|
Importer Alert - Keeping Up With Tariff Schedule Changes
The Harmonized Tariff Schedule of the United States (HTSUS) has just been revised. The revisions are dramatic and far-reaching. Thousands of tariff classifications have changed. The changes will disrupt the supply chains of millions of importers, their suppliers, and everyone in between.
Importers have only a few days to adopt and adapt to the changes. The new HTSUS becomes official on February 3, 2007 and US Customs and Border Protection (CBP) starts enforcing it on February 21, 2007. Few companies are prepared for the changes. CBP will penalize violators for misclassification and other errors.
GRVR Attorneys prepared a course on CD to teach you all you need to know and what steps you need to take to accommodate the changes to the HTSUS. For more information, click here.
Court Roundup - Court Roundup - Court Roundup
 The courts rendered quite a few fascinating and important opinions in the past month or so. Here are some of the more interesting cases.
- US v. Jiang (9th. Circuit, January 10, 2007) - Readers of this newsletter have heard us repeatedly say that lying to federal officials is punishable under Title 18 of the US Code, Section 1001. Section 1001 is one of the most potent weapons that federal authorities have against violators. For example, if the Government investigates you for violating a federal law, but then discovers that, oops, there was no violation, you can still be sent to prison if you lied during the investigation. Jiang set up a deal to ship microwave amplifiers to an end-user in China. The transaction got a little complicated as the manufacturer rejected some of the amplifiers, which forced Jiang to return them to the California manufacturer. A special agent from the Office of Export Enforcement became suspicious and decided to call in Jiang for an interview. Even though the special agent knew that the Defendant’s English was broken, the special agent took no steps to record his conversations with the Defendant. Instead, the special agent sought to reconstruct from his memory what he asked and what Jiang said. And even then, the special agent’s questions were imprecise. The Court reversed Jiang’s conviction.
- US v. Quinn (D.C. District Court, January 2007) - This case should dispel any doubts that 18 USC 1001 is important. Quinn was convicted for illegally exporting forklift parts to Iran. Quinn argued that he did not “willfully” violate the law. The argument did not work, and Quinn was convicted. Quinn appealed. After the conviction, Quinn’s boss pled guilty to violating 18 USC 1001. The boss admitted lying to federal agents when he said that he had instructed Quinn not to ship to Iran. The Appeals Court agreed with Quinn that before anything else is decided, Quinn should be given the opportunity to petition the trial court for a new trial.
- Allstates Trading v. US (US Court of International Trade, Dec 8, 2006) - CBP excluded 7,170 fleece vests that Allstates Trading sought to import from Vietnam. At the time of entry, 19 C.F.R. § 12.130(f)(2), which no longer exists, required Allstates to file certain supporting documents. Allstates did not include any production records maintained on the factory floor, such as cutting tickets and sewing tickets. When CBP denied its protest, Allstates Trading sued in the Court of International Trade seeking release of the shipment plus reimbursement of storage costs. The Court decided that Allstates Trading’s lawsuit was, for the most part, moot because CBP had already released the shipment and, because the regulations had changed, a recurrence was unlikely. The Court also denied Allstates Trading’s request that CBP pay for its storage costs and Allstate’s request that CBP remove the flag next to Allstate’s name in CBP digital files, like ABI.
- Sakar International v. US (Court of International Trade, December 12, 2006) - This case sounds a fair warning to importers that if you want to challenge CBP in court, you had better follow procedures and you had better abide by the deadlines. It also serves as a reminder that a petition is not a protest. The importer imported from China 500 travel chargers for personal digital assistants (“PDAs”) and 2,311 mini-keyboards for PDAs. CBP seized the items claiming they were counterfeit. CBP rejected the importer’s petition for relief from forfeiture and destroyed the items. CBP then issued a $67,775 penalty against the importer and the importer decided to fight the penalty in the Court of International Trade. However, the Court of International Trade concluded it could not hear the lawsuit because the importer had not first filed a protest to challenge the penalty, which CBP then denied. Challenging the exclusion of its merchandise from entry, as the importer had done, was insufficient to establish jurisdiction in the Court of International Trade. Even assuming the Court had concluded the petition was a protest, the importer missed the deadline for filing a protest and, again, for filing a summons in the Court of International Trade. The Court dismissed the lawsuit and, thus, the importer’s only avenue to challenge the $67,775 penalty.
