction may result in large fines and a list of mandated remedial export compliance control measures. Moreover, a wrong CJ puts the United States’ national security at risk. Thus, it is important to identify potential issues and if unsure as to the CJ, ASK QUESTIONS. Steps should be taken to ensure that your company has written procedures in place to alleviate risk. Moreover, a company should ensure that it has proper record keeping methods in place because one is required to retain records of exports for the previous five (5) years. Finally, experts should be consulted to confirm that the information your company possess is accurate and comprehensive. As the saying goes, ‘An ounce of prevention is worth a pound of cure.‘
You may contact us at 347-512-9007 for any questions or concerns regarding export compliance.
How to obtain a refund of sales tax paid while visiting the United States
In general, states within the United States provide an exemption from sales and use tax on tangible personal property purchased in that particular state and thereafter exported to another country. This is would be beneficial for those who travel to the United States from foreign countries and hand carry their goods; however, only Louisiana and Texas currently offers refund of sales tax in such cases.
Other than hand carry, the process for applying for a sales tax refund may be different, depending on the state you have purchased the goods from. In certain situations it may make economic sense (i.e. shipping fees and import duties at the country of destination) to make large purchases in the United States and have them shipped by carrier to your foreign address.
For example: Mr. Doe buys $100,000.00 worth of products in New York and pays 8.875% in sales tax equalling $8,875.00, Shipping those goods to and paying import duties (as opposed to hand carry in luggage) in Hong Kong is only $2,500.00. As long as Mr. Doe keeps all his receipts and shows proof of export for said products Mr. Doe would get back $6,375.00 from the New York State Tax Department. Thus, instead of paying $108,875.00 (cost of products including tax) he would only end up paying $102,500.00 for those products.
*It may also make sense if you are traveling with a group of people to consolidate a shipment all together to a foreign destination in order to benefit from a sales tax refund.
To get the sales tax refunded one must keep all shipping documentation as evidence that the goods left the United States. Shipping documentation may include a U.S. Postal Service, UPS, FedEx receipt, or a freight forwarder’s receipt and a copy of the original bill of lading issued by a licensed carrier describing the goods to which a refund will be requested.
Keep in mind that the requirements are comprehensive and there may be a limited period of time to which one may be permitted to request a sales tax refund. Further, the wait time for the refund can take months. Thus, it may be beneficial to contact an attorney who has experience in this area.
Contact us today for legal assistance is preparing an application for the return of sales tax paid on exported goods.
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.
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.
Chinese clients are presented with the issue of moving more than $50,000 per year from China to the U.S. due to Chinese banking restrictions. China controls inbound and outbound foreign exchange flows. If a Chinese citizen wants to make an overseas payment they must purchase the funds with renminbi (RMB) i.e. official currency of the People’s Republic of China. Further, when converting the RMB to a foreign currency, the bank is required to review whether the payment is for investment or for a regular payment. If it is for an investment the chances of acceptance are slim.
One has a greater chance of acceptance if done through a corporation. Chinese law provides that a corporation can make investments but they have to gain approvals from the government agencies in China such as National Development and Reform Commission (NDRC), The Ministry of Commerce (MOFCOM) and the State Administration of Foreign Exchange (SAFE). This application process takes time. Factors that are taken into account may include 1) the industry sector and size of the investment; 2) location of the corporation; 3) tax status; 4) the feasibility analysis of the investment (which may include scrunity as to the background of the corporate members).
For more information about this blog post, please contact Abady Law Firm, P.C. and speak with our attorney at (800) 549-5099. Also visit www.customsesq.com to chat with a lawyer — who has insight into the Chinese wire transfer limits — about your company’s legal situation and to schedule a consultation. To chat with us, click the bottom right corner tab of our homepage.
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.
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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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!
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.