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

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Posts Tagged "export"

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.

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.

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.

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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

U.S. Export Sanctions to Iran Lifted on Electronic Devices

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.

Import/Export Attorney: OFAC, Cuba, and Baseball

The Office of Foreign Assets Control (OFAC) of the US Department of the Treasury administers and enforces economic and trade sanctions based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States. OFAC acts under Presidential national emergency powers, as well as authority granted by specific legislation, to impose controls on transactions and freeze assets under US jurisdiction. Many of the sanctions are based on United Nations and other international mandates, are multilateral in scope, and involve close cooperation with allied governments.

Baseball and Cuba are synonymous.  Cuba has been known to develop top talent in Major League Baseball.  Such names include Rafael Palmeiro, Jose Canseco, Minnie Miñoso, and Camilo Pascual. However, given the lack of diplomatic relations between the United States and Cuba it has been difficult for Cuban nationals to represent their homeland.  When a player decides to defect from Cuba, he has made his choice between the two countries.   Today, top Cuban Major League players include Yoenis Céspedes, Aroldis Chapman, and Leonys Martin.   In order to sign with a major league team these Cuban baseball players had to first present either an unblocking license from the U.S. Office of Foreign Assets Control (OFAC) or two permanent residency documents from another country. See 31 C.F.R. 515.505 below:

(a) General license unblocking certain persons. The following persons are licensed as unblocked nationals, as that term is defined in § 515.307 of this part:

(1) Any individual who:

(i) Has taken up residence in the United States;
(ii) Is a United States citizen, a permanent resident alien of the United States, or has applied to become a permanent resident alien of the United States and has an adjustment of status application pending; and
(iii) Is not a specially designated national; and

(2) Any entity that otherwise would be a national of Cuba solely because of the interest therein of an individual licensed in paragraph (a)(1) of this section as an unblocked national.

(b) Specific licenses unblocking certain individuals who have taken up permanent residence outside of Cuba. Individual nationals of Cuba who have taken up permanent residence outside of Cuba may apply to the Office of Foreign Assets Control to be specifically licensed as unblocked nationals. Applications for specific licenses under this paragraph should include copies of at least two documents indicating permanent residence issued by the government authorities of the new country of permanent residence, such as a passport, voter registration card, permanent resident alien card, or national identity card. In cases where two of such documents are not available, other information will be considered, such as evidence that the individual has been resident for the past two years without interruption in a single country outside of Cuba or evidence that the individual does not intend to, or would not be welcome to, return to Cuba.

For more information regarding OFAC as it relates to baseball contact us at 347-512-9007.

International Trade Attorney: ATA Carnet

What is an ATA Carnet? An ATA Carnet is an international Customs document that allows a traveler to temporarily import certain goods into a country without having to engage in Customs formalities generally required for the importation of goods, and without having to pay duty or value-added taxes on the goods.  Specifically, ATA Carnets are utilized for the  temporary importation of commercial samples (CS), professional equipment (PE), and goods for exhibitions and fairs (EF).

Why should one use an ATA Carnet?  An ATA Carnet offers ease and simplicity for avoiding the Customs formalities involved in temporarily importing goods into the U.S.
and other countries. If one wishes to import goods without a carnet you will be required to follow Customs procedures established in the specific country for which you are requesting temporary admission of goods. Alternatively, the carnet offers the business
traveler the benefit of using a single document for clearing certain categories of goods through Customs in several different countries.

What procedure must one follow for a carnet? The carnet holder must present the goods and carnet to Customs to prove exportation. Failure to prove exportation on a carnet subjects the importer to liquidated damages equal to 110 percent of the duty and import tax. Goods imported under a carnet may not be offered for sale.

How long is an ATA carnet valid for?
An ATA carnet is valid for one (1) year from the date of its issuance. In addition, it may be used for unlimited imports and exports with participating foreign countries during the one-year period of validity.

ATA carnets can be used in the following countries:

  • Algeria
  • Andorra
  • Australia
  • Austria
  • Balearic Isles Belgium
  • Botswana Bulgaria
  • Canada
  • Canary Islands Ceuta
  • China
  • Corsica
  • Croatia
  • Cyprus Czechoslovakia
  • Denmark
  • Estonia
  • European Union Finland
  • France
  • French Guiana French
  • polynesia- including Tahiti
  • Germany
  • Gibraltar
  • Greece
  • Guadeloupe Bailiwick of
  • Guernsey
  • Hong Kong
  • Hungary
  • Iceland
  • India
  • Ireland Isle of Man
  • Israel
  • Italy
  • Ivory Coast Japan
  • Jersey
  • Korea (Rep. Of)
  • Lebanon Lesotho
  • Liechtenstein Luxembourg
  • Macedonia Macao Malaysia
  • Malta Martinique Mauritius
  • Mayotte Melilla Miguelon
  • Monaco
  • Morocco
  • Namibia Netherlands
  • New Caledonia New Zealand
  • Norway Poland
  • Portugal
  • Puerto Rico Reunion Island
  • Romania
  • St. Barthelemy
  • St. Martin, French part
  • St. Pierre
  • Senegal
  • Singapore
  • Slovakia
  • Slovenia
  • South Africa
  • Spain
  • Sri Lanka Swaziland
  • Sweden
  • Switzerland
  • Tahiti
  • Tasmania
  • Taiwan
  • Thailand
  • Tunisia
  • Turkey
  • United Kingdom United
  • States Wallis & Futuna
  • Islands

For more information on ATA Carnets do not hesitate to contact one of our import export attorneys.

Export Attorney: Commodity Jurisdiction Request

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.

 

 

 

Can I get a refund for state sales tax paid while on my trip to the United States?

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.