- DaimlerChrysler v. US (Court of International Trade, December 15, 2006) - Those niggling jurisdictional issues do seem to trip up importers. In this case, DaimlerChrysler exported United States-origin sheet metal to Mexico for painting and assembly into motor vehicles, and then imported the vehicles into the United States. DaimlerChrylser filed a protest seeking a partial duty exemption under subheading 9802.00.80 of the HTSUS. When CBP denied the protest, DaimlerChrysler sued and won in court. The problem is that it failed to identify seven protests in the summons it filed in the Court of International Trade. The Court of International Trade rejected DaimlerChrysler’s motion to amend the summons because the case was already closed (DaimlerChrysler had won) and there was no basis for reopening the case.
- US v. Roberts (Court of International Trade, December 22, 2006) - This is textbook case of how not to respond to a CBP penalty. CBP issued a penalty against the importer, a corporation, for seeking NAFTA duty preference when it described imported blankets as “woven” when they were not. The US sued to collect the penalty in the Court of International Trade and asked for a default judgment because the importer failed to hire an attorney to defend against the lawsuit. CBP had rejected the importer’s request for mitigation of the penalty. The Court granted the US’s request for $242,000, or twice the loss of revenue for negligence. The Court also refused to waive the penalty, an avenue allowed for some small businesses under the Small Business Regulatory Enforcement Act of 1996, because the importer produced little evidence to support the claim. However, the Court admonished CBP for claiming that it could not even entertain the request (even though the importer had long filed its petition) unless the importer first signed a waiver of the statute of limitations. Finally, the court refused to mitigate (i.e., reduce) the penalty even though it was clear that the company was broke and it had little experience with importing. Affirming the penalty amount, the Court was negatively impressed by the importer’s unwillingness to accept any blame (“We have never imported anything or would not have any idea how to import anything”) or take its responsibilities as an importer seriously.
- Forest Laboratories vs. US (United States Court of Appeals, Federal Circuit, January 23, 2007) - The importer asked for and received a ruling letter from CBP agreeing with the importer’s classification of its goods. The problem was that, while the importer had claimed a 4.2% ad valorem rate, CBP misstated that the items were duty-free as listed under General Note 13, HTSUSA. In fact, the items were not listed under General Note 13, HTSUSA and, thus, did not qualify for duty-free treatment. Still, the importer filed a protest when CBP sought to liquidate the importers’ shipments at a 4.2% rate. The Court concluded that CBP, either intentionally or by mistake, had no power to override Congress as to the proper duty rate and the importer had no business relying on CBP’s clerical error.
David Beck Named ITC Tariffs Director
On January 8, 2007, David R. Beck was named the United States International Trade Commission’s (ITC) new Director for Tariff Affairs and Trade Agreements. Mr. Beck has been affiliated with the ITC since 1974 and has extensive experience with the Harmonized Tariff Schedule of the United States (HTSUS) and the International Harmonized System. He possesses the experience necessary to oversee maintenance and publication of the HTSUS. His experiences include: five years as a Senior Technical Officer at the World Customs Organization (WCO) in Brussels, a four year stint as Chairman of the WCO's Harmonized System Review Sub-Committee, and he was also on the committee that drafted the very first HTSUS. Mr. Beck is one of the foremost experts in the world on the Harmonized Tariff Schedule and an excellent speaker. GRVR Attorneys recently conducted and recorded an interview with David Beck. Click here to listen to the interview.
GRVR Customs Broker Exam Prep Course - Beware of Imitators!
