If you are importing a large volume of products from abroad and are not aware of the C-TPAT program administered by Customs and Border Protection (CBP), then you may want to consider the benefits of the program. C-TPAT is short for the Customs-Trade Partnership Against Terrorism, and participants in the program are six times less likely to undergo a security related cargo examination. Additionally, C-TPAT participants are four times less likely to be subject to a trade related examination than non-C-TPAT members. These significantly fewer cargo examinations help save importers time and money. (more…)
I know the title of this blog is Export Compliance Matters, but I feel compelled to provide evidence that import compliance is also becoming a serious compliance risk. Customs and Border Protection (CBP) just announced Friday that the US government is owed 2.3 billion dollars in antidumping and countervailing duties alone. Moreover, CBP has issued several “informed compliance” letters encouraging prior disclosure of customs violations by warning the trade community that the CBP and Immigrations and Customs Enforcement are enforcing trade violations. The issuance of the letters comes in tandem with more sophisticated auditing techniques that CBP has developed to catch violations, including using customs data provided by CBP’s Automated Commercial Environment (ACE). (more…)
U.S. importers should reevaluate their compliance program as U.S. Customs and Border Protection (CBP)’s steps up its efforts to enforce payment of antidumping and countervailing duties. The efforts come at the heel of this February’s passage of the Trade Facilitation and Enforcement Act, which gave CBP new investigatory authority over claims that certain importers are not paying duties. A new interim final rule is expected by Aug. 22. Importers of steel and other goods from China should be especially cautious. (more…)
The Department of Treasury and Department of Commerce have made several changes to the Cuban Assets Control Regulations (CACR) and the Export Administration Regulations (EAR) since the Administration announced its new direction toward Cuba in December 2014. Since the amendments have occurred in multiple sets of rule changes over the past seventeen months, here is an attempt to summarize where we are in terms of what is now allowed.
It is quite likely that the current and upcoming changes to the United States’ relationship with Cuba will be the most significant we’ve seen since 1961, when the U.S. government initially cut ties with Havana and imposed an embargo on Cuba that has only grown stricter over the years. President Obama’s December 17 announcement signaled the start of efforts to normalize U.S.-Cuba relations and was immediately echoed by Cuban President Raul Castro as the two countries exchanged numerous prisoners on humanitarian grounds. The U.S.’ new approach, details of which were released in a White House fact sheet, includes plans to rekindle diplomatic ties through discussions led by Secretary Kerry, the establishment of a U.S. Embassy in Havana in the coming months, and high-level exchanges between the two governments beginning with the next round of U.S.-Cuba Migration Talks to be held in Havana later this month. The White House also indicated that the Treasury Department’s Office of Foreign Assets Control (OFAC) and the Commerce Department’s Bureau of Industry and Security (BIS) would make adjustments to existing regulations in order to begin the normalization process. On January 15, both OFAC and BIS published final rules implementing President Obama’s initial reforms, which include the following changes, effective January 16th, 2014:
- Travel: OFAC general licenses for 12 specific categories of travelers will make it easier for certain travelers such as those with family in Cuba, journalists, researchers, educators, and performers to visit Cuba as they will no longer need to apply for specific licenses.
- Remittances: The amount a U.S. person will be able to remit to Cuba in a quarter will be increased from $500 to $2,000 and remittance forwarders and those sending money to support the development of private businesses in Cuba will no longer require specific licenses from OFAC to do so.
- Exports: A small group of goods and services will be allowed to be exported from the U.S. to Cuba, including building materials for residential construction, agricultural equipment, consumer communication devices and related software, applications, hardware, and services, as well as other “goods for use by private sector Cuban entrepreneurs.”
- Imports: Upon their return to the U.S., travelers to Cuba will be able to import up to $400 worth of Cuban goods ($100 of which can consist of tobacco or alcohol products).
- Shipping: Certain vessels that have engaged in trade with Cuba will be allowed to enter the U.S.
- Financial Institutions: U.S. entities will be allowed to open accounts at Cuban financial institutions and U.S. credit/debit cards will work in Cuba. Transactions incident to Cuban travel and related insurance coverage will also be permitted.
- Extraterritorial Reach: The scope of U.S. sanctions against Cuba will be limited so that certain U.S. owned/controlled entities located in third countries will be allowed to transact with Cuban individuals in third countries.
It remains to be seen whether these initial executive-led changes open the door to a more comprehensive dismantling of the 50-year-old economic and financial embargo against Cuba and usher in a truly new chapter of normalized trade between the two countries. If this does occur, U.S. exporters and American industry as a whole will have the chance to gain big from opportunities made possible by the newly opened Cuban market. However, a more substantial easing of sanctions is unlikely absent direct congressional action to amend or repeal the various pieces of legislation underpinning the regulations promulgated by OFAC and BIS. President Obama along with the executive agencies can only go so far in suspending the economic embargo on Cuba due to limitations on their power to do so specified in Titles I and II of the Libertad Act (or Helms-Burton Act) of 1996. Undoubtedly, questions of the limits of executive power as compared to that of Congress to change U.S. law and foreign policy will fuel the debate, especially since President Obama must seek support for this initiative from a Republican Congress.
While drastic changes to the sanction regime will not happen overnight, how far OFAC is willing to go in implementing changes to the regulations and subsequent reaction in Congress will give us a better sense of how much support the President has, and how fierce the opposition is. These initial steps will help gage whether a transition to a truly “normalized” trade relationship with Cuba can be accomplished relatively quickly or if it will take many years to dismantle this longstanding policy. Stay tuned.
Customs and Border Protection (“CBP”) is continuing efforts to maximize efficiency through the expansion of its industry focused contact Centers. The Centers of Excellence and Expertise, known as “CEEs” or “Centers,” were created to shift importer contact points from a geographically based locations to Centers substantively familiar with the industry. Along with centralized communication, the Centers will be an industry one stop shop for CBP paperwork and documentation. This will eliminate the current process of filing with various ports based on shipping location.
Currently, there are four active Centers in the U.S. serving the following industries: Automotive and Aerospace, Electronics, Petroleum, Natural Gas & Minerals and Pharmaceuticals, and Health & Chemicals. The initiative is well underway for the new year as CBP plans to open ten new Centers to service the following industries: Industrial & Manufacturing Materials, Agriculture & Prepared Products, Base Metals, Machinery, Consumer Products & Mass Merchandising and Textiles, and Wearing Apparel & Footwear.
The benefits of Centers are two-fold. First, Centers will allow CBP more oversight of specific industries and a better understanding of each industry’s practices. Second, Centers will help streamline the import process for the importer through increased consistency, which is likely to result in reduced transaction costs. According to CBP, the expansion is expected to result in new Centers across the U.S., and will cover the full range of imports within each specific industry.
How can you locate and utilize the Center pertinent to your business and industry?
CBP is actively looking for volunteers to work with Centers – watch out for Federal Register notices for more information on how to participate. If you chose not to volunteer, your company can still access the Centers as an industry focused informational hub.
The contact information for active Centers can be found here.
How will the Centers affect your imports?
If you chose to actively participate in a Center, the process for entry and entry summary will not change. However, the location of CBP entry documentation processing and other activities will be moved from the port of entry to the appropriate industry Center. Since the Centers are “virtual,” they will not require importers to change ports or location of importation. Instead, the Centers will serve as a virtual source of clear and consistent information on CBP requirements while allowing importers to continue using the most convenient port for their business needs.
What benefits will the centers provide for your business?
- Streamlined processing of import documentation and communication at one centralized location;
- Reduced transaction costs;
- CBP contacts with specific industry knowledge; and
- Centralized management of each industry’s imports.