To PEA or not to PEA: Post-Entry Amendments vs. Prior Disclosures

My last sentence is a bit of a farce, isn't it?  Importers are pretty much expected to participate, and they are doing so in growing numbers with never a thought as to the risks involved.  Why worry?  You file and pay electronically.  CBP is happy and importers are happy.

For all I know, there is an iPhone/Android app on the horizon.    

You may ask, who, except a persnickety Luddite, would have a problem when an otherwise cumbersome bureaucracy uses technology to cut through red tape?  Me.  While I may not exactly qualify as a Luddite (a group not known to blog), I confess that I am alarmed by government programs that lack safeguards. 

PEAs are not the only CBP program that is both alluring and risky.

Take C-TPAT, for example.  It is a voluntary program from CBP of roughly the same age as PEAs, which means it’s been around for

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Should Importers Sign Statute of Limitations Waivers?

US CBP often asks importers to sign a statute of limitations waiver (usually two years) in penalty and liquidated damages cases, or when the importer is filing a prior disclosure.  CBP is trying to preserve its rights to sue the importer before the statute of limitations runs out.  Once the deadline comes and goes, the Government will not able to sue unless there is some sort of equitable tolling.  

Should importers sign these waivers?

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Saving Money By Challenging CBP’s Tariff Classification Rulings

Challenging CBP’s Tariff Classification Rulings To Make Money

One of the best ways for an importing company to save money is to reduce the duties it pays on imported merchandise to US Customs and Border Protection (CBP).  A company can save thousands or even millions of dollars by classifying its merchandise under a heading with a lowest duty rate possible under the Harmonized Tariff Schedule of the US (HTSUS).

Importers commonly request that CBP classify items using the binding ruling request process.  CBP publishes its rulings online (CBP’s Customs Rulings Online Search System or CROSS), an extraordinarily convenient and helpful service to the trade community, especially given the size of CBP’s electronic database (which consists of tens of thousands rulings).  However, often CBP’s classification rulings can read like perfunctory edicts with little or no rationale.  Sometimes rulings contradict each other, and it is not at all clear which ruling wins (although interested parties are allowed to report and challenge inconsistent rulings).  Importers are often left to guess at CBP’s logic, to seek a pattern, to argue the merits of a preferred tariff classification, and to hope for the best.

There is also an unstated but obvious clash of interests between importers and CBP.  Importers seek to classify their imported merchandise under HTSUS headings that impose the lowest duty rate possible.  CBP is generally motivated in the opposite direction and, as a result, it can produce rulings that do not always correspond to the clear intent of the HTSUS or court precedent.   

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Recent NAFTA Developments

Recent NAFTA Developments

Tomorrow I am giving a speech at the International Trade Center of San Antonio, Texas.  It is part of the NAFTA Audits Conference featuring leading NAFTA audit experts from all three countries. My topic is Recent NAFTA Developments.

Here is a preview: 

I will go over NAFTA developments over the past year or so, starting with federal initiatives and finishing with court cases.

New Online Free Trade Agreement/Tariff Tool

Don’t know whether your item qualifies for a Free-Trade Agreement (FTA), including the NAFTA.  The US Trade Representative has created an online tool that it claims will allow you to easily find whether your items qualify for any of the seventeen FTAs, including imports into the USA, and will even help you classify your item.  There is even an 8 minute video describing the online program.

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More thoughts on Incoterms and International Sales Contracts

Incoterms can be great.  Incoterms do all sorts of things, like allocating risk of loss and responsibilities for paying insurance and freight.  They were recently amended by the International Chamber of Commerce.  But Incoterms are conventions or standards.  Actually, they are suggestions.  They are not law.  They can’t be law because the buyer and seller can massage them to fit their particular contract.  Often parties don’t even use Incoterms as intended or even at all.  Thus, we can say that when a contract between foreign seller/exporter and the importer of record specifies that foreign seller/exporter pays for freight and insurance, and if those charges are set out separately in the invoice and elsewhere to CBP's satifsaction, then the importer of record can deduct those charges and make sure it doesn’t pay duty on them regardless of what the Incoterms say.

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