Increase in Dept. of Commerce Penalties

On December 11, 2008, the Department of Commerce (DOC) issued a final rule in the Federal Register adjusting certain civil monetary penalties under their jurisdiction. These adjustments were made to adjust for inflation and only apply to violations occurring after the effective date of December 11, 2008. Some of the penalties adjusted by this final rule include the following:

BIS Fastener Quality Act – Old $27,500 to New $32,500
International Emergency Economic Powers Act violations –Old $50,000 to New $250,000

Economics & Statistics Administration
International Investment and Trade in Services Act violations (failure to furnish information) - Old $27,500 to New $32,500

International Trade Administration
U.S.-Canada FTA Protective Order violations - Old $120,000 to New $130,000

"10+2" Importer Security Filing Interim Final Rule Published

Just two days before Thanksgiving, U.S. Customs and Border Protection gave the trade something to be thankful for by publishing the interim final rule for the new Importer Security Filing in the Federal Register. The importer security filing requirements will go into effect 60 Jan. 25, 2009, with enforcement to begin one year later. Due to concerns about the costs of collecting the huge amount of data, reporting requirements and the changes necessary to adjust to the new rules, CBP will show restraint in enforcing the rule for 12 months after implementation so long as importers are making satisfactory progress toward compliance and demonstrating a good faith effort to comply.

The "10+2" rule requires importers to submit 10 pieces of data 24 hours prior to loading at a foreign port, and ocean carriers to provide two pieces of information about the status of containers under their control.

Although the interim final rule includes some changes to the rule originally proposed by CBP, such as allowing some flexibility on the filing deadlines for two of the 10 importer elements, most of the other requirements remain unchanged.

Changes

• CBP is allowing flexibility in what importers report in six data elements: manufacturer, consolidator, stuffing location, country of origin, tariff commodity number, and the “ship to” party.

• The container stuffing location and consolidator's name should be provided as early as possible, but will be accepted up until the 24-hour pre-loading deadline.

• Breakbulk cargo is no longer included in vessel stow plans.

• Compliance penalties were changed from the value of the merchandise to $5,000 per violation.

• Provisions were included for creating an importer security filing bond.


Basic Requirements

Importers, or their agents, must transmit an Importer Security Filing to CBP, for cargo other than foreign cargo remaining on board (FROB), no later than 24 hours before cargo is laden aboard a vessel destined to the United States.

The party required to submit the Importer Security Filing is the party causing the goods to enter the limits of a port in the United States. The ISF Importer may designate an authorized agent to file the required data on the importer's behalf. A party can act as an authorized agent for purposes of filing the Importer Security Filing if that party obtains access to ABI or AMS.

The Importer Security Filing is required for each shipment, at the lowest bill of lading level, including the house bill of lading, if applicable.

The required ISF data must be transmitted via a CBP-approved electronic data interchange system. Required importer data elements must be filed through the Automated Broker Interface; carriers will file by way of the Automated Manifest System.

The 10 data elements required from importers and two from carriers are those that appeared in the proposed rule. The interim final rule requires Importer Security Filing (ISF) importers to provide the following eight data elements no later than 24 hours before the cargo is laden aboard a vessel destined to the United States:

1. Seller.
2. Buyer.
3. Importer of record number/FTZ applicant identification number.
4. Consignee number(s).
5. Manufacturer (or supplier).
6. Ship to party.
7. Country of origin.
8. Harmonized Tariff Schedule of the United States (HTSUS) number.
The ISF also includes two data elements that must be submitted "as early as possible," but no later than 24 hours prior to the ship's arrival at a U.S. port.
9. Container stuffing location.
10. Consolidator (stuffer).

Implementing a program of this magnitude will likely undergo some changes, so be sure to check the CBP web site for various helpful documents related to the security filing such as fact sheets, FAQ’s and other announcements.

Lacey Act Implementation Delayed

The statutory deadline for compliance with the declaration requirement under the Lacey Act amendments is December 15, 2008. To address the concern of both the trade and federal agencies, the USDA has proposed phased in enforcement of the Lacey Act starting around April 1, 2009. (April Fools Day!) Some importers may not be required to comply until July. The following is a proposed timeline for the implementation and enforcement.

December 15, 2008 - Paper declaration form available and accepted. No prosecution for failure to complete the form from December to end of March unless false information submitted.


April 1, 2008 – Enforcement of declaration requirement for HTS chapters 6 and 44. Electronic collection of required declaration available.


July 1, 2008 – Enforcement of declaration requirement for additional HTS chapters – 47, 48, 92, 94


Sept 2009 – Phased-in enforcement for additional HTS chapters 12, 13, 14, 45, 46, 66, 82, 93, 95, 96, and 97.

In case you’ve been busy resolving other trade issues and haven’t paid much attention to this one, remember that the Lacey Act requires submission of a declaration for a wide variety products such as live plants, lumber, paper, products containing plant material such as furniture, tools, sporting goods, printed matter, musical instruments and textiles. Importers will be required to report the species of plant/wood and country of origin. Check out the USDA web site for more information about the Lacey Act.