Imitation sometimes looks like flattery, but often it has little to do with sincerity. GRVR Attorneys customs broker exam prep course is acclaimed for being user-friendly and ensuring that its students pass the customs broker exam. We do this through a combination of online training (available 24/7), boot camps, tutoring sessions, and a style that is dynamic and that teaches you how to take and pass the broker exam. We even tell you what not to study. We are also the only course that guarantees that you will pass. All of our instructors are attorneys who passed the customs broker exam. Our success and especially that of our students have inspired others to try to copy our course and to even plan courses in the same cities and dates as our boot camps. Don’t be fooled. You do not want to settle for second-best and cheat yourself out of the best review course around. You have too much riding on a successful outcome. To find out about our customs broker exam preparation course, click here.
Employment Verification Forms - Are You In Compliance?
The Department of Homeland Security (DHS) is cracking down on companies that employ illegal workers. Some employers may think that their company won't be affected by the DHS' increased enforcement since they don't hire undocumented or foreign workers. AH! Think otherwise, my friend! You, too, could be subject to civil penalties for what is commonly referred to as "paperwork violations."
The Immigration Reform & Control Act requires all employers to verify the employment eligibility and identity o f all employees, including U.S. citizens, hired to work in the U.S. after November 6, 1986. The form that employers are required to fill out when hiring someone is called the I-9, or the Employment Eligibility Verification Form. The form, for some, may seem easy to prepare but it is surprising to find that compliance can be difficult. Many time employers unintentionally, and sometimes knowingly, fail to meet their obligations.
Fortunately, there are solutions that a seasoned legal counsel can provide. Diana E. Morales, a Texas Board Certified Immigration lawyer, will conduct a webinar on Employment Verification Forms. The webinar is scheduled for March 1, 2007. To sign up or to get further information, click here or see the announcement below.
Do-Gooder Corner - VALENTINE'S DAY
<#tradenews p>It's just around the corner. That day, celebrated but once a year, when we surrender everything we have to another. No, we  <#tradenews p>don't mean Tax Day. We are of course referring to Valentine's Day. And what better way to show your love and affection for another than by giving a gift that reflects your role in international trade? Now let's add a cherry on top by making sure that your gift is not derived from slave labor (a big problem in the chocolate industry), promotes traditional cultures, is organic, and is friendly on the environment. Do such wonderful treats actually exist? Yes, and here are a few organizations that sell them.
- Ten Thousand Villages - handcrafted items
No Sweat - fair trade clothing and gear
Organic Consumers Association - Fair Trade and Organic Chocolate and Flowers
Global Exchange - Fair Trade Valentine's Day Action Kit
A Greater Gift - Valentine's chocolates and other goodies
Lutheran World Relief - chocolate with a heart featured in the Valentine’s Day gift bag, box and basket
|
|
|
|
Compliance Calendar
Boot Camps: 3 Dates, 3 Cities for Customs Broker Exam Review Course
Changes to the Import Tariff Schedule - Course on CD
Webinar: Employment Verification Forms
Gonzalez Rolon Valdespino & Rodriguez, LLC Attorneys
Dallas • Houston • San Antonio • Mexico City • Sao Paulo, Brazil • Paris, France
Main Physical Address:
- Park Place Center, Suite 300
- 2911 Turtle Creek Blvd.
- Dallas, Texas 75219
Mailing Address:
- P.O. Box 131587
- Dallas, TX 75313
- Phone: 972-747-5016
Email: info@exportimportlaw.com
Web: www.exportimportlaw.com
Copyright Notice
We wrote this and it belongs to us. We do not mind if you pass it along to others, as long as we get full credit and attribution. But, please, ask our permission first, and do not steal or mangle our words or ideas. İGRVR Attorneys (2007).
Disclaimer
You will not find any legal advice anywhere in this newsletter, on our website, or in any course or public lesson we offer. You should not rely on this newsletter to decide on a legal course of action. If you would like legal advice, you need to ask your attorney. GRVR Attorneys provide legal advice only to existing clients in a confidential and private setting, not in public (i.e., not in a newsletter). Subscribing to our newsletter does not make you into one of our clients. If you are looking to hire an international trade attorney, we would love to hear from you. The GRVR Attorney responsible for the contents of this newsletter is Oscar Gonzalez. He can be reached at 972-747-5016 or info@exportimportlaw.com.
|
|
|
